to make a business of life insurance; but is high enough to weed out the incompetent and the unworthy.

Under Section 97 of the Insurance Law as originally enacted, in 1906, the Company was not allowed to add any new members to its Nylic Association, but old contracts were not invalidated. When the Company was examined by the Insurance Department in 1908, the official examiner commended the system as "highly beneficial both to the agent and to the Company. The benefit to the Company", he said, "was three-fold. It provided a more economical plan than the renewal commission basis. It made the interest of the Company the interest of the agent, and it won for itself a reputation for reliability and responsibility in each community where the persistent agent was located. No other factor, in my opinion, has contributed more to the economical management of this Company than its 'Nylies', and it is a matter to be regretted that it cannot be carried. on with new agents." Being thus advised, the Insurance Superintendent in 1910 recommended a modification of Section 97 which was amended by inserting the following words: "If any such corporation shall compensate its agents or any of them, after the first insurance year, in whole or in part, upon any other plan than commissions and collection fees, the aggregate sum so paid shall in no year exceed the limitations herein imposed, and the schedule and plan of such compensation shall be submitted to and approved by the superintendent of insurance."

Under this amendment the Company has since established "Nylie No. 2." There are now 522 members of the original Nylic, and 651 members of Nylic No. 2.

INSURANCE CLUBS.

In further pursuance of its purpose to organize and maintain an agency force which would make the business of Life Insurance a profession, with certain standards of achievement, and with certain ethical standards governing the conduct of the business, the Company has established two classes of Insurance Clubs. The $100,000 Club and the $200,000 Club. Any agent working in North America who writes and pays the premiums on $100,000 or more (but less than $200,000) of new business under club rules and within the club year thereby becomes a member of the $100,000 Club; any agent who secures and pays the first year's premiums on $200,000 or more, under club rules and within the club. year, becomes a member of the $200,000 Club.

The $100,000 Club had for the club year ending in 1910 a membership of 242, and their total business for the club year was $30,609,738. The $200,000 Club had for the same period a membership of 138 and their total business for the club year was $37,653,715. No additional emoluments attach to membership in these clubs, but the honors of the organizations go to the largest writers. A secretary of the clubs keeps a careful record of each member's work, and the honors are announced in the "Bulletin", which goes to all agents of the Company. The club rules are framed in the spirit of justice to intending insurers and of loyalty to the Company, and are enforced by the club spirit. An executive committee is given power to expel any member who shall be deemed unfit for membership, and the Company on its part pledges itself that any member

expelled for cause shall thenceforth find no place in the agency ranks of the New-York Life.

The Nylic Association and the insurance clubs, supplemented by the weekly "Bulletin" from the Home Office have imparted a strong mental impulse and a high moral tone to the Company's agency force. The bases of a profession have been established, both in standards of achievement and in the ethics that should control men in the conduct of a noble business. Educated sentiment has been found to be a subtle and far-reaching power. It secures more work and better work than the mere love of gain; while at the same time it enhances the earning power of those who devote their lives in a generous spirit to the profession of Life Insurance.

Three of the most successful fieldmen have recently been appointed "Agents' Counselors', or special advisers to members of the $100,000 and $200,000 Clubs. These men have been in the service of the Company for more than twenty-five years and each has a phenomenal record, both with respect to amount of business done and methods of doing it.

THE WEEKLY BULLETIN.

There is issued every week from the Home Office a "Bulletin", containing words of encouragement, suggestion and instruction respecting the business of the Company. History and experience and every-day life are searched for the sentiment and the argument that will move men; and the "Bulletin" is filled with helps of the most valuable kind, and with incentives of the highest order. The best thought of every one connected with the Company, from the President down, is not considered too good to be laid before the field force every Monday morning; while members of that force, in their turn, furnish valuable thoughts for their co-workers at the Home Office.

CHAPTER V.

HOME OFFICE ORGANIZATION AND METHODS.

The business of the New-York Life now includes over one million separate contracts, an income of over one hundred million dollars per year, disbursements to the amount of sixty millions, the investment of forty millions, and the care of six hundred millions of accumulated funds. In this chapter we shall endeavor to show how such a vast and complicated business is carried on with order, accuracy and dispatch.

CONTROL BY TRUSTEES THROUGH COMMITTEES.

The Company is a purely mutual organization-no one has a vote except the insured members-and these elect, under careful provisions of law, a Board of Trustees, who have supreme control of the Company's affairs.* They elect the Executive Officers, adopt By-Laws defining the duties of officers and of standing committees of the Board, and meet monthly to hear and act upon the reports of officers and committees. The standing committees are as follows:

1. A Finance Committee, consisting of seven Trustees and the Treasurer of the Company having supervision of the funds and investments. No loan or purchase is made without the approval of every member present.

2. An Executive Committee, consisting of seven Trustees and a VicePresident, which supervises all expenditures other than those specifically assigned to some other committee by the By-Laws. In January it reports to the Board, for its approval, the rules and methods under which such expenditures are to be made during the ensuing year.

3. An Agency Committee of seven Trustees and a Vice-President, which controls the appointment and compensation of all Inspectors of Agencies, Supervisors, Managers, Agency Directors and fieldmen.

4. A Loss Committee of four Trustees, the Secretary of the Company, one of the General Counsel, and the Superintendent of Policy Claims,-which supervises the payment of death-losses.

5. An Auditing Committee of three Trustees, the Secretary, a Comptroller, a General Counsel and an Auditor,-which audits all disbursements for expenses. This Committee employs a chartered accountant who is under the control and direction of the Committee and reports to it and not to any Officer of the Company.

6. An Office Committee of three Trustees, all the Vice-Presidents, the Secretary and the Treasurer,-which regulates all matters of administration not otherwise provided for in the By-Laws.

At the beginning of each year each of these Committees, except the Finance Committee, prepares Rules and Regulations for the transaction of the particular business coming under its control. These Rules and Regulations go

*See section 94, Insurance Law in Appendix.

into details much more fully than it is possible to do in the By-Laws. They decide many questions in advance as to the general policy of the Company; assign specific duties to the various officers, and fix the limits of their authority. They are particularly full and specific with respect to who may incur expense and to what extent, and how disbursements shall be authorized and audited. These Rules and Regulations must all be approved by the Board of Trustees before becoming operative.

These committees hold regular meetings-some as often as twice a week-keep careful minutes, and report to the Board at its monthly meetings. Nothing is done without the authority of some committee, or of the Board, and such authorization must be a matter of record. A card index is kept of committee rulings and decisions. The President is ex-officio a member of the Board and of all committees. The Home Office force is divided into Departments and Divisions as follows: Departments.-Actuaries', Advertising, Auditors', Comptrollers', Inspection, Law, Medical, Printing, Real Estate, Supply, Treasury.

Divisions-Files and Records, Indexes, Inquiry, Letter '(incoming), Mailing (outgoing), Policy Briefs, Policy Changes, Policy Claims, Policy Issues, Policy Loans, Policy Loan Securities, Premium Collection, Stencil.

ITINERARY OF AN APPLICATION FOR INSURANCE.

As we began these "studies" by examining actual policies, we will illustrate some of the Company's Home Office methods by following an application for insurance through the various departments and divisions through which it must pass for the issue of a policy. On the morning of April 12 three applications were taken from the mail and a memorandum attached to each with the request that each person who did anything to it should note on the memorandum what he did and when; then they were sent on the regular way through the office. Two were declined; the third made the complete journey according to the following itinerary, beginning with the day the application was signed:

1. Application secured in Tennessee April 8, and applicant examined by a regular examining physician.

2. Nashville Branch Office received application and medical examination April 10.

3. "Home Office Memorandum", showing name of Insured, date of birth, amount of insurance applied for and name of Beneficiary, typewritten and attached.

4. An inspection memorandum sent out same day by Nashville Office to be reported on later.

5. Application mailed same day by Nashville Office with other applications. and invoice in an envelope with a big "A" in one corner.

6. Envelope arrived in New York Post Office April 12, was dropped in the Company's special "A" box, and brought to the Home Office by the Company's carrier.

7. Envelope received by Letter Division and sent unopened to Index Division.

8. Envelope opened, papers stamped "received 10.18 A. M." Application

compared with invoice and with Home Office Memorandum attached. Search made through Index containing over three million cards with name, etc., of all applications ever made to the Company, for record of previous insurance. Name found.

9. At 10.38 case sent to Division of Policy Briefs, where among 1,750,000 cards the record of a former insurance was found and note made of same.

10. Application sent to Medical Department at 10.50, where medical examiner's report was found complete and his signature genuine.

11. The case then went to the Rating Bureau where the Company's ratings as to family history, personal record, build, residence and occupation were applied by two persons independently of each other.

12. At 1.45 P. M. it came before the Medical Board. The ratings were approved, the risk recommended, and the case sent by pneumatic tube to the Division of Policy Issues.

13. At 2.10 P. M. it was given to the clerk who handles applications from Tennessee. The widely varying laws of different States make it necessary that each case be handled by persons familiar with the special requirements of the State from which the application comes.

14. At 2.29 P. M. a clerk attached a slip containing the premium rate and other data, and the checker inspected and verified the figures.

15. At 2.40 P. M. the case reached the Logger's desk where it was logged and numbered.

16. It was now sent to the Photo Bureau. The laws of Tennessee require that a copy of the application and medical examination paper shall accompany each life policy sold in that State. The camera is quicker and more accurate than any copyist: it makes an exact copy in about forty seconds.

17. At 3.25 P. M. the papers were given to the Policy Writer who finished his work in just fourteen minutes, and the checker took six minutes more to examine it and add his O. K.

18. The Policy went by tube to the Mailing Division, was put in a Nashville Branch Office envelope, stamped and committed to the care of Uncle Sam.

19. While it was being sent out several persons got busy completing the records of the Home Office. Cards were written for the Index Division, the Division of Policy Briefs, the Comptrollers' Department, the Actuaries' Department and the Agency Department, and the "President's Welcome Letter" was filled out and sent to the new member of the New-York Life family. An entry of the Policy was made on the Massachusetts Insurance Department sheets, which contain a record of each Policy issued by the Company.

20. At 4 o'clock the application and accompanying papers went to the Inspection Bureau, where they were placed in the uncompleted file to await the inspection report, asked for by the Nashville Branch Office on April 10.

21. On April 14 the inspection report was received at Nashville, found satisfactory and mailed to the Home Office, where it arrived on the 19th. It was then attached to the other papers which were sent to the File Room to be filed as No. 4,133,587.

22. The daily report of the Nashville Branch Office for April 30 to the Comptrollers' Department reported the first premium paid on that day.