Evening star., 1896-10-07

and Ohio valleys, the south Atlantic ana
eest gulf states. go
IS, 7OO, ,OOO,eOO. If the value of each dollar
paid to the companies is to be scaled down
to an effective purchasing power of about
81 cents, then, in order to MAINTAIN Ihe:r
obligations at their present value in erect
i've purchasing power, the companies would
need to Increase their al nual income from
S215, 100000 to about $5JO,U0,0OO. Unable to
do this by reason of the nature OF their
contracts their obligations Of about *5,Io,-
COO,HD VIII fall in effective purchasing
power TO about s., SU0.OOo,UU One or the
other will be an absolute necessity. II they
are to maintain their present proud posi-
ton of absolute, unquestionable and apun-
dant solvency, and still yield the same ben
efits they now confer on their patrons.
Value of a. Dollar.
"Our obligations to others. and the OBJ
legations of others to US, are all based upon
the value of dollars worth (or having an
effective purchasing power OF 100 cents
each, and not upon the value OF dollars
worth Tor having an effective purchasing
power Of less than 100 cents each. Never
Stree the war of the rebellion has 1t been
necessary for the life insurance companies,
which have cast all their calculations N
a weli-defined unit of currency, to specify
what shall be the value of the dollar paid
TO them, or the Nalue OF tne uOildT pdlu oul
by them. The text books from which we
were at school taught the value of dol
lar defined it 100 cents-ne:ther more
nor less; and of equal value, whether
stamped by government or turned INTO the
smelling pot. Those who have been paying
d dollar having an effective purchasing
power of 1GO cents for one dollars worth
of life insurance cannot reasonably ex-
the payment of dollar that has
an effective purchasing power of only
81 cents. The man who wants $25,UO of
life insurance, and expects to pay for 1t IN
coin that is virtually subject to ~ per
cent depreciation, VIII find that he cannot
buy ST., ,G0 of life insurance of the effective
purchasing power of today, but only $13,-
coo.
do not allow yourselves to fall into one
very natural error. The life companies
would still pay one legal tender dollars
worth of life insurance for every legal
tender dollar paid to them, even If the
threatened legislation in favor Of the un-
limited coinage of silver should be an ac-
compiished result. They will still grant
legal tender dollars worth of life insurance
for every legal tender dollar paid to them;
and every dollar of life insurance so PAID
will be nom:nally a 1o0-cent dollar, but
it's effective purchasing power will be i'm
paired. If a 100000 policy becomes claim,
s1u,UU of 100 cents each will still be paid.
but it will be in effective purchasing power
equivalent to only about 50 per cent Of the
effective purchasing power of the same
sum today. Already it has been sought to
be shown that we shall be partially re-
pudating our obligations. We shall do no
such thing We shall pay in the current
coin of the realm'-as many dollars as our
contracts provide for-dollars of 100 cents
each; but under the threatened new order
of things each of those 100 cents would
be of an effective purchasing power Of
only about one-haif.
THE uucs ton of what the life insurance
companies will have to do, in the unf'r-
tunate event of their premium and interest
income being paid to them in such 52-cent
dollars, is susceptible of very ready answer.
They will pay all claims that accrue, dollar
for dollar; but power outside of them
selves will have deprecated the purchasing
power of those dollars. The dollars that
they will pay to the widows and orphans
will only buy so per cent Of the necessities
and luxuries of life as compared with what
the dollar can now purchase. Not one
single obligation will they repudiate. No
claim will be scaled down by them. They
will pay the number of dollars agreed-100-
cent dollars each-but when they reach the
Golfers of the poor widow they Will be
found sadly lacking, in that eac! dollar will
buy about half of what 1t would buy To-
day. and Of what 1t would have bought
wheE present existing contracts were male.
A Wis major will be responsible for the
depreciation in purchasing power, and not
the life insurance companies.
Contracts Would Stand.
and unlimited coinage of silver must in
| evitably impair life insurance contracts.
Nothing of the kiEd. Life insurance con-
| tracts can and will be carried out to the
strict letter. The evil will come after the
life insurance companies have done their
| work. For each stated annual premium of
| so many dollars and so many cents the
companies will grant their policies of 81 900,
$40, 900. $20,OOO or $4,000 of insurance, and
| when the death of the insured ensues they
will pay their contract obligations prompt
| ly. Ii is after the claims are paid and the
strictly performed that the trouble will
| come in. The man who in his provident
| forethought intended to leave his family in
| the enjoyment of all those necessities, COM
| forts and luxuries which an annual income
| of $1,000 based upon present conditions
| would secure to them may have insured his
life for the sum Of 1000. Under the con-
| ditlons that threaten us If such a policy
| becomes a claim it will be paid just as he
expected 1t would be paid. but when the
| money reaches the hands of his widow the
prices Of both necessities and luxuries will
| have SO greatly enhanced that the income
| thought will provide the wife and children
| with only about one-half Of what he in
| tended to provide for them. The change
| will not in any sense impair the functions
except as to dividend benefits. and the basis
| of premium payments. It's action will be to
impair the present existing relation be-
tween assets and liabilities and effect a de-
rangement Of these important factors
| which 1t will be very hard subsequently to
| rc-establish.
II desire to repeat, with all the emphasis
| that can. that tho soundness and stability
| Of the institution Of life insurance could
| not be affected by any of these changes.
The policyhoiders would be the only ones
to suffer. This was proven by the expert
| ence Of life insurance companies during
the rebellion. when the market value Of the
legal tender dollar deprecieted to 80 cents y
Tho DeleEates.
Among tho delegates from tho vnriou,
local and state associations, who arc p. es