New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-02-23
THE INSURANCE REPORT.

searching and SATISFACTORY as was lIs "OhA va
examination Legislative investigations are
proverbially unfruitful. serving more often as
an outlet for personal spleen and political ami
mostly than as an effective instrument of reform
The Armstrong committee has been n cOnspic-
mons execution TO that rule. With complete de-
votion to the task of improving insurance al
fairs il has diligently. thoroughly. imparualIy
and ably delved into the secrets OF the business
aud revealed shocking abuses regardless OF
friend or Toe Neither political nor personal
pressure could swerve the committee from its
duty 1t will probably never be known how
great that pressure was All warnings by the
companies of what they might expect II they
asked too particularly about campaign contrtbu-
lions or lobbying bills were lost upon Senator
Armstrong and his Republican colleagues, and.
whatever blame the Republican party shares
with the business world and the whole COM
munity of which il is part in the insurance
abuses we owe TO the fearless and patriotic work
of these Republicans and their Republican coun-
sci Mr. Hughes and Mr.. Mckeen. the complete
ness Of these revelations leading not merely 10
reform in insurance but it may be hoped 10
higher moral standards in all business. The
public has followed the long continued exam
ination. al which almost daily high regulations
suffered. with great interest, perhaps not en-
tirely creditable If as may be believed. large
part OF that interest was due TO keen desire
for Righteousness. possibly something of ii was
also due TO the jackal in human nature, the love
TO tear down and TO glOat over ruined greatness.
The necessary work Of tearing down has been
done. The work of reconstruction is at hand.
The committee, which perfOrce furnished
daily sensation 10 the pOpulace, now reports its
serious conclusions and offers its remedies. All
that was righteous in the popular interest must
be as intent upon understanding that report and
upon evidence Of scandals.
II would be useless within the limits of
newspaper article TO attempt any discussion Of
the details Of q report filling more than three
hundred closely printed pages. a perfect under
standing of the exact effect of the many tech
meal recommendations can come only after long
study. Nevertheless there are few large feat
ures Of the insurance problem the handling of
which indicates the scope and spirit of the pro-
posed reforms. These 90 10 the root Of the evils
exposed in the conduct Of the great insurance
companies. Concerning industrial Insurance the
committee has little or nothing TO say though
| believing there is need Of reform in that quar-
ter. because II had no time TO give attention TO
the subject a recommendation is made thar
the law be changed so as 10 prevent the incor-
pOratOn hereafter of assessment or co-orera-
tive companies. II would secure true investiga-
ton by publicity of lists Of poIicyholders. by
giving an opportunity for a cOInparariveIv
small body to make nominations. and by
The distribution Of official ballots TO all mol
lcyhoiders containing the names of regular
and independent candidates. Such plan while
giving full opportunity for opposition 10 mani
fest itself would also protect companies from
snap votes and chance changes OF administration
Stock companies are encouraged 10 mutuaIize
ana the propriety Of permitting the purchase and
eXtlngulshmenr Of stock ar a reasonable value is
urged though that recommendation does moi
apparently contemplate valuation unrelated 10
u4Fldends and possible lien on surplus, but based
on Tie speculative value OF the control for busi-
hess purposes Of vast sums Still more impor-
tant for curbing the misuse Of funds is the rec
onmendauon that all future investment in
stocks be prohibited and also investment in col
lateral trust bonds based TO more than one-third
OF their face value on stocks. Present stocks
would have 10 be disposed of in five wears
Manipulation Of real estate would also be greatly
restricted All syndicate participations and all
interests Of officers or directors in purchases or
sales are 10 be forbidden The amount of new
business is 10 be limited according TO the ONT
standing business-in the case Of the three great
companies TO Sl50.0OO.00O q year-thus stopping
the enormous agency waste. Relating is to no
more strictly forbidden. deferred dividend mol
icles are II be prohibited for the future and
surplus up 10 the full limit of a conservative re
! serve is TO be enforced. Forms of policies are.
10 De MADE standard and the right of any noIicy-
holoer 70 resort 10 the courts without the Der-
mission OF the Attorney General is 10 ne secured
These are the chief recommendations resne,t
/ ing insurance proper. Campaign contributions
and secret expenditures for legislation are ultra
/ UfTeS' ana are so treated in the report The
/ remedies suggested properly apply 10 all cor
/ he
notice IN connection with insurance the com
mlttee wisely proposes legislation TO cure them.
II would make political contributions bv insur-
ance companies criminal prohibition in which
| all corporations not themselves political might
| well be included II would also sion tho sacra+
expenditure Of money, which made possible tb.
methods Of Hamilton Fields and Jordan and
| would also forbid any person TO influence Iegis-
| Iauon as the paid representative Of anorbar
| without making public record Of the fact stat
| ing the measures he is concerned with and rho
| interests he represents. This is a plsp which
| mas hitherto been described and commenda5 nv,
The Tribune, and think il would 20 far
| toward curing the abuses of the lobby and
toward discouraging the activities of STRIKE lao
| islators
The committee does not believe that additional
power Is needed by the Insurance Department
| though IL suggests many points on which NOR.
specific reports should be required The commit
tee thinks the department has failed TO exercise
It's powers: and, while making allowance for ,+s
avowed theory that the sole duty of the s,ste
| omcals was 70 see that companies were solvent
not 10 supervise their management the commit
tee points out that the examiners own renorts
departed from that theory and pretended 10 give
assurance 10 policyholders that their propertv
was not being wasted. Criticism OF the dena r+
Ment Tor hhoits OF many years standing under
kfa&. t.