The Butler County press. [volume] (Hamilton, Ohio) 1900-1946, 1933-05-05
When Is a Contract Not a Contract? :?
By JOHN p FREY
Secretary Treasurer Metal Trades Department A. F. of L.

I secured. We are now discovering
] that there is difference at times
between the sanctity Of a contract en-
tered into between an individual and
a great corporation, and the sanctity
attached to the contract which the
great corporation enters into with an
individual.
| life insurance, contract is entered
into for certain specified payments
which the insured must make to keep
his policy valid. The insurance COM
pany binds itself to pay specified
amount to the heirs; then the insur-
ance company's contract with the in
dividual goes farther and provides
that the policy, after certain num-
Der of years, will have cash surren-
der value. The insured can return his
policy to the insurance company, and
the company will then give to the in
sured the amount of money they have
paid in premium plus a small interest.
AS a further inducement to secure
| policies, the insurance contract with
the individual provides that after he
has paid premiums for certain
| length of time, he may borrow money
| from the company, the amount being
l
ments which have been made. Thou
sands are now discovering that while
their contract with the insurance
company compels them to pay their
premiums on the dates specified or
| lose their policy, the insurance COM
pany's obligations to meet its part OF
the contract can be set aside; in fact,
] has been voided.
Insurance Holiday Declared
The insurance commissioners OF 81
states have declared a holiday for
insurance companies, during which
all cash surrender values and the
| making of loans to the insured are
virtually suspended The insurance
| commissioners of the 81 states did
not take this action upon the request
of the policy holders. They did it'll
| to protect the insurance companies
| because of national emergency.
They have pointed out the insur-
ance companies necessities and
emphasized the thought that necessity
| knows no law, and quite evidently
this is true. The insurance companies
necessities" saves them from carry
! ing out their contract with the indi-
vidual, but the individuals 'necessi-
ties" do not save them from being
forced to carry out their part of the
contract, which is the legal payment
of premiums.
Of course the insurance companies
are in trouble. They have been large
ly run by the big bankers for the
benefit of the banking magnates
IiSS HdFS UeSH lOdueu up VIII SeCuT-
tiles, sold to them by these bankers,
and because these securities are not
worth their face value something
! must be done to prevent financial
collapse.
| Little Fellow Victimized
| But why is it that when big bust
ness gets into deep water that the
| sanctity of contracts must be waived
on the ground of necessity" while
the poor devil who works for wages
has to meet the terms of all of his
| contractural obligations or suffer the
penalty? Perhaps it is because big
business is better organized and more
in control of public affairs.
/ If the wage earners had been as
well organized as the insurance COM
panies and the bankers; had they
given the same intelligent and con-
tinuous attention to their interests,
, they would be in a position to get a
fifty-ffty break when the time of
I