New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1885-05-26
INVESTIGATING TONTINE.
REPORT OF THE SPECIAL COMMITTEE APP
POINTED TO INVESTIGATE TONTINE IN

Jisiathre orMe state Of Yep- York.


Committee respectfully submit this report together with
the evidence takon during the investigation made in
accordance with tue said resolution. 1t Is due to tho
committee to place upon record the fact that OF the ten
days to which by the terms of the resolution the nves
CATION was limited two fe upon Sundays, leaving but
eight days available, four of which were necessarily
taken up In the performance Of duties deyoving upon
the committee as members OF the Legislature and other
WISE Thus the committee were able devote but four
| days to the investigation.
The importance Of the subject which the mnttee
were directed to investigate hardly be Oyeresti-
mated. Life insurance and the methods under whc1 1t
Tractised subjects which, I'm form, almost
daily brought TO the attention OF the public. The press
urge the subject upon the attention OF the people with
arguments more or less convincing
brlel statement OF the progress OF business which,
II nghty Conducted, Is capable OF conierring untold
| benefits, Is not out OF place.
Auout the FIRST II the very first, company for insur
Ing ives esat sled in tue United states was organized
In Pennsyvanil In the year 1872; but the fret Official
record OF The business OF lilo Insurance is found in 1882
when the NewYOrk Life aad IT isC Company which had
been organized IN 1881 reported to the Controller that
| lives insured.
In some ten COMPANIES with total assets OF about
Sl,9OOOOO were In existence aud ten years later In
| 1850. reports show sixteen companies, with about
S20OOOOOD assets and about SliOO0000 OF Insurance
IN force This period. from 1912 to 1850 seems to have
markell the conservative Of lie insurance, when
palnal buildings erected from tue surplus contributions
OF overtaXed polcy-hocrs when officials whose enOr-
nous salaries are beyond all comparison with the value
OF services rendered were an unknown ana undesirable
factor In the account and when the commissions OF
|
were firmly established on sound basis Is evidenced
by the fact that OF the sixteen doing business In 1850
| thirteen are now In existence
| In 1865 the number Of companies had increased to
twenty i've, while Ia 1871 ;he number had increased to
lime, as new Organizations were projected.
Then clmo an OF disaster when bad methods, I'm
proyident management. fraud and pecuiaton almost
without parallel brought about their legitimate results
The black record slioy dat seventy-seyen companies
that were Organized between 1860 aud 1875 failed
otherwise disappeared, whose total assets were about
Notwithstanding this terrible record, strongly has
the system OF life insurance appealed 10 the people. and
40 great have been It's benefits that now the assets OF
companies reporting To the NewYork Insurance Depart
meut about Sl72DOJOOO, with surplus, so-called,
In 1888 earned about S26,0oO,ooo while
IN l-,i the increase IN assets over lss3 was about
Ia 1873 the total insurance in force about two
billions " dollars. which decreased IN 1880 10 about one
billion four hundred mionsa decrease 81 six hundred
million dollars. owing largely TO the failures 81 com,
the amount OF insurance force gradually Increased
ana there outstanding policies e. che amount OF
about one aud threeqn"iter billions OF dollars. ,,,
An inquiry into the methods Of business under whioh
such great of money accumulated Is proceed
| iug both difficult aud delicate.
Your committee actuated by desire to 90 justice TO
all aud I'm no degree 20 ueelc-sy alarm those have
| cOnnicd 10 the managers OF these great corpOr-
! alton. sacred trust the future protection Of
their families. but regret that # such an investiga
ton was ~ made would meet the fun scope OF the
resolution tho Legislature bad not given sufficient time
Ia which % obtain fa understanding o. the subject
| Enough has been developed by tho committee to
Indicate that investigation surh ~ was called Tor by
believe That by failure Assembly, that duty Will be Tear
lsz-lk
not to say moral coHrase-lhh may DC fel'utell gr
such an undertaking can be appreciated when We call
attention some facts which should not be overlooked
II cihh't nave 'oAp''I oor mum tna.
OF the Legislature EhO voted Tor the apr ointment 81
AZ On" via, tlltnlf, which onlI sccn 10 have BEEN
entirely uucacd for II the companies practising that
system OF insurance had nothing To conceal a., bo,o
l,t u, .'ae o c,d"cI nv The admission OF
is Wee President tho idea entertained " the people
deIusian" though yor committee believe that the people
by the representations made aud the contracts Issued by
What power other than that % immense moncyed cor
porauons could have procured. "a II by prearranged
coucart OF action. such attack made BY the
New.York CTS press with hardly eKcspuon-upon
tue character and reputation OF seyen-k members oil
Was ever greater effort made to prevent inquiry aud
smother investigation Why was this done unlrss
there Il something the maoa,emeut Of tins tontine
plan that viii not bear The lisht OF day
Savs only tirso Of whsh had bs.a available Tor
TRrsa instructions are proesedy organized confer
state. aud yet they every enort which human
iiiy can devise to prevent full knowledge OF their
transactlOnH By the public
Wniie your committee have been able in the brief
period devoted to the inVestgaton 20 ascertain nut com
parativcy few Of the facts IN regard 90 aters within
Inc scope the resolution IL Is patent 10 all That an
oii 81 The hands OF the committee and prevent any
rel ort being made 10 the Degslaiure Aud when In
addition to this have all the power OF the
skilled talent" which suuounis the Capitol invoked to
prevent continuance pf the investigation 10y con
mttes characterized AS incompetent for the work and
therefore from whom presumably nothing was 10 be
feared what other conclusion eau he drawn than that
the extravaganza aud rottenuess thst developed
few years since by legislative Investigation into ine
Affairs OF certain LIE Insurance conpanies ana notably
I'm the agencnt of company which II there Is any
thing in should deal "equitably with It's policy
holders yet exists. and Is only concealed from public
view 10y mantle Of plausible professions. .
The term tOntne," applied TO fund, IA generally
upderHtOol 10 mean contribution 10y lndlflnuas 10
general fund. which fund with It's Accommodations Is TO be
divided at the end OF stated period among Tue Surviving
contributors or members OF the association. IL sNr.
tuAlly agreement by which parties consent
fortunate ~ survive the others shall take or divide
letwecn them the funds contributed by all
The origin Of this OF enriching the few at tho
expense of The many Is credited 70 Lawrence Ionti.
Neapoitan who. approaching what late Insurance
superintendent termed the tontne tendencies o. man
invented the tOntine and gave II Its name He hrst
introduced IL TO the French Government In 1919 IL was
put In for the purpose ~ repenslng tue EXHAUSTED
cdict organized "tonne which resuod 80 fAYorably
that IA Later years others were ORGANIZED
Tonnes for purposes nave since been organ
lzed in England and few In the nature OF private agree
ments Ia the United States. -,
It's opment IN this country In connection with
life insurance IL DO credited to the Equitable Lie
Insurance Association which introduced the pan IN
1868 and whose efforts In this direction, II not prompted
by similar those which actu2ed the ffcncn
Government In 1859. namely to repenish an exhausted
treasury. seem at least 10 have been intenshed Dy
desire to obtain through the forfeiture OF immense sums
fund which could be drawn upon al ho,tH" tor Tue
expenses OF u most eNtraYagtnt management
COMPANIES DOING BUSINESS IN THIS STATE on THE
TONTINE PLAN.
As far as your committee able to ascertain tho
companies doing business in this state on the tonne
plan are the following;
The Equitable Life Assurance Association.
The NewYork Life Insurance Company
The Brooklyn Life Insurance Company.
The Penn Mutual Insurance Company.
Tue Union Mutual OF Name.
The Northwestern Mutual Of Wisconsin,.
The Metropolitan, and the Union Central OF ONO
The Mutual Life Insurance Company OF New YORK Is
said to tOntne policies heir books, and now
issue "A form OF policy called the hve-yea distribution
policy, which 1t Ii claimed contains some OF the elements
OF tOnne But these policies do not contain an absolute
forfeiture clause. Mr. Alexander the yice-pcsdent OF
ths Equitable not certain % the GeInana ana