company becomes a claim at death; in a fire company by accident, or at the pleasure of the owner. The life business is more of a certainty than the fire and depends less on the caprices of men, hence there is less friction. Accident companies, however, are less favored, and their claims partake more of the nature of claims by fire, because of the opportunity for speculation. If these elements of speculation could be eliminated, the saving would be enormous. But the prospects of ever removing it are very limited, although much can be done by underwriters to materially lessen it.

Of necessity the business of fire insurance must be done through agents who receive their pay by commissions based upon the amount of business transacted, for it will not warrant a salaried agent in every town and hamlet. The majority of agents in the smaller places have other business and make insurance a side issue. Their insurance education of necessity has to come from the companies by correspondence, or by such instructive literature as they may send out from time to time, and from the insurance press. To be sure, they are occasionally visited by the "jolly Special" and he does good "missionary work" for the period of his brief stay. But does this good missionary devote enough time to the morale of the business (?); or is the object of his visit to urge the agent to an increase of receipts, leaving him to understand that "business is what we want" and that the principles will take care of themselves? I fear that this is too generally the case, the result being a too general belief on the part of agents that everything goes," and that the much talked of theories of underwriting are a myth. The insured, too, imbibes this same spirit of indifference, for his opinions are molded by the same atmosphere that surrounds this carefully instructed agent. These remarks are also applicable to agencies in the larger cities, where even worse practices are instituted. A loss occurs and the Adjuster tries to carefully ascertain the value of the property, while the assured compares the present desire for correctness with the loose and indifferent manner exhibited when the risk was assumed. The criticism that agents are not careful enough when assuming risks, is a charge companies have frequently to meet, and no remedy for this evil has ever been suggested except the contingent commission plan, and that has its objections; still it may be better than the present system of compensating agents.

66

The words of Scripture that "the flesh is weak" are more frequently illustrated in our business than in any other. In the prosecution of the business the companies have to depend largely upon the agents,

whose judgment may sometimes be warped by the consideration of the commissions involved. Of course the Local Agent is only human, and it is to be expected that he will err. But I believe the time will come when his duties will be more clearly understood, and he will enter upon them with a consciousness of the responsibility imposed upon him. I think that many agents now have this conception, but it takes only a few bad men to disarrange the whole system. The difficulty seems to be that the agent has to act in a dual capacity. First he must get the business for the company, and in doing so he is expected to show a friendly feeling for his patron and give him every latitude and privilege which he thinks will meet the approval of the company. Second, the company also expects him to act as their agent and protect their interests, and he is placed in the position of the man who tried to serve two masters, which we learn cannot be done; for "either he will hate the one and love the other, or else he will hold to the one and despise the other." This dual capacity in which the agent must act has made it necessary for the employment of the "Special Agent,” and he should be a man among men, for I believe it takes more of a saint to be a successful Special Agent than any business under the sun. And when it comes to the Adjuster, why, he simply should have wings; and he will have if he lives long enough. If any have died without it is because of their early demise; for if ever there was a poor, tried soul, it is this humble Adjuster, who is expected to bring peace and order out of discord and chaos. It is said, you know, that "a little leaven leaveneth the whole lump," so the influence of the bad is also felt, and one bad man in our profession will do more harm and create more antagonism than a hundred good men can overcome; and the evil that he does will spread with greater rapidity, and over more territory, than all the good deeds which so largely constitute the acts of the profession. Hence the necessity of companies being careful as to the character and qualifications of men who act in official positions. A man to be fit for our business must be one, honest by intuition; have a high order of integrity; spurn the wrong, "eschew evil and do good." Whether you come up to this standard I will leave each one of you to decide. I can only speak for myself, and the law, you know, excuses me from testifying.

No doubt you are all patiently waiting for the last subject of my paper, "the Devil and his relation to insurance," and are anxious to know what influence the Angel of Darkness has over the people, the companies and the agents. If he is to be credited with all of the bad

things done, he certainly is an important factor in the business of underwriting, and it is my purpose to consider briefly his relation to it.

I had a dream, and in that dream I visited the other world. I seemed to be a privileged character for the time, and by the aid of a guide was permitted to enter the realms of eternal punishment. Being engaged in the fire business, you may assume that I was particularly interested in the physical and moral hazard over which the Prince of Darkness reigns. As none of you expect to go there, a description of the place would be interesting to you, but language would fail me in any such attempt. It must be seen and felt to be appreciated. My guide assured that no harm should befall me, and that I might follow him with perfect confidence. I said to him, "What is this conglomerate mass of stuff off to the right, that seems to be burning brighter and brighter?" "Those," he said, "are some of the officers of defunct insurance companies, who failed in their promises to revolutionize the business and cheapen the cost of insurance." I asked "are their assets here also ?" He said, "no, they were of such a perishable character they were consumed upon the earth." "And what," I asked, "is this thin red flame off to the left ?" 66 66 Those," he said, are some of their agents, who from promises of high commissions misrepresented the companies to their patrons." I then asked if they had any other people there who upon earth had anything to do with insurance. "Yes," he said, "over beyond we have a place devoted entirely to that class, and it is so crowded that these you now see are simply the overflow." At my guide's request I followed him to this exclusive spot, and there found the fire burning even more fiercely. My guide took me by the arm, and as we passed along he explained who the occupants were. "These,” he said, "are Adjusters and Special Agents, most of whom belonged to the companies whose officers you saw burning in the other compartment." "And who are those that seemingly burn so slow ?" I asked. "Those," he replied, "belonged to some of the better class of companies; but who did nothing on earth but demoralize the business." "But have you no agents here?" I asked. Oh, yes. We have them divided off into sections. This pile here are those who got the company's money mixed with their own, and were unable to separate it; and the next, those who knowingly over-insured property for the sake of the commissions involved." "But who is that solitary man standing out alone from all the rest?" "Oh, he is the only agent who ever violated the 15 per cent. commission pledge.” "Have you no

insurance journalists here ?" "No, they are considered sufficiently

punished while on earth, by lack of patronage." "But who are those standing in a row there, and what are they holding in their hands?" "Oh, those are the sprinkler-head men, whose sprinklers failed to work for any earthly fire, and they are now trying to demonstrate their utility here." "Do they ever go off?" "Very seldom, and then only when the pipes melt." "But where do you keep those who set fire to their property, and claimants who swore falsely ?" "We let them go, for they are not considered to blame, as your earthly laws excuse them.” "Have you any officers of mutual companies here ?" "Oh, yes, they have just begun to arrive. We have a separate corner for them, and assess the pile when we need fuel for the stock fellows." "I see no Managers or General Agents here; are there none ?" He was about to reply, when suddenly I was awakened by a dig in the ribs, and a small voice said, "You are snoring!"

I now conclude with the words of the Golden Gate, in its advance comments on the title of my paper: We are persecuted by the world, are nearly out of the flesh, and re rapidly going to the devil. The President

If not, we will pro

Are there any remarks on Mr. Griffiths' paper? ceed to the next on the list. Who more competent to speak of net results than one who, passing a large portion of his life in field work of insurance, has earned and secured promotion to an official position where practical experience, energetically applied, has brought his company substantial returns and a handsome increase of surplus? We will be pleased to hear from Mr. Eugene Harbeck, secretary of the Michigan Fire & Marine Insurance Company, upon the subject of "Net Results."

Mr. Harbeck

NET RESULTS.

MR. PRESIDENT AND GENTLEMEN OF THE FIRE UNDERWRITERS' ASSOCIATION OF THE NORTHWEST:

Having accepted the kind invitation of your President to say a few words to you on this, the twenty-second anniversary meeting of your Association, I was at a loss as to which one of the many topics germain to our profession I should confine my remarks. On reflection, it occurred to me that the one chosen, "Net Results," being the thing we are all most interested in, would not be a bad subject to talk about, even though in practice they are so disappointing and different from those hoped for and anticipated.

It is not my purpose in this short address to weary you with statistics going to prove that the net results of the business of fire underwriting have been for a number of years growing more and more unsatisfactory; that the margin of profit is now so small that an addition of five per cent. to either the loss or expense account means a shrinkage in assets and surplus to the majority of companies. These statistics you all have seen; they have been prepared by able underwriters, and that they are true is unquestioned, and proven by the annual statements made year after year. That the profits in underwriting have been reduced to the danger point, that a great many companies are not accumulating surplus in proportion to the gain in amount at risk, is apparent, and that the inevitable conflagration will repeat the history of the Chicago fire of twenty years ago to-day, is by thoughtful underwriters acknowledged. It is easy to criticise; it is hard to remedy. We know expenses are too high; that many classes of hazards are written too cheaply; that we are unfairly taxed, and unjustly legislated against; that the broker and agent dictate when they should be dictated to, and that other evils exist also, all of which tend to make profits small and uncertain. It is not, however, my province to advance theories of management that will change all these things, but rather to speak of the influence of the field men upon the results of the business, and to consider the question of how you gentlemen, acting under the conditions that exist and have been created by your superiors, can realize "net results" satisfactory alike to yourselves and your employers.

The same underlying principles govern the business of selling indemnity that govern all other business ventures, and the measure of success or failure is the same. He who loses money in either is a failure; he who makes it, a success. Income must exceed outgo, great contingencies be provided against, capital earn a fair interest, the dignity and character of the business be maintained, or failure is certain. Insurance companies are not philanthropic enterprises, but, on the contrary, business organizations created by capitalists for the purpose of making money, and hoping to make more money than the same capital would earn otherwise invested. There is as little sentiment in the business as there is in banking, the sole purpose being to make a profit on the underwriting account and to so invest the assets as will bring the largest possible returns. Every man connected with an insurance company is valuable to that company-only when his services and connection with it influence the right side of the profit and loss account. To the executive officers of the company falls the