Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1905-11-10
The Cost Of Life Insurance.
[Springfeld Union.1

Walter Wellman, the capable WASH
ington correspondent Of the Chicago Rec
ord Herald, is filling in the interim be-
tween Congresses by studying a number
of economic and civic questions and Civ
ing the readers OF his newspaper the
benefit Of his information and observa-
ton. Just at present he is writing a
number Of letters from New York on
questions relating to life insurance, the
topic, Of course, being inspired by the
disclosures in the Equitable society. In
one Of his recent letters he asks this
question: Does life insurance in the
United States cost too much?" and he
answers 1t with very emphatic Yes"
Serene s. Pratt, an economist Of dis
tinction, in a recent article in the Worlds
Work. made the statement that the ex-
pense of 20 American life insurance
companies in 1894 were ia per
cent. of the income, whereas in Great
Britain the expenses Of ordinary life
companies were only go per cent. Of the
income, and in Germany the government
Industrial insurance expenses were per
cent. Mr.. Wellman puts the percentage
of expenses to income even higher, and
says that 20 per cent. is probably correct.
This is more than twice the cost in Great
Britain, and nearly three times the cost
In Germany. He says: obviously Ameri-
can companies spend too much money in
management. There are too many high
cent offices, and, above all, too much
money going out to the agents and solicit
tors who drum up new business"
There has recently been published by
a Boston expert, a volume entitled THE
Brown Book of Life Insurance Econo-
miles," in which a table is given Of
twenty-five leading companies, showing
the expense cost per $1,000 Of insurance
in force, and the ratio to premiums of the
various items Of expenditure. From this
table 1t appears that nine Of these COM
panies have their home offices in New
York city. The remaining sixteen are
scattered. although located chiefly in New
England. The average expense cost of
the nine in New York is $13.05 on each
$1,000 of insurance in force, whereas for
the sixteen companies outside of New
York it is $3.50. The average expense OF
the entire twenty-five companies is $3.50,
and every one Of the nine companies do
ing business in New York city is above
the average. All but four OF the sixteen
companies outside Of New York city are
below the average. In commenting Mr..
Wellman says:
These are significant figures. They
show that life insurance in New York
city is keyed too high The struggle for
bigness, the eager rivalry for rapid
growth, participated in SO keenly by the
managers here, are producing their in
evitable effects. Everything is keyed high
In New York. Living is cosby. money
is spent at the rate which amazes US
homely folk from the modest West or
the easy-going national capital. Salaries
are big in New York. Men live high. 1t
costs as much to set a decent dinner
in this town as we Western boys used to
pay for a weeks board.
THE golden stream that flows into the
treasures of life insurance companies
of this metropolis comes from all parts
of the United States. 1t is one of the
tributes which the country pays to New
| Yorks financial dominance. And the
high-salaried, fat-living, automobile run
ming, swell-apartment, trips-to- Europe
men who control these golden streams
are not as careful or as scrupulous as
| they should be in the management Of
their trusts In these figures we have the
| proof of it."