i.i-i ii in AnnUAL KU'UKI. 1
OP THE
CONNECTICUT
MUTUAL LIFE INSURANCE
COMPANY.
'A "RESUME OP INTERESTING HISTORY
AND A llEVIEW OP RESULT
ING, CONDITIONS.
!To the Memberi i
Tho experience o( the year 1000, whllo
favorable, was In no way especially re
toarkable In tho business or process of the
Company. Its chief Incidents may bo very
briefly summarltcd: Thore was a fair ln
creoso In tho premium Income and In the
amount of Insurance In force; as for many
yearn past, tho rates of Interest on de.
Irable securities showed a general tend
ency downward! the foreclosure of mort
ages, which for sovcral years following
the panic of 1893 was for considerable
mounts, showed a chango for tho better,
with an lncreaso In tho sales of foreclosed
property; tho expeuso ratio has been kept
t 1h usual low limit, save In tho expenses
Incurred upon foreclosed real estate, which
havo been consldornblo In order to put and
keep tho properties In good condition pend
ing sale, and which will disappear as sales
tako placo; tho. mortality of tho year, while
omowhat heavier than that of 1891', was
o far Inside tho losses provided for by our
tables thnt tho saving amounted to f 113,
SS2', tho market values of securities, which
had ruled lower for several years following
tho panic of 1893, Wero In great measure
recovered! for two or threo years wo have
boon able to earn lens-. surplus than for
many previous years, during whloh wo had
keen slowly accumulating nmnll Items of
urplus in excess of our usual dividend,
which. In Just such times as have been
experienced since 1893-4, becomo available
to maintain. for tho present thq tamo high
dividend anlo as for many years past,
nml until tho Interest ratb and other con
ditions which affect tho surplus corning
ability. of all companies shall bo moro defi
nitely settled and tho necessities of tho
futuro can bo better Judged.
"tcadlnea In l)l Idemla.
It is our deslro to go a far as perfect
afety will permit In maintaining a steady
woalo of annually decreasing cash cost.
Tho greatest and most uncertain factor op
erating against us Is tho continued tend
ency to a fall in Interest, foreseolng which,
we, nineteen years ago, changed our calcu
lations from tho basis of 4 percent annual
Interest to that of only 3 per cent. The
only measurably controllable factors af
fecting our ability to earn or savo surolus
re tho death rato and tho cxponse nc-
count, in respect of these, tho caro In
tho selection of risks and tho prudence and
economy traditional with The Connecticut
Mutual aro steadily maintained.
The QJd Century nml Hie New.
With this very brief review of tho gen
eral features of the year's experience, and
railing attention to tho statement else
where of tho details of our financial oper
ations and condition, wo beg to ask your
careful consideration of certain matters re
lating to our own past bstory,'and to tho
existing conditions of the life Insurance
business, which seem especially pertinent
and interesting as wo stand at the begin
ning of a new century, with a history be
hind us of fifty-five most ovontful years.
For in that tlmo thero havo been wrought
on a scale of unparalleled magnitude, and
by many companies, certain great practical
denials of tho fundamental principles or
correct practice and of business morality,
upon their departp.ro from which The Con
necticut Mutual has stood and stands at
Issue.
Tho TrB 'Queatlon.
What, In that time, havo we done; how ef
ficiently have wo accomplished the one serv
ice which llfo Insurance alone can render;
how do wo today stand addressed to the
best rendering of that. service In the futuro;
how far are our bases, plans, nnd methods
rcsponsivo to that special need which life
Insuranco sets' Itself to serve, and loyal to
those facts and principles which them
selves unchanging, must always remain
the basis and tost ,0f legitimate plan and
legitlmato method; how, In respect of these
things, docs our history and present posi
tion contrast with those of many others;
and do we stand condemned by thoso things
In which somo have succeeded, or Justified
by those in which they havo failed, but
In which wo, havo succocdcd; havo wo been,
ro wo today, doing right or wrong;
havo we done, aro wp doing, the best that
:an bo done for widows and orphans, and
tor thoso who must pay Us cost?
l-'lnanelal Saiuiiinry or. Flfty-llvc
Venn,
Tho monetary part of tho story Is soon
told: In the flfty-Bvo years we have re
ceived (rotn our members of ordinary, ex
tra, and annuity premiums, 8211,643,069.86;
wo have returned to them for death losses,
endowments, annuities, surrendered poli
cies, and dividends, 1207,798,111.81, or 98.22
per cent. For Interest, rents, and profit
and loss we havo had 396,820,645.69; a
total Income of 1308,462,615.45. Of this sum,
1207,798,111,81 has been' returned to policy
holders as Just stated;. $27,906,305.69 only
0 per cent has gone for expenses; 810,
418.175.66 has gone for taxes, and tho bal
ance, 162,340,022.29, forms part of our gross
assets $64,965,176.15 covering present lia
bilities and surplus. Tho payments to
policy-holders and tho gross assets aggro
gate 1272,763,287.96, or 128.88 per cent of the
receipts from policy-holders.
These results of more than halt a century
havo been equaled by no other American
company. No other company .has returned
to Its policy-holders as largo a proportion
of ther payments; no other holdB as large
a proportion of its Interest Income In re
serve; no other has dono Its business at
so small a rato of espouse. It has done
moro for Its policy-holders, and at less
cose to them, than any 'other company.
Life Insurance lnt nml Present.
But that Is not nil that Is of profoundest
Interest as we stand at tha beginning of a
new era. To see clearly whero we stand
to Jay, and what tho propriety of our atti
tude, past and present, It is necessary to
rovlow tho main features of the develop
ment of tho business of life insurance dur
ing the flfty-ftvo years of our corporate
existence, which cover practically tho whole
history of the business In the United States.
Fifty-five years ago there was no local
business expc.ienco to be guided by. The
companies organised about that tlmo took
as a guide the experience of tho English
companies ns being that most likely to be
repeated here. They assumed the mortality
shown by the actual experience of 17 Eng
lish companies, 4 per cent annual Interest,
and a considerable margin or "loading"
for expenses. Their plans were very few
and simple. They rcaltted that tha right
business of a llfo Insurance company was
to Insure lives and to make that Insuranco
cost the' premium payer as llttlo as possi
ble. Commissions and all expenses were
pitched on a low scale. Rates of Interest
were fairly high. No provision was made
for any return on lapsing policies. If n
permlilm was not paid all former pay
ments were forfeited to the company, no
matter how largo the reserve or surplus
that bad been accumulated from them.
This -was n very largo source of profit, but
a great cause of complaint on tho part of
those who had to give up their policies,
especially after they begau to learn tbat
not only had their permlums paid the cost
of their policies up to the tlmo of lapse, but
had also provided a reserve fund which was
for the future protection of their policies
and was therefore not needed by the com
pany when theso1 policies Ir.psed and ceased
t be a liability.
Dividend I'erloda.
In view of tho lack of experlcnco and
the small amount of business, nnd following
again English precedent, dividends were
made only at tho end of five-year periods,
or were not begun on any policy until It
had run five years. The profits from for
feitures, tho high rales of Interest, nnd tho
savings from the low expenso rate, nil
contributed, In the carefully managed com
panies, to mako tho dividends unexpectedly
large. It was not many years beforo an
nual dividends beenmo the general prac
tice.
Xo n -Fo r f e 1 1 u r e.
Presently, tho Inequity of keeping n man's
contribution to tho rcservo on a policy
which had lapsed and ceased to be a lia
bility, and the current cost of which while
it was In force ho had fully paid, began
to be moro clearly scon and moro generally
understood. "Non-forfelturo" becomo ono
of the strongest, competitive attractions.
Companies vied with each other" In doing
"equity" to a lapsing policy-holder.
Change In l'lnn nnd Premium.
As an alternative to annual premium
payments during life, rates were made for
tho paymont of all premiums In n limited
period 'of years, as ten, fifteen, etc., whllo
tho policy covered tho whole term of life.
Llfo endowment policies were Introduced,
to cover a certain term of years ns nn In
surance, and payable at their faco nt tho
end of the term If the Insured survived It.
Whero the policy term was long enough to
cover tho period of llfo when ono has
others dependent on him. nnd tho policy
holder was so young at tho outset ns to
mako tho endowment part of his premium
comparatively small, nnd so lung as. tho
companies kept their exponscs down, this
kind, of policies served a fnlrly good purpose-,,
although tho endowment fenturo costs
much moro In a llfo Insurance company
than In a savings bank, becauso of tho
much higher rato of general expense.
Along these general lines, which, within
Judicious limits, woro mostly lines of dis
tinct Improvement, the 'development went
on without any striking divcrgenco from
certftin indisputable universally accepted
principles governing sound nnd cqultnblo-
practlce, until about 1870.
Ncrv Departure.
Tho previous decado had been the forma;
tlon of a multltudo of new companies which
copied the plans of tho older ones and
promised to repeat their success. Dut, In
order to attract agents and get business
thoy found or felt themselves compelled
to pay such commissions to agents and to
Incur such other expenses, as to absorb,
not only all their surplus, but so much of
their reserves ns to send tho most of thorn
Into bankruptcy. In tho 'lato '60's tho cry
bad been that no properly organized llfo
Insuranco company could fall. Tho early
'CO's showed that conduct was quite as vital
as organization, nnd that tho expenso ac
count could bleed to death tho most correct
ly organized concerns; and they died by tho
dozen.
Motive for Jfew Mclieiiiea.
Conspicuous among tho competitors of
that time were certain companies which
were trjlng to fight their way to tho front
by such high commissions and other con
siderations to agents as should draw them
aWay from the moro conservative com
panies, and so build up agency forces thnt
should dominate the field. But their high
expenses made such low dividends where
thoso equaling tho hotter' companies had
been promised, that no ngency force could
hold their policy-holders, and their business
began to decllno with, alarming rapidity.
Tho high expenses could not bo gotten
rid of without losing tho agents. .Thore
was for them no other attraction. There
fore, tho only escape, from tho fato of so
many others lay In some schemo to get tho
dividend question out of tho way for at
least-a long time; such a .scheme, w;as,.soQu;
found. . -r .
floheiMC Baaed on Forfeiture.-
The basis of tho scheme devised was tho
very forfeitures which tho companies had
vied with each other In getting rid of In tho
namo of "equity." "Inequity" was re
vived for the sako of Its profits, put up ns a
prlzo for somebody to win. They tabulated
and exhibited tho lapses of their own dls
satlsfled policy-holders, showed how large
nn amount of monoy their contributions to
reserve would amount to, what n great
sum these would aggregate at the end of a
long period of years, nnd how few would
bo loft at the end of tho period, and how
great a dividend- each ono of thoso few
wquld got if It wcro then divided among
them.
Illustration.
For n typical examplo: Taking 1,000 per
sons, Insuring at age 37, they calculated
that In 20 years, 544 would at one. tlmo or
another lapse, and 103 would die, leaving
only 363 still insured at the end of the
time.
So It was proposed that persons insuring
should agreo that for, say 0 years, they
should . have no dividends'; that whoever
lapsed his policy during this period ahoiild
fortott to the company all his contributions
to reserve and all the surplus which had
accrued from his premiums, and that .In
cose of those who died only the fneir 'of
tho policy should bo paid, and whatovcr
surplus had accrued should be forfeited to
the company; that these forfeited reserves
and surpluses should bo put In a fund apart
until tho end of tho 20 years, and then di
vided among those then alive and still In
sured. They calculated that with 1,000 persons,
aged 37, Insured for $1,000. each, on an mi
nus! premium of $23.17, tho forfeited re
serves and surpluses of tho 544 lapsing policy-holders
and the forfeited surpluses of
the 103 who died would, at the end of 20
years, amount with Interest to $400,773.77,
to bo divided among tho 853 supposed to be
then nllvo and still Insured, giving each one
$1,135.34; Just about double what each hod
paid for premiums during tho 20 years, not
counting Interest. And they got eminent
actuaries to endorse tho estimate'.
The Attraction.
Itwas a bold schemo, Tho public had
Just been thoroughly educated to bcllovo
that such forfeitures werfi a gross Injustice
and hardship to the policy-holder, whoso
payments were thus confiscated, and to his
family, which needed the protection of tho
paid-up lnsuran.ee which his forfeitures
would otherwise havo purchased. The in
justice was palpable, and perfectly, unneces.
snry In any healthy company. Tho, hard
ship wus often notorious and sevoro; and
none had been noisier prophets of "equity"
than these very companies which now In
vited men to take' their two chances out
of three of losing all, for the ono chance 'In
three of getting so great a sllco of tho
fruits of tho Inequity which they had loudly
condemned ns immoral and cruel. Tho
schemo wus offered In the bollef that, with
very many, the Immorality nnd cruelty
would bo lost sight of If a sufficiently bril
liant speculation In their profits was pre
sented, It Popularity.
Tho forecast was correct. Tooplo could
hot at once turn back upon all their Con
victions and sense of Justice. Dutthe glit
tering estimates won tholr way, and meu
put their own payments and tho protection
of their families at the hazard of tho game
for ten to twenty years, with tha distinct
agreement still In use that no account
ing shall be made: each Is to accept as his
true share, and without question, whatever
Is then allotted him.
Agents no longer presented life Insur
anco 4or the protection of families, but
estimates of ''investments" for tho policy
holder himself, Tho larger the estimate
tho more eagerly It was taken. Success
made, the companies promoting tho scheme
very aggressive. Instead of a struggle, for
existence It became a raco for size. Hosts
of agents were employed to do the easy
THE OMAHA DAILY BEE; THURSDAY, FEBRUARY 28, 1901.
work .of selling a speculation based on
seemingly scientific figures. The schemo
took so wldoly that for a tlmo it threat
ened to completely supplant and drive out
true life Insuranco administered to Its own
proper ends. So easily was It worked that
gradually, ono after another, most of the
companies followed more or less completely
In the wako of tho originators of the
scheme, until "Investment" insurance, de
pending for the "Investment" on the for
feitures to be raado during tho period of
"postponement" of dividends, is tho doml
nant feature with most companies. Their
contracts aro no longer termed "policies,"
but aro "bonds," "gold bonds," "contracts
of sale," "debentures," etc., etc. At hot
torn thoy aro all one thing. Tho dividend
Is postponed on the Inducement that by the
forfeltutes of tho unlucky many In the
meantime, the returns to tho lucky few
may bo correspondingly large.
Katlnutte Fall nml Why.
Hut tho wisdom of estimates has not been
altogether Justified of her children. The
rivalry of tho speculating companies In
their struggle for prb-cmlnence has ted ihem
to nn unheard-of expense. They havo writ
ten nn enormous amount of business; thou
sands of millions of insuranco have been
lapsed as expected; hundreds of millions of
reserves and accrued surplus havo been
forfeited as was hoped. Hut so much has
been absorbed by high commissions to
agents, by rebates and tho many expenses
Incident to an abnormal rivalry, that tho
expected results have not appeared; to this
tho decllno In Interest has contributed
something, but comparatively lUtlo.
Kntlimiten nml ItcmiltN Compare!,
The details of their failure aro extremely
interesting.
As wo have seen, tho calculations In 1871,
In tho examplo taken, promised a dividend
In 1891 of $1,135.34. Dut tho 1891 result was
only $433.70.
In 1873 thoy somowhnt moderated their
estimate1, and put It -nt $331.70; but thoy
paid only $379.70 nt tho end of the 20 years
In 1893.
They continued to mako this samo'cstl
mato until 1878, when they again reduced
It to $623.70; they used tho samo estimate
$ti2.1.70, In 1881, and are paying In 1901 only
$297.70-. Tho differences between estimates
and actual dividends In tho 10 nnd 15 year
postponements are still moro striking.
New Mtliiiulnnt Needed.
Obviously, such wide discrepancies be
tween estimates and result, between bril
liant prospect and comparative failure,
pointed townrd tho ultimate break-down of
tho speculative attraction, and other novel
ties of plan and practice began to appear
by which to Incite agents and draw tho
public.
Concealment of Forefelttirc.
Much criticism of tho forfeiture Invest
ment schemes, as a gross Injustlco allko to
pollcy-holdor nnd beneficiary, has led the
companies to -adopt forms of contract ns
remote ns posslblo from life Insuranco pol
icies in form, and called by cvory sort of
namo suggesting "investment" instead of
Insuranco.
CommlNsioiiN mid Itclinti'N.
Agents havo bocn attracted nnd stimu
lated by commissions and allowances from
two to flvo times what they wero thirty
years ago, and have. In their turn, used
theso to stimulate tho public by giving
away In "rebates" to new blood, whatever
was necessary to securo It, until, in many
of tho companies, a new Insurer can get
if ho stands out for It a rebate of from 50
to 100 per cent of his premium, drop his
policy at tho end of tho year, go to an
othor rival and repeat the process each
year, so long as be Is willing to tako the
risk of being ablo to pass a now examina
tion. This makes business easy to get but hard
to keep, as -tho lapses of such companies
saw,. t a . .
"'Competition ! Liberality. '"
Another means of stimulating business
has been tho rivalry In "liberality." It
began in dropping more or less of the de
fenses ugalnst fraud. Fraud may be com
mitted' In two ways: Tho applicant may de
ceive tha company by false statements as
to hla family or personal history, habits of
lite, present condition, etc., so that it
Issues its contract whou it would not havo
dono so had It known the truth, or Issues it
at n different rate from what It would havo
charged had the real risk been disclosed;
or, lie may willfully destroy his own lite,
causing lose when there should havo been
none. All these things, If successful, coBti
and tho cost is borno by tho policy-holders
who do not decelvo and do not willfully
destroy themselves. It Is therefore the
duty of, a company's managers to protect
honest policy-holders against such frauds
and lasses. When ono is asked to make a
contract based on tho statements of the
other party to it, ho has a right to know
the truth of them, and to bo absolved from
his promlso if thoy provo to bo false. That
is the simplest, equity nnd morality. Tbat
Is tho rule In eyory other kind of contract.
Incon tent nullity.
The first "liberality" proposed was, that
If a man could conceal his deception for a
year or two, or three, his policy should bo
"Incontestable," no matter how gross the
fraud. Rivalry has caused such Uborallty
that now somo companies call their policies
Incontestable from tho very outset; If the
deception once passes muster Its later dis
covery will bo disregarded.
Will Court Permit l-'rniidf
There .is, however, such a .thing ns "pub
lic morals" and a "public policy" In re
gard thereto'; and tho courts aro In tho
habit of Regarding fraud and contracts per
mitting fraud as offense gainst public
morals, and forbidden by public policy, and
of dealing with cases of fraud accordingly;
and It Is not probable that, In the end,
fraud In life Insuranco will be found, to be
loss fraudulent, more laudable, or moro
cinduclve to commercial and public moral
ity than fraud In any' other matter. If tho
courts permit It In life Insurance, they must
permit tt In all transactions. They can
permit it In any case only If thero is no
difference between right and wrong, and
if tho truth and n lie aro of equal moral
nnd commercial value, and of equal safety
for tho public. Permission to any fraud
Is an invitation to nil fraud..
Iillierullty ii to 8elf-Uctriictloii.
Another liability Is permission to destroy
one's self In any manner and mako the
rest pay for It. No company would, In these
days at least, contest u claim growing out
of a suicide which was, under any fair pro
sumption, the legitimate outcome of dis
ease, But tho cowardly suicide of a sane
man and thore nre many of thorn Is a
distinct fraud against men who havo the
courage to live, and the honor to fight the
battlo of life fairly, and stay by thoir fam
ilies. A ii n tin I ChhIi Values.
Another liberality 1b the "annual cash
value," by which one may, any year, de
mand back from tho company his contribu
tion to tho reserve, thus nt will changing
tho transaction from Insuranco to a savings
bank deposit.
Tho whole theory of Ufa Insurance and
all Its calculations aro based on the dura
tion of Its Insuranco contracts to natural
maturity, Only so can It fulfill Its special
purpose, secure tbat average experlcnco
which gives security to Its undertakings,
protect Itself against thoso fluctuations of
mortality and in general llnnnctal condi
tions which might othcrwlso be destructive
of a company's existence; and only so can
the business be handled in a manner to
glvo thtf lowest cost. The annual cash
value makes It posslblo to wreck or crip
ple a company In a year, Its policy-holders
may nil withdraw, or so many of Its health
iest lives may withdraw, taking Its quickest
and best assets, leaving only Impaired lives
to. rauso an abnormal death loss to be met
with reduced Incomo and poorer assets, as
to leave It unable to continue business with
advantage or even safety. That is no truo
liberality to thoso whom life Insurance un
dertakos to protect, for whom It was ere
ated and for whom It should be admin
istered. Life Insurance companies cannot
serve as savings banks without danger of
destruction or of serious Impairment in
cmclcncy for their own special purpose
However willing they may bo to take up
their policies for cash when tho conditions
mako It convenient nnd safe to do so, an
agreement to do it at any tlmo and under
any conditions, adds a distinct element of
danger to tho future.
I.oan nn Pollclos.'
Another and kindred liberality Is "loans"
on policies, by which tho policy-holder has
tho privilege to borrow his contribution to
the reserve, pledging his policy as collat
ernl, paying or not paying his debt as he
Pleases; and he rarely pleases to pay.
This was adopted to meet tho stock argu
ment of tho assessment companies; that
a man should pay each year only tho mor
tality cost for that year, and keep tho rc
servo In his own pocket.
This again is a seeming liberality to the
policy-holder, but not to tho family out of
whose policy the loan must finally bo paid.
No ono who has seen tho hardships nnd
the disappointments to families caused by
such settlements can covet the task of
having to mako them; no man who stops to
realize what It means' to his family enn
willingly leave such a shadow on his mem
ory. Llfo Insuranco Is n sacrifice of one's
self for tho Imperativo and unavoidable
duty ho owes his family. Loans and cash
values aro tho i.acrlflco of his family for
himself.
Tho liberality to the policy-holder him
self Is less thnn It Is made to seem. Under
tho usual forms of policies tho rcservo In
creases so slowly tbat no considerable sum
could bo borrowed until after many years.
For Instance: A man Insured at 23 for
$10,000, with an annual premium of about
$215, would pay for 40 years beforo ho could
borrow $5,000. Ills policy would then be
virtually cut In two, but ho would
still pay his $215, and 5 per cent intorest
In advanco, $250 more, in order to get his
rescrvo back Into his own pocket; nnd
when, as is often the case, tiring of this,
he gives up altogether, thero Is little or
nothing left to give his family paid up
Insuranco which, but for the loan, would
probably have amounted to $7,000 to $8,000.
Present Htntua of Competition.
Out of all this, tho situation as respects
tho llfo Insuranco business that which Is
offered tho public In Its name, and tho
methods by which business Is promoted, by
the great majority of companies has devel
oped Into this: Thero Is practically no at
tempt to sell llfo Insurance ns such nnd nt
annual cost; It Is not offered unless men
Insist on having It, nnd tho agent gets but
a very small commission for selling It; the
companies push and pay the high commis
sions for some sort of "Investment" bond
or contract; the essential feature of the In
vestment Is tho forfeitures which can be
worked Into it. This' takes time; so divi
dends aro deferred for flic, ten or twenty
years tho longer deferred tho higher tho
commission In order to securo as many
forfeitures ns possible'. All contract safe
guards against even wholesale frauds, nre
practically abolished, and the protection of
honest policy-holders Is left to what the
various cour,ts may regard as expedient for
public morality. Tho companies aro, by
the annual cash value, putting their corpo
rate Integrity, and tho validity of their In
surance contracts, completely at tho mercy
of those who for personal convenience, or
In a panic, may wish to withdraw, taking
with them the good lives which give a safe
averago mortality, and tho funds which
alono make the Insurancecontra'cts secure.
By "loans on policies," which aro rarely
natd hv thn hnrrownr. lhTiffAr htm vrv
facility to sacrifice toj. bpersonal edit
venlenco as large part of his family's
protection as ho can borrow"; and, to crown
nil, the fight between the. companies which
do all these things Is made mainly by "re
bates" of premiums, carried to such' a de
gree that devices are now being adopted
which may enable a company to dispense
with any legal reserve liability for tho first
year, leaving almost tho entire first year's
premium available for expenses; a devlco
which can be oxtonded to any number of
subsequent premiums when 'the exigencies
of competition which havo caused its use
to the extent of ono premium, shall havo
so grown by what they havo fed upon as
to require, the absorption of more.
Where the Connecticut Mntual Stand
During all tho long struggle out of which
this situation has developed, and amid
the many schemes devised to attract publlo
attention and favor to something else than
life Insurance, tho attitude' and position of
tho Connecticut Mutual has never, been
'doubtful.
It has held to tho cardinal facts: Life
Insurance Is for the protection of those
dependent on a man's life; their dependence
makes it his unavoidable duty. Those de
pendents we assume to protect by our con
tract, at his personal cost; our duty to them
is to mako that protection as large, as se
cure, and as certainly available to them
as possible; our duty to him Is to make Its
cost to him as small as possible.
Theso things aro axiomatic; and certain
definite and Indisputable propositions grow
out of them. Our policies should be framed
In overy detail to glvo, the protection In
tended to thoso tor whom It Is Intended,
They should not set up a scheme of spec
ulation In the forfeiture of that protection
oy ingsu ucpcnueni on ii, nor or nts pay
ments by the man who has paid for it.
Tho Inducement to a policy should be the
protection It offers; tho motive In taking
It should bo the faithful performance of bis
unavoidable duty by htm who has made
others dependent on hlB life. Business
should bo gotten by educating men to this
standard of duty and of Its performance,
and not by changing the business into
something' else, and something which ap
peals to selnsn interest first and leaves
duty to take Its slender chance In a 5 to
20 year lottery.
Annnal Dividend, and Why.
Tho cost of the protection to the man
paying for it is the difference between the
premium charged on tho face of his policy
and tho surplus returned to him. In this,
adjustment ho pays his actual share of the
mortality and expenses, and Is credited with
his share of any surplus interest eurnlngs.
Tho savings from mortality, expenses, and
Interest aro determined each year. Each
year tho company knows Just what bis risk
has cost them to carry; thercforo, each year
the man should pay that cost and no more.
In other words, as tho cost of each policy
Is annually determined, the surplus, If there
Is any safely divisible, should be annually
returned, so that only the actual annual
cost Is annually paid.
Tho only proper reason for deferring div
idends is cither that there is nothing to
divide, or tbat there Is something In the
condition of the company or Its business
which renders a division highly Inexpe
dient.
What Deferred Dividend Conceal.
Annual dividends put the management
of a compauy to a constant test. Deferrod
dividends put off that test to the end of a
long period of years, By annual dividends
a man knows all tho time Just what his in
surance is costing him. With deferred div
idends he cannot know what Its cost Is
until tho end of the period, If ho lives and
holds on; but If ho dies beforo that time,
It will havo cost him too much by the
amount of surplus forfeited) and It he
lapses, tt will have cost him too much by
the amount 'of surplus forfeited, and also
by tho amount ut reserve forfeited to still
further Increaae tho surplus.
The annual dividend Is a steady and pow
erful lncentlvo to prudence and economy.
The deferred dividend gives a wldo and
long opportunity for the extravnganco nud
consequent high cost which it was origi
nally Invented to conceal, nnd which have
been further enhanced by tho rivalry made
possible by taking somo of the deferred
dividend material to uso In more "vigorous
pushing for business,
Itenmiii of Our Own Courae.
Holding such views, our courso has not
been optional. Our duty has been not. to
offer something else than true life Insur
anco on Its own right lines because it could
easily bo made popular, but to try to mako
tho truo thing popular by telling the wholo
truth about It, by administering it In its
truo spirit, working out Its own proper
results in our own company nnd letting
theso stand In Judgment against tho re
.suits of the expenslvo "Investment" spec
illations. Wo have appealed only to thoso
who desire llfo Insuranco only for the pro
tection It gives, and not for tho speculation
that can bo made of it. Thercforo havo wo
refused to follow any of the methods of tho
speculators. Such changes in policy plans
and conditions as exporlenco has shown to
bo desirable have been freely made. Every
condition not found to bo necessary to tho
proper protection of honest men and the
soundness of (ho company has been domi
nated. But wo havo not built with one
hand and, with tho othor, prepared the way
to tear down. Tho Connecticut Mutual re
mains a llfo Insuranco company.
12xienc Cut In All Business hnt Life
Inanrnnee.
Ono of tho most strlklug Incidents of tho
last thirty years has been that general and
extcnslvo reduction of expenses in nil com
mercial, manufacturing, transportation, and
other enterprises, by which only have these
enterprises been nblo to prosper In face of
an unprecedented competition. Present
profits aro Irtrgely, nnd often entirely, sav
ings by reductions from former expenses.
Lower cost Is tho strongest factor In gen
eral business competition. So It should be
In llfo Insurance, of all things. But so It
Is not. The expense account of the com
panies pushing tho deferred dividend invest
ment schemes is from twlco to three times
tho former standard of the most prudently
managed companies. But, tho dividend
thereby affected being so long put off, tho
fact passes long unnoticed. When nt last
settling day comes, tho striking failure of
tho dividend to realize the estimate is ex
plained on other grounds than high com
missions and expenses.
We havo refused to compete In this way.
In order to maintain tho low standard of
cost to tho great body of policy-holders wo
already havo wo have kept expenses down
to tho old standcrd, and added only such
business as could be had on the same terms.
The DIIHcaUle of Our Course.
It must not be supposed that tho main
tenance of our position In all theso matters
has been free from difficulty. The high
commissions of thoso companies nave
tempted away many of our former agents,
and mado It the more difficult to get oth
ers. Our agents with fair commissions,
with no margin in them for robntlng, havo
worked up business only to see It taken
from them by men whoso commissions and
allowances are such that thoy can rebate
from 60 to 100 per cent of tho premium,
and yet havo enough left to compensate
their work. But, happily, we havo been
able to get and to hold as agents tho men
who take their work bo seriously that they
will, not tempt their client to speculate In
his family's protection, or, for higher pay,
place him whero his policy will cost him
moro than It ought.
Ailvrrnc Criticism.
The position so steadfastly held by us and
tho efforts wo havo made from year to
year to sot forth the simple truth and ex
poso the true character and evil effect of
tho demoralization whose growth we havo
here sketched, have, as a matter of' course,
brought upon us criticism and misrepresen
tation without stint. .Success In getting
business by estimates, which have not been
halt fulfilled, has been cited as the com
plete Justification of that method. In tho
heat of speculative competition, we have
been labeled with every epithet signifying
want of enterprise, ultra conservatism and
lack of the modern spirit.
Even the extraordinary persistency with
which our policy-holders havo continued on
has been, Ignorantly perhaps, alleged ns a
danger because older men die faster than
younger; as if the calculations of all com
panies must not and did not amply provide
for the whole mortality of Its membership
and not merely for tho younger or middle
aged part of It.
It Is In the great multitude of lapses and
surrenders that the companies offering "In
vestments" hope for a profit; It Is by the
staying solidity of our membership that we
can get those best results which we seek.
Howover agents of other companies might
strive against each other, they have Joined
to attack tho Conncttcut Mutual. Insinu
ation, depreciation, slander, can do In a
moment and by a word that which much
time and many words may fall to undo.
The abundant defamatory llturature of
other companies has been supplemented by
the highly paid services of certain insur
ance Journals.
Effect ou Our llnlues.
And all this was not without effect. It
hindered our business. From 1874 to 1885,
our amount at risk declined from $185.
366,633 to $161,301,588 before the tide turned.
"Dry rot" was alleged to have set In, and
the extinction of tho company to be in
sight. Meantime we went on educating a
clientage to the idea of Insurance for Iti
own sake and at Its lowest cost, rocast our
premiums and reserves tor new business on
a 3 per cent interest basis In 1882, and wero
laughed at for It though all aro now fol
lowing tbat lead bided our time, and wait
ed for the results of long deferred dividends
to appear; and they have appeared as al
ready narrated, In a stadlly diminishing
stream.
Failure of the "Investment."
As a dovlce for Investment tho scheme
has failed; as n devlco for cheapening the
Insurance of oven thoso who llvo to test
tho bopu deferred, It has failed. For tho
Blmple anuual dividends of the Connecticut
Mutual, with no speculation In them, are
exceeding tho outcome of the estimates;
and no man's surplus and no family's paid-
up Insurance has been taken to do It with.
Let an examplo serve; Fifteen years ago
ono of tho deferred dividend companies Is
sued a $10,00 16-year endowment policy,
at age 35, at n premium of $678.60, on an
estimate that the dividend would bo f 4,030.
In Its settlement, Just mado, the dividend
was only $2,010. Was it worth while, for
this forty per cent of an estimate, to run
the risk for fifteen years of losing alt 7 The
same year the Connecticut Mutual Issued a
policy of the same kind, amount, at same
age, at a premium of $689.00, annual divi
dends, which tho insured preferred to leave
with the company to accumulate until his
policy should mature. Ills dividend, Just
qald. Is $3,163.80; and neither it nor his
policy has been at the risk of forfeiture.
The Tide Turned.
Our amount In force has slowly risen
from S151.301.688 in 1885. to S161.666.603:
our assets, from $64,383,649.05 to $64,965,-
176.15; meanwhile, we have returned $17,-
202,820.46 In dividends, and have Increased
our surplus from $4,557,977.91 to $7,191,
348.44, and notwithstanding the fact, that
by reason of our few lapses and the por
slstenca of our policy-holders, our business
has attained an average ago far greater
than that of the deferred dividend com
panies, with their enormous lapses, our
mortality has been far Inside that 'predicted
by our tables and which we were prepared
to meet.
Tbat is not the kind of "dry rot" that
destroys Its victim or impairs Its vitality,
It seems more a process of sound growth
and frultfulness than that of decay, It Is
not tho size of the company, but what It
does for its policy-holders, that most con
cerns them. Wo have not been racers for
size; wo have striven for tho highest qual
ity of performance. Thoso of our members
who are Insured In other companies know
how far wo have succeeded. Wo are many
times more than largo enough for absolute
stability and for the accomplishment of (he
highest results to our policy-holders. Wo
shall be glad to extend our service ! such
wider clientage as wo can secure "without
Increasing tho cost of our policies either to
tho new or to the 68.000 present members,
who are our first care.
It Is with such n history of performance
nnd of fledllty to tnto standards, rewarded
by unparalleled results to our members,
thnt wo offer our servlco and our simple
best endeavor to thoso whose families need
protection, and who themselves wish that
protection to bo secure, nnd to pay only Its
lowest cost.
Respectfully submitted.
JACOB L. GREENE, President.
Hartford, February 9, 1901.
MAY BEGIN THE WORK SOON
DlannU'ltc from Guernsey Indicate
llurllnittou Activity In
the Writ,
Dispatches -from Guernsey, Wyo Indicate
that tho Burlington Is pushing Its extension
of tho Guernsey-Salt Lake lino nnd that
there Is a strong prospect of the work being
started this year. It Is said that tho
final survey of tho lino Is being
completed In the mountains Just west of
Guernsey nnd thnt as soon as this is com
pleted tho contractu will bo let.
Many railroad builders and gradors aro
on hand looking over tho ground prepara
tory to tho bidding on the work. Ono of
these In speaking of tho work said that It
will require from eight months to a year to
push tho road through tho mountains. Tho
line, as It Is understood to havo been se
lected, In many places follows deep and
narrow canyons, whero It will bo necessary
to drive many tunnels and construct sev
eral heavy bridges. Tho lino Is counted on
to furnish somo of tho finest scenery thnt
tho plcturesquo Burlington will havo to
offer.
Two of tho leading officers hnvo been se
lected for Senator Clark's San Pedro, Los
Angeles & Salt Lako line, nn Item which"
adds .additional strength to tho Idea tbat
this line will be built at once. They aro
R. E. Wells, to bo general manager, nnd
E. W. Glllet, to bo general freight nnd pas
senger ngent. Both men como from tho
Santa Fe, Prcscott & Phoenix.
CJOING AFTKIl PltAIIlIK IIOHS.
tnc of Several Peal Which Cause
Trouble In the Weal.
Pralrlo degs, cutworms nnd locoweed
aro threo subject's which nro rccolvlng con
siderable attention at tho hands of tho offi
cers of the Union Pacific Land company.
Tho pralrlo dogs, cutworms and loco
weed, or lnrkspur, aro three pests which
aro causing tho farnicrs in the western
country no end of trouble. In tho offices
of the Union Pacific Land company aro
letters reporting tho progress of tho work.
The governmental experimental stations In
Colorado, Wyoming and tho national head
quarters have been Induced to take an In
terest In the mattor and mako somo ex
periments. Partial reports havo already
been submitted from tho station 'of the
University of Kansas on two of the sub
jects. For the prairie dog no sure method has
been found by which It can bo exterminated,
though tho Investigator suggests that If tho
dogs aro shot when they are coming out
of their holes, rather than when sitting on
top, thero Is moro hope for the man look
ing for game. Several methods of poison
ing aro being developed. It has beon
found that grasshoppers and cutworms
hlbe'rnato in the nlfnlfa. Acids and that
disking1 in theT early spring wilt kill them
off.
The locoweed Is ono of tbn worst pests
of the western country. Cattle that eat It
become sick, apparently an intoxication of
the brain, but a liking for the weed fol
lows. Cattlo cannot graze In fields whore
this weed Is found more than two. years
without fatal results. No satisfactory
means of exterminating It has been dis
covered and tho only suggestion tho ex
porlmonters havo offered so far is that
cattle be removed from localities whero tho
weed is.
Iln Faith In the Wril,
William Harder, a general' agent In the
freight department of the Great Northern
railway Is lit tho city on his way
home from a three months' trip In the east.
during which tlmo he has visited nil of the
principal railway centers east of here. His
headquarters nre In Portland and he Is an
enthusiastic believer In tho futuro of tho
Pacific" coast states.
Mr. Harder said that ho has found a gen
eral western movement which has extended
all the way from Maine. The farms in New
England are playing out and the people
aro seeking the new country of tho middle
west, whllo the peoplo there are pushing on
to tho western and north Pacific states.
Hallway Note and l'erconala,
E, H. Wood, ejrneral frelnht asront for the
Union Pacific, left yesterday for Chicago on
uubiiicss.
J. B. Durham, chief rntn clerk for tnn
Oregon Short Line, with headquarters in
Bolt Lake City, was hero yesterday on rail
road business.
Chnrles 8. LnFollette. traveling tia.
senger agent for the Big Four, with heud
quarters In Peoria, was hero yesterday. Ho
reports inni me Business or tne uig Four
this venr Ih Krcater than that of last vear.
which, by the way, was heavy traffic.
Tho Burlington route Is havlnir nrennrpd
a handsomo Tot of colored pictures of Yel
lowstone Dark which It will soon lilstrllmtn
over (ho country. There nre fifty pictures
in ino aeries ana iney are or unusuni
bounty, bclnir In natural colors. The first
Hamnlen of the lot arrived nt the Burlington
headquarters in this city yestorduy.
The new train which the Burlington will
Slnco In Its St, Louis-Denver service about
lay 1, as announced several weeks ago, is
now in the process of being named. The
puHuengcr department ut the general oflloes
in this city has sent a request to the agents
along tho line which tho new train will
irnverse asKing mem ror suggestions as to
tho name for the train. Tho competition
Is open to any ono who has nn idea on
tho subject,
The contract which Van Court & Winn
of this city have In connection with the
Hock Island extension from Liberal to
121 Paso is one of tho heaviest pieces of
work on that now line. Their contr.irt
colls for a cut through n mountain which
in aupposea to ue boiiu, line, red nunustono
rock. Tho cut will be nbout elalitv.flvn ti-nt
deep nud a mile, lone. About sixty men
iii'.vti u.reuuy hums uuwn irom iiero una
when tho work Is opened up the Omaha
firm will put about 2W men to work.
ITINERARY OF THE BISHOP
Xpeclal Hurvlce to lie Held In Diocese
of Omaha with lllahop
Mcnnucll I'reaent.
Father A. M. Colanerl. chnnccllnr nt llm
diocese, has sent out'announcementa nf th
spring visits of Bishop Scnnnell to the
cnurcnes or tno uioccse of omaba. Con
ferences will ha held In thn ft
the diocese, at which papers on different
Huujecis win ne presented ana discussed by
the assembled priests. The datos for the
conferences are ns follows: fimnhn a., hi
8; Columbus, April 10; Grand Island, April
it; west foint, April 23; O'Neill, April 24;
Jackson, April 30.
Confirmation ceremonies will hn .hei.i
follows; Columbus, May 6; Duncan, May 6;
riaue uenter, way 7; Tnrnov, May 8;
Humphrey. May 9: Hartlnotnn mv in
Constance; May 20; St. Helena, May 21; Bow
Valley, May 22; Emerson, June 3; Ponca,
June 4; Newcastlo, Juno !; O'Neill, June
tu; spencer, Juno ii.
Croker la Cotnlns; Back.
LONDON. .Feb. 27. Richard Croker savs
he will return to America In good time to
take part In the coming campaign.
10 HELP TAX COLLECTOR
Bweping Meuura ii Now Faqia; Bifort
Nbrsk LejiiltBti'.
DRAWN BY ASSISTANT CITY ATTORNEY
Illll la Sneelnll)- Pcsfsjneil to Put
Kud to MtlKallna Asralnat the
Payment of Tmscs Some,
of lla Provisions.
If tho bill uow pepdlng In the legislature
and known as houso roll 450, becomes a
law, tax fighting In Omaha will bo a thing
of tho past.
The measure was drafted by Assistant
City Attorney James II. Adams. It provides
that the mayor and council shall havo au
thority to re-levy taxes which have been
declared Invalid by tho courts, either on ac
count of ellnht Irregularity In nrocecdlnsa
or on Jurisdictional grounds.
This la a sweeping bill, tt applies to alt
sorts of taxes, but Is of particular Impor
tance because of tho large amount of inn.
clul taxes which has been defeated In
umniia and will bo rclevled and collected
In case the measure becomes 'a law.
(irnnU Authority to Council.
Not-only would taxes which aro declared
Invalid in the futuro bo affected by this
law. It Is retroactive nml wniilrt until hn
council authority to relevy and collect all
taxes wnicn navo boon defeated In tho past.
auprcmo courts in many states havo held
that such a law la valid nod thn nifimliro
now pending was fashioned after lawa
wnicn are on tno statuto books of sovcral
states. City councils have authority to
grnnt councils tho right to levy taxes for
Improvements without nny petitions from
property-holders. This holnsr true. tha
courts hnvo hold that n council has author
ity to render a tax valid.
In discussing tho proposed law City At
torney W. J. Conncll said: "I bollovo that
a council can bo grnnted tho right to cor
rect slight Irregularities In proceeding!! and
relevy taxes which havo been voldabjo be
causo of such errors. 1 doubt whether tho
leelslnturo can rmnnwnr n rnnncll in r.
lovy n tnx which was defeated for jurisdic
tional reasons."
Councilman Hnnrntl n
Similar to that of tho rltv nttnrtmv nml
said thnt a distinction must bo mado be
tween void and voldablo taxes. 1n cases
whero thero la somo mistake In the pro
ceeding ho thluks It may bo within thn
province of a council nnd mnyor to correct
tho error and relvy the tax. But whero
thero has been n failure to comply with tho
provisions of thq charter concerning tho
steps In making Improvements Councilman
Hnscnll questions whethor n council can
be granted authority to mako" tho tax valid.
Will Knd Litigation.
Thousands of dollars worth nf turn
which havo been defeated In Omaha will
bo rendered valid In case this bill becomes
a law. It will put an ond to pending liti
gation, in which largo sums are Involved.
Tho compromise paving bill, which has
been favorably acted on by legislative com
mlttcos, will simplify special nsiessmontn
mado In tho futuro and do awny with much
special tax litlcatlon. This tnenKtirn re
quires petitions for both paving and re
paying ana stops property owners from
questioning tho validity of a petition attar
improvements navo been made.
Future paving tax will bo comnamtlvrlv
safo from defeat after this
measuro has been passed, and tho bill
prepared by Mr.' Adams Is Intended to pro
tect tho past taxes, which are being ns-
Baneii so ruriousiy.
SETS MR. COLE A-GUESSING
Put llliu on the Anxlou Heat for
Fear of Game Larr
Violation.
David Colo was In a nuantlnrv h nthnr
day and for several hours did not know
whether he was to bo mado the victim of
designing norsons or was to hn lnitir,t t.v
a blundering friend. The event proved both
oi ms surmises incorrect, but for fwclvo
hours ho trembled.
In thb mornlna- mall ho rerelvmi n nn.ini
card from an .Interior town which said:
"Wo today ship you a case of noultrv nnrt
game."
Tho signature on tho card was llihin
and Mr. Colo, remembering thn nrnlrlfi
chickens ho was forced to incinerate somo
days ago. nnttctnated a further lminomi.t
Then ho thought that possibly a representa
tive of some of tho sportsmen clubs would
be prcBcnt when the game arrived to proso-
outo mm as an example. Thero was no way
to atop tho consignment and when It ar
rived Mr. Colo did not know whether to ac
cept it or throw It Into tho river. He
finally decided to open the box and found
that It contained domestic fowls and wild
ducks, which aro not prohibited. He now
Insists that consignors specify the kind and
character of gamo shipped.
Belgian Hare Show.
omanans nro to bo given an opportunity
to seo a fine display of Belgian hares. On
March 6, 6 and 7 .tho Nebraska Belgian
Hure club will give a show In this city.
Rabblters in all narts or thn im
promised to bring some of their' finest
animals for exhibition. One of the features
of tho show will bo Belgian hare dinner
which nro to be served all three days. Prof
urnuiruo oi utnver, wno is now liolillnc a
elclan hare Institute In thla rltv. win ...
slst In conducting tho show.
Of Winona, Minnesota, Well Known
in That City, Cured of Liver and
Stomuch Troubles by Cuscurine.
The Only Treatment That Did Her
Any Good After Four Years'
Sickness.
Winona, Minn, Feb. 27. Mrs, Katy Noot-
tleiran, a social leader, is well again after
four years of suffering. Bho was cured by
Cascarinc, after a fow weeks treatment.
She suffered from constipation and bilious
ness and spent hundreds of dollars with
doctors to get well, but she became worse
Bbo never used any special treatment be
foro, but after a talk with her physician
bo prescribed her Cascarlne, the great fam
ily remedy for diseases of (ho stomach,
bowels, liver and kidneys. Aft;r using ono
bottlo she felt much better and after a
second bottle was used she was well and
cured absolutely of her biliousness and
stomach troubles.
Cascarlne Is tho greatest laxative tonlo
In existence. It Is gentle In- action, pleas
ing In taste, and will not grip, the most
delicate stomach. It will tone up your en
tire system, mining you reel HKe a new
person. Cascarlne la not a pill or tablet.
It comes In bottles wrapped, In blue and
whlto wrappers.
Qo to your druggist and buy a bottle to
day.
Price per bottle (0 cents. If your drug-
gilt hasn't It, ask him to get It for you ot
itis Jobber.
The manufacturers of Cascarlno will send
absolutely freo a valuable book on diseases
of the stomach, liver, bowels and kidneys
to any address.
Address Rea Tiros. & Co., Minneapolis,
Louisville and New York.
If you are suffering with Piles, buy Red
Cross rile Cure. It cures every t-' At
all druggists, or sent direct for fl.
MRS
NOOTTLEMflN
i
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