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is none so poor to do it reverence.

We have spoken of the late commission-
er a« the laie Julius L. Clarke. The man
still lives, but in the insurance world we
shall meet him no more foiever. He has
departed from our sphere of vision like a
noisome exhalation which the morning sun
disperses. His absence gives us a clearer
vision of the system which his official in-
capacity partially obscured, and we must
say for him that many, if not most of the
faults which were attributed to his person-
al obliquity, were simply faults of a sys-
tem which he was set to administer with-
out the natural tact or breadth of intellect
ni^oessary to success. His personal offen-
ces were many, but it is hardly fair to
credit all the tergiversations of the Massa-
chusetts department to them.

As the Chroniclb was first instrumen-
tal in contributing to the public recogni-
tion of the late commissioner, it would be
ungrateful of us to allow him to depart

** Like a tenant witboat warning
]>owB Uw back entry of time,"



and so we place, in sad reverence, this last
chaplet of immortelles upon the spot where
rests all that is immortal in Mr. Clarke's
official career, his resignation.



A Hystery Explained.

On the 22d day of October, in the year
of our Lord 1874, in the city of New York,
at Delmonico's a party of gentlemen dined,
as gentlemen can dine only at Delmonico's,
and although faint echoes of the good
cheer and kindly feeling which sparkled
to the surface and overran tliat festive
board had been heard from time to time
outside, and although it was rumored that
the dinner was given by the underwriters
of New York as a mark of esteem' to an
English gentleman to whom they fancied
their craft indebted, still, beyond this na-
ked fact, little was known of the dinner, or
the guests, or the speeches which followed.
The press was not invited, because, as was
stated, many of those who were expected
to respond to the toasts of the evening were
too modest to air their eloquence if there
was

**A cbiel amang them takin' notes.**

They had a lingering fear that their after
dinner oratory might not look well in
print, and that they would not appear be-
fore the press to such advantage when on
their feet and under a necessity to say
something worth saying, as when dispens-
ing advertising contracts from their office
chairs.

We could scarce credit this explanation,
and yet we are now satisfied that it was
the true one. For the murder is out, the
speeches are published in a pamphlet of
86 pages octavo, in clear type and on heavy
toned paper. And we are sadly forced to
the conclusion that the underwriters have
made a mistake in giving these speeches
to the press in cold legible print, rather
than to have them taken from their impas-
sioned lips, warmed with the generous
wine, for

Brighter woa]d their memory Bbine,
Seen flaming through its crimson blaze.

The^ are not, with perhaps the exception
of the .one we have already published, good
speeches. They are, if we can udge,
much below the average of after dinner
s[>eeches, and as we have, by permission,
published the best, we may be allowed to
give our readers an idea of the general av-
erage, by publishing one of the worst, that
of the president of the Equitable Life As-
surance Society.

It must be stated in extenuation of all
these s[>eecbes, except that of Mr. Hope,
that they appear to have been made by the
wrong men, the Chamber of life insurance
and the National board having so confused
things as to destroy the identity of men, so
that Mr. Hyde found himself talking to
Mr. Winston's toast, while the secretary of
the Equitable was represented by Mr. De-
pew, late secretary of state, and Mr. Crow-
ell found himself making a speech to one
toast, when he had been loaded for anoth-
er. These little mistakes will occur in



after dinner oratory. However, to Mr.
Hyde's speech, the sentiment being:

The Chaanber cf IAf€ Insurance, representinQ in-
teresu that have the best da^me vpon the beneficent
and humanlfarian epirit Qf our age. ThU branch
qf underwriting ehould be fostered and encouraged
by aU as the true bentfactor of the widow and fatkar-
less^ and the promoter <if thrift and prudence,

Mr. Chairman and Gbntlbxen:

I think it was originally intended that Mr. Wins-
ton shonid speak to this toast, bat he was nnable to
be present Not linowing that I was to respond I
came quite unprepared, and therefore felt bad when
Brother Heald brought out the facts and riews upon
which I might have spoken. Then when Brother
Hope was making his fine remarks on integrity in
fire underwriting, I wanted to tell him that I had
been in the life insurance business S3 years, and
during th&t time never knew of a lie being told in
the business I (Laughter. )

Now, with regard to life insurance, let me say
this,— that I know of no other institution, claiming
to be purely business in Its characteristics, which
may be so beneficial as this. I would say that life
insurance is Hope; and I believe life insurance men
are happy— partly because they have got an honest
superintendent in the state of New York.

I will say one word with regard to life insurance
as first known in New York city. I remember the
New York Life In-i. Co. in 1845, opposite th« present
Mutual Life, and the Connecticut Mutual Life on
the old comer of Wall and William streets. The
Manhattan was on the site of the present Mutual
Life. The companies were then transacting a busi-
ness of two or three millions a year, which was con-
sidered admirable. We had no superintendent In
the state of New York. We had very few statistics,
for the admirable system of Mr. William Barnes wa^
not then instituted. Then, from 1868 or 1864 to the
close of the last jrear, life insurance bosinesi was
very active. I doubt whether we shall ever again
experience such active years, and perhaps the time
has come when companies should do their basineM
on a little difiierent plan. The means then taken to
get business would now be needless. Now we have
our department examinations and our statements.
And as in the fire branch, so with ns, tliere are ma-
ny companies ionnd wanting, and certainly the fit-
test are surviving. I think nave than the number
named by the gentleman (Mr. Hope) have, with os,
gone down one way or another. By the time anoth-
er 10 years have run on, I believe life insurance will
have assumed quite a new position, which sliall
prove better for itself and better for its patrons.

And now let me say a few words with regard to
onr distinguished guest 1 felt very much honored
by the reception 1 had from him this evening. I
had had the pleasure of meeting hi^i on the other
side of the water; and to-night, when I came into the
room and went up to shake hands with hir. , he look-
ed at me for a moment, and said: ** How do you do,
Mr. Hope, I am very glad to see you.** Now a man
who can write a dictionary should be Tery accurate
and I was indeed surprised that he shoold take »o
plain a man for Mr. Hope. (LAughter.)

When ti:e gentleman was speaking of California,
I was reminded of being there some years ago, and
when out on the plains, going at the rate of IS miles
an hour, 1 saw an old fellow sitting there with yel-
low beard and yellow hat, and I said to him: ''Slow
work, this." He looked at me a moment, and said:
** Stranger, I have walked over these plains from the
Missouri river to the ocean, and we are going a great
deal faster than we did then." When my friend
visited the superintendent of the Insurance depart,
ment, did he think that, slow as we arc now moving,
our progress is great compared with that of a few
years ago? I am glad to hear that the superlnten.
dent there does not represent the legislature in their
views.

I will not detain yon longer, bnt wish onr dis-
tinguished guest a pleasant voyage and a safe re-
turn home.

The opening sentences of this speech
are so like those of the others, that thej
call for no comment; but the closing sen-
tence of the first paragraph aeems to have
been so hilariously happy a hit at to h^y^



Digitized by '



.oogle



THE CHRONICLE.



created laaghter; probably at the thought
that the innate good breeding of the life
insorance profession was the only thing
that had saved to it a reputation but once
before achieved in the nation*s history;
though possibly the laughter was occa-
sioned by the sight of such a clear case
of mental and moral strabismus.

In the second paragraph, there seems to
be a confused grouping of thoughts with-
out sequence, or rather words without
thought. "Life insurance is Hope," we
are told, with a capital H, and the speaker
expresses what we should Judge to have
been his personal feeling at the moment,
his belief that **life insurance men are
^PP7;'*~c^ci here the wandering eye and
thought seems to be searching for a reason
for this unusual happiness, and chancing
to observe the superintendent of insurance
instead of a wine-glass, we have the extra-
ordinary conclusion to the sentence which,
on any other hypothesis, seems so incom-
prehensible.

What a memory, too, he develops when
he really starts in on life insurance, recall-
ing those exquisite lines of Dr. Holmes:

••KIm bat the cryBtaVs mystic rim,

Each shadow fends its flowery chain,
Spriojirs in a bnbblo from its brim
And walks the chambers of the brain.**

He remembers where, in 1845, the New
York office of the Ck>nnecticut Mutual (or-
ganized in 1846) was located, and also pla-
ces upon Broadway, in full business career,
the Manhattan, which was organized in
1850. '*We had no superintendent then
in the state of New York," which may ac-
count for the incorrectness of Mr. Hyde's
'* statement."

•* We had very few statistics, for the ad-
mirable system of Mr. Wm. Barnes was
not then instituted." We should think
not, there being nothing to base statistics
on, to an alarming extent. The Massachu-
setts Hospital, and the New England Mu-
tual, in New England, and the three-year
old Mutual Life and the two-year old New
York Life in New York, would have been
rather a sorry array for Mr. Barnes* majes-
tic march of figures.

** Perhaps the time has come when com-
panies should do their business on a little
different plan." Tontine? **The means
then taken to get business would now be
useless." Alast for the degeneracy of our
day, is truth now at a discount?

Really, for Mr. Hyde's sake, the press
should have been there. His speech would
have created loud and prolonged and un-
controllable laughter. It is worthy of re-
mark that, from beginning to end, there is
not a word in it about the subject of the
toast, the Chamber of life insurance.



y>



Eliznr Wright on Term Insurance.

Editdrs Chrokiclb:

Your criticism on the security for the
persistence of term policies closes with
this question:— **Will Mr. Wright say that
flie premium upon such a policy as we
recommend is unreasonable? "

ITot ^ he knows how it it << loaded."



The net premium you propose is not un-
reasonable. And I should think the load-
ing for expenses and contingencies would
not begin to be unreasonable till it exceed-
ed one-third of the net premium. But if
it were 50 per cent, which, for its purpos-
es, seems to me rather unreasonable, the
premium would still fall' short of furnish-
ing the requisite security against lapse in
the early years of the term policy you
recommend.

Allow me to illustrate this point by re-
ferring to a remarkable editorial on *' Sur-
render Values," which appeared in the
New York World of December 30. The
writer is obviously not a mtor vltra crept-
dam. He uses a proper last, only of a size
sufficient for a sign boot, like that which
a St. Louis shoemaker placed on the roof
of his pauvre hontique^ about as large and
considerably taller than the shop itself.

This writer, after giving good reasons
why a company should guard against any
possible diminution of the average vitality,
comes to the point of the proper compen-
sation for the loss of good lives, thus:

It is obvloar, therefore, that the company ii* enti-
tled to, and \tA future solveMy requires that it re-
ceive, some compensation for the loes of a soand
life by withdrawal: and that the amoant of sach
compensation should bo equivalent to the sa i
which the outgoing life would contribute to the
payment of mortality claims if it remained a mem-
ber of the company, and continued to bear its share
of the mortality burden until its removal by death.

But looking at the individual alone, it is
impossible to say, till he is dead or his pol-
icy expires, how much he will contribute
to mortality claims, or what is the ** equiv-
alent" of it. We can only say what he
will contribute on the assumption that his
vitality is up to the average of some table
of mortality or other. The "equivalent"
of such future contributions, which the
writer in the World takes more than forty
words to describe, I will, fur the sake of
brevity, denote by the two words **tn«Mr-
ance talue,** His forty-six words are, in
fact, a remarkably clear definition of these
two.

I hardly need stop to point out that, if
the future solvency of the companies re-
quires, as a compensation for the loss of a
sound life, the whole insurance value of the
policy, if not more, as the writer asserts,
there is not a single company in this coun-
try which can expect to remain solvent
many years, for the plain reason that the
lapses are so numerous, and take place al-
most entirely before the reserve or "self-
insurance value " has become equal to the
"insurance value" of the policy, there
is no security for the payment of any such
surrender charge on term policies, and not
on ordinary life policies till after many
years. But nobody need be frightened.
This is only a sign boot. The shape is
right, but the size— Oh, no. People don*t
wear *em, or need to.

There is no evidence that the policies of
any age, that terminate by outward selec-
tion, are better lives on the average than
those they leave behind of the same age.
Still, it is best to err on the safe side, and
exact « little too much compensition, an4



guard against possibility Where there is no
probability. Hence I do not object to a
surrender charge of eight per cent, of the
" insurance value " as a compensation for
the loss of a sound life, though I think
half that would keep the company whole
against any amount of lapse. But with a
charge as high even as eight per cent.,
there is not reserve enough on term poli-
cies and some very heavy endowments to
meet it at the end of the first year, and not
for a number of years in some cases. And
this is why I would have an independent
deposit, to bring the security up to the
rule.

Let me illustrate this'with a few figures
in regard to a term policy, on the Actua-
ries* mortality, at four per cent, from 85
to 50; amount, $1,000. The Chronicle's
security for persistence, I take it, is noth-
ing more or less than the reserve, or self*
insurance value, arising out of the com-
muted premium. As a matter of average
this may be sufllcient; but if it is suficient
during the first four years, then surely a
charge of eight per cent, of the "insurance
value " is unnecessarily high. I give be-
low, in parallel columns, the surrender
charges proposed by the writer in the
Worlds the Chronicle— as I understand
it,— and myself:

SURRENDER CHARQB8.

Term policy for $1,000, entered at 35.
Term, 15 years.

No. of WoH<r$ CH„ovir« Wright's

prems. 100 ^ ct. ^^5?JS^" 8 ^ ct. of

paid. oflns. VaL ^^^^^ Ina. Val.

1 $111.70 $1.79 $8.94

S 107.80 8.47 8,58

8 108.00 6.0J 8.84

4 98.80 6.48 7.86

5 98.80 7.69 7.46

6. 87.60 8.78 7.01

7 81.40 9.68 6.51

8 78.90 10.84 5.91

9 66.50 10.68 5.88

10. 68.80 10.58 4.70

11 49.16 9.97 8.98

IS. 88.88 8.6S 8.11

18. 27.88 6.66 S.19

14 14.48 8.77 1.15

As it is evident enough that the compa-
ny suffers the greatest loss when the policy
lapses at the end of the first year, it seems
sensible that it should then make the great-
est charge; and if $8.04 is a sufficient
charge, it is plain that, at a later period, it
will be more than sufficient, so that there
may be, after awhile, a small surrender
value even to a term policy. However,
according to the Worlds the issue of term
policies at any rate, and with no surrender
value, would soon bring a company to
grief. But I must leave the Chronicle
and Tr<^2(i to fight that battle.
Yours truly,

Elizur Wright.

Boston, Jan. 4th, 1874.

Bjqxainite.

The Board of police and Are commis-
sioners and the fire- marshals have been ac-
tively considering the proposed introduc-
tion of dynamite into the facilities for ex-
tinguishing fires, and will probably take
some action in the matter thia afteraooo.

Digitized by ^OOQLC



THE CHRONICLE.



Last Saturday afternoon it will be re-
membered that several experiments were
made 800 feet west of the city limits, in
the vicinity of Harrison street. The ex-
periments were made by Col. Eallman, a
civil engineer m good standing, and elicit-
ed the unqualified admiration of the Board
of fire commissioners and fire-marshals.

The following technical description of
the event has been obtained from Col.
Kail man by a representative of the Tri-
bum:

Test No. 1 was- made upon an iron col-
umn 13 inches square, and upon a column
of timber of 10 inches. Upon the top of
each column was placed a linch cartridge.
The results of the simultaneous explosion
was the reduction of the iron column to
fragments, and the parting in twain of the
timber.

The second charge was made upon a
solid brick pier, 22 by 22. Upon the top
of this was placed a li inch cartridge. The
result was an avalanche of fragments.

The third charge was a magnificent af-
fair. Four timbers, 10 by 12 each, were
placed in a horizontal position, forming a
solid mass of timber 12 by 40. On top of
this was placed a brick pier 33 inches in
thickness. Upon the top of the timber
was placed a li-inch cartridge, 2i feet
from the end, and leaning against the
brick. The cartridge, as a result of the
explosion, cut the timber in twain and de-
molished the brick.

The fourth charge was made upon a
brick pier 33 by 33 and 33 inches in height.
The pier was built upon solid ground. On
the top of the pier was placed a li inch
cartridge. A perfect shower of bricks fol-
lowed, falling a distance of 50 or 60 feet.

The fifth charge was made upon two
upright timbers 10 by 12. A li inch car-
tridge placed on top caused a cleaving
through of the timber and a hurling of the
upper portion to a distance of about six
feet The execution was done through the
power of a battery placed about 120 feet
distant from the cartridges.

Col. Eallman declares that but one re-
port is necessary, irrespective of the num-
ber of cartridges.

This is the first test of the genuine
dynamite made. Several others, it is un-
derstood, will shortly be ordered, exhibit-
ing even more thoroughly the wonderful
strength of the compound known as dyna-
mite.— (7Au»^ IVOmne, Dec, 31, 1874.



Law Beports.

NOTES ON INSURANCE CASES.

—In 1871, on the night of Feb. 6, a train
loaded with oil was on its way from Al-
bany to this city, on the New York Cen-
tral and Hudson River Railroad. The
train was knocked off the track while
crossing the bridge to the south of New
Hamburg. One of the cars was left lying
across the up track. About 10 o^clock on
the night in question, the express train,
going up, came into collision with the oil
train; and the result of this collision was



that the locomotive, the baggage car, and
three of the sleeping cars were utterly de-
stroyed by the conflagration which en-
sued. The then American and Mer-
chants' Union Express Co. (which is now
known as the American Merchants' Union
Express Co.) had on the baggage car a
large quantity of valuable merchandise,
upon which they placed a value of about
$22.612. 55. They claim that this property
was completely ruined by the collision,
and they now bring a suit against the Im-
perial Ins. Co. of London, in which they
had insured the merchandise, for the re-
covery of the amount of the policy — ^a sum
of about $18,000. It appears that there is
a clause in the policy to the effect that the
insurance company will not hold them-
selves liable for damages resulting from
the conflagration of petroleum. The de-
fence substantially is that the loss in the
present instance having been caused by
the burning of petroleum, the plaintiff, un-
der the clause in question in the policy, is
not entitled to recover. The jury return-
ed, by order of the court, a verdict for the
plaintiff

— On the 23d of December, Mr. Herman
Sellheim, of No. 135 Clinton street, came
before Judge Eilbreth at Essex Market
police court and applied for a warrant
against Louis Klopsch, who, he stated, had
swindled him out of some $6,000 by means
of forged receipts on different life insur-
ance companies in this city. Mr. Klopsch
has been arrested and held to bail in the
sum of $2,000.

— A case which is exciting considerable
comment in insurance circles, and the com-
ment on which is not at all flattering to the
management of the Equitable Life Assur-
ance Society, is stated in the law reports of
the city papers of Jan. 3 thus: In 1868
Alexander H. Stevens obtained from the
Equitable Life Assurance Co. of the United
States $35,000 on bond and mortgage on
the building and lot No. 108 Chambers
street. He-died shortly afterward, leaving
a widow and several children, his wife and
son Ledyard being appointed executors of
the will. The financial panic of last year
left them unable to take up the mortgage
and even pay the interest The result was
a foreclosure and sale, the property being
sold in February last for $38,500, the As-
surance Co. being the purchasers. There
was due them on the mortgage $38,164,
but from the proceeds of the sale $2,886
had to be paid to the referee and on ac-
count of other legal expenses. Soon after
purchasing the Assurance Co. resold the
property for $57,500, but this was not sat-
isfactory. They applied to Judge Daly for
leave to sue for the balance still due on the
mortgage. Upon this application the
Judge has Just rendered the following de-
cision:

I assame that the object of the provision in the
Revised Statates, Part iii, chap. 1, sec. 9, art 6, de-
claring that after a bill shall be filed, while the same
Is pending and after a decree, no proceedings shall
be had at law for the recovery of the debt secured
by the mortgage^ unless authorised by the court of
chancery, was intended to suspend the right to sue



at law until the remedy in equity was exhausted. I
do not think that it was meant to, or that it could
have the effect of empowering a court of equity to
prevent the bringing of any action at law upon the
bond under any circumstances after a suit had been
brought in equity to foreclose the mortgage, for that
would have been contravening the provision in the
constitution of 1823, art 7, sec. 1. which declared
that the trial by jury, in all cases in which it had
been theretofore used, should remain inviolate for-
ever. One object, I think, of the amendment, was
to prevent multiplicity of suits and the unnecessary
accumulation of costs, by suspending the right to
sue at law until it were ascertained whether the
debt could be satisfied by the sale of the property
under the foreclosure, and, if it could not, to induce
the obligee to take a decree in equity for the defi-
ciency, but not to compel him to do so or cut him
off from the right to a trial by jury, in an action at
law, upon the bond, for the deficiency. The appli-
cation here is to sue at law for the deficiency, no
decree having been entered in equity for it, and I do
not think I have any right to refuse it, the design of
the enactment in the Revised Statutes having in
this case been fully carried out, and, the discretion
vested in the court being a judicial discretion, I
confess that I have come to the conclusion unwil-
lingly, for the foreclosure and sale were at a period
of public depression caused by a pecuniary panic;
tlie plaintiffs in the foreclosure bought the property
for their own indemnity, and sold it in a very short
time afterward for an amount largely exceeding the
debt, interebt, expenses and costs; this, however,
cannot affect the strict legal right to sue for the de-
ficiency, whatever may be thought of their bringing
the action under the circumstances.

If there is any explanation of this case



Online LibraryCosta RicaThe Chronicle: a weekly journal, devoted to the interests of ..., Volume 15 → online text (page 2 of 100)