Burton J. Hendrick

“ He spent the morning over his correspondence, usually with Equitable agents, in preparing circulars and advertising matter, and receiving callers. Casual droppers-in seldom got away from Hyde's office without signing applications for insurance, and usually leaving checks for the first premium. Hyde spent his afternoons and evenings personally soliciting insurance. He joined the ranks and worked side by side with the humblest agent. In every citizen he saw a prospective policy-holder. He utilized all his business associates; he made every one insure with whom he or the society did business. ”

“ When you are in company note carefully all manifestly interested in the subject, and call upon them the succeeding day. Follow up every marriage and every funeral. What better wedding present than a life-insurance policy? What more persuasive argument than the death of a man uninsured? ”

“ Elizur Wright's great distinction as a reformer in life-insurance rests upon the fact that he eliminated from it the element of forfeiture. In his ideal company every man received the exact insurance equivalent of every dollar he paid in. ”

“ In the early seventies, construction work in New York cost just about half as much as now. The new Trinity Building, a twenty-one story marble sky-scraper, several times as large as Hyde's first Equitable office, and much more elaborately decorated, was recently put up at a total expenditure of $2,500,000. Commonplace and dingy as the the first Equitable Building appears to-day, it was the architectural wonder of the age. ”

“ The early seventies was the period of distress among the New York life-insurance companies. If we carefully study the causes that brought so many to destruction—the Globe, the Guardian, the Continental, and the rest—we shall place the chief responsibility upon the methods pursued by the Equitable. Dishonesty in management somewhat explains the failures; but, above all, competition, reckless commissions to agents, enormous advertising expenses—on these rocks the larger number went down. At one time the New York Life, under the management of Pliny Freeman, was found insolvent ”

“ Hyde not only kept this annual percentage a secret, but deceived the insurance department concerning it. In 1867, for example, the Insurance Department propounded to the Equitable this question: "Do any of the officers of the company receive a commission or percentage on any of the business of the Company, or retiring allowances, annuities, or any other remuneration besides a fixed and regular salary?" ”

“ Even while he "lobbied for the widow and orphan" in the Massachusetts legislature, the man who was so largely to undo his life work and re-establish the system on the basis of forfeiture and injustice had already become a marked figure in the life-insurance circles of New York. In 1858, when Wright got his legal reserve law through the Massachusetts legislature, Henry B. Hyde, then only twenty-four years old, had become the cashier of the Mutual Life. In 1861, when Wright forced through his non-forfeiture law, Hyde had already successfully launched the Equitable. ”

“ Detailed and separate instructions are given for canvassing tradesmen, professional men, merchants, and every other social class. "You will find," said Hyde, thus forecasting the modern attitude of cynicism toward the policy-holder, "that nineteen men out of twenty will let you decide for them." Hyde pursued his own agents as unceasingly as he advised them to pursue the public. While his dignified competitors took things easy in their New York offices he was whirling all over the United States, everywhere strengthening and inspiring the Equitable force. ”

“ In other words, he discovered the advertising advantages of the modern office building. In this proposal Hyde again revealed that audacity which was the most striking part of his character. At that time the Equitable had only $1,500,000. of assets; the building then projected ultimately cost $4,000,000. Hyde proposed, in other words, not only to invest all his policy-holders' reserves in a most hazardous undertaking—but he had in his treasury only a fraction of its cost. He confidently depended upon his own energy to get the money when the bills came in. ”

“ He chiefly depended for public confidence, however, upon his assertion that the Equitable was a "purely mutual" company. He had capital stock indeed; and the majority of this capital stock has always controlled the society; but that capital stock was a requirement of the state law. In 1859 you couldn't organize a mutual company in New York State. No law has more adversely affected life-insurance history. It created, in a dozen years, some forty-one stock companies, all, like the Equitable, with at least $100,000. ”

“ He had already demonstrated the success of his idea; had developed the modern type of life-insurance agent; had already passed by the sleepy Massachusetts companies; and was rapidly gaining on the Mutual Life. All this progress, of course, Hyde made at the expense of his policy-holders. Instead of piling up a surplus to pay "dividends," he drew upon it for agents' commissions on new business. In 1862 Hyde spent twenty-seven cents out of every dollar received, in expenses. The Equitable's charter required the distribution of surplus once in every five years. ”

“ In the Directors' room the most conspicuous paintings are those of himself and his father, Henry Hazen. The latter had only an incidental connection with the Equitable. He gave all his time to the Mutual Life, and died, in 1873, as its general agent in Boston. A less conspicuous picture is that William C. Alexander, the Equitable's first president. In other more sordid ways, as we shall see, did Hyde thus identify his family with the society.
Hyde's "Extra Compensation" Only such a man could have constructed one of the world's largest life-insurance companies out of nothing. ”

“ For several weeks Hyde canvassed influential New York. Few rich men successfully avoided his advances. He enlisted many supporters in the Fifth Avenue Presbyterian Church. He corralled others by promising them important positions in his society. He offered to make Dr. Edward W. Lambert medical director, provided he raise $25,000. of capital stock; and to make Henry Day counsel, provided he raised a similar amount. He showed his shrewdness by providing for a Board of fifty-two directors. He thus secured support and influence in many directions; and also a large number of initial policy-holders. ”

“ All advertising matter, all pamphlets, he supervised and usually prepared himself. He early adopted the practice of circularizing his force at regular Intervals. His famous "hints" to agents, issued In 1865, is still a classic in life-insurance literature.
If you wish to trace the evolution of the modern life-insurance agent, you will find it in this little compendium. Hyde herein imagines every situation in which agent might find himself, and furnishes precise instructions for meeting it. There is only one way to "get business," he declares ”

“ He also originated many of the agency methods which Henry B. Hyde later on so effectively used. He ultimately built up a business at Boston that yielded him an income of $20,000 a year. Schoolmaster Johnston had an even more remarkable career. After spending several years in the service of the Mutual Life he went West and, in 1858, helped found a company which has since become the Northwestern Mutual of Milwaukee. Henry B. Hyde found no immediate opening in life-insurance, and, perforce, accepted an uncongenial clerkship in a mercantile house. ”

“ Get lists from your doctor of insurable people, and, if necessary, make it an inducement to him to smooth the way. Make your clergyman help you insure his flock; join literary societies and clubs—in order that you may insure the members. ”

“ Of this $700,000. or $800,000. is given as the the cost of the land. 4↑ Superintendent Hendricks report on the Equitable assets; Page 4. Mutual-Equitable War All these evidences of energy alarmed the Mutual Life. Frederick S. Winston at last appreciated Hyde's ability. He now saw that he had let the ablest life-insurance man of his generation slip between his fingers. In seeking some way of checking the upstart, Winston finally hit upon the plan of paying annual cash dividends. In Massachusetts Elizur Wright had preached this system for several years ”