MUTUAL AND PROPRIETARY LIFE ASSURANCE.

Evening Star, Volume IX, Issue 2531, 28 March 1871, Page 2

MUTUAL AND PROPRIETARY LIFE ASSURANCE.

To the Editor.

Sib, —Yon give us this evening an extract from Chambers' Journal on this subject. The date is not mentioned, though of the utmost importance, for opinion must necessarily have changed very much with the progress of life assurance. But let tint pass. With every respect for the source whence emanates this defence of the Mutual system, I have quite as much for the practical sagacity of M'Culloch and those who oppose it, and I cannot blind my eyes to the partizan character of the extract which you publish, nor to the reckhss slatemcnts which are therein made. Nor to the further fact that it is so far one-sided as to set forth only tljo benefjfs of the Mutual system without alluding to t}ie psks and dangers, in wlr’ch assurers under it, aip involved.

But I have no intention at U)is timo to go frilly into the subject, and would simply make a slight reference to a few passages that 1 have marked.

The writer pictures how a life assurance company proceeds, hy stating that a “ set of speculators start it with a large apparition of capital.” A sot of speculators! Would he so characterise the proprietary of such office.s as the “ Royal,'’ the “City of Glasgow,” or the “London and Liverpool,” after casting his eyes over the names that constitute these share-holding bodies ? And then he concontinucs, “by means of a handsome-looking officer, incessant advertising, and active managers and agents, business is chtahied.” And have the Mutuals, I would ask, no handsome offices ? —if indeed au elegant exterior be a crime ! And has any Proprietary office gone so far and so fast, in advertising, as the one Mutual that reigns on this side the globe, or resorted as it lias done, to the trick of employing a fluent and spacious lecturer? The writer in question must surely have Jived when Mutuals existed, iu a condition of very primeval innocence. For certainly if ever proprietary offices bore the character which ho ascribes to them, they now too much respect themselves to condescend to such a role as that which the Mutual of the south furnishes to its pleasant lecturer.

After stating that proprietary offices did actually “give periodical bonuses as in the mutual system," the writer goes on to say : “ But hero the benefits sink far below what are to be usually obtained from a respectable Mutual office.” And how far do they sink ? How much have those to pay for the security of a wealthy proprietary, and for being free of partnership risks, who prefer to pay for these advantages? Let him turn to the many sources from whence he may get information to the Encyclopaedia Britauiea, to Oliver and Boyd’s Almanack, to M'Culloch’s Dictionary, pr the prospectuses of the

various offices, and lie will find that the difference between the bonuses Riven by Mutual and Proprietaries, varies from onetenth to one-fifth. Even if he show this up (to use his owu phrase), into a huge "apparition” of figures, which will it bo? And which, in each indivi Inal case? Those who submit to the difference, reckon on other benefits, and what have they to pay for them ? Ouc-tenth or oue-fifth ! But Chambers does not be ieve that any guarantee or security is required, and that the combined action of assurers "only can fail in the event of a change in the' laws of nature, or such au alteration in the condition of the country (affecting the value of money), as no ind of security could gainstand.” Rut in this concession the whole argument is, to my t unking, yielded. For it will be admitted, that even as a blieht may be fatal to the farmer, so au epidemic, or a sudden and extraordinary money panic, may be fatal to A ssurauce Societies. But to which class would it he most particularly fatal ? In such ca -e the Mutuals de ending entirely upon themselves, would of necessity succumb ; while the Proprietaries would fail back upon resources exterior to themselves. The last passage I would notice, is as untruthful as it is discugenuous. “ As might he expected,” he says "the means taken for obtaining bnsinesss by the proprietary offices, was not in general of a very scrupulous natureand he then expatiates on the system of commission, as he called it. Surely the writer was not aware, that if there exist (or rather, did exist), a number of forcing or speculative offices the greater number are of unquestioned respectability and standing, That sham Mutuals have sprung up as well as sham Preprint tries; and that the commission paid to agents, is after the first yeay (when 10 per cent, is paid), only 5 per cent, on the premiums j or, iu other words, that to obtain LIOO per annum, an agent must effect assurances to the extent of LIOO,OOO. I am, ic., Bonus Proprietary. March 27, 1871.