davidaulloa/AmericanStories huggingface dataset:
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-15
Economy Results from
Spreading the Risks

Insurance is a business which
gathers undoubted economies with
increase of size. The chief economy
of insurance is the subdividing and
spreading Of as many risks as pos
sible. If the size of risks taken IN
creases with the size of the aggre-
gate business done by any insurance
institution the gain in risk economy
is not found. The theory Of
chances" and the correlated claw of
averages" which give the scientific
mathematical basis Of the elaborate
actuarial tables used by the life, fire,
marine and other insurance concerns,
are solemn and methodical express
sion of a fact which shrewd human
nature sees every day in ordinary
things of life. Happenings unex-
pected and beyond the control Of in
Gividuals come with the appearance
of pure chance, but in communities
of millions, or in nations, these and
other apparent accidentals occur with
an approach TO average regularity.
The more individuals brought within
the average, and the broader the
area over which they are spread, the
closer to a certainty becomes the cal
culation of the average probability
Of any particular accidental occur
renee. The influence Of known
factors is to be figured in, Of course.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-15
International Insurance

risks in a small locality, and spread
them among one another. Insurance
practice had gone far beyond legal
requirements in limitation of indi-
vidual risk for the sake of safety
economy. General legal requirements
ore that a company should write an
amount not greater than tenth OF
its capital in any one risk. The great
companies, by reinsurance, keep it
down as low as per cent. Reinsur-
ance was so arranged as to give the
primary insuring company a proflt
on the whole transaction, in order to
carry the overhead cost of getting
the business. That is, the reinsur-
ance cost the primary company a
smaller rate than it charged. There
were companies that confined them
, selves to reinsurance.
The system grew from its internal
reactions. By its means company
capitalized at, say, S1O,000,OOO, could
safely carry risks of 100000 on
single manufacturing plants by di-
viding them up and reinsurlng.
Sometimes the reinsurance Of large
risks was especially negotiated. In
creasingly, however, reinsurance was
mechanically effected without spe-
cial negotiation through treaties
which were general contracts be-
tween groups Of companies by which
they gave and took portions of all
risks above a certain size. THESE
treaties were international IN scope.
American insurance companies con-
tinued to reinsure with German in
stitutions clear down to our declara-
ton of war, and American branches
of German companies, registered
here and maintaining funds required
bv law, are said to be doing business
vet. The reinsurance across the
ocean not only economical the use of
capital by our companies, but inter
national insurance has been advan-
tageous in minimizing particular
Iisk by spreading liability. 1t has
made the insurance safer for the in
sured because it put so much vaster
a volume of responsible capital back
of every contract, and it was safer
and more economical for the insti-
tutions because the great spread
over many countries equalized and
steadied averages, so that the effect
even a great confagration in one
country was absorbed in the world
wide volume.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-15
WAR FINANCE A PROBLEM IN
ECONOMICS, NOT IN ETHICS
Man at the Front Says Professor Segman Must Pay axes
as Well as the Stay-atomes, but the Greater Part OF
Military Expenses Should Be Raised by Loans

directly and it forces an economy
which is much needed in war time
But. according to Professor Carver
there is no such thing as too heavy
taxation. His criticisms OF the OBJ
iections to excessive taxation sho"
that he virtually disbelieves in the
possibility Of any excess. He Is, IN
fact. reduced to the necessity OF
cishing up for US again that hoary
old fallacy of taxation acting as a
spur to industry. Let US take up his
criticisms in detail.
The first objection to excessive
taxes was that if levied upon con-
sumption they will cause popular re-
sentiment. Professor Carver's reply
that this is a political and not an
economic objection, shows that he
has not made a deep study of fiscal
administration. Let him compare
the cost of collecting the whlskey
tax in the mountainous districts OF
the South, where there is popular OPP
position to the tax, with the cost OF
collecting it in other sections, where
there is no such opposition. EX-
cessive taxes on articles of necessary
consumption are not only politically
unwise but economically unsound
and difficult of enforcement. He
who thinks that they would
cause no popular resentment had
better consult the files of the
Congressional Record during the
debates in recent years on the tariff
and the income tax.
The second point was that ex'
cessive taxes on industry will re-
strict the spirit of enterprise. To say
that war inevitably disarranges in
dustrv is, Of course, no answer. Fol
if war of itself disarranges industry
the government should be all the
more careful not to add to this dis
ARRANGEMENT. Furthermore, to con-
tend, as Professor Carver does, that
there will be the same dislocation OF
industry whether we raise the money
by loans or by taxes discloses re-
markable forgetfulness of funda-
mental principles. 1t is like saying
that when a man buys a house it Is
immaterial whether he pays for all
Of it in cash or whether he borrows
one-half on a mortgage. To contend
that both loans and taxes cut dowr
our ability to purchase supplies for
private consumption overlooks two
essential facts. If I loan money tc
the government | get interest on the
loan; if / pay over the same amount
in taxes | get no interest. Further
more, many Of those who buy gov
eminent bonds borrow from the
banks, hoping ultimately to repay
the bank loan by the savings of {
wartime economy. To maintain, IL
short. that loans and taxes exert the
same restrictive influence on indus
try is to ignore the role that credi'
PLAYS in modern life.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-15
Public Sense Of
Justice Received Shock

II is not TO be assumed that the
directors, the trustee, the bankers or
the several committees that were put
forth to accomplish their plans were
conscious that they were doing any
thing improper. They were merely
following out old and we'll estao-
lished principles that have ruled IN
Wall Street corporate reorganlza-
tions for generations; principles
which, vicious as everybody realizes
thew are. have, through long usage,
become Wall Street law. 1t was
only through the wide publicity CIV
en- to Rock Island affairs that its
financial evils and irregularities in
management have so shocked the
public's sense of justice and awak-
ened it TO a realization of the extent
to which the investing public was
being maltreated and deprived of
ltS savings.
As a matter Of fact, the Rock ISL
and security holders were not dealt
with any differently than have been
the security holders of many other
railroad and industrial corporations
ever since 1864, when Gould, Drew
and Fisk showed Wall Street the
trick of controlling a great railroad
without owning any securities, and
being short Of them besides. Cor
poration history has shown that the
Gould-Fisk system has found favor
with. and been emulated by many,
for few railroads or large industrial
-, corporations have, since 1864, been
permitted to escape the financial re-
organization mill.
A coterie of modern financiers
have, since then, sprung up and, sur
rounding themselves with brilliant
counsel, have practically monopolized
the organizing, financing and reor-
ganizing of American corporations,
through which they have become not
only fabulously rich, but powerful in
wide variety of financial opera
tons.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-15
War Debt Consumes
Taxes in England

England will raise this year by adj
djtional taxation very little more
than the interest on her war debt.
England, therefore, notwithstanding
the criticisms Of some of her econo-
mists, is following the theory to
which Professor Carver objects. But
when | proposed to raise by add
tional taxation at once about as
much as England raised in the third
wear of the war the plan involved is
something very different from that
bursued by Great Britain. If we
were to follow the English plan we
should raise by additional taxation
this year only four or five hundred
million dollars-the interest on the
ten billions of contemplated loans.
What / have suggested and what the
Senate Finance Committee is ar
ranging for is to raise about one and
one-half billions by taxation-a sum
equal not only TO the interest but
to heavy amortization quota of the
loan. Professor Carver, therefore,
misrepresents the situation when he
contrasts his plan with one that no.
body espouses in this country. lie is
attacking "A puppet Of straw-of his
own creation.
Since, then, every one agrees that
taxation should be heavy, the ques-
ton Of craftsmanship and economies
is how heavy should IL be. AS To the
advantage Of heavy taxation no ons
differs. II brings homs the burden
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-15

same argument true, asks he, as to
Investments in the Liberty Loan!
For a double reason, Of course. The
investment in the loan bears interest
and the money invested in the loan
is often borrowed; whereas the
money paid in taxes is not only
gone for good, but cannot ordinarily
be borrowed. 1t seems almost
puerile to point out the distinction.
If nv surplus income is taken by
taxation | shall, of course, not de-
vote it to philanthropy; but if | IN
vest my surplus income in a bond l
shall have no hesitation in drawing
on my capital to continue my usual
philanthropic gifts, because / know
that my capital will ultimately be
restored to its former figure as soon
as the bond is paid off, and in the
meantime the interest on the bond
will carry the interest charges on
the reduction in my capital.
Tits Against d
Puppet of Straw
The fifth point, again, that taxa
ton must not be stretched to the ut
most at first, is not answered at all
by Professor Carver. He says, IN
deed, it will be impossible to increase
taxes, but that we shall not need to
do so. But what warrant has he for
this assertion? Has it not been
proved by the experience of every
nation that war expenses grow from
wear to year? But if we put on the
heaviest possible taxation at the be-
ginning, it will obviously be neces-
sary to place larger and larger
loans as the war proceeds. Professor
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-15
Insurance a Commodity
With World Wide Sale

Fire and marine insurance came to
have worldwide spread before the
war for two reasons. One was that
insurance is virtually a commodity,
and the production Of it requires a
big background Of capital. England
has exported insurance just as she
made foreign investments and sold
manufactures abroad. Branches of
English companies are found every
where in countries where capital was
needed more for other purposes.
Thousands Of little policies of few
hundred dollars cover suburban and
farm properties in the United States,
written by the great British COM
panies. Germany also exported fire
and marine insurance in the same
way. We depended on England and
Germany for the greater part of our
marine insurance and for large
part of our direct fire insurance.
The second reason why insurance
was international was the important
one that the growth of immense in
dustrial establishments carrying i'm
mense individual amounts Of insur-
ance, and the size Of modern steam
ships and their cargoes, led to the in
stitution of reinsurance, and Of in
ternational insurance treaties" by
which the single institutions, how
ever large. subdivided the big risks,
or large accumulations Of small
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-15
The Beginning Of
A Reorganization

The methods and processes are the
same as in Gould and Drew's time.
A corporation is organized, the Sc
curities sold to a widely scattered
investing public, the organizers re-
tanning little, if any, of the securi-
ties, but intrenching themselves Sc
curely in the control of its affairs.
II the company prospers, they con-
tinue to act as directors, and often
as it's bankers. They extend anbsome-
times over-extend the company's
credit. But let the smallest cloud
gather on the horizon Of the COM
pany, and the organizers and direct
ors soon withdraw their support,
take advantage of their inside in
formation to sell the few securities
they may have, and sometimes go
short of them in the market, al
though the latter is probably the ex-
ception, not the rule.
Meanwhile, tie company, on ac-
count of its dependence upon its
banking or financing directors. usu-
ally has lost connection with other
banking institutions and the advan-
tages of an open competitive market
for its securities. When. therefore.
its own directors and banking aflilia-
lions desert it, as they frequently
do, the corporation has no alterna-
tive but to become a subject for re-
organization. Here is where the
trouble begins for the security hold
ers. Without any advance notice TO
the stockholders or bondholders of
any change in conditions, insinua-
tons and statements soon find their
way into the public press that be-
cause of the company's poor financial
condition it may have TO be reorgan-
lied. Then follows the announce
ment of the self-appointed protec-
tive committees, composed usually of
friends of those affiliated with the
insiders. These committees soon be-
come brutally frank as TO the weak
cred financial condition of the COM
pany. Usually, as in the case of the
Rock Island, these conditions are
greatly exaggerated, but the result
is always the same; the helpless
security holders become frightened
and sell their securities ut great
sacrifices.
Following the work of the so-called
protective committees comes the for
nation of the reorganization COM
mittee, also composed Of friends Of
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-15
His Quarrel With
Professor Carver

Ny quarrel with Professor Car
ver's theory Of war finance is IN
the second, and not in the first, part
of his statement. | thoroughly
agree that a government ought to
raise as much as possible by taxa
ton, if that phrase be interpreted to
mean to raise by taxation as much
as possible, while maintaining the
social productivity at the maximum.
1t is the latter part of the principle
which is open to misinterpretatlon.
To say that a government should
borrow only as supplementary
measure is perfectly correct, for 1t
means that what a government can
not wisely raise by taxation it must
raise by loan. But if it means, as
Professor Carver evidently intends,
that the great mass Of the war ex-
penditures must come from taxa
ton. and that only an insignificant
share should come from loans, con-
slider the principle fallacious. Even
the so per cent theory, which was
originally promulgated by Secretary
| McAdoo, is exaggerated for the be-
ginning of a war. AS have pointed
out elsewhere, Great Britain in the
third year of the war raised just II
per cent Of its war expenses from
taxation. This is manifestly toe
little, although it is far more than
las been done by any other belliger-
ent. Even if Secretary McAdoo'S
present scheme goes through, we
shall be raising some Is or 20 pei
cent of the first years expenditure
by taxation. With every additional
year of the war the proportion to be
raised by taxation ought to be In
creased; but there is manifestly q
great difference between the II per
cent of Great Britain and the 30 pei
cent originally put forward by Sec
rotary McAdoo, not to speak of the
far greater percentage which Pro
fessor Carver has in mind.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-15
Wherein Theories
On Taxation Differ

In the second place, Professor
Carver misreprescnts my position
although in practice there is prob
ably little difference between US
for I, like Professor Carver, have al
ways declared myself in favor Of
heavy taxation, while Professor Car
YER, lizs myself, believes In thu ne
eessi.y Of large loans IN the begin.
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-15
By n. L. AMSTER

defensive battle of the Rock
u Island stockholders to save
their equity in one of Americas
great railway systems, while teach
ing few, if any, new lessons, has
emphasized various old and serious
lessons which stockholders of many
railroad and industrial corporations
in this country have learned since
1864. when the Gould, Drew and
Fiske coterie gave their first pyro-
technic exhibition in the manipula-
ton, strangulation and reorganiza-
ton of the Erie Railway.
Like others before them, Rock ISL
end stockholders, when they began to
investigate, found that the people
who were enthroned in the control
of the financial and physical manage
ment of their company owned few.
if any, of its securities; that those
who did own the securities, paid the
bills. and were to be called upon to
furnish new and additional capital
were on the outside, with no power
or control Of their property, and
we're simply begging to be permitted
t, have a peep into the inside of
the company's affairs.
Their request met with the usual
prompt denial, but, contrary to the
customary tame submission of
American stockholders of other cor
porations, they refused to accept as
final the decision of their servants
Cor what else are officers and di,
rectors of a corporation but servants
Of the stockholdersO and petitioned
the Federal court for permission to
intervene and take part in the solv-
ing of their companys problems.
Trustees Wanted to
Sell Stock at Auction
Here again they were refused, on
the ground that the trustee of their
collateral mortgage (the stockhold-
ers were then holders of the collat-
eral bonds secured by the stock, which
they later received in exchange) was
then in court representing them in
request to foreclose and sell the
pledged stock at auction, and that
they, being "his wards" (for that
is Just the relation of bondholders
to the trustee of their mortgage), had
70 standing in court. The stockhold-
ers, or collateral bondholders, pointed
out to the court that
(a) Their trustee in requesting the
courts authority to sell the
block Of stock at public auction
at a time when the stock ex-
changes Of the world were closed
was acting against their best in
terest.
(b) Their trustee was then occupy
ing a dual position, since he
was both the guardian" so TO
speak, of "his wards"-the col
lateral bondholders and at the
same time the chairman of a
committee who sought to buy in
the very block of stock which
he held in trust for them.
The objections had no effect on the
lower court, which evidently ad
hered to the old court rulings on
the questions Of the rights of secur-
ity holders to intervene. The Appel
late Court, however, took broader
and more modern view of the situa-
ton, and reversed the decision of the
lower court. Here we had a devia-
ton from old set court rulings in
keeping with the trend of the times
and public opinion.
Since then the stockholders have
enjoyed, to some degree, the priv
ilege of exercising their rights as
stockholders-have been kept in
formed of their company's affairs
and have taken active part in solv-
ing its problems.
~
New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-07-15
From The Americds)

~ EVELATIONS of the use that
X the Germans have made of
~ intimate information about
The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1917-12-23

Pillow Cases
L.uscheon Set
Sofa Pillow
Electric Lamp
Pin Cushion
Lace Curtains
Suit
Waist.
Pctticoat
Corset Cover
House Dress
Slippers
Scarf
Negligec
Apron
Table Cloth
Bath Mat
Brushes
Stationery
Umbrella
Sweater
Corduroy Bath
robe
Crochetcd Snug
gler
Ivory Pyralin
Articles
Silver Articles
Guest Towels
Lamp Shade
Dress Goods
Auto Hood
Manicure Set
Veil
Silver Thinble
Library Lamp
Pie Server
Bread Mixer
Bra SIS Pieces
Casserole
Electric Iron
Vacuum Cleaner
Fancy China
Travelling Bag
Japanese XII
mono
Electric Stove
Electric Perco-
lator
Water Set
Brooch
Cut Glass
Comfy Slippers
Comforts
Hosiery
The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1917-12-23

Domes
Kitchen Goods
every kind
Aluminium Ware
Steamers
o'cedar Mop
Table Lamp
Oil Stove
Waste B.l skct
Toothbrush
Rack
Tumbler Holder
Soap Cup
Towel Rack
Cut Glass Pieces
Table Linen
Bed Spreads
blankets
Embroidered Pill
low Slips
Cedar Chest
Dresser Scarf
Draperies
Percolator
Chatting Dish
Electric Toaster,
Irons. etc.
Serving Trays
Their Useful Gifts
The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1917-12-23

Candle Sticks
Cedar Chest
Dressing Sacque
Corset
Underskirt
Nightgown
Bathrobe
Muff
kinono
Library Table
Cover
Bed Spread
Napkins
Combs
Clock
Ostrich Scarf
Mirror
Gloves
Watch
Chest of Silver
l.avalliere
Chatting Dish
Embroidery
Novelties ...
Carving Set
bic Dish
Eoudoir Cap
steamer Rug
Auto Veil
Vase
Ncckwear
Ostrich Scarf
Silks
Sugar and
Dreamer
Waffle Iron
Jardiniere
PerColator
Electric Toaster
Savory Rooster
Chocolate Set
Photo Album
Shears
Beaded Bags
Perfumes. etc.
Dancing Slippers
Vanity Case
Pearl Beads
Handkerchief
Holder
Covered Shoe
Trees
The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1917-12-23
For the Young Man

Leather Pillow
Collar Bag
Waste liaskc ct
Slippers
cuff Links
Bath Towel
Bath Set
Paiamas
Shirts
Eathrol,e
Therinos Bottle
Toilet Case
sweater
Military Set
ilandkelchicfa
Shaving Mirror
Safety Razor
Suit Case
The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1917-12-23
For the Home

iIassotks
Willow Chairs
Willow Rockers
Mating Utility
Boxes
Bed Sets
Blsscll Sweepers
Lace Curtains
Pillow Slips
Piano Scarf
Table Scarf
Brass Beds
Enamel Beds
Pillow Shams
Bath Mats
Electric Stove
Mahogany Can
dicslicks
Mahogany Elec-
trolicr
silk Lamp Shade
Pictures
Picture Frames
Statuary
Bric-a-brac
Vases
Silverware
Hundreds Of Oh
The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1917-12-23

Collars
Neck wear
Reading Lamp
Tie Rack
Whisk Holder
Laundry Bag
Chain
Hosiery
Ncckwcar
Gloves
Smoking Jacket
Card Case
Mutficr
Tourist Case
Smoking Set
Knife
Wardrobe Trunk
PuttccS
The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1917-12-23
NJ. NJ. Co. Gift Bonds

On nearly every Holiday Shopping List is the Of
It may be he-or shehas Everything" that heor She
IS very particular; that hcor s1e-woud welcome the
truly practical presents that friends can't always choose
isactorily.
Cresco plain dealer. (Cresco, Howard County, Iowa) 1913-1945, 1917-09-07
BIG BOHEMIAN CONVENTION AT
sE&N SARATOGA.

There will be convention Of the
Bohemian Presbyterian churches Of
the central west in the Bohemian
Presbyterian church in Saratoga. Del
egates and guests about one hundred
in all, are expected next Saturday to
attend this meeting which begins Sun
day. Sept. 9th. A tent will be set up
by the church to hold the crowd and
every one who is interested is invit-
ed to attend these meetings which will
last for three or four days.
The meetings will begin every
morning at $3.50 o'clock and will last
through the whole day. At noon re-
cess will be given for dinner and at
about 1870 o'clock the afternoon ses-
sion will begin. Every meeting in the
morning will begin with preaching
services at which also there will be
some special music
Sunday evening and perhaps Mon
day evening also there will be: serv-
ices in English for the benefit of our
American friends. These will be also
in the tent At one Of these meetings
the Rev. John H. Burma, D. D., vice