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msmi^i^ii^^ 
 
 
 -■^.^l^p^l^- 
 
 //.„ 
 
 CANADIANS 
 
 A.1VI3 
 
 Life Insurance. 
 
 THI3> 
 
 Silver Question. 
 
 (From the Montreal Shareholder.) 
 
 ' * > 
 
 i^oo. 
 
 
o^*^ 
 
 JOHN JAMES STEWART 
 
 COLLECTION 
 
 V 
 
 1 
 
AflERICAN INSURANCE COHPANIES. 
 
 V The prospect of the establishment of free silver in the 
 
 United States at a ratio of sixteen to one and its becoming 
 a legal tender is having a very disquieting effect upon Cana- 
 dians who hold life policies in American companies. The 
 whole question involved is that arising from the legislation 
 to result from the success of the silverite party. Their 
 failure to succeed at the presidential election to be held this 
 Fall will not, however, finally dispose of the question. It 
 will only serve to postpone it. The issue involved will, in 
 the case of failure at the time referred to, still be kept alive 
 and will re-assert itself at subsequent elections. Policies in 
 life companies are taken out with the intention of continuing 
 them until the death of the policyholder, or at the maturity 
 of the policy in the case of endowment policies. That may 
 not occur until a number of presidential elections have taken 
 place. What policyholders have to look to is the legislation 
 on the currency question which may be in force at the time 
 the policy will mature. When such men as Colonel Greene, 
 president of the Connecticut Mutual, and John A McCall, 
 president of the New York Life, felt it necessary to issue 
 the circulars to shareholders in their companies to which we 
 referred to in a former issue, some idea may be formed of 
 the extent of the anxiety which the officers of American 
 companies experience at the prospect of the success of the 
 silverites. Colonel Greene says, " Should we come upon a 
 silver basis your policies would for the present be paid in 
 'dollars' worth to your families only about fifty cents; and 
 the great bulk of them would probably be paid in * dollars ' 
 worth not more than from twenty-five to thirty-five cents." 
 Mr. McCall said, " If the views of the Chicago candidate 
 prevail the companies could not, even if they are willing, 
 provide for the payment of their claims in gold dollars." 
 This being the case with two such companies, can it, we 
 
 i 
 
ask, be expected that other companies will be in a different 
 position ? From this it results that the endorsation on the 
 policies, ** payable in gold," will be of no value. The settle- 
 ments will have to be made in the legal currency of the 
 country in which the contracts are made and dated. In 
 that case the payments may have to be made in silver dollars 
 worth " not more than twenty-five to thirty-five cents.'' 
 Such an endorsation, if permitted by law, would involve the 
 payment of two hundred cents on the dollar in the event of 
 the success of the silverites at any time during the currency 
 of the policy. With the prospect of the amount of the policy 
 being paid at maturity, whenever that may be, in greatly 
 depreciated money, the present position is one calculated to 
 create consternation among policy-holders, as men, more 
 especially those of limited incomes, regard the possibility of 
 the provision the policy is looked upon as securing being 
 reduced to such an extent as to involve a heavy loss. We 
 are told that the inducement to Canadian policyholders to 
 insure in American companies is that the rates of premium 
 are lower. In the event of the amount being payable in 
 silver worth only fifty cents on the dollar (to say nothing of 
 a lower rate) the rates of premium in Canadian and British 
 companies should be calculated on one-half the amount. 
 In other words, the comparison of the rates should be the 
 cost of insuring, say $2,000, in an American company with 
 that of insuring $1,000 in a Canadian or British company. In 
 that case the advantage is largely in favor of insuring with the 
 latter companies. For a number of years past The Share- 
 holder has conceived it a duty to bring under the especial 
 attention of Canadians the advantages to be derived from 
 insuring in Canadian and British companies over American 
 companies. In an article which appeared in its issue of 
 September i, 1893, we pointed out the possibility of a 
 change in the legal currency of the United States, such as 
 that now constituting the leading plank in the Silverite party 
 platform. That article is so a[)plicable to the circumstances 
 that we reproduce it in this issue, without any apology for 
 so doing, as we are convinced it will be re-read by our many 
 readers with no little interest. 
 
 V 
 
PAYABLE IN GOLD. 
 
 We publish in another cokinin a correspondence which 
 has taken place between one of our leading citizens and the 
 y/ Canadian manager of the New York Life Insurance Com- 
 
 pany, the name of the insured being witliheld, as it has no 
 effect upon the merits of the correspondence. The appli- 
 cation was a simple straightforward one, being from a policy- 
 holder, whose policy did not specify the description of 
 money in which it was payable. He desired to have the 
 words " payable in gold " endorsed on his policy. The 
 reply is anything but re-assuring, and is calculated to increase 
 rather than allay dissatisfaction. Mr. Burke, acting under 
 instructions from the head office, says : " The Company is 
 not going to adopt a silver standard." r>y this, we presume, 
 he means voluntarily, as Congress may adopt it for the 
 company and compel it to accept it. From what we have 
 said elsewhere, we are (^uite convinced that the company 
 would very much prefer that no change be made in the 
 currency laws of the United States, but those laws may come 
 and the company would be powerless. It would have to 
 pay in the legal currency of that country, and dare not dis- 
 criminate against American policyholders in favor of its 
 Canadian policyholders unless the laws of this country made 
 it a condition of its (or any other American Company) doing 
 business in this country, that the amount of the policy on its 
 becoming payable, shall be payable in lawful money of the 
 Dominion of Canada. Without such a provision in the 
 Canadian Insurance Act, the endorsation on the policy of 
 "payable in gold " would, in the event of thj success of the 
 Silverite party, be, in all probability, a violation of United 
 States law, which the company dare not indulge in, inasmuch 
 as it would be simply illegal, to say nothing of the discrimin- 
 ation against American i)olicyholders which such an 
 endorsation on Canadian policies in American companies 
 would involve. 
 
6 
 
 CANADIANS AND LIFE INSURANCE. 
 
 (From The Shareholder^ September isf, 1893.J 
 
 Our attention has been called to the fact that the amount 
 paid in premiums last year to the American life insurance 
 companies doing business in Canada was $3,251,598, as 
 shown by tlie report of the Superintendent of Insurance, 
 •and that this is the largest amount yet paid in any one year 
 to these companies. The total amount of insurance in force 
 with these companies at the end of the year was $90,708,482. 
 'That in force with Canadian companies was $154,709,077, 
 and that with IJritish companies was $33,692,706. That 
 the amount in force with American companies should run 
 up to so large a sum astonishes us, especially when we con- 
 sider the advantages which Canadian and British companies 
 offer. We have no objection to American companies doing 
 business in Canada, but we are surprised that Canadian 
 people should pay their premium money into foreign com- 
 panies when equal if not better security is furnished by 
 Canadian and British life companies, for in the discussion 
 of questions of this description we do not hesitate to place 
 Canadian and British companies on a common footing, both 
 being equally entitled to the confidence of the people and 
 both being in fact British. We say that we are surprised 
 at the large amount carried by American companies. It 
 cannot possibly be ascribed to any want of confidence in 
 the other companies, and must be artribulable to a want of 
 thought, a want of that consideration which should accom- 
 pany such an important matter as the taking out of a life 
 insurance policy, which is not a matter for a year or two, 
 but one of a life-time. Circumstances which exist to-day 
 may undergo extraordinary changes in the course of ten or 
 fifteen years, and the possibilities which may accompany 
 these changes should be seriously weighed. The policies 
 issued by American companies are governed by American 
 laws and American usages. These change. War between 
 the two countries might take place during that time, and if 
 it did what difficulties would arise in securing payment of 
 
 f 1 
 
E. 
 
 I 
 
 the capital at a time when it was most needed it is difficult 
 to foresee. This should certainly carry some weight as an 
 argument. Again, the depreciation in the value of the 
 currency of that country should also be considered, for 
 American policies are payable in United States currency, 
 whatever that may be, unless by the terms of the policy 
 they are specially payable in gold, and even in that case an 
 Act of the Legislature might relieve the companies from gold 
 payments, and authorize silver or something else under 
 extraordinary circumstances. In the present financial de- 
 pression in the United States difficulty might be experienced 
 in making a large number of payments aggregating a large 
 sum at one time, and delays would ensue, when the value 
 of the policies to the bereaved would be greatly reduced by 
 their failure to afford immediate relief. We are told that 
 some of these companies return to their assured annually a 
 large proportion cf the premiums, and that this is a strong 
 inducement. Canadian and British companies do the same, 
 or, at least, make quinquennial distributions of profits, which 
 is better and more equitable than annual ones. We have 
 before us an American policy for $i,ooo, payable in fifteen 
 years, on which the annual premium, paid in advance, is 
 $67.36, the age of the assured at the lime the policy was taken 
 out- being 33. The policy is for fifteen years. Twelve 
 years have elapsed, and during that time $98.77 have been 
 added to the policy as suri)lus profits. The first year the 
 sum allowed was $9.15 and two years after it was $11.72 ; 
 that was the largest amount for any one year. But of late 
 years the profits have been growing less and less, the last 
 distribution a year ago giving only $4.90. The inverse ratio 
 would have been looked for, and the older the policy the 
 greater the profits would be, a natural expectation on the 
 part of the assured. We cite this as a case coming under 
 our attention ; there are, no doubt, hundreds of others 
 similar. Under all these circumstances we think that 
 Canadians would do well to give their preference to Cana- 
 dian and British life offices, and thereby avoid the possibil- 
 ities with which the womb of the future may be charged. 
 Life assurance is a provision, not for the presenr, but for the 
 
 f 
 
future and lor the loved ones. Iwery possibility of mischance 
 or depreciation in value should be avoided, and this can be 
 done by assuring with Canadian and liritish offices. 
 
 Mr. McCALL on SOUND MONEY. 
 
 Mr. lohn A. McCall, president of the New York Life 
 Insurance ('oinpany, issued a circular to the 287,000 policy- 
 holders of the Com[)any in which the "financial heresies" 
 of the Democratic platform adopted at Chicago are 
 denounced in strong terms. The circular is a strong appeal 
 in behalf of sound money, to the public in general and to the 
 holders of insurance policies in particular, and calls attention 
 to the fact that the triumph of the principles embraced in 
 the democratic platform would mean the enforced payment 
 of the claims of the insured in a debased currency. 
 
 Mr. McCall shows that the total outstanding insurance 
 contracted to be paid is over nine and a half million 
 dollars, and asks if this sum is to be paid in dollars of gold, 
 worth 100 cents, or in dollars of silver, worth 53 cents. 
 He then continues : — 
 
 " The premiums have been paid in gold or its equivalent, 
 and to compel the policyholder or his family to accept one- 
 half the value that he has paid for at the maturity of the claim 
 would be as ini([uitous and indefensible as though he had 
 been robbed on the highway. 
 
 "If the views of the Chicagc -candidate prevail, the 
 companies could not, even if they are willing, provide for 
 the payment of their claims in gold dollars. The platform 
 on which he stands reads in part as follows :— 
 
 " ' We demand that the standard silver dollar shall be 
 a full legal tender, equally with gold, for all debt, public or 
 private, and we fovor such legislation as will prevent for the 
 future the demonetization of any kind of legal tender money 
 by private contract.' 
 
 " The circular closes with an official appeal to the 
 insured for united action against those who would 'greatly 
 impair, if not destroy, the protection that has been secured 
 by much self-denial.' " 
 
SILVER QUESTION vs. CANADIAN 
 
 LIFE-POLICY-HOLDERS IN 
 
 AHERICAN COnPANIES. 
 
 To the Editor of Thk Siiarkholdek : — 
 
 Sir, — While advocating the cause of life insurance 
 generally, and of (,'anadiap life insurance companies in 
 particular, as has been repeatedly done by you, an(l specially 
 in your article " (.'anadians and Life Insurance," in your 
 issue of September i, 1893, likewise in your articles 
 "American Insurance Companies," and " Payaljle in dold,"* 
 in issue of August 14, 1896, you have cciiferred no small 
 obligation, at the same time, upon Canadian life-policy- 
 holders in American companies, by t'Mj verv faithfiil and 
 clear exposition of the cii.umstanceh 'n which they might 
 fin^l tl jmselves to be placed in case of anv disturbance of 
 the United States financial system. The lirst-mentioned 
 article, which was opportunely repeated in last issue, now 
 read in the light of sul)se(iuent events, goes far towards 
 entitling you to be credited with the gift of "second sight " 
 The contingency of war on account of the Venezuelan 
 question was, as is now a matter of history, barely averted 
 by the righteous indignation of the better classes of the 
 community asserting itself over the unscrupulous uUerances 
 of political demagogues. And now, what was said l>y you, 
 "An Act of the Legislature might relieve the com[)anies 
 from gold payments," looks almost on the eve of fulfil- 
 ment. 
 
 It seems a mystery why so many of our citizens should 
 still persist in patronizing American life companies, notwith- 
 standing the many serious risks and disadvantages involved, 
 and thus send so much money annually out of the country 
 in life insurance premiums, which could be profitably em- 
 ployed within it, seeing we have sc many strong and reliable 
 companies within our own borders. One '■easoii inxoked 
 by you, viz. : " We are told that tlie inducement to Canadian 
 policyholders to insure in Ai-crican companies is that the 
 rates of premium are lower," is wholly without foundation, 
 for not only are the rates of the Canadian companies lower 
 than those of American companies (m ith j)erhaj)s the excep- 
 tion of one company v/hich keeps all its |)rolits for the 
 
10 
 
 stockholders and gives none to its policyholders), but their 
 profit returns to policyholders are much greater. The 
 most powerful influence seems to be the enormous commis- 
 sions paid to brokers for bringin^' business and the alluring 
 and misleading promises made by them. Unfortunately, 
 even the promir.es of some of the chief agents are not to be 
 relied upon ; take, for example, the present silver question. 
 It has been asserted by some of them at the present time, 
 in order to allay the fears of the policyholders, that even in 
 the event of the silver standard being adopted, their claims 
 would be paid in Canadian currency, but the dicta of 
 President Greene and McC!!all clearly contradict this, as 
 pointed out by you. Nothing could more strongly emphasize 
 this than the following (quotation from a circular issued by 
 the latter gentleman : — " If the views of the Chicago candi- 
 date prevail the companies could not, even if theyare willing, 
 provide for the payment of their claims in gold dollars." 
 You have pretty well exposed the fallacy of the statements 
 made in the letter of D. M. Burke, local manager of the 
 New York Company, in his attempt to reassure his policy- 
 holders, but the 4th point referred to by him should not be 
 passed over in silence, as it does not appear to be over 
 ingenuous. It is said, " The Company's assets held in 
 Canada are sufficient by an excess of over $1,000,000 to 
 pay all its obligations and policy claims at their full legal 
 value." The question is (leaving out the consideration of 
 depreciated values of American securities), would that be 
 available to pay Canadian policyholders in full if the com- 
 pany should otherwise be in such a position as to be able 
 to pay its other policyholders at the rate of 50 cents in the 
 dollar only ? The Dominion Insurance Act, as originally 
 framed, or as it now stands in conjunction with the Winding- 
 up Act, says not, and Mr. ]^urke, there is good reason to 
 believe, is not ignorant of this fact, although the statement 
 referred to appears to convey a different impression to his 
 policyholders. 
 
 If Canadian citizens will persist in insuring in American 
 life companies they have themselves to blame after the 
 warning voice so often raised by you if they should after- 
 wards suffer for their imprudence, but they should at least 
 refuse to acctpt any American policy unless it is clearly 
 stated in the body of it that the amount is payable " in gold 
 coin of the United States of the present standard weight 
 and fineness." 
 
 Yours, N. P. 
 
11 
 AHERICAN INSURANCE COHPANIES. 
 
 To the Editor of The Shareholder :— 
 
 Dear Sir, — I enclose you some correspondence re life 
 insurance which may be of interest to your many readers. 
 
 Insured. 
 
 Davh:* Burke, FIsq., 
 
 I)e:ar Sir, — Will you kindly have your company write 
 me a letter stating that they will pay policies in gold, and 
 oblige, 
 
 Montreal, 23rd July, 1896 
 
 Dear Sir,— 7?^ Policy No. 195,920, I duly received 
 your favor of the 23rd of July, and forward same to our 
 head office. In reply, the Secretary in.xjrms me that they 
 cannot well consider the question of changing contracts 
 already made, to read payable in gold, but they can write 
 new insurance with premiums and payable in gold. The 
 Company wish to state the following points in connection 
 with matter of policy claims in Canada :— 
 
 I St. The Company has paid every dollar of its policy 
 claim obligations in the past. 
 
 2nd. The Company expects to maintain its good reputa- 
 tion for the same fair dealing with its policyholders in the 
 future. 
 
 3rd. The Company is not going to adopt a silver 
 standard. 
 
 4th. The Company's assets held in Canada are sufficient 
 by an excess of over $1, coo, 000 to pay all its obligations 
 and policy claims at their full legal value. 
 
 Yours truly, 
 
 D. M. Burke, 
 
 Montreal, August 1st, 1896. General Manager.