Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1911-02-08

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Grand Forks Herald: The follow
ing communication from we'll known
insurance man relative to bills now
nending in the legislature has beer
received by the Herald:
REGARDING TrimbIe Bill on insurance
lnvestments-S. B. 104
! Anv law seeking to compel the IN
vestment of outside capital, In a stats
is as unsound in principle, as lmprac
tical in operation, and as un-Amerlcan
in shirt, as a law fixing the maximum
nrice of bread or the minimum price
If wheat. It cannot be done.
Legislation to force investments In
any locality is not only unwlse ana
unfair, but unsuccessful, and TINS Is
especially true in respect to 1unus
held by life insurance companies: Inc
only and inevitable effect of the
Trimble bill would be to repel all
life insurance investments ana 10
drive all foreign companies out OF
the state. Perhaps this Is the rea!
object of the bill-if so our local
friends are digging their own graves
bv supporting this bill, for 1t would be
lust as impossible for a local com
pany to comply with its provisions
as for q foreign company.
without any compulsion but oper-
ating under sound investment rules
and observing simply the~1aw OF sup
nly and demand, the policy holders
money naturally seeks and finds Sc
! curities which represent the pohcs
holders local interests.
Texas is the only state IN the VI
ion that has passed laws trying 10
force Investments. Although the Tex
as bill has been introduced IN great
many legislatures during the past
four wears. no state has been foOlsn
enough pass it, and Texas is now
seriously considering the repal Of the
law because it drove all reputable
life insurance companies out OF the
state, to the tremendous loss OF the
state of Texas in revenue, In 1nsur'
ance and in all the benefits that lie
insurance gave to the citizens OF
Texas. :,
The state of Texas in 1907 dis"
credited itself as q natural and de-
sirable field of investment, by pass
ing a bill to compel insurance COM
panies to invest in securities tn Tex
as whether the nature OF the secur-
tiles was attractive to them or not.
Very naturally, investors would not
consent to invest in a state where the
securities were so unattractive that
the legislature found it necessary to
pass laws compelling investment in
them. and therefore any life insul
ance companies of any consequence
that were doing business in Texas
(some 26 in number) promptly with
drew from that state. The result
was that Texas acquired reputation
for hostility to capital and other en-
terprises besides insurance have been
reluctant to extend their business and
invest their money in Texas. Besides
the people of the State of Texas have
been deprived, to their great loss, Of
opportunity of insuring in companies
of recognized financial stability, and
thousands Of families in Texas have
found themselves without insurance
protection.
In addition to this inestimable loss
to the citizenship of that state, the
state itself, by driving out these CON-
panies, has been deprived of a rev.
enue of about $175,OOO per year in
taxes, besides losing thousands Of Cit
liens and their families who were de-
pendent upon the life insurance bus.
mess for a livelihood and found it
necessary to remove to other states.
The solvency and permanency of
life insurance company depends alb
solutely upon the investment Of the
funds held in trust by the company,
When, where and how to invest said
funds is a inter of detail that must
be left to the discretion of the CON-
pany's management, which manage
ment is responsible for the success
or failure of the business.
Investors must have the entire field
of investment open to them in order
to select from it the investments that
in their judgment would be safe and
profitable for the funds of life insur-
ance. Narrowing this field by laws
compelling investments in any locali-
ty, substitutes the law for the judy
ment of the investor, limits the field
of investment, and shifts the respon-
sibility for the success or failure of
the business, from the management of
the company where it belongs, to the
legislature who made Tia law.
Such law would be very serious
reflection on the resources of the state
that passed it. North Dakota is a
state in which capital has voluntarily
come, and where it has found safe
and profitable investment. Are the
good people Of the state ready to con- |
cede that it's attractiveness to capital
has detetriorated and must now be |
bolstered up by laws compelling in
vestments within the state. do not
believe that the best citizenship Of
North Dakota will approve of the SELF !!
qualification of the state which such
a law not not merely implies but
positively demonstrates.
Practically all life insurance poll |
cies now carry loan privileges to poll |
cy holders, some policies guarantee
ing - high as eighty per cent of the !
premium, on demand. II IS per cent |
~ tia nnominm "a afate6 IN tho Trim.