The herald., 1898-09-27
JOHN A. INGALLS, REVIEW OF
THREE DECADES
CALIFORNIA SAVINGS BANKS
Statistics Of Their Latest Showing.
In Healthy Conditional
Gain in Deposits
OFFICE OF THE HERALD,

Los Angeles, Sept. rs, 1893.
A comparison of the conditions affecting
the business Of life insurance in the United
States a quarter Of century ago with
those operating today Is necessarily one OF
much interest. The period covered, says
Bradstreets Is ono OF great Importance In
the history Of life insurance, and Is one
that has witnessed remarkable changes in
economic conditions generally. Compris-
ing, as 1t does, periods of reverse and OF
success, 1t could not fail to furnish ma
terial Of most interesting and instructive
kind to the scientific student of the insur-
once system. No small degree OF attention
will therefore be attracted to the notewor-
thy review OF life insurance from the date
Of the first national convention OF insur-
apco officials which was given in the ad-
dress delivered by President John A. Nc
Call Of the New York Life Insurance COM
pany. before the convention OF the Nation
al Association Of Life Underwriters at
Milwaukee, Wis, this week.
The first national convention Of insur-
ance officials in the United States was held
in the year 1871. The nine years following
must be regarded, the speaker said as the
lean life insurance. The number Of COM
panies which ceased doing business in
New York was forty-six; only four REIN
sured in companies which remained solv-
ent and only ten others paid their liabili-
ties In full. The total loss to policy hold
ers by failures among American life In
surance companies was about sS5, ,00O, ,000
The period from 1881 to the present time,
on the other hand. has been one of uninter-
rupted progress. There has been but one
failure Of Importance, and the business
has steadily grown In public favor. While
it required fourteen years to regain the
volume Of insurance and income reached
In 1872 and 1878. 1t required only seven
years more to double It, The notable fea-
lures of the latter period have been de-
cline in the interest rate, the rise of indus
trial insurance. the liberalizing of the pol
icy contract and an increase in the ex-
pense rate.
President McCalrs conclusions regarding
the causes of this loss of business during
the first period are noteworthy. 1t seems
clear, he says, that the failures resulted
from bad management In the broadest
sense of the term. The management was
extravagant, wasteful, dishonest. 1t paid
too much for services rendered, and did
not take proper care of the results OBJ
tanned. The data upon which 1t proceeded
were not deceptive; no company failed be-
cause of an excessive death rate. nor, save
II. a single case, because 1t was impossi-
BILE to realize a rate of interest equal to
that upon which it's premiums were cast.
The assumption which failed was that the
loading on the net premiums would equal
expenses and losses on investments. From
his study Of the period President Mccall
was led to suggest the following safe
guards namely, the utmost care in max
ing investments, security to be always
the paramount consideration the necessity
of frequent revaluation of securities and
of their rigid adjustment to changing con-
ditions, the close study of a company's
business upon the principles of thel gain
and loss exhibit now required by several
insurance departments, and the assump-
ton for purposes Of practical administra-
ton Of higher standard of reserve than
that by which the company's solvency is
tested under the law. All of these sugges-
tlons are in the direction of conservatism
in management, and are commended fur
ther by the general ability of the paper In
which they are put forth.