The Poverty Bay Herald AND East Coast News Letter. PUBLISHED EVERY EVENING. WEDNESDAY, OCTOBER 20, 1880.

Poverty Bay Herald, Volume VII, Issue 1152, 20 October 1880, Page 2

The Poverty Bay Herald AND East Coast News Letter. PUBLISHED EVERY EVENING. WEDNESDAY, OCTOBER 20, 1880.

Government cannot enter the market and invest its surplus at current rates ' of interest. All it. can do is to invest its funds in his own securities, in which i they will realize exactly as much as the rate of interest at which our Government can borrow in England. This : rate, when the negotiation of the loan is not bungled, is about 4i per cent. A private insurance company, on the contrary, has the range of the globe from China to Peru before it, and can deal in any kind of security. Its funds can be invested just a3 securely as our Government funds can be, and at six, seven, or eight per cent, interest. And though the management of insurance companies is often wasteful, it will be contrary to all experience if the Government will not be found equal to spending a vast deal more upon management than the most lavish of existing companies has done. It has grown to be a maxim that Government institutions cannot be as economically managed as private affairs. How, then, can life insurance be made profitable, when not only will the management be more wasteful, but the income from invested funds less than the corresponding income of a private company by at least fifty per cent., in consequence of the restricted nature of the investments 1 These remarks apply with equal force to the business of life insurance in New Zealand. While the private companies have declared handsome bonuses to their members, the Government Life Insurance Department, thought one of its principal features is supposed to be that of a periodical division of profits among policy holders, has not yet been in a position to do so. Two quinquennial balances 1 have been struck but the amount of profit on each occasion was so insignificant as not to be of any advantage whatever to the insured. Another ' feature which the New Zealand Government urge in favor of their company is a lower scale of premium. True the rates are somewhat less than those of other kindred societies, but, as no profits have been divided, it is not difficult for the meanest capacity to judge which is by far the cheapest in the end. The writer in our ■ Canadian contemporary warns the Government that — It is absurd to suppose that they will » do a great business should their communistic scheme go on to completion. The only case at all parallel is Gladstone's Defened Annuities scheme, adopted shortly after the Post Office Savings Banks were constituted. A more complete failure than the Deferred Annuities cannot be cited, but if the Canadian idea be not abandoned, we are afraid Mr. Gladstone will be able point to at least one other failure » more complete than his own. It must be borne in mind that the insurance business is not one in which the conT ductors have things all their own way. People do not come rushing up with their premiums in hand begging to be insured. It is necessary to tout, and k tout actively too, for business. We 3 question if one tenth of the insurances [. is made on the motion of the insured. The other nine tenths is procured by r indefatigable, irrepressible, and brassy canvassers, whose pertinacity and ingenuity have become a proverb. Fancy the Government having agents of this sort scouring the country for business ! Yet without them next to no business : can be done. What would the Canadian Press ) say if they were aware of the fact the New Zealand Government actually had such agents touting for their business ! It is further considered that the Government should not possess such a political power, as tho r control of the life insurance scheme would give them by accepting men whose "lives" had been lefused by a i reputable company as a bribe for ) their votes and influence. We do not - know that any attempt to exercise 3 this power has ever been essayed in i this Colony, but the way is certainly } paved for corrupt practices. Judging s by the status of the New Zealand " Government Life Insurance Company, - we are not surprised that the Canadian i Press is averse to the introduction J of such a scheme into the Dominion.

The London Review reprints an i article published in the Toronto \ Globe on the Canadian National In- 1 surance scheme. It is interesting as i showing the opinions of Canadians on 1 the principle of Government Life ] Insurance, as the Government of this 1 colony have already taken the matter < in hand. We have not space to re- ' print the whole of the article, but \ will give our readers a digest of the < arguments used. The writer says : — There is but one plea that can be urged for the Government going into the business of insuring the lives of the people and that is the greater security which it may be supposed will attach to a Gov- i eminent policy. Setting aside the obvious retort that the ruling party in this \ country is now coquetting with a policy \ that leads directly to repudiation, and that therefore the public faith is not to be relied on, it is quite plain that absolute £ security is not the only thing which in- | surers look for. If they did look for j security they conld find half a dozen t companies already doing business, in j Canada, whose security is practically as J good as that of any Government under the sun ; and therefore the plea that t Government insurance is necessary, in c order to furnish security, falls to the i ground at once. But, as a matter of a fact, in insurance as in every thing else, there are a host of purchasers willing to ( take some risk, provided that the article f they want can be procured cheaply. c These insurers would not patronise the c Government institution, for the reason t which we will presently demonstrate, I that Government insurance must neces- 1 sarily be very much dearer than that a conducted by private institutions. f Why should' Government descend f from its place and take the bread from l the months of the people now earning f their livings from life insurance 1 What j argument in favor of Governmenial life insurance could be so put as not to extend to Governmental fire and marine £ insurance ; to Governmental manufac- c turiug establishments ;to Governmental a stores ; to Governmental everything? j. Life insurance is in no sense a necessity j like the carrying of the mails. What a nonsense it is to be moxirning about 3 the spread of socialism and communism s when the Government itself stands ready t to take a longer step towards socialism t than any yet taken in this country. 1 It is not difficult .of proof that the < insuring of lives by the Government must necessarily be a more expensive a process than the same business con- c 4ucted by a private company. The a