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JUNE 9, 1911
The Commoner.
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Canada's Great Annuities System
The following letter was written to Mr. Bryan:
Government Annuities Branch, Ottawa, May
19, 1911. My dear Sir: I have read with much
pleasure your complimentary reference to the
Canadian government annuities system which
I am charged with administering, and it is grati
fying to know that you yourself have been
recognizing the value of such a proposition to
the wage-earners and people of small means,
and have been endeavoring to inaugurate some
system that would be workable in your own
country. I am not surprised, therefore, that
we are constantly in receipt of many inquiries
from the United States from persons desirous
of participating in the benefits which our act
provides, and that these inquiries are not con
fined alone to Canadians living in the United
States, but are also made by natural born United
Statesers, letters, I think, having been received
from every state in the union. The subject is
also interesting many of the state legislatures,
to whom full information has been supplied.
But the act restricts the sale of annuities to
persons domiciled in Canada, chiefly for the
reason that the rate allowed on payments made,
four per cent compound interest, is rather in
excess of the earning power of the money in
vested. And for the latter reason the maximum
amount of annuity which can be purchased is
$600; if we were prepared to sell annuities of
unlimited amount we would have to increase
our staff many times, as the people even in this
comparatively new country recognize the ad
vantage of having an absolutely safe plan of
investment, and that is, perhaps, the secret of
the success of what may properly be called an
experiment, namely, the government being be
hind the proposition. But the object of the act
is to promote habits of thrift and to provide
wage-earners and persons with small incomes,
and persons with but limited capital, with a
plan of investment which will give them the '
largest possible return and a source of income
which nothing can deprive them of, the annuity
being unassailable by any process of law.
The earliest age at which an annuity can be
gin, except for Invalidity or disablement, Is
'fifty-five, the act having in view an income at
a time when one's earning powers may become
less; but the majority of purchasers aim at the
annuity beginning at 60 or 65, as the longer
the annuity is deferred the larger will be the
income for the same amount paid in. Where a
person has been paying in for a number of years
and becomes disabled or an invalid, and is
unable longer to earn a livelihood, and the
amount at his then age would purchase for him
an annuity of not less than $50, the annuity
may begin though his age is under 55, and if
the amount is not sufficient to give an annuity
of $50 it is returned with three per cent com
pound interest from the . date when payments
were first begun.
The annuity is payable quarterly and, ordi
narily, tlie contract would end with death after
the first payment became due; but for a small
increase in the payments the annuity may be
guaranteed for 5,10, 15 or 20 years, so that if
the annuitant should die before the guaranteed
period had expired the annuity would be con
tinued for the remainder of the term to his
legal representatives. If he survived the guaran
teed period the annuity would be continued to
himself so long as he might live without in
creased cost.
Annuities are sold on two plans. One that
In case of death before the annuity falls due all
payments made with three per cent compound
Interest are returnable to the heirs. The other,
where the same annuity can be secured for a
smaller payment, there would bo no return in
consideration of that fact.
The rates are calculated on the assumption
that the premium is paid half-yearly in advance,
but the annual premium may be split up into
half-yearly, quarterly, monthly or weekly pay
ments, and the same benefits be derived as if
the whole annual payment were paid in advance;
so that the smallest wage-earner will receive the
same benefit as the purchaser who is able to
pay down the whole annual premium in one
payment.
The earliest age at which the purchase may
be begun is 5, but payments may be begun at
any age thereafter; and any person of the age
of 55 or over may pay in a lump sum and
receive an immediate annuity, the first quarterly
payment of which will be made to him three
months thereafter. There are various other
forms of purchase. For example, if a man has a
lump sum at $40 which he can spare, he can
pay this down, and without any further pasr
ments receive such annuity that the amount will
buy improved at four per cent compound In
terest at 55, or any ago thereafter, and this
payment may be made on the plan that provides
for the return of the payment in case of death
or not, as he may desire.
Last survivor annuities may be purchased by
any two persons whether man or wife, sisters,
brothers, or as the case may be, and the an
nuity will bo paid so long as either lives.
There are no penalties or forfeitures, and if
a man or woman after having paid for a few
years finds that they cannot continue their pay
ments, the payments will be improved at four
per cent compound interest, and at the annuity
age the amount of annuity which the payments
made so improved will purchase will bo paid to
the annuitant. If a sufficient sum has not been
paid in to secure an annuity of $50, which is
the minimum amount which can be purchased,
all payments made with three per cent com
pound interest would be returned to the pur
chaser. Our plan of reaching the people is through the
medium of lecturers who travel from one end
of the dominion to the other, and each postmas
ter in the dominion is created an agent of the
department by order of his excellency, the governor-general.
Payments may be either made at
the post office, or sent direct to the department,
as may best suit the convenience of the pur
chaser. The government bears the cost of ad
ministration, and the annuitant receives the
benefit of every cent that he pays in, there be
ing no loading for any purpose. I am also
sending out from week to week "readers" to
the newspapers of the dominion that they may
publish them for their news value if they
choose. Some of them, however, refuse to pub
lish them on the. ground that they think the
government should payfor them as advertising
matter. But this we 'have refused to do. 'I
enclose sample of these "readers" and also
enclose copy of our rate book and of tables
showing the cost of a deferred annuity guaran
teed for 10 years, and of an Immediate annuity
guaranteed for the same period. Guaranteed
rates for other periods have not been printed.
I also enclose you copy of a table which shows
the amount to be returned to the estate where
payments are made on that understanding and
death occurs before the annuity falls due.
If, on your return to Nebraska, you should
desire further information, you have only to
command me. Faithfully yours,
S. T. BASTBDO.
y
SEED-TIMID AND HARVEST
The school children of Toronto had at their
credit on the 10th of March, last, in the penny
savings bank, $164,384.85; of which amount it
is said one boy deposited the tidy sum of $500.
This splendidly illustrates the advantage of a
convenient means of depositing small amounts.
But what is of greater importance to our young
people, and to older people also, is that they
should have some plan of investment for their
savings that may bo of permanent advantage to
them, a plan that, when old ago arrives and
their earning days are over, will furnish an
income that will enable them to live in comfort,
happiness and dignity for the remainder of their
lives. Such a plan Is -provided by the Canadian
government by its annuities act. If, for example,
the lad referred to, who wo will assume for
the purpose of illustration is 16 years of age,
will avail himself of this plan, and will deposit
with the government one-half of the amount
which ho has already saved, or $250, ho will
receive at 60 an annuity of $15485; and if ho
will add to his $250, $20 a year from 16 to 60, he
will receive a further sum of $245.70, or a total
income of $400.55 a year for life, payable In
quarterly installments. If he should die before
60, all his payments would bo returned to his
estate with three per cent compound interest;
though the same payments woull secure for him
a larger annuity if he did not wish to provide
for this return. ' '
If the pennies of the children had not been
deposited In the savings bank, there is little
doubt that in the majority of cases they would
have been spent in trifles; but while the custo
dian of their savings Is the savings bank, the
temptation to withdraw will constantly recur.
If deposited with the government for the pur
chase of an annuity, they cannot bo withdrawn,
for if they could be the object aimed at would
probably in 99 cases out of 100 never be at
tained. The advice of Sir Walter Raleigh:
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APPRECIATED IN NEW YORK
C. B. Matthows, BufTalo, N. Y.
Enclosed I hand you $1.00 for ronowal
of my subscription to The Commonor,
which expired January 31st. It Is vory
interesting to note In our stato and In
the cast generally that the staudpat and
reactionary democrats aro the kind that
nover subscribe for Tho Commonor and
aro perpetually joining forces with tho
standpat republicans to resist In every
possiblo way tho reforms urged by pro
gressive democrats, The senatorial
battle continues unabated in this stato
and the situation becomes somewhat In
teresting as tho only stock argument
favoring tho election of Slieohan Is
"majority rule." Stand by tho organi
zation or tho party must go down to
defeat. Probably there aro very few
readers in tho cast of The Commoner
that do not well remember how quickly
Mr. Shoehan deserted tho prlnciplo of
"majority rulo" in tho convention of
'96 and becamo a sturdy and interested
operator in tho cause of anti-democracy.
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(s
"Uso thy youth so that thou mayest havo com
fort to remember It when it hath forsaken thoo,
and not sigh and grieve at tho account thoroof;
use it as tho springtime which soon departoth
and wherein thou oughtest to plan and sow all
provision for a long and happy life," is good
advice still, though given over three hundred
years ago; and you can now plant and sow
whero tho harvest will bo sure and abundant, for
tho annuities plan Is positively tho only plan
open to you that will enable you to spend your
principal and Interest without your Income bo
coming smaller no matter how long you may
live.
In youth, life seemB limitless and boundless
but before middle age Is reached tho shortening
process becomes daily moro real. There is no
timo to sow "wild oats." Statistics show that
at 45 ninety-seven per cent of men meet with re
verses and lose their entire accumulations; that
at 60, ninety-five per cent aro dependent upon
their daily earnings or on their children "fdr
support; and that of those who fall at 45 only
two per cent ever- recover their financial stand
ing, The advantages, therefore, which the an
nuities system presents as a means of making
provision for old age should be apparent to
everyone. In an Interview a few days ago with
an old lady of 90, who Is an inmate of a poor
house, she said she frequently cries for hours
at a time at the thought of having to end her
days In such a place. But no one who has
purchased a Canadian government annuity need
ever be afraid of ending his or her life there,' as
no process of law can deprive him or her of it.
The wolf will nover enter their door.
Anyone of tho age of five or over who is
domiciled in Canada may begin, and may re
ceive the annuity at 55 or jiny ago thereafter;
and any person now of the age of 55 or over
may purchase an immediate annuity. For a
small addition to the ordinary rate an annuity
may be continued for a certain number of years
though death occurs before the number of years
expires.
Literature explaining all about this most
provident systQm may bo obtained at tho post
office or on application to S. T. Bastedo, superin
tendent of annuities, Ottawa, Canada, to whom
letters go free of postage. He will be glad to
give you all Information if you will write to him.
"INDEFENSIBLE AND INTOLERABLE"
Findlay, O., May 29, 1911. Editor Com
moner: Continuing your editorial in the cur
rent Issue on the Standard Oil decision by the
United States supreme court, quoted in United
Press under Lincoln date line, you might, with,
great propriety add: Fourth, it explains why
Judc ?.Van Devante'r of the circuit court of ap
peals from whose decision the Standard case
went to tho United States supreme court was
selected by Taft to fill one of the vacancies on
tho supreme court bench.
.The circuit court was composed by Judges
Sanborn, Hook; Adams and Van Devanter. Tho
case in that court is reported at length in tho
173 Federal Roporter at page 177. Judge San
born wrote the principal opinion. The record
disclosed tho fact that from the date of the con
demnation of this trust by the supreme court of
Ohio in March, 1892 till the formation of tho
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