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Show INSURANCE INVESTIGATION. (From Collier's Weekly.) A reaction Is certainly taking place , In favor of the smaller Insurance com panies, though to what extent can not be told. Years ago the dangers of un- ( limited size were pointed out. In a I ft paper by an actuary read at the Convention Con-vention of Insurance Commissioners of 1892, for example, it was argued that the largest companies might , "grow to such vast slzo that their ns- sets and affairs could not bo perfectly managed by their oillcers, supervised ' by their directors, and examined by state insurance officials." And he, like other prophets, pointed out also ' the moral temptation, Increasing with the size. Mr. Hughes, pressing an officer of-ficer of one big company about syndicate syn-dicate operations, received tho reply that they were necessary In order to handle so much business. To tho paraphrase of Mr. Hughes, that the j insuranco companies fight for an j amount of business that will force them to disregard tho law, there was, i as there could bo, no adequate reply. These big companies have come to bo indifferent to the permanence of the business written. Tho public has been naturally hypnotized by figures. The statement of an agent that his I company has hundreds of millions in assets stops criticism, for "a billion oi assets in force" must Impress tho uninformed un-informed imagination. Tho policyholder policy-holder can hardly be expected to know that under tho law of legal resorvo each thousand dollars of Insuranco is protected by a resorvo, and that therefore a company with $20,000,000 of insurance in force, and a reasonable reason-able surplus, is as sound as ono with many times that volume. Tho principles prin-ciples of life Insurance, however, will, at tho end of tho present upheaval, bo better understood by the public than they ever w.ero before. A limitation of the amount of insuranco permitted to ono company Is likely to bo among tho many legal measures taken to keep this vast and necessary business from becoming dangerous to tho policy-holders, to other lines of enterprise, enter-prise, and to the community. The worst prevailing evils brought out In tho legislative investigation of insurance are two. Lobbyiug and bribery, direct or Indirect, aro worse, but they are not special to Insurance, constant, and closely Interwoven with the system. Tho two most demoralizing demoraliz-ing practices aro tho participation of Insuranco officers in syndicates and tho control exercised by international bankers not only over Insuranco companies, com-panies, but over tho wholo financial market. Including the railways and other largo interests which Issue bonds. A railway wishes to sell bonds direct to an Insuranco company. An intimation comes from tho banking houses that such procedure will bo severely se-verely punished, and so great is tho power of these robber barons that , nobody dares refuse their rake-off. " ' Morgan &. Co., Kuhn, Loeb & Co.. and Speyer & Co. thus boss tluo financial world, with ruthless and Inexcusablo greed, and it would require a bold railroad to defy their will. Tho in-uranco in-uranco companies can secure tho most profitable investments only by going into syndicates, most of which arc In close relation to those banks. , Tho actual wrong, on tho part of In surance men, lies not in buying through syndicates for their companies, compa-nies, but in accepting allotments for themselves, thus reducing tho amount of a desirable investment granted to tho company, nnd also reducing their ability to form entirely disinterested Judgments In tho company's behalf. Part of the syndicato ovil can bo ', dealt with fairly well by absolutely preventing insuranco officials from investing in tho same securities which they buy for their companies but how to keep tho bankers from forcing themselves between tho sellers nnd i tho purchasers of securities, by threats of ruin to all who refuse tho rake-off, is one of 'tho hardest problems prob-lems in the situation. Tho few are wiser sometimes than the many. Every week thnt passes makes clearer tho wisdom of Japan's decision to have peace, and tho Japanese Jap-anese crowd will understand it somo time, even as Americans now approvo of the Jay treaty for which Alexander Hamilton was stoned on Broadway. We do not yet know what, if any, part the bankers took; whether or not tho British government promised to guarantee Japan's now territory in tho treaty by which India is to bo protected; pro-tected; or whether the wiso orientals counted profit and cost without having hav-ing to reckon with either of theso external ex-ternal influences, but only with what might happen If Itussla wero able, with money and internal control, to wait doggedly for somo years. What wo do know Is that Japan wins not only the things expressly stated, but others of as great or greater moment as the ultimate control of China and of the railways that nominally are hers. Tho government's explanation explana-tion to tho people, that tho now conditions con-ditions call for commercial energy and prowess not less than the prowess and energy that defeated Russia, will sink more and more into tho people's mind. Somo have been sorry to sec peace, becauso of a guess that war would have brought a speedier revolution, revo-lution, a remote and uncertain surmise, sur-mise, hardly to bo weighed against tho ardent wishes of cautious and progressive Russians like M. do WItto. Nor do we expect appreciable loss to American Interests In tho Occident Oc-cident by tho hysterical over-oxpres-slon given to the president's Important Impor-tant role. If tho peace is a good ono for Japan, as wo believe it is, tho Japanese peoplo will lose their resentment resent-ment at us step by step with their growing understanding that they havo not been bullied as they wore ton years ago. |