The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1939-02-16
On Capitol Hill
By GEORGE L. KNAPP

Washington, d. C. QLNS). - TheI
opening testimony before the monop-
oily committee on life insurance has
dealt chiefly with the tremendous
growth and astounding concentration
OF insurance power. In 1900, there
were S,600,000,000 of insurance poll
cies outstanding in 1920, about AZ bill
lions; in 1928, just under 40 billions.
Their excess of income over expendi-
lures in the last 20 years has been
$4,000 100000. Only once, in the 1929
depression, did they have drop in
income. The 308 legal reserve COM
panies have assets Sl1 100000, 900
greater than the taxable value of the
whole city Of New York.
And six companies, starting with
the metropolitan and ending with the
Mutual, hold $50 per cent, by value,
of all the life insurance policies in the
United States.
X X X
Chief Justice Hughes of the United
States Supreme Court must be chuck
ling over at least the early stages Of
the insurance investigation of the
monopoly committee The Securities
and Exchange Commission has charge
OF getting the information required by
the committee on this score. And the
SEC QUESTIONABLE follows, point by
point, the report which Mr.. Charles
Evans Hughes wrote for the investi-
cation Of insurance 33 years ago, in
1906.
The Hughes report said that no in
surance company should be allowed to
hold any stock in any company. The
SEC asks for the stock and bond hold.
ings Of the companies-and how they.
have varied in value since 1929.
The Hughes report said that no in
surance company should be allowed to
go into a brokers' syndicate The SEC
demands to know the details of those
syndicates. The Hughes report scores
the "fagrant abuses in connection with
investments in real estate" The SEC
calls for details on real estate invest
ments Of insurance companies for
good many years back.
But there is one crying abuse in in
surance which hardly existed in 1906,
and which the monopoly committee has
not yet taken up. That is atrocious
cost Of industrial, weekly payment in
surance; the only kind that the aver
age worker is able to buy, the kind in
which lapses, meaning the total loss
of all payments made, have outnum-
bered the total amount written during
some of the depression years.
One of the things | haven't seen in
Washington yet is the labor man or
New Dealer who is getting any salts
faction out Of the sum which the IVA
has agreed to pay for the parts of the
Commonwealth & Southern which the
IVA is to take over. The IVA itself
said the properties were not worth
more than S55,000000; and in all prob
ability, this was about right. Instead,
it is paying S78 100000; boost in its
own price Of nearly 43 per cent.
The Commonwealth & Southern was
not Investigated by the Federal Trade
Commission. The PIP companies which
the ETC did go over had 81 ,491 10000
Of pure write up; and write up, no
more than any other graft, gets into
wages. 1t is pay for faxed capital, not
for work.
The makeup of the c.. G. S. is such
as to make anyone suspicious. There
are 100000 preferred shares out
standing, which are quoted on the
market at about S51 a share. There are
33,673,328 common shares outstanding;
which brought $1.65 a share before
this deal came off-and not one of
those shares has vote; which is itself
a strong warning of shadiness.