The Vermont watchman. [volume] (Montpelier, Vt.) 1883-1911, 1896-08-26

money which will be paid for his claim to
himself, as an old man, or his wife and
children at his death. In the same way,
the pensioner Of the government, who is
life annuitant, is interested in the question
OF what his pension will buy, when he re-
oeives it. If the dollar be debased one.half,
the insurance and the pension are depre-
ciated in the same proportion but upon
this point no special light is given by the
paragraph quoted from Mr.. Bryan's speech.
Neither will the companies be able 10 cast
gold-interest- bearing assets at proht II
silver becomes the standard OF our values
They hold few assets of that nature, and,
besides, the very nature OF their business
obliges them to make contracts reaching
far into the future, thus making 1t impera-
tive that their securities shall be OF the
very best and marketable the world over
II money be debased, good securities, like
every other good thing, will rise in value,
II the same are to be paid for In vitiated
currency. II companies sold their very
best investments for the purpose of realiz-
ing the market value above par, they would,
In turn, be forced to pay equally great or
greater premiums to secure an equally safe
Investment to take their place.
The probable effect OF a change in the
standard Of our money, upon insurance
companies, would be this: Those who al
ready, have large accumulations ana out
standing risks would not be able to shift or
exchange either. They cannot increase
their average premium income per one
thousand dollars, for that is fixed by con-
tract. They would be forced to accept the
legal-tender money OF the country Tor
for interest on their investments. The
working expenses, calculated, as part OF
the premiums, upon faith in the gov
eminent as to the maintenance OF stable
currency and the purchasing power of money,
would be reduced without any power in
law, or in the nature of things, to augment
them Every one employed in the business
would be exposed to a reduction OF in come
Fire insurance and other companies would
be forced to raise their rates. Doubtless a
vast number of policies would be Cancelled,
fires would be more frequent, and the rate
OF loss increased, as is always the case in
times OF financial distress. There would be
depression of probably serious conse-
quences, and the progress of insurance as
an institution would be checked for the
time. What the companies want is sta
bility and non.interference with money
values, for that is essential to the success Of
contingent obligations, which aim to afford
prote ction and stretch far into the future.
The main injury would fall upon individual
beneficiaries, because their effective in-
surance would be halved. Claims would
be paid in deprecated dollars. The OBJ
jects OF insurance would be defeated to the
extent to which the purchasing power OF
money would be impaired. This phase OF
argus and Patriot in its issue OF August 10,
In the following words;
WHO WOULD SUFFER-?
"Now, since all losses are paid out OF
current premiums, the effect OF deprecia-
ton of the currency would merely be to re-
duce the actual amount OF insurance paid
for and receivable without'atfecting the re-
lation between premiums and policies. In
other words, II we had the threatened
fifty-cent dollar, man who had been
buying $4,000 insurance for 500 year
would buy 81 800 insurance for 500 year.
II he wanted to keep up his policy at the
old rate, all he would have to do would be
to continue his former payments at theiI
actual value. The only sufferers in such q
case would be the people who had paid
premiums for a long time on the gold
standard, and who were too old to take ou
additional insurance at economical rates
That is to say, the above man would have
to pay 5000 year of deprecated money tC
maintain $4,000 OF nominal insurance, anC
that the effective result Of this would bt
the same as that secured before by paying
800 per year Of sound money for an actua
insurance Of $4,000. This amounts to the
suggestion that "a policy.holder can ge
around the difficulty in which cheap money
would involve him by doubling his pay
ments and his insurance. The Argus IL
quite right about one thing, however, ant
that Is that the fifty-cent dollar stand
10y to only 81 800 of effective insurance
and that the holder would have to double
up il he was anxious to maintain his orig
inal protection unimpaired. But 1t wa
not made apparent Q) that very larg
number Of men are no longer insurable, ant
therefore could not possibly avail them
selves of this way out of the difficulty; e
where most men would get the extra none.
to pay for this double amount OF nomina
insurance; (3( upon what considerations
justice, fair-play, or decency, it is right t
thus cut in half the policies OF such as ar
no longer insurable or cannot pay tn
double premium; (D what benefit ther
would be in doubling things, as suggested
If the effect is in no wise changed and as
Stunning that this initiation were possible.
The last part OF the statement, abou
" the only sufferers in such case, is nc
only untrue but cruel. All men VIII
sought the cash value of their policies, al
who used them as collateral for loans, a
who collected the matured endowment {
their contracts as provision for their oil
age, and all widows and orphans, all Oh
tates. creditors and assignees, having an II
terest in policies terminated by dealt
would suffer, and in the precise degree i
which the purchasing power of their none
had been debased Against this deprecif
ton of insurance and all incomes, it is rigl
to protest. A man taking policy ane'
and paying for it in fifty-cent dollars coul
find no fault, if his claim was settled in tn
same coin. But even the insurers of the II
ture are justified in opposing any propos
ton which would place an indetermina
value upon their protection. They cann
afford to leave in doubt any provision II
their own old age or their dependent ben
fcaries. And what of the old soldiers wi
receive life annuity from the government
Are they to be excluded from 4" the on
sufferers " under a regime OF fifty-ce
dollars" j. A. DEBoER.