The daily morning journal and courier., 1901-02-23

where we stand to-day, and what tn propriety of our attitude, past an present, if is necessary to review, tn main features of the development of tn business of life insurance during tn fifty-five years of our corporate exist ence, which cover practically the whol history of the business in the Unite, States.
 Fifty-five years ago there was no To cal business experience to be guided by The companies organized about tha time took as a guide the experience o the English companies as being tha most likely to be repeated here. The! assumed the mortality shown by thu actual experience of IT English coTnpa nies per cent annual interest, and z considerable margin of loading" fol expenses. Their plans were very few and simple. They realized that the right business of life insurance com. pany was to insure lives and to make that insurance cost the premium payer as little as possible. Commissions ant all expenses were pitched on a low scale. Rates of interest were fairly high. No provision was made for any return on lapsing policies. If a premi. um was not paid all former payments were forfeited to the company, no mat ter how large the reserve or surplus that had been accumulated from them This was very large source of profit but a great cause of complaint on the part of those who had tofgive up their policies, especially after they had be- gun to learn that not only had their premiums paid the cost of their policies up to the time of lapse, but had also provided reserve fund which was for the future protection of their policies and was therefore not needed by the company when these policies lapsed and ceased to be liability
 Dividend Periods
 In view of the lack of experience and the small amount of business, and fol- lowing again English precedent, divi- dends were made only at the end of five-year periods, or were not begun on any policy until it had run five years. The profits from forfeitures the high rate of interest, and the savings from the low expense rate, all contributed, in the carefully managed companies, to make the dividends unexpectedly large. It was not many years before annual dividends became the general practice.
 Non- Forfeiture
 Presently the ineuuity of keeping A mans contribution to the reserve on a policy which had lapsed and ceased to be a liability, and the current cost of which while it was in force he had fully paid, began to be more clearly seen and more generally understood. Monitor feiture" became one of the strongest competitive attractions. Companies vied with each other in doing equity to lapsing policy holder.
 Changes in Plans and Premiums.
 As an alternative to annual premium payments during life. rates were made for the payment of all premiums in limited period of years, as ten, fifteen, etc, while the policy covered the whole term of life.
 Life endowment policies were intro duced, to cover a certain term of years as an insurance, and payable at their face at the end of the term if the in- sured survived it. Where the policy term was long enough to cover the pe- riod of life when one has others depend-' ent on him, and the policy holder was so young at the outset as to make the endowment part of his premium conn., parat1vely small, and so long as the companies kept their expenses down, this kind of policies served a fairly good although the endowment fea- ture costs much more in life insur- ance company than in a savings bank, because of the much higher rate of general expense
 Along these general lines, which, within judicious limits, were mostly lines of distinct improvement the de- velopment went on without any striking divergence from certain indisputable accepted principles govern ing sound and equitable practice, until about 1870.
 New Departures. s The previous decade had seen the of multitude of new com oanies which copied the plans of the older ones and promised to repeat their success. But, in order to attract agents and get business, they found or
 
 commissions to agents, and to incur such other expenses, as to absorb, not 'nly all their surplus, but so much of heir reserves as to send the most of hem into bankruptcy. Tn the late eos he cry had been that no properly or sanized life insurance company could ail. The early '70's showed that con- luct was quite as vital as organization, md that the expense account could 'leed to death the most correctly organ zed concerns; and they died by the lozen.
 Motive for New Schemes. 1 Conspicuous among the competitors f that time were certain companies which were trying to fight their way to he front by such high commissions and ther considerations to agents as should raw them away from the more conser- ative companies, and so build up agen- y forces that should dominate the field. ividends where those equa1ing the bet CT companies had been promised that 0 agency force could hold their policy olders, and their business began to ecline with alarming rapidity.
 The high expenses could not be got an rid of without losing the agents. here was for them no other attraction. therefore, the only escape from the fate f so many others lay in some scheme , get the dividend question out of the 'ay for at least a long time; such a