Morning journal and courier., 1892-02-15

II tAO raiCty UT pIOSpoTlty Ol IlI0 anee depended in the least degree on keep | Dg the business young, it ought to be | out of existence as wholly in secure. |
 NEW BUSINESS. |
 Our members are we'll aware that we are less anxious to gain new members rapidly, or in great numbers, than to give our pres ent large membership the best possible re- suits on their business. We have, there fore, not increased our proportion of ex- penditure for new business-which would have been at the expense of present mem- bers-but we have, notwithstanding, made 8 fair gain over the business of the pre- ceding year and made considerable ad- dition to the amount of business in force, which now amounts to $155, ,043 055. None of this was out for collection in the hands of agents when our books were closed. It was all paid for.
 EXPENSE ACCOUNT.
 We have practiced the wonted and tradi- tional economy of the company in every direction; and yet have allowed no trus interest to suffer from false economy. The ratio of expense of management to income for the year was 9 9S per cent. Q ratio materially less than that of any other com pany.
 It is quite the fashion for our rivals to exhibit expense ratios based on the amount at risk, or on the amount of new business written, or some set of figures other than the income. But expenses do not come out of the amount at risk, nor out of the new business, nor out of any thing else in the world than the income as long as that is large enough for expenses and nfhar fhinoo and failinn that fhau come out of the assets.
 It is to be regretted that the most push ing companies no longer publish, except in the reports to insurance departments, such statements of their affairs as show the items of income and expenditure and as would enable the public to judge of the cost at which they are transacting busi- ness.
 COMMISSIONS.
 In the light of the revelations now being made to the public of practices existing in certain great companies it seems proper to inform our members that tho commissions paid by this company for business are strictly maintained at the conservative standard of former years; that our con- tracts with agents do not give them flu ture control over these commissions; when an agency ceases the remuneration for the agent ceases, and such commissions ss are then fixed upon the existing business of that agency, go to the new agent to assist him in his work; We do not add to the cost of paying men who are at work for us by paying also men who have worked for us, after they get through; we do not submit GO pay enormous commissions on new business in order to let an agent who has got through working continue receiving o1l ho1 ,,p contracts for future commissions against which "advances" or f'loans'or "commut- | ed commissions'' can bs made and charged up to th~ agent, to make "rebates" out of, l or pay absurd commissions and brokerages | out of, on business which will presently ! be s'twisted" into some other liberal con- pany by the same com mpetitive measures, l leaving old members to pay for the ambi- ! tious exploit The resources of this com I pany are not mortgaged to anybody. l It is true that in these days of fierce en- l terprise and competition, it has not been easy for us to secure agents against the 1 tremendous temptations held out by the ! "Racers." But we have been and are slow ! ly getting men who believe with us, that success in life insurance means and can only mean giving pure and absolute pro l teotion to families It it's lowest possible cost; and that competitive methods worthy of 8 lottery scheme are poor credentials fol ! 6 company asking men to commit to 1t the l most sacred of secular trusts.
 1 So the agents we have and get are true msn, and the business they get stays, ant pays.
 1 SUCCESS.
 Insurance is indemnity against loss. l
 is and can be made nothing else. To give perfect indemnity at the lowest true coz l is perfect success; not brilliant success
 nor one gratifying to an "ambltious man ! ager," perhaps; but it is the only success
 there is in the matter; and anything els,
 that is substituted for it, however brill
 liantly it may succeed for the time being
 and until it has worked itself out, will ul
 timately come to naught.
 This fact ia slowly coming to the light il
 the case of the great
 ToNTINE COMPANIES.
 In order to "boom" their business the, ! ceased to teach men the sacred duty of pro
 tecting their families by life insurance
 and began, instead, to show them estimate
 of the profits that might be made out ol
 the forfeiture of protection. Their exper
 fence had shown that, in their companies
 out of thousand men of middle age talk ing policies, only about one-third would
 pay premiums for, say, twenty years; abou l one hundred of them would die, but nearly
 six hundred of them would lapse-give ul
 paying. So they proposed that no ont
 should have any dividends for. say, twen ty years, but pay his premiums in full
 that if any one died he should get the fac.
 of his policy, leaving behind all the divi
 dends his policy had earned; and if any
 man 1apsed-couldn't psy-he should for
 felt all he had paid, both the dividendl ! earned and the reserves on his policy; a
 the end of the twenty years those who hai
 been lucky enough 10 live and pay through
 should divide up what the unlucky onei
 had left
 This was called "Tontine Insurance;'
 this, or a modification of it, as to tn,
 amount forfeited, is now usually called
 Investment Insurance"
 It took nightly. The estimated profit
 were very large, and people did not real
 ize and perhaps some of them did no
 care, that the profit they might make wa.
 the loss of other men and of their families
 and that. in order to get e chance at il
 they had to risk their own money and tho
 protection of their own families. The
 reckoning day was far off, and agents were
 tempted by tremendous commissions and
 
 and Communications" by mortgaging the , comp.ny's margins of premiums for many years ahead. Business increased in the ! most brilliant manner; such increase be came the one criterion of success. It wal
 hard for plain conservatives to make head
 against the swift rush. The glitter of big figures and the rebates quite overbore such l sober facts as the multiplication table and l the moral law.
 But in order to getlnpses and forfeituree enough, they had to force the speed; and | to force the speed they have had to burn ] their own cargo. They competed with l each other for business by increasing re-
 bates, and they competed for each others l agents by increasing commissions and l bonuses; and this sort of thing has gone on until it swallows up practically all of the first premiums, leaving nothing to cover the cost of insurance; the forfeitures to the Tontine or investment fund are 1 drawn on to pay death losses and provide reserves in place of the premiums swsl- ! lowed up in competitions; the settlements 1 of Tontine profits now being made are less l than one-hslf what they were estimated at, ! and they are decreasing nearly every year; ! and yet, they are advertised AS results I sufficiently tempting to warrant men in betting their own money and their families protection to get chance at the diminish l ing pool. Great as are the figures of sur plus advertised by these companies, they are less than half what they were expected to be. The 1892 settlements are at a nota- ble reduction from those of 1891, in cer- tain companies at least. But hundreds of thousands of policies have contributed their earned surnlus and reserves which