New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1909-09-25
WI If H-iS BEEN ACCOM-
PLfSfFED SINCE PROB
ING OF %.
GhASfs IN Lac Haze U'Orhcd to
\ -ld,aRtaet Of PoHcyholders
ard Com panifs Hike.

{ Ia the four years that have passed since the
Insurance inFestis,ttions the public has had
ample opportunity satisfy itself as the quail
tty ana th0roUghresS Of the reforms that have
been instituted and carried out rs a result OF
what developed in 1895 Conditions prior to that
year such ~ render imperative from
every standpoint the probing that performed
with such painstaiing and satisfactory thorough
ness by the Armstrong committee
II is not surprising that the regulation and
practice Of insurance should have fallen short
lDf what y admittedly should have been when
one considers the rapidity ard immensely of the
growth Of the business in the United States
lFhe companies away with themselves to
Speak. not So much beCaus, OF the Terrchcnsible
conduct Of their officers as BY reason Of the fact
that until that time the insurance business was
"a mystery to all save comparatively few per
iSons. These. Ia the main. We're the ones actively
ienGaged in selling insurance ana in managing
the finances of the companies. The policyhold-
ers we're lax and indifferent. and they had not
been awakened 10 a sense OF their responsibilities
as Iocyholdcrs and sharers in the surplus
Accommodations Of the companies
H. custom and engendered by the legitimate
ambition Of the officers to get business and in
Ecrease the number Of pOlicyhoiders practices
grew which would doubtless never have existed
had closer scrutiny been given the management
of the company BY poIcyholders from the begin
ming. The companies absolutely solvent.
and the fear and cry OF the alarnlsts that they
were in jeopardy of becoming bankrupt were
speedily quel!ed once the light was thrown upon
them
WHAT WAS TIE MATTER?
: What vas the matter with the life insurance
companies in 1905? Ii Was stated. and in some
cases established that the policyholders of nut
ual companies had little or no influence or part
in their management and that a system OF per-
petuatiOn in Office vas in operation by the Off
GERS through their control OF proxies Few Of
the Stockholders went TO the trouble 70 vote
themselves.
Stock control of the large companies lacked
public confidence. and it urged for the poll
icyholders that they should be allowed to have
voice in the selection Of directors.
Abuses were charged in connection with real
estate investments and in the purchase of stocks
OF banks and trust companies subsidiary 70 GER
tain insurance companies. in which officers and
trustees were financially interested. and which
were allowed TO become repositories OF large
sums Of Insurance moneys at low rates Of in
terest- Through participation in syndicates for
the underwriting of stocks. in which officers and
trustees shared It was said that companies had
been made 10 exceed their functions and to run
gers and responsibilities.
Companies had made contributions TO pOlitical
funds. in line with organized efforts on the part
Of some of the large companies to procure or to
bloch the enacting Of laws relating to the in
6urance business, as we'll as TO important in
tereSts with which the companies had through
the acts Of their officers become connected The
expenditure OF many thousands of dollars OF
which no proper accounting had been kept was
alleged in these III 1urseIuents
NEW BUSINESS EXPENSIVE.
Complaint was brought that extravagant ex-
pense was gone 90 to obtain new business and
that while the officers depIOred such expendi-
lures they urged that they were made necessary
by the strength Of competition. In this COM
petition. 1t was argued, the practice Of rebatIng
had grown. by which money was wasted by
making allowances and reductions 60 Insurers on
their first premium. This was part Of the proc
ess 10y which excessive commissions and allow
anoes were made to agents.
In regard TO deferred dividends il was charged
that these policies afforded the companies i'm
proper advantages through permitting the ac-
cumGIatiOn of profits for long terms without
an accounting: that large proportion OF out
standing insurance was In the form OF deferred
dividend policies: that its extension had been
accompanied by estimates Of profit TO the
policyhOlder that had not been realized: that
on this form OF policy larger commissions were
granted to agents than on other forms OF bust
ness: that the disappointing results OF deferred
dividend insurance were due to n reduction on
the rate Of interest Investments but princi-
paIly TO the wasteful methods OF the companies:
that the companies were at variance as to the