The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1905-09-10
The POLICY HOLDERS INNING.

In the weller of extravagance and
betrayed trust exposed by the investi-
cations so far into the conduct of the
great life insurance companies, the
most alarming feature uncovered has
been the low standard of honor held by
the very men who might be supposed
10 regard their positions as a judge re-
CARDS the ermine or a trustee of an
estate the funds held for the widow and
orphan.
To read that the treasurer Of one of
the greatest companies thinks it honor
able for officials and members of the
finance committee TO participate in
profits due to manipulation of tho poll
icy-holders' funds is bad enough; but
to have the practice defended because
all the officials, or practically all, did
the same thing is cause for real con-
Germ. II the men guilty OF these things
were ordinary employees OF a CONNER
ciaI concern, or even if they we're Off
Gals of a bank conducted for profit
solely, it would be bad enough though
not criminal; but in this case the guilty
ones are custodians of millions in trust
not for their own profit but for the
mutual profit OF the policy holders, and
they have violated their trust fiagrantly
by organizing trust companies and di-
verting the profits Of insurance TO these
companies, eventually to the officials
individually.
Securities have been fioated by the
use OF insurance funds, and the pur-
chase of these securities has resulted
in profits to insurance officials who had
"syndicated' and underwritten the
bonds as individuals. Salaries have
been increased and increased, not in
proportion 10 the services rendered, but
as gratuity unearned. Apparently the
purpose of the men in control has been
to prevent the policy-holders from get
ting the dividends rightfully belonging
20 them, whereas the single aim of
every official should have been the pres
ervation of every cent that could be
earned and its payment to the policy
holders to whom it rightfully belongs.
Fortunately for the American stand
ard Of commercial honor. the investi-
cation has also developed the fact that
wrong-doing cannot always go I'M
whipped Of justice. The downfall OF
Hyde and Alexander and Of Depew and
their ilk is ample evidence that justice,
though slow, is also sure; and in time
honesty Mill oo,,7n into is nm, Mana
over, the Connecticut Mutual and the
Penn Mutual management have demon
strated in the publicity given their af-
fairs that some companies have men
at their head who hold the old-fash-
toned notions OF a trust and administer
their insurance business as conscien-
tiously as they would their own private
affairs. Indeed, one man, President
Greene Of the Connecticut Mutual, who
died recently. seems 10 have paid more
scrupulous regard TO his eompany's
wen-being than he did to his own per-
sonal profit.
Nor are these two the only compa-
MES that bear the light of publicity;
gone through the ordeal of examination
triumphantly and deserve the honor
they have won as high exemplars of
what insurance companies should be
as contrasted with the others which are
all that a company should not be.
Every test applied shows that the
great companies are solvent and more;
they could pay every dollar of liability
and not feel the strain; they are earn
ing immense profits, only part of which
goes to the legitimate owners-the poll
icy-holders; but by the grace of an
aroused public opinion and the demand
of the American people. they will be
compelled TO reform their methods, re-
duce the senseiessly extravagant sal
aries and expenses generally, and re-
turn TO the real owners, the insured,
such dividends as they earn over and
above reasonable, legitimate cost OF
management and operation.