the reserve on the policies? A valuation on a legal standard would determine the interests held in the company, and the present rights of parties therein. What possible law can be passed to ameliorate this evil of amalgamations and not leave wide open a door for fraud?

The great wrongs perpetrated by the reinsurances as now practiced, are by no means borne by the policy-holders of the reinsured company alone. The company which reinsures or takes in another, without any examination as to health conditions, without reference to climatic disabilities, and regardless of the real cost of carrying such risks to maturity, does a grievous wrong to its policyholders. These new policy-holders, en masse, are forced trespassers upon the reserve fund of others. There may be isolated instances wherein two companies have been merged as an economical measure, to the mutual advantage of each. These cases are rare indeed. The elements composing the mixture are not harmonious. Jealousy and ill-feeling of ousted officers make easy work for wreckers who desire fresh spoils. Agents who have spent years of work in building up a company are left in an extremely vexatious and embarrassing position towards their patrons, to explain something which is unexplainable. They have been retailing false hopes and promises, coined for them at the home office. The pecuniary loss and injured business reputation of the agent who has unwittingly duped his friends is no small factor in the product of the iniquities of reinsurances. These elements of disorganization and discord, combined with the deluded policy constituents, leave but faint hopes that the new compact will prove a lasting success.

The

The men who have set themselves up in the business of selling life insurance, and by fair promises have drawn in the money and influence of policy-holders, and who fail to carry out in good faith the contracts they have entered into, are not entitled to any false sympathy, much less to money emoluments. deluded victims of their incapacity or dishonesty need sympathy and the protection of the strong arm of the law to reclaim a portion of the funds entrusted to incompetent hands.

The idea of allowing a company to "recuperate" by cutting off expenses and ceasing to do new business, is fine in theory, but it is practically a slow and painful way to dissolution. It also affords too safe a means of spiriting away assets, and a rare opportunity for freezing out policy-holders.

Life insurance companies of ordinary size and strength cannot float up stream. When the oars of active competition are shipped, a retrograde movement is the result. New life and strength must be infused or destruction and death will ensue. When the crew lose confidence in the managing officers, confusion and disaster are inevitable. If the officers of life insurance companies were elected by, and could be held directly responsible to the policy-holders, doubtless many companies could be saved by a change in the management. The facts are that many of these corporations are mutual only in name, and the policy-holders have no controlling interest whatever. If any concerted action on their part could be secured, it would be marshalled only for ignominious defeat by the ring management who control the funds, and perhaps the unlimited use of a proxy majority of the policy-holders.

These ring managers hold on to power, and by the ingenious circulation of the rumor that new business will be declined and that "recuperation" will be inaugurated, take their leisure to find a profitable purchasing customer. No intimation was ever promulgated that these managers had commenced recuperation by pruning their own salaries. Information as to where and to whom premiums may be paid, since the withdrawal of the regular collecting agent, is frequently denied to policy-holders, as is also any statements of the finances. The process of freezing out policy-holders is lucrative as it decreases the reserve liability and enhances the net profits of a re-insurance.

It is probable that there is a very large majority of policy-holders in the States who would even vote their companies into the hands of receivers to-day, rather than subject themselves to be sold out and transferred without their knowledge or consent. The wrongs now done to policy-holders are small compared with those for which present re-insurances are simply paving the way. The decrease in the number of companies is not yet so great as to prevent active competition,

but the tendency is to build up huge monopolies, which the people, and particularly the policy-holders of life insurance companies, in the light of recent reinsurances, have good cause to fear.

The policy-holders of this country demand from the law-makers of each State, that charters life insurance companies, a statute that shall absolutely compel such corporations to fulfill their contracts, or to disgorge and make a pro rata distribution of the funds to the lawful owners. Not only do the present interests of policy-holders demand such a protection, but the purification, if not the salvation, of the business of life insurance, with its untold interests, call for it as distinctly as do the mutterings of thunder presage a storm.

Mr. Chapman said he would go even farther than the language of the resolution, and prohibit reinsurances altogether. No company should take a risk larger than they wished to carry, with the view of reinsuring a portion of it in another company. He thought there could be no reasonable objection to the passage of this resolution. It does not propose to be a remedy for all the evils of amalgamation; but it does purpose to secure the rights of policy-holders. The resolution does not prevent the reinsurance of a risk; but permits companies to reinsure a portion of a risk within six months of taking it, providing the risk is too great. Amalgamation is the exercise of a power assumed to be given by law for one company to take the risks and absorb the business of another company. The commissioners have no power to interfere with a company until its reserve is eaten into, and consequently can do nothing to keep the company from disaster until it is too weak to stand. There has been good come from reinsurance; but the evil has far overshadowed the good. The question now is whether we should adopt some plan to prevent amalgamation until a better law is proposed. The theory of getting the consent of the policy-holders before amalgamation is impracticable. Some of them will prefer one company and some another, and the question of consent is, therefore impracticable.

It is also impracticable to have the Supreme Court step in as final arbitrator, because the Supreme Court has no generel knowledge of the subject. It is also unsafe to enact a law to put the power of approving or permitting the amalgamation of two companies into the hands of a State Commissioner. To dump a dying company over into a reinsuring company is simply to introduce the seeds of death and prolong the agony. It is an effort to save a few at the expense of the many, and only arrests temporarily a disaster that must come some time, and is the greater the longer it is deferred. It is a ruinous policy, which the public welfare demands should be, if not absolutely forbidden, which seems impracticable, at least discouraged and limited by legislation as far as possible. He cited the plan submitted yesterday for the amalgamation of weak companies, and claimed that it was entirely wrong in theory and impossible in practice. Actuaries differ. Experts differ. What is solvency to one is hopeless insolvency to another. In fact, nobody seems to know much about it. This thing is sure-a receivership is the worst mishap that can befall a company. But an amalgamation is the surest road to a receivership.

Mr. Rhodes said the resolution met his approval as it stood, though he thought a better plan might be devised with further experience. The law of Massachusetts already deals with the question of amalgamation as contemplated by the resolution. He was of opinion the final arbitrator should not be the State Commissioner, but the Supreme Court. It is a responsibility no man can safely be intrusted with and not be open to the charge of bribery at the hands of the powerful companies. The speaker agreed with the views of Commissioner Chapman. There is, he said, an unmistakable demand that the evils of amalgamation shall be stopped, and that this Convention shall not adjourn until it has agreed upon some measure for that purpose. The present resolution is almost precisely the same as that before the Convention last year. Massachusetts acted upon the spirit of that resolution, and had in a great measure stopped the evils complained of. In the matter of life insurance, policy-holders don't always know their own interests. They have not the means, they are not in a position to know them, and are not, as a general thing, the proper parties to which the question of amalgamation should be referred. They must depend upon some third party or power for protection from dishonest companies.

Mr. Russell said, as in political parties great numbers defer to and follow a few leaders, so the mass of policy-holders are led by a few individuals. The average policy-holder has nothing to say except that he wants security, but how or where he is to get it he has no idea. If asked for his consent to the amalgation of his company with another, he cannot tell whether it would be best or not. If he did, he would know enough not to go into such a company at all. The assumption that the policy-holders must decide the question of amalgamation rests on the popular fallacy that everybody can do everything, when everybody knows that he can do no such thing. He would like the resolution better if it simply stopped with saying amalgamation must be abolished. As to the question of a company's solvency, he would have that submitted to a committee of experts. Experts cannot differ as to whether two and two make four, or six.

Mr. Barnes said he believed the Massachusetts law was a step in the right direction, and he hoped the example would be followed by other States. He favored the passage of the resolution as it stands, and the continuance of the Committee on Amalgamation another year, in hopes of its being able to digest and present at the next annual meeting a still better plan.

The resolution was unanimously adopted.

[The President in the chair.]

Mr. Rhodes offered the following resolution:

Resolved, That it be the duty of every member of the National Insurance Convention to prepare and submit, at its next session, a paper upon the subject of amalgamation.

Which was adopted without debate or opposition.

Mr. Nye submitted the following resolution, which was adopted:

Resolved, That the thanks of this Convention are due, and are tendered to the Post, Free Press, Tribune, The News, and other papers of Detroit, for the unusually able and complete reports of the proceedings of this Convention.

Mr. Steadman moved that a committee of three be appointed to nominate officers for the ensuing year.

The President appointed Messrs. Steadman, Morrill, and Doyle as said committee.

On motion of Mr. Nye it was decided by ballot to meet next year in the city of New York; and 10 o'clock A.M. of the third Monday in September, 1875, was fixed, by vote, as the time of meeting.

Mr. Rhodes presented the following resolutions:

Resolved, That the thanks of this Convention are hereby tendered to the Common Council of the city of Detroit for their courtesy in placing at our disposal their elegant chamber.

Resolved, That the thanks of this Convention are hereby tendered to the Underwriters of the city of Detroit for kind attentions received at their hands during our sojourn in their city.

Mr. Morrow offered the following resolution:

Resolved, That the thanks of this Convention are hereby tendered to Hon. Samuel H. Row for the numerous courtesies he has so freely extended to the members of this Convention.

The Committee on Nominations reported the following as officers of the Convention, for the ensuing year, who were thereupon elected by ballot :

President-Orlow W. Chapman, New York.

Vice-President-Samuel H. Row, Michigan.

Secretary-Oliver Pillsbury, New Hampshire.

Executive Committee-Julius L. Clarke, Massachusetts; Gustavus W. Smith, Kentucky; John M. Forster, Pennsylvania; Edward Russell, Kansas; Lucien J. Barnes, Arkansas; and Joshua Nye, Maine.

After some congratulatory remarks by the President, on the work accomplished during the present session, the Convention adjourned at 2 o'clock P.M.

APPENDIX.

TAXATION.

In accordance with previous notice, Mr. R. J. Smith, of Chicago, ir behalf of the "Association of the North-West" (Fire-Underwriters) submitted the following upon the subject of Taxation, which was referred to the committee on that subject:

MR. PRESIDENT, AND GENTLEMEN OF THE CONVENTION-Your invitation to present in form our views upon the subject of insurance taxation was as unexpected as it was courteous and generous. Notice of our appointment to represent the Fire Underwriters' Association of the North-west came to us at so late a day that we had no time, even had we anticipated your courtesy, for such a preparation as should have been made, to properly present the great number of facts and arguments, a thorough knowledge of and digest of which is necessary to any useful consideration of the subject.

Having at the annual meeting of our association-held at the city of Louisville, Ky., in May last-presented a report which embodies our views, we beg your indulgence in submitting it at this time for your consideration.

The difficulties surrounding an equitable adjustment of this important question, and especially the great variety of opinions which obtain, as how best to effect such an adjustment, renders the duty devolved upon us an exceedingly unsatisfactory one, as doubtless the discussion of the subject will be to your Convention and the interests it represents. Besides this, so much has been said pro and con, and the ground so thoroughly gone over by others, there appears little else to do than follow a beaten track.

The following table represents the percent. of taxes on fire and marine premiums, as exacted of insurance companies in the different States: Alabama, 1 net; Arkansas, as personal property; California, 2 net; Colorado, 1; Delaware, $100; Georgia, 1; Illinois, same as other property; Indiana, 3 net; Iowa, 21; Kansas, 2; Kentucky, 21⁄2; Louisiana, 1; Maryland, 13 over $20,000 on all kinds; Massachusetts, 2 net; Michigan, 3; Minnesota, 2; Mississippi, $1,000; Nebraska, same as other property; Nevada, 2; New Hampshire, 1; New Jersey,