The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-12-20
Many Persons Think This Would
Be a Panacea for ALI Ills, but
There Are Others Who Distrust
It's Absolute Efficiency.
UNCLE SANS SUPERVISION
NOT ALWAYS SUCCESSFUL
Record of the Insurance G
panies Is an Enviable One, -.
Their Future Prosperity One
that Is Beyond a Hint Of Sus.
picion.
BY HERBERT vANDERHooF.

tiers, lit appears that way has been
discovered to regulate the whole sub
ject."
"Yes?" said his friend, interrogatively.
"And what may that way be?"
''Why, it would place the life insurance
corporations under the control of the De-
partrnent Of Commerce. This department
would have the power to inspect the
books of the companies and make any
regulations that it deemed advisable. 1t
could restrict them in the matter of in
vestment to certain classes Of securities,
for instance, the idea being that this
governmental control would result in a
great saving in the operation of the COM
panies, and therefore bigger dividends
to the policy holders
Whether control by the government
would result in any greater efficiency
on the part Of the life insurance COM
panies, or in any greater return to the
policy-holders, is a question that Is yet
to be determined. Government control
of corporations has not always proved
itself success. Uncle Sam, for instance,
maintains a rigid control over the ma
tional banking system, or at least is
supposed to do SO, but he seems to be
| unable to prevent banks going to smash
sometimes.
| Chicago has had a conspicuous instance
| Of that fact this week, when bank
accounted veritable Gibraltar was COM
PEELED to close through operations car
| ried on in spite of the banking laws.
And yet this bank had been regularly ex-
amined by the national bank examiners,
and had furnished sworn statements OF
it's condition whenever the comptroller OF
the currency called for them.
| Magic In Government Control.
But there is something magical co Q
ment, government control" 1t is assoc
ciated in their minds with honesty and
efficiency. when, as a matter of fact, il
me- rs neither aa ioI Men are not and
lation, and this fact might as well be
thoroughly comprehended AS long as
human nature is constituted as it is, SO
long will men be dishonest, and so long
Will inefficiency in the conduct of great
| business enterprises sometimes become
| unpleasantly conspicuous.
The national banking system is not the
only conspicuous example of the power
lessness Of government control. There
have been for number Of years statutes
on the books designed to regulate inter-
mission has devoted it's entire time to
correcting the abuses in railway rates,
by which one shipper is given an unfair
advantage over business rival. Yet the
before the law was passed.
On the other hand, there are two other
considerations that on their face might
prove distinct advantage to the life in
surance companies, If they were placed
under federal control One of these is
that the companies would be no longer
state legislatures, who find attacks on the
insurance companies one of their most
lucrative perquisites. A venal state in
surance department. with the assistance
of a few corrupt legislators, can make a
heap Of trouble and expense for the life
insurance companies.
What is life insurance company to
do In such case? Is it to allow inimical
legislation to be passed without an al
tempt to prevent it, or is it to fight
against this legislation with all its power?
If it's officers did not fight they would be
unfit to hold their offices. It is the Off
GERS who are the trustees for the policy
holders, and when the company is at
tackled it is in reality the policy holders
who are attacked.
Money for Legal Expenses.
How a6OS.t are such attacks to be met and
shows annually that large sums of money
are paid for legal expenses. Not ali.
part of this item is paid to counsel Who
appear before legislative committees and
oppose with all the skill they possess
legislation that is of hostile nature to
| SIAC AilSulduCG lIpdTleS. LAWYERS with
the peculiar ability to conduct such cases
are. men who realize their value, and
their charges are in proportion to their
merits. 1t is not to be inferred that
cealed or covered up by this item, al
though sedulous attempt has been
made to create this impression in the
public'S mind.
The second consideration that NAV he
cited In favor Of federal control of the
life insurance companies is that 1t would
90 away with the multiplicity of exam
nations that are now necessary under
state control. These examinations are
not only a source Of large expense to
me companies, but they also seriously
business. 1t is not possible for a CORDS
or accountants to take possession Of
i. the books of great corporation fol
weeks at time without seriously i'm
peding it's business
Under federal control one examination
would do for the entire country and the
company would have only one bill to pay
where It now may have to pay twenty OF
thirty during the course of year. State
| insurance departments are not conducted
as charitable bodies. the companies are
| expected to pay their expenses. and in
additlon are required to pay percentage
on the business they do in each state.
Aside from these two considerations. II
Is difficult to see where the policyholders
IN the life insurance companies would de-
rive any benefit from federal control The
record Of life insurance in this country
| WhCiC ~ HdS dCllltNSu lCS greatest 0aVel-
opment, is one Of such magnificent re-
suits and such undertaking prosperity
that 1t Is doubtful in the minds of many
| unprecedented students of the subfecl
whether it Is wise to interfere with ex.
listing conditions. 80
Irn3regnabIe to Financial Storms.
AS the life insurance companies stand
today, they are impregnable to any finan.
c1al storm. They have never failed tx
meet their obligations and they are album
dainty able to meet all they have as
sumed in the future. There is no dis
trust in the minds of the public of theft
soundness or the ability of their manage
ment. The few instances of remissnes
and laxness in the management of sucl
certain companies that have been show1
by the Investigation that has been con
Quoted have not impaired the financia
standing of those companies, nor hav
they reflected upon the conduct of lif
insurance as whole. In one way, tn
investigation may be hailed as a BLESSING
because it has resulted in the eliminatio
of certain elements that were undesir
able, and has UNNECESSARILY strengthene
the companies that were the subject Q
attack.
II There is only one thing to be deplore
in connection with this investigation, an
| that is that it has consistently brougf
II to the public notice every feature con
Injected with life insurance that Nigh
Il arouse distrust and has sedulously KEEP
| in the background everything in th
I management of the companies that wa
II commendable and praiseworthy. Sue
Fl one sided Investigations, because q th
livery anfmus that Is unrulE1kably &aOW1
II becorne farcical,