ment itself. No influence of any director or officer should be permitted to affect a finance committee in the acceptance or refusal of any mortgage offered to it. There are certain classes of property which, while having a present value, are, nevertheless, but poor subjects for mortgage, judged from the standpoint of an insurance company. No company should be placed in the position where, if compelled to foreclose, it could not find a ready purchaser or renter for the property. Hotels and theatres are examples. I venture to assert that if the records of companies were examined it would be found that by far the greatest percentage of foreclosures was upon securities of this class. Human judgment is not infallible, and no matter what care may be exercised in the making of loans, I think it is impossible to prevent a certain number of foreclosures. When this takes place there are but two courses open to the officers, and I have known corporations which have followed each of them. One is to immediately dispose of the foreclosed property even at a loss, and thus avoid the trouble, expense and worry incident to management of property. The other is to spend sufficient money to place the property in excellent shape, and then attempt to find a purchaser, or, failing in this, to find a tenant desirable in every way. Either of these ways is good, but to get the maximum benefits it must be carried out with all the energy and intelligence which it is possible to bring to a troublesome subject.

Some corporations have shown a preference for loans on collateral. And here, again, we are confronted with the old difficulty that the influence of a director or an officer is so apt to be a dominant factor. It was never intended that an insurance company should exercise banking functions; and it is a more or less disturbing truth that most of the collateral offered for loans is of a kind which is affected by the rise and fall of the stock market. I do not include in this category the loans made to policyholders upon the security of their contracts, for in my opinion there is no investment which is so productive of good results as this one. It not only serves to relieve any temporary financial embarrassment of the policyholder, but it is absolutely ideal in the security which it presents; for if the policyholder lapses,

the loan (which I assume, of course, is always within the reserve value) ceases and the company recoups itself from the policyholder's funds which are on deposit with it. Should the policyholder die, his loan is deducted from the proceeds of the contract before they are turned over to the beneficiaries.

There are numerous ways of investing a corporation's money, but primarily all of the collections from policyholders are placed in banks or trust companies. And it is here that the greatest evil is experienced. The good old times when a bank was merely regarded as an institution which attended to a corporation's collections and disbursements, have unfortunately passed away, and in their place has come a feeling that no insurance institution is complete without a financial annex of some kind. This annex serves the purpose not only of attending to the legitimate banking duties, but furnishes a means of circumventing the laws and standards established by the state. With a full realization of the precarious character of agents' balances, supervising officers (granted the authority to take such action by the statutes of their states) have ruled that assets of this character are inadmissible. The ignorant and innocent have assumed that the insurance companies have accepted these dicta with resignation, but the recent disclosures have shown that it is no uncommon thing for an agent to secure his advances from the convenient bank or trust company, and this loan has been guaranteed by the insurance corporation. The guarantee may take many forms, but the fact remains that huge deposits of policyholders' moneys must be maintained in the banking institution in order that such accommodation should be granted. It goes without saying that a transaction of this kind is indefensible when judged by every standard of good business and simple morality.

All of these standards may be observed by an insurance company, and yet its ultimate success may be seriously retarded by the poor system of records which it maintains. If proper books are not kept which show conclusively all profits and losses which the corporation has sustained, it is not conducting its operations in a manner such as ought to bring to it the approval of all right-thinking men.

We frequently hear it asserted that no criticism ought to attach to certain individuals because their acts have not resulted in a loss to their corporation. This fallacy is one that, owing to its simplicity, is hardest to meet. A thing is either right or wrong, irrespective of its ultimate results. And the excuse which is given by so many unsuccessful speculators, who take the funds of institutions toward which they exercise a fiduciary capacity, is just as logical as the reason just assigned.

These may be unpalatable truths for some of us, but I believe they will, nevertheless, stand the test of time. The standards which I have given may seem hard of realization, but the officer who purchases bonds or stocks, who permits any motive to actuate him other than the ultimate safety of the funds is recreant to the trust which has been imposed upon him. It may be difficult to obtain securities yielding a high rate of interest and combining the elements of safety with those of desirability. If such be the case, the remedy is not to invest in securities of a questionable nature, but, rather, to seek those yielding a lower rate, and the managers of companies need not be afraid but that their actions will meet with the approval of the policyholders. In fact, I know of no more patient individual than this policyholder. He entrusts his savings to an institution concerning which, in many cases, he knows nothing at all. He entrusts the investing of these surplus funds to people with whom he has no personal or official acquaintance; and when he is invited to attend corporate meetings and exercise his proud privilege of the suffrage, he shows his indifference by his failure to attend. I cannot at this moment recall a single instance where any officer or group of officers has been deposed as long as he or they remembered the cardinal principles of official virtue and honesty. It is only when offences against corporate decency have been flagrant that the long-suffering policyholder has risen in all his might and glory and effaced from the earth the offending officer; and I am happy to bear testimony to the fact that in reforms of this kind the agency corps has never been backward in deciding upon which side it should be arrayed.

It is an unfortunate fact that the life insurance company from the public's standpoint is not the same as

from the examiner's viewpoint. An intelligent business man of my acquaintance illustrated his opinion of the manner in which companies treated their policyholders as far as the profits of their institutions went. He told of a boy leaning against a fence and sobbing as though his heart would break, but in a very quiet way. A stranger approached him and upon learning that the cause of the lad's grief was the theft of one of his two oranges by a street loafer, asked: "And is that the loudest you can cry?" Upon receiving an affirmative answer he promptly took the other orange and made off with it.

As I have already said, I feel that this does the business of life insurance a huge injustice, but I cite it as an evidence of the feeling which exists among some men today. The time is coming when the cry of the policyholder for his rights will not be as quiet and soft as it has been in the past. And you gentlemen of the agency corps can obviate the necessity for any lamentations upon the policyholders' part if you will only use your great power to secure a reform of the evils which exist among some corporations today. From my personal knowledge of many of your members and from a study of the aims of your organization, I feel that it will require merely a realization of these truths to have you unfurl your banner in such a cause. And when that time comes the life insurance company from the examiner's viewpoint, will be the same corporation as from the agent's viewpoint and the policyholder's viewpoint. [Applause.]

Mr. J. Carlton Ward, New York City-I move you, sir, that the thanks of this association be extended to Mr. Wolfe for his very able and interesting paper.

The motion prevailed.

President Dolph-The next thing for us to take up is the discussion of the first topic, which will be opened by Mr. I. Layton Register.

Mr. Register-Joseph Chamberlain, the English statesman, tells this story about himself. Upon one occasion he was the guest of honor at a dinner where the mayor presided. After the coffee had been served and the cigars lighted, the mayor turned to Chamberlain and touching him upon the arm said: "Shall we let the

people enjoy themselves a little longer, or shall we have your speech now?" [Laughter.] We have so thoroughly enjoyed the splendid addresses of the distinguished

speakers who have held you spellbound that it seems like dropping down to earth to now inflict upon you five-minute paragraphs, and yet these brief talks have become one of the most important features of these conventions.

The irrepressible chairman of the committee on topics has asked me to prepare an introduction on the following subject: "Life Insurance the Highest Type of Commercialized Beneficence." That sounds like an axiom, and therefore requires no proof. As such it is a complete argument for life insurance in epigram. And yet I do not like the words "commercialized beneficence." Life insurance is a business, rather than a beneficence. It might rightly be called a beneficent business. The word commercial, in brief, means trading. And beneficence means active goodness. The word has the same derivation as benevolence. It therefore seems unfortunate that a goodly act, which springs only from a noble heart, should be qualified by sordid trading as the channel for a manifestation of the highest type of beneficence.

Life insurance is a fulfilment of the gospel teaching that a man should provide for his own. It is the consciousness of this injunction that induces husbands and fathers to insure. If men could have a decree that they would live long and be successful, the beneficent aspect of life insurance would not appeal to them.

It is because they may die early and leave their families destitute, that the business character of life insurance, based upon the scientific principle of the law of average, convinces them that there is no other certain way of indemnity.

The commercial side of life insurance may refer to the compensation of officers and agents. The business must be managed, and the laborer is entitled to his wages. To be sure agents work along commercial lines when they ap