Evening star., 1942-04-30
BY OLIVER MCKEE.


purchasing power during the war
emergency, individual savings, as
the President pointed out in his
address Tuesday evening, hold a
major place in the administration
program for combating q destruc-
tive price imitation. BY lessening
the competition for scarce goods,
the diversion of a large part of the
Nations increased income into saw
ingS should contribute much to
checking inflationary trends result
ing from the vast expenditures on
ornaments and the shift of the
country to a total war economy.
Life insurance added $4,000 ,0O0,-
600 to the savings Of the American
people last year, an amount esti-
mated at about IA per cent of the
country's net savings. Most life in
surance policies include both pro-
lection and savings.
Supporters of the proposal to
grant tax incentives for insurance
payments cite these figures as evi-
dence Of the importance of life in
surance as q savings system. BY
granting tax recognition, savings
through insurance, they believe,
could be substantially increased this
year. thereby providing a powerful
reinforcement for the Governments
drive against imitation.
Allays Financing Reaction.
Few people recognize that, be-
cause Of the nature Of life insurance
savings, they perhaps do more than
any other type to protect our Gov
ernment against the i'll consequences
Of vast emergency financing pro-
gram" o. j. Arnold, president of
the Northwestern National Life In
surance Co., declared In addressing
the Association of Life Insurance
Presidents at its annual convention
In New York City last December.
Life insurance purchases of Gov
ernment securities neither act to in
nate the credit structure, as do pur-
chases by banks, nor do they carry
the threat Of Generalization Of the
Governments credit by dumping aft
er the emergency, as do individual
holdings. While this latter point
the long time nature Of life insur-
ance tnvestments-may at present
seem relatively unimportant. I feel
certain that 1t may prove to be q
most valuable aid to the Govern
ment In meeting distressing post
war problems"
Life insurance companies in re-
cent years have been investing an
increasing proportion Of their funds
In Government securities. OF the
$32 $50 900 900 in assets reported by
the 40 United States legal reserve
companies at the end Of 194l, nearly
5000, ,000, 900 were invested in obli-
cations Of the Federal Government.
BY placing part of their savings in
life insurance, it Is pointed out, the
American people will thus contribute
directly to the financial support Of
the Federal Government.
Value Cited by Court.
Life insurance is the least costly
and the most equitable device yet
evolved to preserve families in a
wage-earning society from destitu-
tion," the United States Supreme
Court said in decision In the case
Of Commission VS.. Keller. Those
who are urging that credits or de-
ductions for insurance payments be
authorized in the new war revenue
legislation stress the need for pre-
serving existing policies, not only
as a means of savings, but as a
protection to the American home
against the premature death of
breadwinners and the economic haz-
ards of the postwar period.
Policies now outstanding are wide
ly distributed among all income
groups. Many families, lacking ac-
cumulated savings, have no other
protection than life insurance. No
people have been more insurance.
minded than the American. Though
the United States has but per cent
OF the worlds population, Amer
leans, it is estimated, own approx
imately 10 per cent of the life
insurance now in force.
AS a matter of long-range public
policy, 1t Is argued, the Federal
Government, during the war emer-
gency, should therefore encourage
Americans to maintain their insur-
ance protection by permitting tax
deductions or credits for payments
on premiums. Such action, 1t is
contended, will reduce the amount
Of money that will be needed later
for public relief and lessen the
burden on private charities.
Extends Social Security.
In the Social Security Act, the
Federal Government has already
provided . measure of protection to
the workers of America against un-
employment and dependency in old