If there were any practical utility in it, we might analyze the premium into three functions: the insurance value of the insurance by the company, the insurance value of the self-insured, and the endowment-value function, making, in the present case, $511.15$50.42$135.97$324.76.
At the end of five years, in the case of this policy, the reserve or self-insurance is $595.82, and the "insurance value" is reduced to $37.90. According to the absurd rule, imported from England, no regard is had to "insurance value" withdrawn, but only to reserve, and the "surrender charge" is from one-third to two-thirds of the latter. Of course, no one would think of sacrificing a "paid-up" policy at such a rate. Prof. Bartlett recommends that in this case the company should deduct the entire "insurance value" and pay $557.92 as the "surrender value." My own opinion is, that eight per cent. of the "insurance value," or $4.03, is a sufficient charge to keep the company whole. This charge of eight per cent. is based on two assumptions, either of which seems to me reasonable: First, that the members who will select themselves out of a mutual company will not be collectively as much as eight per cent, better than the average. Secondly, that eight per cent. of the "insurance value" deducted from the reserve will be more than sufficient to replace that withdrawn with others as good.
|Boston, April 22, 1874.|
HOW shall this nation behave itself when it comes to be a hundred years old? Something extraordinary must be done to signalize that event. For we are a great people, spread over a great continent, on which are great lakes and rivers, and prairies, and coal-fields, and copper-mines; and we have had a great war, and got a great debt and a great common-school system, and how shall we pose in a manner befitting all this greatness when the nation has come to be as old as a very old man? To be sure, a large proportion of this greatness affords no very obvious ground of self-exaltation. The vast continent, with its mighty resources, we certainly did not make, and have got possession of it by means that are not greatly creditable, while neither a great civil war nor a great debt growing out of it is a thing to be much boasted of in this age of the world. Nevertheless, our people do not care to discriminate very nicely in this way; they have got a "big thing" in hand, and manifestly a great destiny before them; and by much contemplation of these things they have engendered a self-consciousness of greatness, which it is calculated will reach the exploding point by the Fourth of July, 1876. What manner of demonstration will befit that occasion is now the perplexing question.
The special event to be commemorated is undoubtedly political. The act of severance by which we established our national independence was a political transaction. We refused any longer to accept a foreign rule, and decided to shape our own government and do our own governing. We worked out a measure of political reform by laying down the simple principle that the people living here are better judges of what they want than people on the other side of the world. It was a step of rational advance in the management of public affairs, and was significant not so much for any vast or absolute good immediately attained, as for opening the way for other and better things in the future. We abandoned monarchy and a state Church, toggled up an arrangement called the Constitution, and entered upon the experiment of shaping civil institutions in accordance with reason. After