Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-12-21
Trade Trend and Outlook
Insurance Company President Considers Unemploy-
ment Policies Would Be Only Palliative in In
dustrial DepreSsions- Business Gain.
BY EDWARD d. DUFFIELD,

President Prudential Insurance Co. of
America, as told to j. v. Fftz Gerald
So much discussion regarding unem-
ployment insurance is taking place that
it might be well to point out that while
such relief might minimize the difficult
ties of a situation similar to the one
from which we are now emerging, 1t
would be only a palliative and not a
cure. Here and there industrial con-
Germs have put in forms of unemploy-
ment relief TO which workers are look
ing for successful future results.
Probably many large corporations will
work out similar plans in the near flu
ture. The question of having unem-
ployment relief funds available for the
use of workers in periods of depression
is a most important one for the Stabil-
iZation of employment, but it seems to
be quite as much of a problem for in
surance companies as it Is for industry.
Obligation of Companies.
While the insurance companies of the
country might be willing to undertake
the underwriting of policies of this ma
ture in cooperation with employers and
employees, it must be remembered that
life insurance companies have the very
definite purpose of providing for finan-
cha! losses occasioned by death. Their
funds are held in trust to meet obi
cations incurred through making such
provision.
The officials administering these
funds are not free agents. They are
trustees, and as such they are reSpon-
sible to the policyholders of their COM
panies They can't permit their per
sonal opinions or desires to guide their
nj
Sirable they believe some form OF I'M
employment insurance would prove to
the individual worker in times Of de-
preston.
If life insurance officials engage in
this new and, to some extent, untried
form of protection to the individual
worker, they will have to be satisfied
that the goal sought can be reached
without any loss to their present policy
holders. Therefore, the adoption of any
general policy looking to participation
by the insurance companies in such
plan presents certain problems that
must be given most serious considera-
ton.
Much more information than is now
available would be desirable. Compli-
Gated tables would need to be prepared
and analysed before insurance COM
panies in general would be likely to find
it desirable to enter this new field. Al
together it presents a rather. difficult
task for the statisticians and actuaries.
Problem Of Industry.
OF course, unemployment. with its
accompanying evils, is problem of in
dustry. If method can be discovered
to prevent undue imitation, we are not
likely to have periods of depression at
intervals. Nor are we, under such con-
ditions, likely to have much unemploy-
ment beyond that of a seasonal nature.
1t is the business experience of this
country that our periods of greatest ex-
pansion and prosperity are followed by
widespread speculation. This helps to
create imitation, with the result that
true values are often lost sight Of. Then
comes depression, unemployment and
hardships to many. Optimism gives
way to pessimism. Most often we go
from one extreme to the other, and, as
a result, recovery is often delayed more
than it ought to be.
We are inclined to spend too much
in periods of high prosperity and pay