Butte semi-weekly miner. [volume] (Butte, Mont.) 1886-1890, 1888-02-04
H A PASS En6.

Illegal kubuT0uCc CCu0AA0O DOAAo "OAA0
in Butte-Fallacies of the Assessment
system-Wholesale = Mortality of thu
Hat Passing Companies.
A man who is working life insurance or
the ~hat-passing plan, called on the local o
The MINER to nave the beauties OF the as
sessmsnt system of insurance written up
He represents an organization that il
ostensibly under the auspices OF one OF thu
Of the benevolent societies. and in the nam
OF that society, he doubtless catches many
victims. As there are thousands OF people
being induced to squander their money on
the so-called cheap insurance furnished by
these mushroom organizations, commonly
known as hat-passers, a few words on their
systems may be interesting and useful.
There are a great many varieties OF the as.
sessment system, but the principle is prac-
tically the same in Ill. The victim has to
pay an entrance. or initiation fee with his
application, and an assessment upon each
death in the organization. It is represented
to him that the methods OF the old line
companies are dishonest and extravagant;
that a large proportion Of the premiums
paid in goes to put up costly buildings and
PAY LARGE SALARIES
to the officers of the companies; but that
the assessment companies are carried on
for purely benevolent purposes; the officers
and agents work for nothing or very near
it,; and they give safe insurance at what it
costs. The facts are that the expenses of
the hat passers are infinitely greater in
proportion to the amount of business done
then in any OF the old line companies, and
the agents who work them receive as com.
mission from so per cent to the whole OF
the entrance fee. Even supposing their in
t~entions to be honorable, the system is so
rotten that not one OF the thousands of
assessment associations hat have been
organized in the United States, has livei
for twenty years. The death losses are
supposed to be paid by assessments upon
the surviving members, and they are paid
during the period of prosperity sometimes
enjoyed for some years by the association,
but there comes a time when they are not.
for the surviving members refuse to be as.
sessed, and drop out. 1t is admitted by
all that the death losses must be paid out
OF the pockets Of the members if vt all.
The association starts out without any
capital, it has no reserve fund Iaccummulat.
ing by interest; no buildings drawing rents;
nothing but the
POCKETS OF THE MEMBERS
to draw on. If an association OF that
kind has 1000 members, insured for ST..
OcO each, aggregating 50, 600. 900, it is evi. /
dent that if the association lives the l 1000
members must pay the $4,000, 600, and
most OF it must be paid by the members
who live longest. The agents claim that
they can obviate this result by the con.
slant addition of new ~blood-young men,
to the association; and by rapid increase
OF membership they do delay the ~inevita-
BILE result. but they only delay it: they can
not prevent it. The principle is the same
whether there are 1000 or 1901 900 mem.
beers; there is no resource for the payments
oil losses except the pockets of the men,
bers, and ii the association could live 20
or 80 years the surviving members would
pay out in assessments more than their
own certificates would call for at death.
The fact that from 100 to 200 of these
societies have been organized. and died in
each Of the populous Eastern States
should be sufficient warning to keep out of
them, whether they nave borrowed the
names OF the Odd Fellows. Masons, or any
other reputable Society. A large number
OF the hat-passing concerns that are sup.
posed to be solvent have reached the turn.
ing point, and
R NOW ON THE wANE.
Among these is the Northwestern Masonic
Aid Of Chicago, which is still drawing many
assessments from Montana. There is no
worth having except that fur
nished by what are known as the old line
companies, and a good evidence of this is
the fact that the most brilliant business
men of the age, such as Jay Gould. Russell
Sage, Cyrus w. Field, John Wanamaker
and Others of that ilk, carry fir IN $50, 900 !
to $500, 600 each in the solid old line com.
panies that nave the financial ability and
the integrity to carry out their contracts
and do SO. The assessment organizations
are not able to show the financial standing .
required by the laws OF Montana and can l
not legally do business here. There are I
plenty OF reliable insurance companies that
can, and they furnish safe life insurance at