Omaha daily bee., 1906-01-09
PRIMARY ELECTION LAW is FAVORED
Railways Will Probably Object to Change
in Method Of Making Tickets
OPPOSITION TO RAILWAY PAsse'
system of Issuing transportation In
Exchange for Political Fsvors
IL vicious and should
BE Abolished.

Iowa general assembly convened at 10
o'clock today. Lieutenant Governor Jonn /
Herriott called the senate to order and !
Hon. n +. Teachout. senior representative /
from Polk, officiated in like capacity in !
the house officers chosen at the Saturday !
night caucus were elected, George W Clark !
OF Adel being unanimously chosen for |
speaker.
BY agreement among the house members !,
the credentials committee recommended |
that neither Representatives whtmer and
Youde, who are conteesting seat from
o'Brien county, be seated, and that the
matter be referred to a special committee
TO be selected by the house.
Promptly at o'clock q joint session of
the senate and house was held and Gov
ernor Cummins message was read
Governors MessaEe.
In his message to tho legislature Gov
ernor Cummins said that the taxable value
of all the assessed property in the state for
1905 was s6s0,S941l0 the rate for general
state purposes 3.2 mills. The receipts for
1906 including the cash in the treasury,
January /, $s51, us. will he, it is estimated.
A,O74,15. and the expenditures $3,i43, 4s2.
leaving a balance January l, 1907, of 232
The state treasurer under the law received
$Ss.95s interest from the banks in which the
state funds are deposited.
There has been much discussion Of life
insurance among the people in general dur
ing the last two years II is Just beginning
to be "A little understood by the policy
holders The opportunities for dishonesty
and extravaganza have been so fully ex-
plotted IN the Investigations recently car,
Is engrossed with the inquiry. What can
he done to insure fidelity and protect those
who have contributed the immense sums
now in the possession of the insurance
companies?
slider at this time the possibility or prob
ability of federal supervision. nor would it
accomplish anything to repeat the condem-
nation we all feel for the fragrant breaches
of trust which have been exposed.
This state long ago adopted the policy OF
nR s ,ts c ms ssa
plan to deposit securities with the state
treasurer in amount not less than the legal
reserve for Lhe protect citon OF the policy
holders. II seannot be doubted that this is
wise system. We have seen that the pos
session OF great volumes of securities which
can be changed, manipulated and used for
individual profit and Interior pdrposes, pre-.
result, and constitutes menace that ought
not TO be perpetuated.
Would Have Greater Security.
! believe therefore. that from this time
forward all 'old line life insurance COM
panies, organized under the laws of other
states and desiring to carry on business
In the state Of Iowa, should be required to
deposit with the state auditor, securities
equal in amount to the legal reserve upon
the policies issued upon the lives in this
state, for the protection of such policy
holders; the deposits to continue until the
state in which the company is orga lied
shall require deposit of the entire legal
reserve with some state officer, at which
time our auditor should transfer the securi-
ties SO placed with him to the officer OF
the state in which the company s organ
ized. II a few states would adopt this
PLAN II would result in every state having
Insurance companies requiring the deposit.
Another grave defect in the methods OF
life insurance is the accumulation OF a So
called surplus, which, in great measure at
least represents deferred dividends; that
Is to say, the sum which the company IN
a vague way, promises 10 distribute at a
future time to Its policy holders, but con-
corning which there is no specific agree
ment fixing the amount of the distribution
The surplus existing is not reckoned as a
liability for the reason that no policy, sc
far as | have been able to ascertain, con.
tatns any more positive assurance Of dis.
tribution that that the policy holder shall
he entitled to such share of the surplu:
as the directors OF the company may de
termine. The whole scheme OF deferred
dividends has tendency to lead. the bust
tendency which is altogether too promi
nent and which should be checked by such
reasonable regulations as can be prescribed
without injuring the legitimate enterprise o
insurance; but there is a still more poten
objection TO the practice Ii is well known
that the premium charged by a iega
reserve company is made up of two parts
frst mortality second. the loading 70
The actual mortality is considerably les
than the theoretical mortality, and
might happen that the share allotted to eX
pense Is not altogether consumed From
these overcharges In the premium, togethc
with portion OF the interest earned, IA
surplus is created, and the general promis
is to return the surplus to the policy holde
in the form of dividends. I am speakin
now OF "A mutual company, although Il
likewise true of a company having capita
stock, with one exception OF the diminuio
in the earnings caused by whatever clair
the capital stock may have upon them.
Promises Not safe.
No company can safely make any dctiuit
promise with rvsEeot 10 the surplus 5
acquired for the obvious reason tuat il
extent must always be uncertain ono {
the issues In the insurance business al IN
present time, therefore, IS. shall this suI
plus be ascertained Ind apportloued. an
disposed OF In some manner at short iutrl
Nats, shall Il be allowed to acCumulaj
during long periods and then be paid
the pOlicyholuer IN such proportions tt
board OF directors Of the company ma
think best. II seems TO me that ever
consideration of safety and fair deanu
requires that the surplus to be credIte
or paid to participating policyholders sha
be ascertained and paid, or otherwise di
posed Of, every year. l, therefore, recon
mend that the law be So strengthened
10 require an annual accounting betwee
each company and its policy holders so IN;
NJ the close OF each year the policyholdeI
will be- notified Of their respective shar,
in tho surplus of the preceding year m
amendment should also provide for a
options which al that time may be exc
ciscd by the poiicyholder; namely, TO wit
draw the dividend in cash OF to use IL Il
the purpose of purchasing further insu
ance. In SO RECOMMENDING, il must
understood that I do not advocate Il
distribution annually OF the entire surplu
IL would be unwisc to insist that the asse
Of tile company shall az all times be /
Iuorc than It's liabilities. There must be
margin OF safety To cover unexpected an
extraordinary conditions.
IL is believed by many thoughtful m,
that there should be q limit TO the a
sregste amount OF insurance which cor
panV should have outstanding; or. IN 9th
words that the amount AT risk should
restricted 10 some large, hut veasonab
sum l have not been able 10 leach
satisfactory conclusion upon this subje,
and. therefore, make no recommendati,
upon IL IL is. however, so Important
deed. so fIndamental-thst 1 comOly wi
lnsntinued on Ninth Psgs)