The Intermountain Catholic. (Salt Lake City [Utah] ;) 1899-1920, 1905-05-27
THE LIFE INSURANCE PROBLEM.

in this country.
: We have before us copy of the New York In
surance Journal, the major portion OF which Is
devoted to discussions of this unfortunate embrog
lilo, and incidentally these afford some startling
revelations to the perils which are menacmg
the sacred interests of the millions of policy-hod
ers in these institutions.
One of the first articles to catch the eye appears
under the caption, what Harm Has the Equitable
Squabble Done Life Insurance" In this article
the editor stoutly maintains that possible harm
can ensue; that whilst the business may temporarily
suffer because of aroused feelings of dstrst, the
principle of life insurance-or the system under
which it is conducted-s so pre-emncntly sound
as TO preclude any harm being done it by the
Equitable, no matter how sensational may be the
developments concerning its affairs.
With this conclusion anyone who has made a
study of the legal reserve or 'od line system is
readily disposed to coincide In theory it is abso-
lutely sound, As the system is, unquestionably,
the most benefcent of our modern financial insti-
tutons, it is extremely regrettabIe that cannot
hold, with "a like degree of confidence that it is
equally sound in practice.
To east any suspicion, however slight, upon the
system of life insurance, is repugnant task. 1t
is exceedingly unfortunate that anyone should be
| deferred from avaing himself of its benefcent
provisions-pro he might do so with the de-
| sired degree of safety.
When, however, the mutual system, which the
public had been led to believe was the very acme
of achievement in the line of life insurance is as
sailed by most cogent arguments against its sound
ness by such eminent underwriters as President
Durham of the Travellers and President Alexander
of the Equitable is irresistibly inclined to
pause and ponder-to ask himself whether after
ALL his confidence in the system of life insurance
in general is really well founded.
The gentlemen mentioned, in articles appearing
IL the journal above referred 20, insist that it is
impossible to conduct these institutions, when
they have once attained the stupendous propor=
tons which several of the most prominent and
popular companies already have reached, on the
mutual plan; that their affairs must, of necessity
be managed by who have been chosen by the
holders of proxies; that by that means unscrupulous
men may become autoeratc in power and loot their
policy-hoders to their hearts content. If the
writer's mentioned do not use the precise language
that here appears, the latter at least presents the
essence of their contention; and unfortunately,
their arguments present a most plausible case.
The purpose of these men in exposing the weak
ness, in practice, of the mutual plan of life insur
ance is to establish the superiority of the stock
concerns, such as the institutions over which they
preside. Concedng that it is well to maintain the
"proft-sharing" feature, they contend that this |
may be the more satisfactorily accomplished under
d management that is responsible to a limited NUM-
Der of stockholders who will not entrust the selec-
q
proxies. In this way, they caim, the funds of the
will be more faithfully administered
than under the mutual autocratic" system, which
latter system must stand finally condemned, in the |
light of the cogent arguments of we'll qualified
to determine the questions at ISSUE
Now if this ALL the insuring public might,
with good grace, protect themselves against the
dangers inherent in the mutual plan by availing
themselves of the opportunities afforded by such
stock companies the Equitable. But in view of
the fact that that company is Withholding from
the pohcy-holders approximately $70,000000 of the
dividends to which they are Justly entitled-legal-
y withholding, in the shape of deferred dividends !
to be sure-and that the attitude of the stockhold-
ers is such to Justify suspicion that
hey have unjust designs upon this vast
o inspire the public with any great de-
gree of confidence in this 'stockholder-managed"
As heretofore pointed out in these
columns, the fact that the 100000 stock of the
Equitable, upon which the dividend is limited to
$1,000 by the company's charter, is, or was until
ecently, held at Approximately $150O0,000, seems
o afford conclusive proof that the holders of this
confined to the company's of
icers-are not disposed to administer its affairs
trictly in the interest of the policy-holders.
Under the conditions herein elucidated, the {
question may well be asked: (Which horn of the {
ilemma shall the public siezel"
As the writer has no desire to disparage life l
in which he is a firm believer he would
ain indicate judicious course for the insuring !
ublic to pursue. Available space will not how S
yer, admit of doing at this time. 1t is hoped S
hat more favorable opportunity may be afforded 1
4 the future, when an effort will be made to L
Indicate the clements of soundness in the various i
fe insurance companies bidding for the patron L
&c of the public