The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-12-03
How the Millions Of Dollars Held
for the Policy Holders Havl,
Been Used in the Upbuilding d
National Interests.
RY HERBERT vAhpERHooF.

or of any other industrial or financial &
institution. Y
The laws regulating the conduct of e
banks, as every one conversant with the
subject knows, are extremely strict. They
may only invest their funds in certain
classes OF securities. They may only
loan a certain proportion Of their funds
to any one person or corporation. They
must make at certain intervals sworn
statement of their condition. In addi-
ton to all these safeguards, they must
submit to an examination Of their con
ditions at irregular intervals, in order. !
that the authorities may ascertain for
themselves that everything is going along
well. Surely, If legislation could assure
their safety and. the safety Of the funds
that they hold in trust for their thou
sands OF depositors, they would never
fail. Yet, as every one knows, banks do
fail, and as rule, when they do the
deposition gets the worst Of 1t.
Contrast the record of the banks Of
this country with that of the insurance
companies. In the aggregate the latter
hold as much. II not more, money in
trust than the banks do. Yet we never
hear Of the life insurance companies fail
ing. On the contrary they so safely
guard the money intrusted to them by
the policy holders that the latter re-
ceive every cent that is guaranteed to
them by their policies, and great deal
more That is what the surplus OF the
insurance companies amounts to. OF
the many millions Of dollars which is
classed as surplus in their annual reports,
every dollar will ultimately go to the
policy holders. This surplus is really
liability. and is constantly being augment
ed by the income from investments. As
policies mature this surplus has to be
drawn upon to make good the companies
promises. -..
Good Reason for Pride.
| That the insurance companies have
| been able to show such splendid results
| in their administration of the vast sums
intrusted to them is something of which
! every policy holder should be proud. "Oh,
yes, says some captious critic. that's
all very well. but it is not SO much to
the credit Of the managers as it is to
the wise laws which regulate Them As
a matter Of fact, the law is entitled to
! no credit, or very little. If law win make
men honest and sagacious, how is it that
| it fails to do SO with the banks AS
| matter OF fact. the success of the insur-
ance companies is achieved in spite of the
! law. In most Of the states they have to
pay tax on the sums they take in from
policy holders, generally per cent Sup
pose the savings that are deposited in
the sayings banks Of the country were
taxed 2 per cent What a howl of in
h dfgnation would go up all oyer the coun-.
try, and what an irresistible wave of
II peal Of such law.
Yet if the savings deposits should not
T Ta Is ali seg dh
to-savings-and that of the most sacred
character. The money that the policy
and support of his wfs
and children in case OF his death, and
he has as good a right to demand it
savings bank depositor. But the policy
holder seldom stops to think of this, tho
at the same time his policy is impaired
In value just to the amount Of this tax.
Acts Of Hostile Legislation.
This is only one, Illustration Of the mat
ter in which the law protects the poll
icy holder. AS matter Of fact. the in
to expend millions Of dollars every year
unnecessarily. because Of the law. Leg
good, easy mark whenever some poll
tician has designs on the millions they
hold in trust There is seldom a session
act Of a hostile nature is not introduced.
This accounts for the large sums that
are charged to legal expenses every year.
sci to argue against and defeat such leg
] islation. It would be the sheerest folly
to TO-, assert that any, any considerable part OF
any public demand, or IS In any manner
in the interest OF the policy holder. II
Is not not and a9d it. is the duty Of the officials
vent this legislation, wherever possible.
If they did not do all that lies in their
the shey wonld rssrsant t. their
proach.
Some adverse legislation might be cas-
! Hy prevented by the force Of public opin-
! such matters. It is safe to say that there
I tical district to make themselves ' power yWr
at the polls. How many so called
Statesmen" would dare to vouch for the
That 81 ensy @oad bs
one: They would know that their future
withdrawai Of the obnoxious measure nns sprea'
\l Building up the Country.
The insurance companies OF this coun.
dreds Of millions Of dollars. and disburs
\ 4 ing annually other hundreds of millions
N It has become the fashion with som,
people to assert that the companies ar,
90 deeply interested in Wall street. with
out at the same time explaining wha
they mean by Wall street But il ,
! man has a large amount of money to In
vest he Is almost certain to go to Wal
street and would indignantly deny tina
he had utilized it, but he has, Just tn
| same. -
Wall street Is the money center Of TN
country. and whenever city or a stat
contemplates an issue of securities TO
\ the purpose of local Improvement. an,
other purposes, anvil street is generaI
LOGGED to for the funds in exchange TO
the securities. In time these securifie
hare disposed Of to banks and indiyid11al
4 all over the country. Our investor ma,
have exchanged his money for securitie
Il q thousand miles from Wall street bi,
hiWaI street first foated these securftie,
Great financial institutions such as tn
insurance companies which are yearl
Investing hundreds Of millions OF doIlars
necessarily have to go where these secur
y tiles are dealt in. Incidentally the none
they thus invest goes to build up the elf
Il les and states which issue the Securities
i But for the assistance the insurance com
Il panfes have thus extended many q rio
= and prosperous city Of this countrq wouI
never have been able to attain the posi-
L ton which 1t holds today. The invest
merts thsu made have not only built u
cities. but have also built railroads. an
thus enable the farmers Of the land I
obtain market for their produce.