APPENDIX-INSURANCE: GOOD, BAD, AND INDIFFERENT.

Annual Statements, and other Official Documents, of Life, Fire, and Marine Insurance Companies.

No other business, or profession, exhibits such striking contrasts, in a moral, or, rather, immoral point of view, as that of Insurance. We give the preference to the epithet "immoral," because the overwhelming preponderance in number, as well as in pretensions, is on this side; because, for every one company, whether life or fire, that pursues a straightforward, honest, and honorable course, there are at least twenty companies that obviously have no higher aim than to obtain as much money as possible from the public and return to it as little as possible.

This, however, is nothing new; but the contrasts become more remarkable from year to year; nay, from month to month; and who, that has a thought in his head, could expect a different state of things, since four-fifths of those who insure their lives give the preference to those who evince most adroitness in the art of defrauding the widow and the orphan? Our people claim to be the most intelligent in the world, and, at the same time, no people on earth are so easily, or so habitually duped. Regarding them ornithologically, they are the species of birds which, above all others, are most easily caught with chaff. Among no other tribe can the vultures, the ravens, and the buzzards fatten with less trouble or danger to themselves.

None have given more illustrations of the different grades of underwriters than we; nor has any one taken more pleasure in commending the faithful and just. In the present article we pursue the same course, but in a somewhat modified form. In criticising certain companies, upon the other hand, we disclaim all intention of doing injury to any one, further than to give our opinions of the facts in our possession, for the public good. We investigate as far as possible, and employ competent persons, in whose integrity we have confidence, to investigate for us; at the same time, we cannot pretend to vouch for the strict accuracy, in all particulars, of every statement we make; although we make no statement, or even allusion, which we do not believe to be true and just. If, after observing every precaution that occurs to us as proper or necessary, we wrong any one, our pages will always be open to those desiring to vindicate themselves, in a fair and temperate manner.

The official statements of the various Insurance Companies for 1874 are now in hand, and we are ready to fulfil, as best we can, our promise of examining them, and ascertaining how they compare with the reports for 1873. But, before turning to these statistics, we wish to call attention to a recent alleged performance of one of the fattest of the companies, which, although published in several daily papers, has hitherto failed to attract the comment it deserved.

It may be remembered that in our December number we spoke of

the mortgage system as one of the favorite instruments of oppression in the hands of some very "beneficent" companies; but we were not prepared for so prompt an illustration of the actual working of that system as the one with which we were presented not long afterward.

If we are correctly informed, the Equitable Life Assurance had loaned $35,000 to Alexander H. Stevens on his property in Chambers street. This property, we should think, ought to have been sufficient to cover the amount loaned, the company being one of those which profess never to lend on property not worth thrice the amount of the loan. However this may be, the mortgage, it seems, was foreclosed. Mr. Stevens was dead, and the panic in real estate had made it a very good time for making a profit on the transaction. The company managed to buy in the property for the sum of $38,500, which, though considerably exceeding the amount of the original loan, was insufficient to pay the interest, costs, and expenses which had accrued, so that there still remained of the debt an unsatisfied balance of $2,557.75, for which the company was legally entitled to judgment.

So far, it cannot be said to have done any thing unusual-that is, as far as we know-but the cream of the story is in the sequel.. Although the company had contrived to obtain the property for the price of $38,500, only a few days afterward they sold it for $47,500, making a clear profit of $9,000 on the transaction! Instances have been known of mortgage creditors in such cases refunding to the debtor the surplus over their actual dues. This, however, would be too much to expect from the Equitable Assurance Company. But what was its course? Should we not admire the appropriateness of the title? Having quietly pocketed its $9,000 profit, it coolly applies to the court for leave to sue the executrix and executor of Mr. Stevens for the $2,557.75 not realized on the original sale under foreclosure. No wonder that Chief-Justice Daly, while granting the application as a strict legal right, remarked that he did so most unwillingly.*

If all companies holding mortgages were in the habit of using them as instruments of oppression or extortion, there would be little use in

* Some are ill-natured enough to say that it is in order to divert public attention from performances of this kind, that the Equitable Assurance has its fine buildings described and praised in one paper (with lists of tenants, accounts of great libraries, etc., etc.), and has the same description, with lists, etc., copied into as many other widely-circulated papers as can be induced to foist that sort of "news" on their readers.

Be this as it may, we well remember that the same tactics were used when the manager of the Equitable was also the manager of a concern styled the California Petroleum Company, which had also enormous "assets," but whose assets did not save it from a premature and rather dishonorable grave. Perhaps the Equitable editorial or correspondence column in the pious, disinterested Independent, will explain these little matters, and show, ex more, that they are just the things for the widow and the orphan!

pointing out particular instances of that sort of work. But we know that such is not the case; we are in possession of the most satisfactory evidence that the Manhattan and the New England Mutual, the Mutual Benefit, and the Continental, treat those on whose property they hold mortgages as considerately and liberally as they treat their policyholders.

Since writing the above we have been reminded of another New York company whose conduct in this matter is highly creditable and exemplary; namely, the Universal Life. An incident which has recently come to our knowledge will illustrate this: One, on whose property this company holds a mortgage for $19,000, writes to the secretary to request the privilege of paying the amount in instalments of $1,000. That gentleman replies promptly and politely that, wishing to be as accommodating as possible, the company accepts his proposition, and will receive the $1,000 in fifteen days from the date of the application. When the appointed day arrived the necessary official formalities had not been completed; but that the applicant lost nothing by this will sufficiently appear from the following letter:

"NEW YORK, March 12, 1875. "DEAR SIR: We think it proper to say that, inasmuch as you have been ready since the 23d of February last to pay the sum of $1,000 on account of the mortgage held by this company on property No. to stop interest from that date on said Very respectfully,

sum.

"JNO. H. BEWLEY, V. P."

Eight days later the company was prepared; the fact was communicated, and the $1,000 paid. We think that a company which behaves in this manner deserves to succeed, and is morally entitled to public patronage.

The annual statement of the Equitable shows that it has done a pretty. good business in the above line. It claims to own, at present, real estate in New York and Boston, and purchased under foreclosure, of the value of $3,931,451. This, of course, does not include such trifling items of profit as the $47,500 for which it sold foreclosed property that cost it only $38,500, or the $2,557.75 for which it proposes to sue Mr. Stevens's estate in addition thereto. These are side-profits-perquisites. We observe, moreover, that while the premiums represented as received by the company amount to $8,227,299.40, the claims which it returns as arising from deaths and matured endowments do not exceed $1,948,362.36, less than one-fourth of its income from premiums. Verily the practice of resisting the payment of policies when they fall due, appears to have proved profitable.

This company, however, cannot claim to have attained the perfection of ingenuity in defending claims or policies unless it establish its identity with a certain insurance company which is reported to have been lately sued on a policy issued in Scranton, Pennsylvania. It is stated

that the individual insured had received warning, at a spiritual séance, that he would die on a certain day. In anticipation of this event, he prudently insured his life, and-mirabile dictu!-died on the day appointed. Of course, the spiritual circle did not lose the opportunity of proclaiming the testimony thus borne to the truth of their pretensions, and the story reaching the ears of the company, it refused payment of the policy, on the ground that the insured had committed moral suicide! What the courts thought of this defence we have not yet been informed.

While on the subject of defences to claims, we cannot refrain from noticing one recently set up by the Globe Mutual Life, in the suit of Maria Inman and children, in the U. S. Circuit Court at Louisville, Kentucky. The policy was for $10,000, issued July 3, 1871. The first two annual premiums were paid. For the third, a note at 30 days was given, July 3, 1873, and paid August 4, 1873. One month later-viz.: September 13, 1873-the insured, Inman, died, and it happened that on the same day the money, which had been received a month previously, was remitted by the agent to the company. The latter refused payment, on the ground that the policy provided that agents should not have authority to receive any thing but money on the annual premiums, and on the further ground that the note being dated July 3, was due August 2, and that a payment on August 4 was not a good payment—although the agent had been furnished by the company with blank notes for the very purpose, and the money due on the note had been received and pocketed by the company!

We were glad to see that Judge Ballard charged the jury that, notwithstanding the policy, the course of the company was equivalent to adopting the act of the agent in receiving the note, and that the note itself, being an inland bill of exchange, did not fall due until August 5th. But what can we think of a company which would deliberately seek to evade payment by a quibble like this? when it had actually accepted the money, the payment of which it pretended was irregular.

The New York Life does not seem to have driven quite so thriving a trade as the Equitable in the matter of resisting claims. But it returns $16,828,955. 14 invested in bonds and mortgages "secured by real estate valued at more than double the amount loaned." We all know that " figures cannot lie." Nevertheless, print occasionally may, and does. We should like to ascertain from the company the true history of certain long rows of houses in the upper part of the city, on which it holds mortgages of $6,000 each, not one of which has realized double, or even half as much again as the amount loaned on it, and on most of which, second and third mortgagees, who have loaned their money on the faith of this company's professions, have come off badly bitten.

The John Hancock Mutual, whose liabilities came last year within $29,268 of its gross assets, as reported, and which, nevertheless,

paid out $28,010 in dividends, and in its report made a mistake of $80,000 on the wrong side of its asset account (which mistake ran on for six years undiscovered) has finally concluded not to give up the ghost. It came very near so doing, however, and it is said that a number of enterprising New York and Hartford companies hovered round the supposed moribund, and employed agents of their own among the policy-holders to induce them to transfer policies and assets, or at least to re-insure them. It is suggested that even the Chamber of Life Insurance, which is said to have a most affectionate appetite for companies which show symptoms of decline, manifested much more disposition to sympathize with the disease than with the patient. But the latter has thus far persisted in living, and the crowd of wreckers, vultures, or heirs expectant-by whichever name they prefer to be calledare, for the time, disappointed of their anticipated spoils. They need not despair, however. Years ago, and repeatedly since, we predicted the untimely end of the concern referred to; and we are sure it cannot be far distant now.

How far the principles of amalgamation and re-insurance are made an engine of fraud, let their own voices tell us. We quote from a speech, delivered by Mr. Clark at a recent meeting of the John Hancock Life:

**

"During the last four years, the policy-holders of 30 life insurance companies, authorized to do business in Massachusetts, have been made the victims of amalgamation. There were in number of these policy-holders, nearly 87,000, and there was insured upon their lives more than 209,000,000. ** On the $219,000,000 of insurance, the computed premium reserve was $17,550,000 which was the security which had accumulated from the money of the policy-holders, and was held for the payment of their insurances at maturity.

*

I speak from my own knowledge and observation, when I say, that of this amount not less than $12,000,000 (?) have been forfeited to the use and emolument of the amalgamators themselves, and their paid officers."

Hints are dropped that the wreckers are now about to try their hands on a certain Hartford Company. In this, it seems, as well as in the John Hancock case, there is something rotten. One thing is certain, that, whatever may be the principles of wreckers, they do not set about their trade unless they see some distinct indications, or, at least, probabilities of a wreck. Policy-holders would do well to mark the signs of the times. The Chamber of Life Insurance is said, whether justly or not, to be mainly responsible for this new gang of wreckers; acting for the benefit of certain enterprising companies, are only too ready to play the part of prowling assignees for all moribund companies.

The investigations still proceeding at New Haven into the affairs of the American National Life and Trust, promise some curious revelations as to the manner in which a certain class of life companies make out their reports. For instance, the guarantee capital of $100,000, which was sworn to be paid up in cash, was really paid by crediting the subscribers with $25,000 previous dividends, to which they were not entitled,