The Intermountain Catholic. (Salt Lake City [Utah] ;) 1899-1920, 1905-11-25
INSURANCE GRAFT.

actions which, il INDUCED i'll by bankers those
engaged in other lines of business would land them
in the penitentiary for good long terms. Yet these
life insurance officials coolly recite stories Of the
most barefaced trickery and fraud practiced by
themselves against their own companies, and they
become highly indignant when it is intimated
that such practices are fraudulent. They are hor
rifed beyond measure at the suggestion that they
resign They have been fattening at the crib SO
long that they resent any intimation that this
money belongs to the police holders, and that they
merely the trustees of it. They speak of their
methods as being "the custom of life insurance
companies" thereby implying that that is sufh
cient and that such customs supersede all laws of
God or man.
These great aggregations of money illustrate
the enormous earning power Of interest These
companies. after paying excessive commissions to
SCENTS, millions of dollars for advertising, absurd
~ large salaries to officers, brides to legislatures
and officers, are still piling up their assets at ire
mendous rate. The real basis of this increase is
the Understanding securities held by the
panies 1t is true that they have gone into Syn
dicateS and made big profits but it turns out that
these profits were Immediately absorbed by the
terprising officers, i'll way another. The way
they worked the syndicate proposition was, TO buy
some manufacturing plants at low figure, then
form consolidated company, issue stock for
era times the original stock, and then sell the stock
at premium to the dear public After making an
immense profit in this way with the company's
money the officers would then divert the profits
or most of them, into some other company in which
they we're interested, and each take big sl
nd +bo-o IL
called "get-rich-quick' schemes, those who manipu
late them are called "fakrs," and the making way
with the money is called 'embezzlement." Not so,
however, with the august life insurance men. With
them the terms are "syndicates7 high fnanciers,"
and participation"
The question arises, how is this state of affairs
to be remedied! By state supervision? That seems
to have been powerless so far, against such i'm
mense money power, in the hands of INSCRIPTIONS
bribers. By federal supervsion2 That would
doubtless require an amendment to the constitution
of the United States, and would take long time
to accomplish. The simplest remedy would seem
to be to remove the cause of the abuses. The real
cause of the abuses is that these life insurance
companies have gone beyond the realm of life in
surance, and into the banking business. They in
lures than life insurance. Instead of charging the
policy holder what it is worth to insure his life,
payable at his DEATH and combining themselves to
that, they insist upon charging the policy holder
double or treble the amount, the promise that
they viii return the excess to him, with interest.
In so far as they write contracts of insurance con-
tanning this feature OF depositing money with
them for Investment they become bankers, and
should be regulated as SUCH The result of this
method is, to place in their hands many millions of
dollars, over and above what possibly be
needed to pay death losses. The company does not
promise as does a regular banker, to repay the
amount so deposited, with agreed rate of inter
est. Not at all, that would not be in accordance
They merely promise to pay something, which can
only be estimated. and which must be left to their
idea Of fairness as to amount. Think of banker |
to do business ON that method. And |
think what policy holder may expect from the
fairness of these teaches and grafters as shown by
this investigation.
Why should not the life insurance companies
confne themselves to life insurance. Surprising the |
fire insurance companies should get together, and /
refuse to write fire insurance for the insurance |
alone but should demand double or treble the /
amount, to be Invested" by them, and to be re-
turned to the policy holder at such time and in
such amount as they would estimate" Yet it
would be as reasonable as the contracts written by
the life insurance companies. Suppose the rail
road should form like combination, and charge to
shippers of freight and passengers, double ire
Die the rates. the promise that they would invest
the surplus, and make such settlement later as
would seem to them to be fair. How long would
the public stand it? The same might be illustrated
oy gas and electric light companies, water conpan
les and other companies which the public generally
1atronize.
The exact cost of life insurance can be figured
% nicety-more so than any other line of bust
less. There mortality statistics, the accuracy
If which has been proven for generations, and are
% accurate as to form the basis of legal decisions
elating to annuties. life estates, etc. The insur
lnce companies rely upon them, and set aside their
eserye to pay death losses accordingly. While the
ife of particular individual is uncertain yet the
average life Of one thousand people is absolutely
certain. By fixing the rate according to these sta
isties, adding a reasonable amount for expenses
md profits, schedule could be arranged which
would regulate the business and keep it within its
,rn,or obonra1- Eaob ofota should I,acr 1ou-s