Burton J. Hendrick

“ Like Hyde, he depended entirely for the greatness of his company upon the persuasive agent. He engaged anyone who could get business, irrespective of character or standing; he advanced hundreds of thousands of policy-holders' money to defaulters and notorious gamblers. Brusque and distant with most men, he would pet and fawn upon the successful producer. When John I. D. Bristol, the well-known Northwestern New York manager, demonstrated his capacity in the early '80's, Beers pursued him day and night. ”

“ In such a wager as this, the most needy, whom life-insurance is especially designed to protect, are pretty sure to be the losers. Besides, the large accumulations which Tontine insurance gathers in the hands of a company, at the expense of those who die, or are unable to maintain their policies during the Tontine period, offer a strong temptation to wasteful expenditure, which, if indulged, must sooner or later bring disappointment even to the survivors of those who play at Tontine hazard. ”

“ Greene's ambition was, not big commissions to his agents, but big dividends to his insured. Again, he rebelled against certain "liberal" ideas introduced by Tontine companies—notably their so-called "incontestable policies." He regarded the payment of the claims of suicides as a violation of the mutual idea. He declared that a man who, unless insane, committed suicide in order to benefit his family, did precisely as the man who fired his house in order to collect the fire insurance: he practiced a fraud upon his associate insurers. ”

“ The Mutual adopted the idea somewhat shamefacedly, in deference to what it declared a genuine public sentiment; the New York Life more cheerfully. Indeed, the latter company found it as convenient an escape from embarassment as did the Equitable itself. Organized in 1841 as a purely mutual company, the New York Life, from the first, had been unfortunate in its management. For many years Pliny Freeman, a thoroughly unscrupulous and dishonest man, had held the chief control. ”

“ Every day the Equitable gained upon its older rival. Hyde purchased Mutual agents right and left; its entire agency system, according to President Winston's own words, threatened to become "so impaired that years would be required to restore its efficiency." Rebating now became a regular feature of life-insurance competition. This, it may be explained, is the agent's practice of dividing his first year's commission with the new policy-holder. This custom, now one of the greatest scandals of the business, is the direct outcome of the Mutual-Equitable warfare of the '70's. ”

“ Lapsing policy-holders, up to that time, had been obliged formally to notify the company that they expected a surrender value. If they neglected this formality, they received nothing at all. This provision frequently worked great hardships. On no subject has ignorance so generally prevailed as in life-insurance; and people by the thousands dropped their policies, unaware that they were entitled to any return. ”

“ He declared that, once a man had entrusted to his keeping certain sums for his family protection, the insured had no right to withdraw them. The company had accepted this money as a trustee, and under no conditions must it use it for any other than the intended purpose—that is, life-insurance. Should poverty prevent the payment of premiums, Greene believed that the accumulation should be used only in buying a paid-up policy. ”

“ Dodd, therefore, provided in every policy that, if the lapsing member selected no option, his reserve would be used until exhausted in continuing annual premiums on his policy. That was, no man could forfeit his policy however hard he tried. Many bereaved widows have been amazed to receive checks, in payment of policies, from the Mutual Benefit Life-Insurance Company. Their husbands had formerly carried policies, they knew, but supposed that they had dropped them years before. Amzi Dodd, unknown to them, had taken the reserve value, at lapse, and applied it to continue premiums. ”

“ The Mutual flooded the country with circulars containing similar statements. "The Mutual Life-Insurance Company of New York," declared its most celebrated anti-Tontine document, "issues all kinds of legitimate life and endowment policies, and the premium rates are lower than those of any mutual company in the world. But it does not issue Tontine policies; nor encourage anyone to engage in the Tontine game. The principle of the game is to rob the unfortunate by canceling their policies without consideration, when it is found impossible to raise the money for premiums ”

“ Every move the Equitable made, President Winston opposed. In 1873 Hyde invaded Europe; a few years later, South America. Winston promptly and accurately pointed out the dangers of the innovation, and declared that the Mutual would never follow suit. "Other companies may go to the West Indies, Central and South America," said President Winston in an official report, "but not the Mutual. It is not fair to introduce risks on bad lives, especially when exposed to deleterious climatic influences. The rate of exchange greatly interferes with the transmission of funds ”

“ McCurdy at once surrendered to Hyde. He converted the Mutual Life into another Equitable. He made the Mutual a Tontine company; and established agencies abroad. He entered the race for bigness, and began heaping up that huge surplus against which President Winston had so strongly and truthfully preached. He showed even less moderation than Hyde himself. By using Hyde's methods he built up an enormous company, but at tremendous cost to Mutual policy-holders. Since 1885 dividends in the Mutual Life have regularly diminished. ”

“ Whenever the insured died before this money was exhausted the full face of the policy was always paid. In working out the details of these reforms Mr. Bloomfield J. Miller, the late mathematician of the Mutual Benefit, shares the credit with Amzi Dodd.
Mr. Dodd did not go to such extremes as President Greene. He did not share the latter's views on cash values, suicides' claims, or even on the management of the agency force. He made no hysterical bids for new business; he did desire, however, a steady and healthy growth. ”

“ The home field affords ample scope for the exercise of whatever capacity and energy any company may possess." Again president Winston frequently argued against that besetting sin of the modern life-insurance company—the craze for size. In 1874 the Mutual announced that it would issue policies only up to 100,000 lives; after that, take new risks only to fill such vacancies as occurred. Winston constantly attacked the Equitable's huge surplus. ”

“ That they remained for years the favorite canvassing documents of Equitable, Mutual, and New York Life agents was notorious. Connecticut Mutual policy-holders were inundated; leading citizens of American cities were overwhelmed. Anyone even mildly contemplating life-insurance inevitably received, through the mail, a marked copy of the Monitor or the Times. Many of these articles were found mailed in Equitable envelopes. Greene, over his own signature, charged that the New York companies had spent $500,000 hounding the Connecticut Mutual. ”

“ It was made possible only by family coöperation, by the joining of the many to bear the burdens of the few; therefore it represented, as did no other institution, human brotherhood. Above all, it rested upon absolutely secure scientific grounds; it was thus a product of human progress in intelligence. ”

“ Her husband, she said, had foolishly taken out a Tontine policy, had had reverses and could not make his future payments, and consequently must lose everything he had put in. "If it were only a regular policy," she added, "we might pinch a little and pay the premiums; for then we could stop any time and get a surrender value; but, as it is, we must throw the whole thing up." ”

“ Business was affected; policy-holders began to turn away from Tontine. In fact, Hyde and McCurdy thoroughly tired of the subject, and sought some way of stopping the discussion. In the early part of 1886 Greene sent a four-column letter to a leading New York paper. The editor forwarded a proof to the Equitable, inviting a rejoinder. The Equitable threw up its hands. It had had enough. It consulted with the Mutual as to the best way of ending the war. They finally sent for James G. Batterson, President of the Travellers Insurance Company of Hartford. ”