New Zealand Times. TUESDAY, JULY 21, 1874.

New Zealand Times, Volume XXIX, Issue 4160, 21 July 1874, Page 2

New Zealand Times. TUESDAY, JULY 21, 1874.

It seems to be forgotten by opponents of the Government, when raking up objections to their policy, that the scheme of Colonial Insurance and Annuities is not without precedent at home. Persons who ought to be better informed will persist in calling the Government traders, because there is a Life Insurance Department ; carefully ignoring the fact that no Mutual Association can possibly be so classed, and that a large proportion of existing policies is issued by societies without capital, and whose profits must be divided, and losses borne by the insured. When Mr. Vogel in 1869 moved his resolution in favor of Life Assurance being taken up by the Colony, it should he remembered both that he was not then a Minister, and that his proposal was accepted by Mr. John Hall, at that time Postmaster General, on behalf of his colleagues. It was shown that Mr. Gladstonehadsometimepreviouslybronght forward and passed a Bill to effect the same object at homo, and that nothing but the influence of the powerful companies, making a business of the matter greatly to their own advantage, prevented a much wider extension of the principle. Coming into office shortly after his resolution was adopted, Mr. Vogel gave prompt effect to the expressed opinion of the House of Representatives. It did not then seem to have occurred to anyone that this was entering into trade, nor would it have been said since, had it not been hoped that ill-feeling would bo fostered, and a want of confidence created, by the use of a terra, invested in some mysterious way with an offensive meaning. So large an amount of distress had been caused by the disgraceful collapse of several insurance associations, and at so recent a date, as to render it dangerous for anyone to object to a measure by which perfect security would be afforded. As time has passed, the memory of former disasters has faded and the tongues of the selfish and ignorant have been sot free to cavil. Little argument is needed to prove the desirability of all persons making a provision by insurance for those dependent on their exertions, and, more than that, the imperative duty of so doing in the case of men with fixed incomes dying with them. Too commonly wo see those who are in receipt of a regular salary, unless they are bound by the periodical payments on a policy, persuade themselves that they cannot spare oven a small sum to be regularly invested ; so that in the most favorable instances, where the average duration of life has been exceeded, the end findsa family with the crowning misery of poverty, added to the natural grief for loss. How hitter, too, the feeling when the head of a household has striven and pinched himself for years to pay premiums and, when it is too late to begin again, finds all is thrown away, and his money swallowed up by unprincipled speculators, or wasted by incapable directors. Hence, insurance is often avoided from the dread of companies failing, or mutual societies being mismanaged. Thera cannot bo a doubt but that the first demand the insured has a right to make is for absolutely perfect security ; and, the second, that this should bo obtained with the lowest possible scale of payments. Those just claims can only be met where the State, the whole body of the people, is the insurer, and where, consequently, no profit is needed by the guarantors to cover loss. Prudence is of so groat benefit, and pauperism so dire an evil, that a country would be fully warranted iu incurring a

certain amount of risk to promote the virtue and prevent the misfortune. The payments required by English companies are calculated according to the low rate of interest obtainable for secure investments; but here it is equally safe to grant more favorable terras, in consequence of the interest on colonial debts being much higher, though to the insured the security is as good as the world can afford. As to the value of life, the Colony cannot lose by adopting the tables in use in England. Our climate is far more favorable to health, and few among our population can be said to pursue unhealthy callings. Those dreary bores, the self-styled political economists, lift up their testimony against State Insurance as violatingtheir hallowed maxim that everything should be left to the law of supply and demand. In ordinary business transactions this may be convenient, but then such transactions are soon finished, and if either party is dissatisfied, the next day sees a change. A contract to endure for a lifetime is a totally different matter. No amount of care within his power will enable one who seeks to insure his life to test the boastful assertions of the companies either as put forth in their advertisements, or, still more lavishly, by oily-tongued and irresponsible canvassers, who are themselves not unfrequently among the deluded. The objections to the protection of policies of a limited amount against- the claims of creditors may come from the hard and ing usurer, but we seldom hear one word said against it by the ordinary creditor —the man of business—who himself knows the perils and fluctuations of trade. It is not necessary now to go into detailed arguments in favor of the Government scheme. The rapid increase of business shows that those who are most interested are convinced it is wiser to turn a deaf ear to the pleadings of the commission agents and accept complete safety for those who come after them. The new proposal of the Premier appears to us te render the whole theory of the institution complete in every part. Up to this time the benefit to the assured lias been chiefly in the vital point of security. Fully recognising the right of policy-holders to any profits that may be made, and, on the part of the Colony, entirely disclaiming any desire to make an income by insuring, Mr. Vogel now proposes to have a periodical examination made by a competent actuary, with a view to the distribution of the profits among the assured to such amount, and in such manner, as both Houses of the General Assembly may by resolution direct. The canvassers for Mutual Associations have persistently dwelt on the advantage of the bonus system as carried out by the societies they represent, and it must be admitted they have therein a show of truth on their side. The companies complained that profits would be made by the Colony in unfair competition with those who subscribed capital as a guarantee. Both classes of critics are now answered. Security better than any company can possibly give is to be combined with the fairness, free from the risk, of the Associations. The Colony cannot lose so long as investments are confined to our own debt, and the bonus or other benefit given to the assured will be larger than an association can possibly afford to pay, as no losses can occur by fluctuations in value of securities. Life insurance by the Government is now fully established on a sound and equitable basis, and it may be hoped future years will see an extension of business in the direction of taking larger risks than in the infancy of the Department it would have been prudent to accept. It may not be possible to exclude by law other insurers from the Colony, but there should be no difficulty in offering such facilities as to render it unnecessary, in anything but extreme cases, for any policies to be given past this truly Colonial institution.