The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1899-11-01
LIFE INSURANCE.
Mr.. Belts Answers Mr.. Duncan.

Editor of The Tribune
Sir: Although l can hardly spare the
time, l Will endeavor to devote a few
moments to answering Mr.. Duncan's let
ter in The Tribune Of this morning Gnd
give lin the Information ne asks for.
In the first place, Mr.. Duncan says that
his letter was no more in the nature of
the advertisement of the two companies
referred to in his first letter than was
mine, which appeared in The Tribune of
last Friday morning in regard to the
Three Giants"
| would remind MIR. Duncan that l did
not bring forward the words Three
Giants" These words were first intro
duCed by the editor of The Tribune; con-
sequently, | was at liberty to use those
words without any indelicacy. Had l
used the term "rhree Giants" first, then
l would have been in a position of seek
ing an advertisement. But, under the
circumstances, the matter appears in an
entirely different light which he cannot
say was the case in his reference to the
companies named
Secondly, as to why used misleading
ratios" this was done simply for the in
formation of The Tribune. AS l natural
ly presumed that he had gathered his in
formation in the first article from ratios,
l took those ratios and showed what they
purported to prove and then showed the
fallacy of relying upon them.
Thirdly, as to "assets held": AS MIR.
Duncan says, ANY one with the first
grain of sense would understand what
assets held means" in so far as the re-
serve as compelled by law was concerned,
but that does not include the surplus.
Surplus may be any amount that COM
pany chooses to hold, and unless there is
a tontine liability against the surplus, it
must necessarily be sweated from the
poliCy-hOlder. There is, however, no rea-
son why we should draw into our COM
PARSONS the amount of reserve held; this
amount being identically the same in all
companies and so understood, there is
no reason that it should be considered for
a moment
We, then. come back to the surplus
The adroitness of Mr.. Duncan consisted
of the manner in which he associated a
company, holding n surplus of nearly %
per cent, with the other companies
whose combined surplus amounted to lit
tie over 10 per cent. As Mr.. Duncan re-
fers to the annual dividend companies In
the matter, presume neither of the COM
panies mentioned has much tontine insur-
ance In force Therefore, the enormous
percentage of surplus must have been
withheld from the policy-holders. The
question naturally arises, for what rea-
son? AS it was not returned to the pol
ICY -IlOlNtTS WHO ultu OF H1dluTcu IIlelF
contracts in the past. what reason has
the insuring public to believe they will be
treated more fairly in the future?
Fourthly, we come to the matter OF
"threshing over old straw" The reason
I used this phrase was, because i have in
my office ten or twelve ratio statements
similar to that used by Mr.. Duncan in his
letter Of the 2Sth inst, which our agents
have gathered up, from time to time
them a LONG
which were issued by Mr.. Duncan's COM
pany, and some by Mr.. Duncan himself,
in competition for business. l therefore
felt justified in saying that Mr.. Duncan
was "threshins over old straw"
In regard to the volume of bust
ness: AS Abraham Lincoln truly said
You can fool some of the people all OF
the time and all of the people some of
the time, but you cannot fool all of the
people all of the time" l would there
fore say that the immense number of
people insuring in the larger insurance
companies is the best evidence of the
value of those companies to the insuring
public This may be, however, due to the
fact that there has been no Moses to
lead this immense number of people into
q better way of insuring lives.
He also takes exception to the "larger
companies" as he terms them, going 20
the ends of the earth for insurance, and
asks how this can benefit the American
poliCy-holders. For his instruction
would say, it benefits the policy-holder
In two ways: Firstly, because 1t gives
us better averaged mortality and bet
ter security. An epidemic that would
effect one particular portion of the ccun-
try would not effect the whcle world. We
therefore get better average of mortal
ity and right here l would say that the
mortality of the cities of Europe
is better than is the mortality of
the American cities of the same
size, owing to better sanitary pre-
cautions. Then again, a financial crisis
that would effect the securities held en-
tirely in one country or one section CT
the country, would not effect the whole
world. Thus, by going over the whole
world for insurance we minimize the
question of mortality and financial loss
to a great extent.
Then, again, where an insurance COM
pany is supervised by only one govern
ment (and practically the supervision of
the different states of the United States
is only one supervision after alD, mis-
takes may creep in, corruption may be
possible; but where we go abroad under
different governments,t those governments
hostile to American Insurance companies.
we must secure a more rigid standard
Of governmental supervision. For in
stance, the countries or Austria, SWitZer-
land and Prussia will not admit any for
eign company to do business unless all
securities of a fluctuatirg character and
doubtful farm mortgages are eliminated
from their reserve Gssets; and the larger
companies who do business in those coun-
tries were forced to teach themselves
some new lessons and to face the ques-
tion of governmental supervision from n
new standpoint. Supervision by govern
mcnts we have been accustomed to al
ways, but supervision as presented to us
by our own states becomes a different
problem when presei ted by a foreign
state. There is such a thing as a French
mind, n German mind, and a Russian
mind. The same fact presented to these
several minds becomes a different fact;
and so supervision, even though not real
~ more severe, becomes a different thing
on the other side of the Atlantic. But
state supervision is really very much
more severe there than here.
Hoping this will convey the information
that Mr.. Duncan may desire, am
Very truly yours
n TT