Truth. [volume] (Salt Lake City, Utah) 1901-1908, 1905-12-30


ness was written on such plans. He
has gone so far lately as to confess
frankly that the New York Life could
not go on in business without defer
ring dividends for long terms. Now
this is the root of the whole matter.
The contrast is not between straight
life and the deferred dividend bust
ness. All sorts of policies, including
straight life, limited-payment en- low
ments, may have their dividends de-
| ferred for periods of five, ten, fifteen
or twenty years or even longer. Other
policies which are also straight life
or limited-payment life, or endow-
ments or limited payment endow-
ments, might all have their dividends
payable annually. Thus the true con-
| trast and the real issue is between the
payment of annual dividends and the
deferral of surplus for long terms of
years.
"The arrangement is ideal, when
dividends are deferred for the con-
cealment of the condition of a COM
pany and for the denial of the most
valuable publicity to policyholders.
| Add the further fact that certain
clauses in fine print in policy-con-
| tracts, best illustrated today by the
fine print on the third page of all
policies issued by the New York Life,
provide that these companies shall
hold their growing surplus irrespon-
sibly and with no accounting until the
end of such periods when an accoun,-
| ing gives no useful information. The
clause to which / refer reads about as
follows:
| "In any distribution of surplus or
apportionment of profits, the pr.n-
ciples and methods which may be
adopted by the company for such APP
portionment and it's determination OF
the amount equitably belonging to any
policy which may be issued under this
application shall be conclusive upon
the insured under said policy and up
on all parties having or claiming in.
terest Hereunder
| ut assures what such a company
needs, namely, an irresponsible con-
troll of all the margins derived from
| over-charges in premiums and inter.
| est on the same. Margins for safety
| are declared to be necessary and re-
sponsibility for their handling and for
| a proper accounting is denied Thus is
| created very dangerous situation.
| The policyholder believes the repre-
| sensations of some agent and does not
see the while game. He willingly pays
an excessive rate so that he may pos
sibly provide a broad margin of safe
ty and have returned to him some
thing above the face of his policy
from his over-payments. He is advised
and misguided into taking de-
ferred dividend period, mostly of
twenty years. He is not told by the
company or by any one else that poll
cies do not stay in force in deferred
dividend companies handling sur
plus in this manner for as long as
eight years, on the average. Thus
most policyholders on the average
come no nearer than within twelve
years of the possibility of a declared
dividend and never see one The few
who do complete their periods in spite
OF money wasted and give and forget
OF money wasted and graft paid from
this surplus in every direction, may
receive an apparently fair settlement,
but the adjustment leaves millions of
dollars to be diverted to uses such as
have been disclosed and under ac-
countings which are denied. The
question is not, as in the old times of
Tweed and Fisk: Where did he get
it,? the question is: What did they
do with it?' Did they build country