Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-05-21
RISKS AND GAMBLING.

An inquiry made in letter to the New
York Tribune shows widespread inabil-
ity to distinguish between the chances and
risks of legitimate business and those of
gambling The writer imagineS person,
A, to win considerable sums of B in bets
on cards and horse racing. For the third
transaction the writer presents the follow
ing:
\ thereafter, rejecting on the mutability
of human affairs and on the inevitable tend
ency of all bettors and gamblers to ultimate
ruin, besides the distrust and dishonor in
which all such persons are held by right
minded members of the community, pro-
ceeds to the office of a well-conducted life
insurance company, which we may call E,
where, after mutual careful examinations of
all the chances and risks involved by both
parties, A takes out policy on his life for
10000, paying the first annual premium of
$3.50 on the spot. Six months thereafter A
dies, whereupor the company, Z, which
takes just pride in its prompt settlement
of its debts, pays the $4,000 to AS heirs.
VIII not some intelligent correspondent of
| the Tribune, with a talent for casuistry,
| kindly ditferentiate for me the moralities of
| the above suggested transactions?
The signature to the article indicates
that the inquiree is a college student; but
great many grave business men have
shown a similar difficulty in distinguishing
between gambling operations and the bust
ness systems which benefit mankind. The
| language quoted shows the idea of the in
| uuirer to be that because an insurance
| transaction involves chances Just as a
horse race does-it is plain the inquirer is
innocent enough to imagine that horse
races are not always ssfixed'-therefore it
| is gambling.
Notwithstanding the confusion of ideas
on this point the distinction is per-
fectly plain one, and it is so i'm
portant that it is worth while to
make the explanation somewhat fire.
| quently. The fact that business con-
tains risks does not make it gambling. All
business has more or less risks. The busi-
ness of putting down oil wells is one of
| wide chances, and is entitled to large
profits to balance them, which it could get
| if it did not have the misfortune to be sub
jeet to mOnopolized market. The bust
ness of handling sugar is subject to few
chances, and consequently fraction of a
cent is good profit. Because the risk is
| greater in one case than the other it does
not follow that one is any more legitimate
than the other.
The distinction between legitimate bust
ness and gambling is this: In gambling
transaction whatever one party gains
another must lose; in legitimate business
transaction both parties get something
that they wish. A bets B $40 and wins it,
Exactly what A has gained B has lost. A
buys SO worth of goods, or the same value
of service, from B, and both are better off
for the transaction. The insurance trans
action instanced above differs from
gambling because A paid the premium
and got what he wanted, namely, the as
surance that in the case of his death his
heirs would be provided for. The insur-
ance company got what it wanted, namely,
an increase to its premium receipts which,
based upon the doctrine of averages, yield
it profit over and above the annual death
payments The idea of the writer seems
to have been that by dying within six
months the policy-holder made great
stroke of financial luck; but very few in
vestors in life insurance will take that
| view.
To return to the fact that there are
| varying risks in different sorts of business
which must be compensated in the profits,
the whole business of insurance may be