Omaha daily bee., 1893-10-01

SOL, or nearly one-third OF their premium in
come. Is there any further proof neces-
sarY TO substantiate the statement that the
largest, IL not the only, source of profit
TO the policy holder is from lapsesl Bond
companies are condemned by writers pre-.
viously referred to Tor introducing this
source of profit into their plans. Can we
commend a principle in one case and decry
II IN another The examples previously
referred TO in the report of the Equitable
company show the actual cost of life insur-
ance on those policies to have varied from
$50 per 81 900 per annum at the age of p, to
sou per 81 900 per anhun at the age of IL.
The reports of thirty-one companies to the in
surance commissioner show that 2S per cent
or their annual premiums for 1892 was used
for expenses; 30 per cent paid for death
claims and 30 per cent (the r~emainder) for
Withdrawals and investment to pay toutlne
aud endowment maturitics. Bond invest
ment companies devote 80 per cent of their
premiums to Immediate payment of maturi-
ties, 3It2 per cent to Withdrawals and in
vestment in a fund for final cancellation
or obligations in winding up the
business, l2Ia per cent for currant expenses.
Is there, then, such a wide differencel Both
issue a contract which Is kept in force by
the payment of premiums. Both divide the
premium into three funds. Both use one
fund for current expenses. Both use an
other fund for immediate payment of con-
tracts, one paying on the contingent matur-
ing contracts by death, the other on u CON
tingent maturing them by number. Both
using the other fund for Investment to pay
Withdrawals and later maturing contracts.
Both operate upon the law of averages and
both have the same sources of profit, viz,
lapses and Investment. Where, then, is the
differencel Simply in the contingent upon
which the money is paid as stated above.
Can IL be that so slight a change transforms
u plan that has hitherto received the high
est commentator, for the good it has done
10 untold numbers, into "a fraud and swlndle,
and deserving the severest censure of the
public as being outrageously inconsistent
and opposed to the public eoodl
According to the report of the Equitable
company this plan was devised in 1868 and
for the past twenty-five years numerous
companies have been operating it without
untavorable comment, paying millions of
dollars to their patrons and at the same
time rolling. up fabulous sums in assets,
which are increasing continually. In n re-
cent edition of Public Opinion a statement
appeared in which it was said that the
assets of the life insurance companies of the
United States were about $3.50, 900, 900, or one
and one-half times the inJerest-bearing debt
of the nation.
When such profits as life insurance COM
panles pay can be produced by the operation
OF a plan that Is acknowledged legitimate,
Is 1t a wonder that men seek to utilize the
plan for investment, when to do so it is only
necessary TO change the contingent on which
the money is paid. the contingent being a
factor in the plan that has no bearing upon
its ability to produce profitable %returnsl
Something over two years ago a company
III Missouri introduced into its plan a multi
pie with which to determine its table of ma
turtles. Upon the appearance of their ad-
vertising matter a building loan company
had 1T forwarded to the Postofice depart
ment at Washington, attached to an opinion
by their attorney p~ronouncing it a lottery.
In the absence of the assistant attorney gen
eral the law clerk of the department decided
against the company and closed the mails TO
them. Upon the return of General Tyner he
reversed the decision and reopened.the mails
to the company. Since that time many prom
lnenent attorneys have not only endorsed
General Tyner's opinion, but together with
innumerable merchants, manufacturers,
bankers, real estate and insurance men, doc.
tors, ETC., became investors in bonds. In
view of these facts is it strange that good
men have not only lent their names and IN
fuence to the business, but have given it
their time and energieSlI Is it not stranger
that one should be found with the boldness
and temerity to pronounce it a fraud and
apply the appellation of dupe and ignoramus
to the long list of business and professional
men who are now carrying bonds in these
companies2
Great men, however, do not always agree.
Judge Thomas, the present assistant at
torney general, does not take the same view
that his predecessor did, hence has closed
the mails TO all companies who use a multi
pie in making their table of maturities. but
no restrictions lave been placed upon those
who mature numerically. His action causes
the writer of the article in THE SUNDAY
BEE to remark that the companies are
''scotched, but not squelchod." He also ac-
cuses them OF prosecuting the sale of bonds
In out-of-the-way places with a vigor born
of desperation and attempting to make a
long and grand haul before the day of
reckoning, which is soon coming. Were he
called upon to prove this statement in
court he would be in rather a bad
predicament. This statement has no
foundation in fact which of itself gives color
to the belief that there is a malicious intent
behind 1T. An inquiry at the express offices
in Omaha will reveal the fact that the bond
companies are not sending or receiving any
appreciable amount of business by express
as stated, in fact nothing but what they
would at any other time in the ordinary
course of business. An examination of the
books of the companies that are excluded
from the mails will reveal the fact that they
are not selling bonds at all. The significant
calm" referred to 'in bond investment cir
cles," il significant, simply means that there
are men engaged in the business whose hon
esty and integrity of purpose have never
been questioned by those who know them.
Men AVE gone into the business, believing.
after a thorough investigation, that
it was just as lawful as life in
surance, the legitimacy Of which
is unquestioned, men who still
believe in it and who will conduct it with
Wv shSS tAf's ASS - ~ ShIDO
States mails and without confiictlon with
the laws OF state or United States or not at
all. Men who,. rather than resort to the
courts to establish a point that many good
lawyers tell them can be made, prefer to
change their plans so as to eliminate any
suspicion Of lottery and are accordingly
quietly awaiting the results of changes sub
mitted for the approval of the department
authorities. Men who, rather than enter
into any newspaper controversy, would pre-
fer to bear any reasonable amount of abuse
and devote the time necessary for reply to
their business.
Sometimes, however, forbearance ceases
to be a virtue.
In view Of the fact that bond companies
have been incorporated in ten different
western states besides Nebraska and that
the statutes of many others will permit such
incorporation, / wonder If the members of
our legislature will take kindly to the criti-
cisms on their past work, as made by the
writer of the article in The SUNDAY BEEF
The policy of states generally is to permit
Incorporation for any legitimate business.
To permit in one case and exclude in an
other where the business is la wful savors of
class legislation, which is in conflict with
the constitution. AS the legislature cannot
anticipate every business that might want
to incorporate, they can only, in justice to
all, enact a broad statute and exclude the
unlawful, They can enact laws 10 repulate