either unable or unwilling to meet. It was in this way, and from data of their own furnishing, that we predicted the failure of the International, the Security,* and several others. Well, the event, so long foreseen, in due time arrived. The Chicago fire of 1871 extinguished some of the seemingly properous companies, and gave others the excuse for which they had only been waiting, to go into bankruptcy, with the money of the policy-holders—from which they had been for years deriving a comfortable annuity-in their pockets. Some companies, which we could name, contrived deftly to exploiter both fires. They went to pieces with the first news of the Chicago disaster. Sympathy was at once expressed for the unfortunate directors, but of the more unfortunate policyholders not a thought was had. The friends of the directors came together, and the companies were started anew, with perhaps slightlyaltered titles, but the same organization, the same directors, and (unfortunately for themselves) many of the same policy-holders. About a year later, a fire occurred in Boston-and at once these companies again threw up the sponge-there were fresh receivers, fresh marshalling of assets, and the same lamentable deficiency of funds for the payment of debts, that had been witnessed but a short time previously.

These conflagrations are the only opportunities which are generally afforded of testing the reliability, or unreliability, of fire companies. In the case of a life company, every policy must in the nature of things one day become due. The question of the company's ability or willingness to pay is thus constantly presented; and any company, who makes it a principle to evade or resist the payment of just claims, is sure to have its character pretty well ascertained before many years have expired. With fire insurance companies the case is entirely different. Of the numerous houses, and other buildings on which they issue policies, whence they are in the receipt of a regular and handsome annuity in the shape of premiums, the presumption is that not one in three thousand burns down in ordinary times. Consequently, the losses of any one company are comparatively rare, and occur at sufficiently long intervals to allow it to contest the payment as often and as unreasonably as it pleases, without calling much attention to the fact, or affecting its general reputation. But let a fire of any extent occur, and up goes the company like a sky-rocket, and the losers may whistle for their money; or, if the company determines to face the music, why the community will before long learn that no life company or other institution will show more ingenuity and determination in contesting and evading the payment of the policies on which it has so long been pocketing the premiums.

* Before the Chicago fire, we had prophesied that a small conflagration would suffice to wipe out the Security, whose assets, on its own showing, appeared to be a sum barely sufficient to insure one policy-holder.

When the Boston fire, following rapidly on the heels of the Chicago conflagration, brought about the result that we had so long predicted, we resolved to refrain from further criticism of the fire companies, until such time as the test of solvency and reliability which was then applied to them should have had fair time to operate, and it should appear what companies were in a condition, after a payment of their just debts, to carry on their business-which would burst like a spent bubble, and perhaps, after wiping out their debts with a sponge, start the business afresh under some flimsy disguise--and which would choose the course of contesting most of their losses and letting the result of these contests decide whether they should continue or collapse. The approach of the time when we may look for the usual report of these various companies suggests that now is the proper occasion to examine what they have done, and to furnish some light by which these coming reports may be examined and the reliability of their statements tested.

At the time the report of the former year's proceedings was published in February last, we were struck with the absurdity of many of its statements, and with the fact which appeared too clearly that, of the assets returned, many were utterly worthless, consisting in numerous instances of the stock of other companies and other private corporations, loans on stock collaterals, and cash on hand or deposits in banks for the amount of which we had to take the company's word. We speak of this at present only to put the public on their guard against any similar process of manufacturing assets which may appear in the forthcoming report, and to indicate how, while confining ourselves now to general remarks, we may be in a position in future to place our finger at once on the diseased spot, and put the proposed returns of the individual companies to the test of truth.

For example, one company last year returned a surplus of $497, 456.32, of which $214, 150.00 was in loans on the sort of collateral stock above mentioned, and $199,595.00 invested in stock of the same, or a like nature; $37,493.73 more was in the shape of debts owing; leaving, on its own showing, only $46, 317.63 for real substantial investments. Another, whose surplus, according to its own account, was only $20,349,33, had $117, 166.50 loaned on stock collateral-principally railroad and insurance-and an investment in Tennessee State bonds, very considerably below par. Of its assets, $7,592.44 was cash in hand, and $20,908.38 money on deposit in the bank, $23,478.00 money due. No wonder that its expenditures exceeded its income by $16,971.13. A third, which had indulged its penchant for loaning on stock collaterals to the extent of $76,495.00, found itself with a balance sheet of $175,505.63 income to meet $225,599.74 expenditures.* A fourth, which had

*In this case, the whole income received on the stock collaterals was $3,637.10 -something under five per cent.

$36,500.00 out in this class of loan, and $20,000.00 invested in bonds, not of the United States, expended $15,855.92 in excess of its income. A still more disastrous instance was that of a company which invested $41,840.00, in town, county, and village bonds, and loaned $217,901.29 on stock collaterals, principally the stock of one insurance company. The result was that the company found its capital impaired to the extent of $88,565.45.

Our readers will learn from these facts how to estimate companies whose returns show loans on, or investments in, the stock of other insurance companies. Of what use is it that companies are prohibited by statute from holding their own stock, if they are to evade the prohibi tion by the simple process of exchange? Let a conflagration occur, and it will soon appear whether the policy-holder's security is any better because the company's funds are invested in the stock of another company instead of its own, when both are going up in the same explosion.*

Another remarkable fact which appeared in the last report, and will no doubt be repeated in that which is forthcoming, is the disproportion of the receipts and expenditures of many of the companies. This fact suggests some questions which may well puzzle the uninitiated. By what sort of manipulation did a company whose expenditures at the close of the year 1873 had exceeded its receipts by $72,658.08 contrive to declare a dividend in January, 1874? One is inclined to wonder where the money came from. Why, again, should a company, whose receipts exceeded its payments for losses by $18,577.91, have yet, on its own showing, expended beyond its income the sum of $29,822.46? Do the $30,000.00 paid out in dividends, and the $15,183.32 for salaries, tend to account for this? How did another company which had received for premiums alone $784,046.53, and paid out for losses only $534,863.87, contrive to spend $48,368.12 in excess of its receipts? How did it pay $50,000.00 in dividends, $115,906.69 for brokerage, and $69,077.29 for salaries? How much have the payments to stockholders and officials to do with this excess? These statements are, of course, not new-in fact, they are old enough to have been generally forgotten; and for that reason we revive them to show the companies that they have not been overlooked. We have in this article refrained from mentioning the names of the companies to whom we have alluded; but we propose to take up the next report immediately on its appearance, and shall then as in the past give, without hesitation, the names of those whose returns shall furnish a proper subject for criticism. We are anxious, moreover, to see whether, in the report of the different companies for 1874, the same large proportion of assets will be returned as Cash in principal office," · Cash deposited in banks," "Interest due and accrued," " premiums in course of collection," etc. This class of assets are, to say the least, very scaly. Items of this sort, which the public has no means of verifying, are as easily put down at a large as a small figure-and it is too convenient a mode of swelling up an unsatisfactory balance-sheet for the benefit of the uninitiated not to be open to the gravest suspicions; particularly as we can think of no reason why companies who really own these large sums should not keep them properly invested instead of leaving them on deposit at a very small interest, or, perhaps, no interest at all.

66

The enormous assets returned by the various Hartford companies have long been a laughing-stock. Here, for example, is a company who claimed last year to have assets to the amount of $5,845,802.03;

* We shall have occasion, Lereafter, to mention an instance in point.

but of this sum only $405,000.00 was represented by real estate, and $91,311.00 by loans on bond and mortgage. The rest was all stocks, bonds, loans on collateral, and money due, or cash on hand, or on deposit-all items for which the company's word had to be taken, and which might or might not be as stated in the report. It is surprising how closely the expenses of this self-styled enormously rich company shared its receipts. Here is another which pretended to have assets amounting to $705,254.00, every penny of which was invested in fancy stocks, except $130,500.00, which was represented as "cash on hand.* Who is to estimate the real value of this class of assets? A third, which calls it available (!) assets $2,415,681.51, has $1,046,683.61-an amount exceeding its paid-up capital-represented by the same kind of fancy stock, $171,662.65, "cash items," and $372,918,05, money alleged to be due! What margin remains for real, tangible, unquestionable property? We would advise these companies to be a little less eager to inflate their assets, and to confine themselves more strictly to their genuine and tangible investments, or we may deem it necessary to prick the bubble.

The real value of many of these nominal assets appeared very distinctly in the returns of the receivers of such companies as went into bankruptcy. Of the New York Etna, for instance, whose liabilities— including $6,000.00 attorney's fees-amounted to $631,551.77, the assets were only $31,501.53, of which $3,763.00 were admitted to be bad or doubtful, and $7,200.00 consisted of stock in the Washington, which itself became insolvent! The balance, except $163.00, representing "all other property," was described as "cash in bank." The Washington itself showed only $48,439.71 assets, to meet $495,407.55 liabilitiesso we may infer what the security of the Etna is worth. The Astor showed $52,905.18 assets, against $177,790.00 liabilities. The Humboldt had in the hands of the receiver about $113,476.93, while its liabilities stood at $154,840.09; of which the referee's, receiver's, and counsel's fees and expenses were estimated at $18,000.00. The reciever of the Harmony realized $6,800.00 from bonds and mortgages, and $6.315.00 from loans-when the amount realized from this insecure mode of investment so nearly equalled the amount of the bonds and mortgages, what must have been the amount lost? The International had invested money in Alabama State bonds which were worth, on the market only $5,280.00, while their par value was $12,000.00. No wonder that the available assets of this company fell short of its liabilities nearly $30,000.00. The Manhattan had assets of the estimated value of $7.000.00, to set off against liabilities of $93,781.08. The Market returns showed some very curious investments, or at least securities taken as collateral for loans. Central Park N. & E. River Railroad bonds; Mechanics' and Traders' Bank stock; Firemen's Fund Insurance stock; U. S. Match Company stock; Mystic River Hardware Company stock! all securities whose market value was more than 50 per cent. below par. The Yonkers and New York showed $33,915.33 assets against $373,276.21 liabilities. We can imagine the feelings of the credulous policy-holders who had for years been paying regular annuities to these companies and their directors, when they saw their prospects of payment growing "fine by degrees and beautifully less." Yet, as if the gullibility of mortals were to be without limit, we now see many of these extinct companies virtually doing busianew, under a name perhaps slightly altered, having for president the receiver of the defunct company, doing business in the same offices-with the same nominal paid-up capital!

ness

THE

NATIONAL QUARTERLY REVIEW.

No. LX.

MARCH, 1875.

ART. I.-1. Historia Critica Philosophie (Critical History of Philosophy). BRUCKERT.

2. Manuel de l'Histoire de la Philosophie, de M. TINNEMANN, traduit de l'allemand par V. COUSIN.

3. Histoire de l'Université de Paris. Par M. CREVier.

4. Histoire Comparée des Systèmes de Philosophie, etc.

It seems remarkable that, amid the diversity, now quite large, of what are styled philosophies or theories of history— that is, of principles imagined to account generically for its main course-it seems remarkable, we say, that the most obvious of them all should have hitherto been overlooked. The oversight, however, would be quite consistent with the course of knowledge; with the way in which it is acquired in its progressive stages. The more difficult or complex the subject or the solution, the later, of necessity, can it be mastered by mature science. The truth may earlier be felt implicitly, or be conjectured by speculation; but it is only when enforced by demonstration that it becomes science. Those earlier stages are respectively but personal or popular sentiment, or, in the case of speculative notions, a mere opinion. The former knows through sense and substance that the thing has been so through

VOL. XXX. —NO. LX.