The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-05-21
A DRAIN ON DIXIE
Money! Poured Into North
ern Money Centers.
A Life Insurance President in Tampa
Florida, Gives the Following Terse
Statement of Facts in The
Matter.

ing up the StaIlSllcS anu AdSlS Oli tiAS
question of life insurance. along the
lines of your editorial on the subject
of the great volume of money going
from the South to the East, in excess
of the annual amounts returned, and
/ find the following facts more tersely
expressed by an old friend of mine,
that has just been elected president
of a life insurance company at ram
pa, Fla, with 100000 full paid in
cash capital. He makes the follow
ing statement which are thoroughly
accurate and reliable:
IAN examination of few figures
will show the Importance of the sub
ject, and the immense amount OF
money that is being taken from the
South annually and sent to the great
money centers of the North for IN
vestment
I'm 1902 the official records show
that fourteen Southern States paid In
life insurance premiums $45, 800,
and that the losses paid during that
year were $15,578,163. In 1903 the
same States paid i'm life insurance
premiums $751; 06.S25, and the losses
during the same year were $1S,O7S.-
$50
During the last twelve years in the
State of Florida the receipts have
been $10,165,676, and the losses paid
$2,13O,211. The insurance records
show that life insurance receipts in
Florida last year were $1,527.322, and
the losses were $428.579; industrial
and benefit insurance receipts $173,-
779 and losses $39,S54; accident in
surance receipts $97.17S, and losses
$34,5S6.
Practically all of these premiums
except a part of the industrial bust
ness, and except the agents expenses,
make their journey to the North for
investment, and notwithstanding We
have one of the most prosperous COM
monwealths in the whole United
States, it is az we'll recognized fact
that we are in great need of money
at a reasonable rate of interest for
the development of the State. and for
investment in perfectly. safe securf-
ties.
There is nothing mysterious about
life Insurance. The actuaries of the
country have reduced the system to
an exact science. Our investments
here are just as safe as they are any
where and will yield from 6 to 8 per
cent, while the great companies of
the North do not average more than
8 to 3 IA per cent. Furthermore we
expect to keep our operating expenses
as low as is possible consistent with
therefore, write just as safe a policy
at a less rate than the nonresident
companies.
"Other companies have been or
ganized i'm the South and where prop
erly managed, have met with marked
success. The State Mutual Life and
Annuity Association was organized
and commenced business in Rome.
Ga, on October 90, 1898, and on the
31st of December of that year their
total assets were $1,963.12, and on
the 31st day of December, 1904 their
total assets were $306.632.75, and
their surplus $193,064.28. During
1904 they saved above operating eX-
penses and losses over $4,000. The
Security Life and Annuity Company
of Greensboro, n. c., has also been
eminently successful. During 1904
their total receipts were $123,433, and
their total disbursements $74,927."
Comparing these facts in relation to
life insurance going to the East an
nually Just think of the sinking funds
and interest going East annually, and
then think that only a few of the
largest trust companies allow penny
of interest on these sinking fund pay
ments on our bond Indebtedness. In
fact they don't want the sinking fund
at all, but charge enough as trustee
fees and for the receipts and dis
bursements of the interest on the very
debts the sinking funds are to cam
eel. to make all the money they want.
The great talk about the Equitable
Life Insurance Company handling
such volumes of money, the interest
on the railroad bond debt alone OF
the United States, handled by the
New York Trust Companies. reaches
past the billion dollar mark. A few
of the old line trust companies in
New York will condescendingly agree
to allow 2 per cent straight per an
mum on the sinking fund deposits,
but charge for receipt and disburse-
ment of interest. no matter how long
it lies idle, it must remain without
increase. And yet the South will
continue, as its industries multiply, to
pour in its millions and pay per
cent, per cent and 10 per cent, even
as high as IL per cent, certainly
never less than 6 per cent. to get a
portion of the money back for furth-
er use ard development. So long
have these insurance and trust COM
panies controlled these lines of action
as the medium for passing money be-
tween capital and it's borrower, with
out rendering a dollars worth of adj
vantage to either or assuming dol
lars risk on their part for the profits
they make, they have concluded that
there can never come a change. As
worker for the interest of the South
and as believer in the integrity and
the ability and conservative business
qualifications of the men in the South
and in North Carolina. l believe the
time for change is close at hand,
and when we contemplate men draw
ing salaries of 100000 per annum,
twice what the President of the
United States receives, and paid from
the sacred funds accumulated by the
sacrifices of the toilng people, trying
to protect their children from hunger
and want when they are gone, and
not only one man in single life in
surance company, receiving a $780,
GOO salary, but several others in the
same company, no doubt, receiving
either directly or indirectly rs great
ones. If the fiashIight of publicity,
and the investigation that is now be-
ing made in the Equitable, will strike
a true trial balance of the Equitable's
assets. and deduct from these assets
that are scattered in marble palaces
and other securities that have been
erected from San Francisco to Boston,
and from st. Paul to Atlanta an
Tsof.. e..