The herald., 1898-09-11
SWOLLEN CONDITION OF BIG
LIFE CORPORATIONS
HOW COMPANIES ARE WRECKED
Savings Bank Statistics-Enormous
Increase in Deposits-Condition
of Canadian Banks--Notes
OFFICE OF THE HERALD,
Los Angeles, September 10, 1898

Los Angeles. September 10, 1898.
Never year goes by but that some
warning voice Is raised to protest against
the great aggregation of wealth possessed
and controlled by the great corporations
Especially Is this true in regard 10 the life
insurance companies, which have such an
enormous amount of assets and. of course
correspondng,y enormous amount Of la
bi!i;es. The latest of these jeremiads
comes from American Investments, and
while 1t contains some pessimistic refec
tions, 1t also conveys some sound ideas that
should appeal 10 conservative minds. 1t
Is, therefore, quoted as follows:
No man possessing ordinary wit will
question the statement that our great life
insurance companies in their mad rush
after business. and the manifestation of a
crazy desire to he the largest of their kind,
are running a risk of which they need to be
warned No man possessing ordinary
eense Will for a moment doubt that there
ls point in the growth of a life insurance
beyond 1t which ought not to CO. We know
the argument, that a large company can
be conducted on a smaller percentage of
expense than Its diminutive n,eghbor. but in
making this statement no account is taken
OF the increased danger In other directions
The time has come when some of our le-
viathan companies should pause and take
an account of stock. We know some per-
haps all. Will say that this they low do but
every business man knows that an inventory
taken when everything Is running at high
pressure Is not likely to be accurate done
The reasons for extreme care do not appear
TO exist. And yet they are there just the
same.
We confidently believe that every single
advantage possessed by the excessively
large company Is more than balanced by
tic lfar at.rb
Dor which are very apt to be verlooked
or lightly regarded by its leviathan brother
Not long since we heard well known bust
ness man declare that as for the future for
him In respect to life insurance he pro-
posed to give a preference to such compa-
MES as the National Life with its s5Oco
president supported by director that has
no ambition to own the earth and the full
ness thereof. rather than the metropolitan
one with Its 100000 president surrounded
by temptations and snares almost impos-
sible for an ordinary man to resist He
Delleved that there was better
chance for company to be con-
servati~ely and honestly managed in
vermont than In Wall street, where the
switching backward and forward of securi-
ties offered such a fine opportunity for
profit at the expense of the policy holder.
We have heard it said that the life of a
cautious, conservative man in one of these
"rusher" companies was simply unbearab
ana that sooner or later he was given to
understand that he must fall in line with
the bowling boomer for more business or
stand freeze out. These companies should
not forget that reckless rush after busi-
hess. putting a mortgage on surplus funds
TO procure 1t and salaries way beyond the
ability of man to earn, are not
compatible with trusts assumed for the
widow and orphan. But the important
question now is, what is the remedy? 1t
Is not easy to give it. We believe how
ever. that closer relationship between the
assured would go some way towards pro-
viding remedy. Suppose all the policy
holders in the New York Life that live in
Buffalo should form a little coter.e by them
selves for mutual instruction and protec-
hon. And suppose this should include the
best business and professional men In the
community. but not single representative
or the company. No feeding, jaunting
trips or toots of any kind at the expense of
the company. Would the head office listen
to any tale of woe that such body of men
would send up? Much more likely to do so
than If an individual should make COM
plant. Now. suppose, also, that in every
city or town in the country where there are
dozen policy holders in this company
there should be similar organ.za tions,
would not this great independent
company prick up its ears and
be very apt to act as if 1t had
recompenSe unto the reward?" And SUD-
pose still further that delegates from each
Of these bodies should meet in convention
and should bring to bear it's influence upon
the company to redressIany' wrong or cor
rect any evil that might exist, would not
the company be respectful and listen? We
rather think so.
The day will surely come when some such
plan will be adopted but ID will not come
until some great calamity will have come
upon the policy holders in our great life in
surance companies bringing them to their
senses. The way matters are now going
the policy holder gives himself completely
over into the hands Of the company to pro-
tect those dependent upon him. He NAV
have the protection he is paying forand he
may not-he is compelled to take the com
pany's word for it. Even with a state
ment Of the condition of the COMPANY he
tore him he can be easily msed
We are told that 1t would be neither wise
nor profitable for company to publish all
OF lts anairs, and that If all the details of
management and expense were known
there would be little stampedlng amongst
the policy holders. This may be true. but
perhaps little dose of stampede would ha
precisely the thing most needed. By the
way some Of these companies are conducted
ana the manner In which their policy hold
ers are treated. good quantity of conceit
and self-importance could be taken ont of
their Officers and the business of Itfe in
eurance be all the better for ~