—9.

cases encourage consolidations ; they should certainly encourage measures for the prevention of duplication and for harmonious and intelligent co-operation among particular kinds of institutions and among all the social institutions of the community generally. These obligations or limitations upon the use of community-trust funds necessitate upon the part of the community-trust board not only a continuous, intimate, up-to-date, friendly, but critical knowledge of each institution applying for aid, but of all the accredited institutions in the community ; of their relative merits : of the relationships which exist between them ;of the standards which should apply in the various fields of service—a broad and at the same time an intensive knowledge of the needs of the community and the relative importance of various kinds of service. - Trust Companies, August, .1924. SETTLEMENT IN TRUST OF LIFE-INSURANCE MONEYS. 5. A recent authority on insurance, writing in the Research and Review Netvs, published in America, points out that there are two types of values in existence — (a.) Human-life values : These values consist of the character, industry. technical and managerial ability of the individuals. (b.) Property values : These comprise land, buildings, machinery, raw materials, finished goods, and business goodwill. He adds that personal values are the real source of all other economic values, and that the current earning-power of the adult population has a value six or eight times the aggregate of the nation's material wealth. This is only a statement in another form of the well-known fact that the potential earning-capacity of the average individual in the community greatly exceeds the amount of property which he has succeeded in accumulating ; but, although the personal values usually greatly exceed the property values, they are of a less permanent character, and are always open to sudden and abrupt termination by the chances to which human life is always exposed. It is the object of life insurance to guard against the disastrous results which might follow from the sudden or inopportune death of the wage-earner of the family ; and the extent to which insurance has been availed of is evidenced by the fact that according to figures published in the National Association of Life Underwriters of America 81 per cent, of the property handed down from one generation to the next consists of life-insurance moneys. In the association's report it is stated that in the single year 1923 the new insurance written exceeded the total which was in force in 1904, and that the year 1924 shows an increase of 15 per cent, injthefamount of insurance taken out over the total of the previous year. Notwithstanding the extent to which insurance has progressed, there is still a very large field which remains untouched. Hitherto the great brdk of insurance-moneys becoming payable on the death of the insured have been paid over in cash to the widow or next-of-kin of the deceased person. It is stated in the report of the association that "of the 400,000,000 dollars which were paid out on life-insurance claims last year 90 per cent, was paid in cash —the most fluid form of capital." As a result of this fluidity and the inexperience of many of the persons to whom the funds are paid there is a great tendency for life-insurance moneys to be dissipated either by extravagant expenditure or through ill-advised investment. The greater number of persons to whom such moneys are paid have had little experience in the handling of funds, and have a most limited acquaintance with the possibilities of profitable investment. The moneys are thus exposed to a constant and grave risk of being lost. It is to meet this difficulty that there has grown up in the United States of America a special form of trust known as the " life-insurance trust." This development is being encouraged by the life-insurance companies working in conjunction with corporate trustees, and aims at securing that insurance-moneys paid over by the insurance companies shall be wisely conserved and protected in the interests of those who are beneficially entitled to them. In some cases the trust provides for the payment of premiums becoming due under the policy from funds made available to the trustee by the settlor of the trust. In other cases the insured person himself arranges for the payment of premiums and the keeping of the policy in force, and the function oi the trustee

12