Evening star., 1939-02-19

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the Monopoly Committee of the opera
ton and the structure of Americas life
insurance industry leads tc two tenta-
tive conclusions.
They are:
/. That the study, first of any COM
prehensive nature since the New York
State investigation of 1906, is amply
justified and should provide public
record of considerable value.
2. That the industry is financially
sound and powerful; in other words,
that millions of life insurance policies
are as substantial and secure as could
be any investment or device known to
contemporary man.
While the second is perhaps the more
important conclusion and certainly the
one of most immediate interest to the
64,000,000 Americans now intrusting
their principal hopes of security or pro-
lection to insurance policies, the first
embraces rami1cations of deep sig
nificance
SimplificatiOn Difficult.
So ponderous and far-fiung are the
interests and the influences of the in
surance industry that it is difficult to
rationalize about it, difficult to drama
tie it in any smplified fashion. BY
collection of charts and figures, the
Securities and Exchange Commission
pictured the industry from the stand
point of size. Subsequently, through
documentary and verbal testimony, it
outlined operation from the standpoint
of management.
Later, there will be more detailed
analysis from the standpoint of invest
ment policies and their unquestioned
effect upon the national economy
In its day-by-day unfolding, the pic
ture of size and operation was diff
cult of appraisal In fact, just as ac-
curate evaluation of today's history must
await tomorrows events, SO it may be
that the true appraisal of today,,s insur-
ance industry must be determined in
the light OF its future.
Talking in terms of pictures, the S.
E. c. has presented to the committee
rough sketch in the form of a pyra-
mid.
At the base is cross section of all
American enterprise, public and private,
represented largely by the bonded in
debtedness of the component enterprises,
but in some added degree by their physi-
cal properties.
Life Insurance at Top.
At the apex is found the life insur-
ance industry, represented by 40 COM
panies which hold about 95 per cent of
the total assets of the industry.
Totaling $26 ,00O, 900 900, these assets
penetrate into the base of this pyramid
by virtue of embracing, for 1890, $780,
900 900 in cash; s4,551 900 900 in United
States Government bonds; STATS G00,-
600 in bonds of political subdivisions;
s3,082 000,0 900 in railroad securities; So
254 100000 in public utility securities: ::
81 1,453O0O,0 900 in miscellaneous corporate
securities; $500 100000 in farm mort
cages; $4,142, 900 900 in urban mortgages,
and few added billions in assorted
forms.
Measured another way. these assets
included II per cent of all the United
OF the debt of political subdivisions, 2295
per cent of all railway bonds, % per cent
of utility Indebtedness, and Is per cert
of all miscellaneous industrial debt
From these figures it is obvious that
the 40 insurance companies have great
financial powers and interests; but the
very reflection of this circumstance need
not be considered an implication of good
or evil.
Running through this pyramid, as
disclosed by the S. E. c. X-raying pro-
cedure, are the channels of human con-
troll, stemming from the relatively few
men who comprise the directorates of
the 40 giant companies.
That these men, averaging about 30
to each company and including few
Implications among the 40 life insur-
ance firms, are the apex rather than