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Editorial Page A Life Insurance Law That CHEATS THE FAMILY Borrowing on Policies Makes Life Insurance Ridiculous. Such Loans Should Be Forbidden---NOT ENCOURAGED BY LAW Hundreds of thousands of women in this country look to the life insurance policy of the husband as a protection for children. AND IF THEY KNEW THE FACTS, THEY WOULD REALIZE TO THEIR SORROW THAT THE LIFE INSUR ANCE POLICY IS NO PROTECTION AT ALL, BECAUSE THE INSURED HAS BORROWED THE FULL VALUE OF THE POLICY. The object of life insurance is to provide money in the event of the death of one who provides for the home. Laws, stupidly planned, ACTUALLY COMPEL THE LIFE INSURANCE COMPANIES TO LEND MONEY TO THE POL ICYHOLDER, so that, over and over, when the policyholder dies, the family finds that all protection has been wiped out by the dead man’s borrowing. We have had letters complaining that life insurance com panies do not lend enough to their policyholders, or that they charge too high a rate of interest. If we had the power, we should make it impossible for any policyholder to BORROW A SINGLE DOLLAR ON HIS POL. ICY, unless it were just enough to pay the premium in the event of his being unable to take care of that premium., The actual condition is not known by those who rely on life insurance for protection. And it does not receive proper atten tion from lawmakers, who compel the insurance companies to permit the insured to borrow in advance and waste the money that ought to be kept to protect the family. The Georgian is interested in the women and the children who rely upon life insurance. ! And we advise every woman who believes that her husband is insured for the benefit of his children TO FIND OUT HOW MUCH HE HAS BORROWED ON THE POLICY, and try to prevent any further borrowing. Each policy has a certain ‘‘paid-up value.”’ That is to say, at the end of a certain length of time, after the paying of certain premiums, the policy has a cash value. And in many States the law actually compels the company to lend that cash value to the man insured. Thus, in tens of thousands of cases, instead of carrying life insurance, which is a protection for his family, the man is carry ing a heavy debt. He is paying interest on the money that he has borrowed from the company, and he is also paying the dividend to keep the policy going. This is disastrous to the policyholder, simply adding to his indebtedness, THE LAW ACTUALLY ENCOURAGING HIM TO BE A BORROWER. It is a system absolutely ruinous to women and children who depend upon insurance. And it is unjust and oppressive to the insurance companies, causing them to be un justly suspected. Over and over it happens that some woman whose husband has suddenly died, leaving her with young children, appears with her life insurance policy, expecting to get the full amount of the policy. She is told—quite truthfully—that her husband had bor rowed the money before he died, that his policy is worth very little. She is told also, which is true, that the law actually com pels the life insurance companies to lend money in this way— giving to the insured to be squandered or used in speculation that which should be the family’s protection. Of the men who borrow on life insurance policies in small amounts, only SEVEN OUT OF A HUNDRED ever pay the In his recent report to the stockholders of the Postal Tele graph and Cable Company Mr. Clarence Mackay took occasion to advert rather contemptuously to the present state of the demand for the Government ownership of telegraphs and telephones. Mr. Mackay is doubtless an excellent manager of the prop erties with which he is entrusted, but he is a singularly bad judge of public opinion. It is curious how often this blindness to the perfectly obvious course of public sentiment appears in men whose business affairs should compel them to observe and judge it more wisely. But perhaps it is only the proverbial blindness of those who will not see. The real fact of the matter is that Government ownership of telegraphs and telephones stands to-day where the parcel post stood a very few months before the law establishing it was en acted. The Postmaster-General has warmly advocated the plan in his message to Congress, and a committee appointed last June to report upon the feasibility of acquiring the existing lines is nearly ready to report. These evidences of activity Mr. Mackay dismisses lightly as “‘the specter of Government ownership,’’ but if all specters were composed of as much substance Spiritualism would enjoy more tangible evidences. What Mr. Mackay is pleased to call a specter made its ap pearance in 1903, when Mr. Hearst, then a member of the Fifty- B NEW S R REg— A 5= Public Ownersfiifi of the Telegraphs money that they borrow. In other words, where a hundred men borrow on their policies, ninety-three die, or drop the policies, without ever making good the loan. The trouble originated at first with the life insurance com panies themselves. . In the days when there was no regulation there was keen competition for business. And as an inducement to make men insure their lives the companies offered to lend a certain amount of money on the policy at any time. And they incorporated that agreement to lend money in the policy itself. It was natural enough that the companies competing with each other for business should forget the real interest of the pol icyholder and his family. 5 But it is incomprehensible that lawmakers should actually pass laws COMPELLING COMPANIES TO LEND ON POLI ICIES AND THUS GIVING TO THE POLICYHOLDER, WHO IS TRYING TO PROTECT HIS FAMILY, THE CONSTANT TEMPTATION TO 0 INTO DEBT AND SPEND IN AD VANCE THE MONEY THAT OUGHT TO BE KEPT AS A PRO TECTION FOR THE FAMILY. | This newspaper suggests that instead of compelling life insurance companies to lend on policies, the law should FORBID SUCH LOANS. An exception could only be made if the policyholder is unable to pay his premium. Then the life insurance company might well be compelled—if the value of the policy justified it— to lend enough to pay for the premium and tide the man over his difficulties—BUT NO MORE. . The funds of life insurance companies should be kept intact for the benefit of the insured—not paid out in loans that encour age policyholders to run into debt and forget the very purpose for which life insurance was instituted. The large sums accumulated by the companies should be invested for the benefit of the policyholders under the strictest supervision AND FOR THE BENEFIT OF THE PEOPLFE AS A WHOLE. Life insurance money has done wonders in this country, in the way of nation building. It has also done some wonders in the way of enriching private individuals, guilty of rascality— but that is another story. And strict legal supervision has put an end to the stealipg. The money paid in by millions of little policyholders forms a gigantic fund which should be kept intact for the benefit of families after death, and used through wise investment for the building up of the nation, its industries, its railroads, its other necessary enterprises, IN SOUND, ABSOLUTELY SAFE BOND INVESTMENTS. There ought to be in each State some ‘‘statesmen’’ wise enough to see that to compel insurance companies to encourage policyholders running into debt is unwise, criminal, dishonest to the children and the wife. Pending such action, we advise the wives of insured men to find out just what value there is to the protection which insur ance is supposed to give them, and just how much, if anything, the husband has borrowed on his policy-—for every dollar thus borrowed will be taken away from the family in case of death, The whole system is preposterous—encouraging men to spm money for the protection of their families—AND THEN BY LAW COMPELLING THE INSURANCE COMPANIES TO TEMPT SUCH MEN TO RUN INTO DEBT. Either stop life insurance entirely or make it real by for bidding such stupid tampering with its actual purposes. eighth Congress, introduced a bill for the construction and oper ation of Government telegraphs. Another specter was material ized by Mr. Hearst at the same session in the form of a bill for the creation of the parcel post. The latter proposition has been enacted into law, and the service established under that law has won universal public ap proval, in the face of persistent efforts on the part of interested corporations to limit and to cripple it. As yet the Government ownership of telegraphs is unaccom plished. Itis opposed by forces identical with those that opposed the parcel post—namely, monopolistic corporations enjoying the privilege of doing the public’'s business at a large private profit. It is natural that they should resist any change. The Administration characteristically enfeavored to defeat or delay Government ownership by forcing the dissolution of the combination by which the telegraph and telephone companies were enabled to give the public a better service. But the effect of the foolish act will be to hasten the very thing it was intended to avert, for the public, having tasted the lesser benefits under private combination, will turn eagerly to the greater advantage of general telegraph and telephone combination under govern ment ownership. When Mr. Hearst made his proposition in 1903 it was re garded as rank radicalism and suppressed by Congress. Now it has been approved by two postmasters general, is seriously dis cussed by Congress, and its early enactment into law is certain. Week Ending Mar. 3, 1914,