84 TRANSACTIONS OF THE CANADIAN INSTITUTE. [VoL. VIII. 
and handing to the receiver general about two millions in cash and bonds, 
while large sums were deposited with the government agents in England. 
I was opposed to a system of government inspection, and am so still. 
I cannot see wherein insurance companies differ from mercantile concerns 
such as gas and electric light companies, steam and trolley railway and 
traction companies, trust companies and savings societies, which all issue 
long date bonds, for twenty or more years, and some sell perpetual obliga- 
tions. It is evident that the absorption of the companies’ funds in govern- 
ment securities at a low rate of interest tends to make insurance dear, for 
either the premiums must increase or the profits be less. It is also evident 
that depositing securities with an insurance department does not secure the 
solvency of the companies; that depends upon the judicious investment 
of funds by the directorates, and the care and economy of their management. 
There is expense connected with all government inspection, it comes ulti- 
mately out of the pockets of the insured, and we have seen that the expense 
accounts, both in fire and life business, are in need of reduction. Finally, 
a false confidence is instilled into the public, who imagine that if only a 
company has the government license, they need not scrutinize its annual 
financial statements. I understand that in Australia the companies are not 
in fetters as they are in the Dominion, in every one of its provinces, and in 
the states of the adjacent Union. Having advised against the formation 
of an insurance department, it was evident that if one were created I could 
not accept its superintendence, but, shortly after my leaving Ottawa, the 
office was founded and Prof. Cherriman became superintendent. The chair 
is now filled by Mr. W. Fitzgerald, who in his last report says ‘‘a revision 
of the insurance act at an early date may be considered expedient and 
necessary.”” It is probable that the laws will be made more binding and the 
inspection more effectual. I am at present doubtful of the efficacy of the 
government superintendence, that is, of the laws on which it is based, 
and I have not yet seen any official certificates that the fraternal societies, 
which are now doing a very large business indeed, have sufficient reserves 
to be solvent, or that their premiums are sufficient to provide for the la- 
bilities they assume. Already four assessment companies make returns 
to the Dominion superintendent and several others probably do so to pro- 
vincial officers. If there has to be an inspection it certainly ought to be 
thorough and complete. 
The magnitude of the life insurance business in Canada is shewn by the 
following statistics, which I have extracted and condensed from the report 
of Mr. Fitzgerald for 1903. 
