Gathering the People’s Money
By Editor
Among the questions which come to the editor there is now and then one concerning life insurance. We have had our own opinion about this matter, but it seemed to be of little use to express it, inasmuch as we did not have at our command well-established facts to give force to our views. Now, however, the situation has been changed. An official investigation has been in progress for some time, and witnesses have testified under oath, making most astounding revelations of the betrayal of great fiduciary trusts. The misuse of the people’s money, entrusted to their care, by the managers of the leading life insurance companies has been proved over and over again, and all the leading journals of the country have discussed the various phases of the question in strong language. That conservative magazine, The World’s Work, has begun to publish an exhaustive study of “The Life Insurance Machine,” to make clear “the mechanism by which the biggest treasure in the world is gathered into the hands of a few men without responsibility to its owners.” The writer asks: “Why has this rottenness centered about great insurance companies? What is there in the organization or the conduct of life insurance that has utterly demoralized the financial world?” And with terrible plainness he says: “In the depressing revelations of this insurance investigation, direct violations of law have been laid bare. But many more violations of moral law have been exposed; yes, on almost every page—for the whole thing is a mire of moral rottenness.” Preliminary to the consideration of “the most wonderful piece of financial mechanism that has ever been built since the world began,” the writer of this study directs attention to the steady flow of money into the hands of a few men through “the device of modern insurance.” We quote as follows:— Mississippi bubbles, South Sea bubbles, and all other schemes of all adventurous financiers become insignificant in comparison with the peculiar and simple device whereby an unceasing stream of money has come into these big insurance companies, for the use of a part of which the managers of the companies are not responsible to anybody. A mere handful of men have control of a practically inexhaustible flow of money, not their own, coming in, coming in, coming in to them, year after year, in constantly increasing volume. A large part of it is not needed for the conduct of the business. Yet they are not obliged to return it. If it is not theirs, the use of it is theirs. And though they use it for their own enrichment, for financial jugglery, for industrial and political debauchery, they run no practical risk of bankrupting these great companies so long as the device of modern insurance works. So long as this works, they can go on, getting money in, getting money in, with a constantly increasing margin above the companies’ needs. Although they pay out to policy-holders all that they specifically agree to pay, and although they “divert” many millions, in mismanagement, in waste, in criminally large salaries, and in other ways, the stream comes in without slack. All other treasure supplies that the world ever heard of at some time became exhausted. It will not be so with this, if the simple device by which it is perpetually renewed continues to be acceptable to the public, as it has been for a long generation. From this extract it is evident that modern life insurance is so conducted that policy-holders are required to pay into the treasury of the companies enough money so that all legitimate claims can be paid, and millions upon millions be left in the hands of the managers of these companies to use without direct responsibility to the real owners of it. The recent investigation has shown that it has been used very largely for the personal benefit of the managers and their friends. Furthermore, the ability to pay the claims of policy-holders depends upon a continuance of reasonably normal conditions in the financial world. In the troublous times which are just before us these institutions with their immense accumulations of money will be just as helpless as the ordinary individual. Their gold and silver will go to the moles and bats with all the rest. In view of these facts, why should those who believe in the soon coming of the Lord contribute to the flow of money which is being poured into the coffers of life insurance companies? Would it not be altogether more consistent to make our deposits in the bank of heaven? “Where your treasure is, there will your heart be also.”