230 INSURANCE 



and healthful trade conditions. Of the assets of the companies, 

 about 75 per cent are securely invested in bonds, stocks, and mort- 

 gages, including every form of approved federal, state, and municipal 

 indebtedness, first-class railroad bonds, farm loans, etc. The neces- 

 sity of earning a certain rate of interest demands the most experienced 

 judgment in making these investments and a watchful eye on general 

 banking and trade conditions. All of the great financial reform 

 measures by which this country has reached its preeminent position 

 in the world's money market the National Banking Act of 1863, 

 the resumption of specie payments in 1878, the defeat of the free 

 silver craze in 1896 and 1900, and, finally, the passage of the Gold 

 Standard Act - - have contributed to the progress and stability of 

 life insurance during the past forty years. In fact, such progress 

 would have been out of the question as long as there existed 

 "great dissimilarity in the laws governing banks in the several 

 states, precluding uniformity, security, and safety." Hepburn 

 points out that, in 1861, "there were then some seven thousand 

 kinds and denominations of notes and fully four thousand spurious 

 or altered varieties." It is not a matter of surprise that under these 

 conditions, between 1851 and 1861, the actual increase in life policies 

 in force should only have been 30,600. 



But the influence of life insurance extends to every aspect of 

 finance and trade. With its necessarily intimate relation to banks 

 and trust companies, life insurance assumes the position of a regulat- 

 ing medium to which in no small degree may be attributed the more 

 perfect control of the money market in hours of uncertainty and 

 impending financial disaster. If crises and depressions are to-day 

 a more remote element of business probability, and if this is due, in 

 part at least, to "the greater skill and prudence exercised by bankers 

 as the result of experience," I do not go too far when I hold that 

 this gain is due in a large measure to the fact that there are few 

 important banks and trust companies which have not on their 

 boards of directors one or more men who are also executive offi- 

 cers of life and other insurance companies. Our financial history 

 of the past ten years shows conclusively the influence of conserva- 

 tive life insurance finance as a restraint and preventive of a recur- 

 rence of the disastrous series of panics between 1825 and 1893. 



Sociology and social science, including all the more important 

 divisions, is so comprehensive a term as to preclude consideration 

 in detail. Social structure alone, as revealed by the census and other 

 statistical investigations, bears a more or less direct relation to 

 insurance development and progress. Census inquiries are now 

 made with more skill and accuracy than heretofore, and every new 

 investigation brings out new facts and tendencies of society in the 

 process of evolution from homogeneity to heterogeneity. The 



