The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-09-24
THE HOME COMPANY PROBLEM
DANGER OF LARGE COMPANIES.

the questions of the cost OF life lnSur-
ance says it "costs more than it ought
to- and adds that North Carolina
companies with their small expenses
can insure more cheaply than those
companies whose money is handled by
the Rockefeller crowd to the injury
of the people"
The Statesville Landmark copies the
above comment of the Winston SEN
tinel and says:
They ought to but they don't. The
North Carolina companies charges as
much for insurance as the Northern
companies, but they propose to give
better returns. Most of US would pre-
fer insurance at less cost and not so
many promises of big returns. 1t is
the promises of big returns, not real
lied, by the way, that has given the
Northern companies. SO much bust
ness. But between the two, by all
means patronize the home companies. >"
There is food for thought in both
these statements. The Winston SEN
tinel is right in saying that insurance
costs too much. That is apparent
from the fact that nearly the entire
first payment is given to secure the
policy, the big commissions paid to
agents, the cost of management and
the extravaganza in the conduct of
most of the big companies. 1t is equal
ly true that home companies with
their small expenses can insure more
cheaply." The home companies can
get five and six per cent. for their
money and keep it busy, whereas
much of the money in the big New
York companies brings only two and
three per cent, whereas it formerly
brought five and six. Before the
present investigation was ordered
there was a plan on foot by the
big three in New York to in
crease the premiums on the ground
that interest rates had fallen and not
more than three per cent. could be
realized. Our home companies, there
fore. can get twice as much for their
money, and therefore pay back more
money to the policy-holders in diyi-
dendS.
The Statesville Landmark says that,
while our home companies can insure
more cbeaply they don't" but charge
as much for insurance as the North
ern companies" We have not exam
ined the rates charged by home and
New York companies but accepting
the Landmarks statement as true, let
US consider whether the home COM
panieS at this time are not acting wiser
to charge what are termed standard
rates with a promise of a square deal
in dividends, than to reduce the pre-
miums. There have been many skep-
tics in North Carolina who have doubt
ed the ability of North Carolina folks
to manage life and fire insurance
companies The men at the head of
these companies have had to over
come this skepticism and doubt. If
they had offered to write insurance at
a low rate-as low as they can do it
safely-they would have been met by
the statement: ct cannot be done,
and when an insured person dies, his
family will not be paid" If there is
anything that a man wants to be per-
fectly safe it is his insurance money,
and if the home companies had sought
business by offering cheapness, there
are many who have insured with them
who would have been afraid they
couldn't insure at less price. than the
great New York companies. They
have, therefore, gone to the people
and said: I'VE have adopted the
methods that experience has shown
are perfectly safe. We can conduct
our business more cheaply than any
New York company. We have abund-
ant assets to meet all our obligations.
We can get six per cent. on your
money, whereas the New York COM
panies do not get more than three or
four per cent. Insure with us and
We will return you every cent of d.
vidend that can be earned by economi-
cal and honest management" That
is the guarantee that the North Caro-
lima companies make to men who are
asked to insure in home companies.
1t is a guarantee backed by deposit
of bonds with the State Insurance
Commissioner by men of known in
tegrity and business capacity The
North Carolina Insurance Company,
well organized and safely managed,
is as sound as the greatest New York
company because it has all the assets
it needs Not long ago North Caro-
lima banker sat next to two New York
bankers whose assets ran into the
millions One said: MY bank has
fifty million dollars of assets" The
other said "My bank has seventy
five million dollars of assets" 1t was
then the turn of the North Carolina
banker to speak, and he said: My
bank has all the assets we need"
Though it was only in the thousands
where the New York bank was in the