MATHEMATICS OF LIFE INSURANCE 45 



agents, and this person has control of the company. This individual 

 is, of course, a puppet in the hands of the officers of the company, at 

 whose instructions the agents suggest his name. Thus, once in power, 

 the officers of a mutual company have no difficulty in continuing so 

 indefinitely. 



The idea of a mutual organization, the members going each year from 

 California to New York to vote at an election, is as absurd as the idea 

 of all the citizens of the United States going annually to Washington 

 to enact laws. In classic Greece the ideal government was a city of ten 

 thousand, for then all citizens could come together and settle matters 

 of state. This being out of the question in a great land like ours, a 

 different principle is employed — the principle of representation. 



Similarly^ insurance companies should he representative instead of 

 mutual, as conducted at present. The most convenient grouping for the 

 purpose of electing representatives would probably be according to 

 states. The pohcy-holders of each state could elect someone (a com- 

 petent actuary) to represent them at the annual meetings of the various 

 companies. Besides acting as a legislative body for the companies, 

 these representatives could make annual reports to their constituents 

 concerning the conditions of the companies. Of course, this scheme 

 involves some expense, but each policy-holder's pro-rata share would 

 be triffing. Fifty cents to one dollar per year would be sufficient, while 

 the improvements and savings which these representatives could bring 

 about (and consequent deduction in the cost of insurance, or increase 

 in dividends) would be, relatively, very large. 



