TABLE 27.-IMMEDIATE ANNUITIES-MALE AND FEMALE.
RATES OF THE PRUDENTIAL InsuraNCE COMPANY OF AMERICA.

Annuity Purchased by Payment of 1,000 Dollars.

TABLE 28.-SPECIMEN PREMIUM RATES MONTHLY INCOME POLICY. ANNUAL PREMIUMS FOR AN INCOME OF $10 PER MONTH FOR TWENTY YEARS.

NOTE. For a monthly income of a greater amount than $10 the premium charged would be correspondingly greater. For example: To get the rate for a monthly income of $20, multiply the above figures by two; of $25, multiply by two and one-half; of $50, by five, and so on. This policy provides for dependent survivors for a period of twenty years, and for self-support in old age in the case of endowment policies. Under this plan, instead of paying the amount of insurance in one sum on the death of the insured or on the maturity of the policy, a monthly sum of $10, or multiples thereof, is paid for a period of twenty years.

TABLE 29.-SPECIMEN PREMIUM RATES-CONTINUOUS MONTHLY

INCOME POLICY.

ANNUAL PREMIUMS for an INCOME OF $10 PER MONTH FOR TWENTY YEARS, OR SO LONG THEREAFTER AS THE BENEFICIARY SHALL LIVE. (NON-PARTICIPATING.)

Under this form of policy the monthly income, instead of being for a period of twenty years, is made continuous for the subsequent lifetime of the beneficiary. In other words, the monthly income is paid for twenty years in any event, but, if the beneficiary lives beyond the twenty-year period, the amount is paid for as many years thereafter as he or she may live.

MASSACHUSETTS SAVINGS-BANK INSURANCE AND

PENSION SYSTEM.

BY LOUIS D. BRANDEIS.

Massachusetts offers in its savings-bank insurance and pension system a partial solution of the problem of providing for the superannuated workingman. Unlike Germany, Massachusetts seeks to secure for her wage-earners voluntary instead of compulsory old age insurance. Unlike England, Massachusetts plans to make her superannuated workingmen independent instead of dependent, and to relieve instead of further burdening general taxation. She seeks to do this by creating the most efficient and inexpensive instrument for providing old age insurance,-to make saving by way of old age insurance popular by giving to the saver all that his money can earn, and to make the opportunities for saving the workingman's money as numerous as are the opportunities for wasting it.

The Massachusetts system of savings-bank insurance and annuities was made possible by Chapter 561 of the Acts of 1907, which authorized any savings-bank to establish under proper safeguards an insurance department for the issue to residents of Massachusetts of legal reserve life insurance limited to $500 and annuities limited to $200 a year on any one life. The Act, however, permits the same person to take out life insurance and annuities from more than one bank.

The purposes of the Act are:

First. To give to Massachusetts wage-earners an opportunity to secure safe life insurance at the lowest possible cost as a substitute for industrial life insurance, on which the expense of conducting the business is about 40 per cent. of the premiums paid.

Second. To give to Massachusetts wage-earners an opportun

ity to make provision for their old age by the purchase, out of current earnings, of annuities at the lowest possible cost.

The low cost of life insurance and annuities offered under the Massachusetts savings-bank system is attained :—

1. By eliminating entirely the paid solicitor of insurance and house-to-house collector of premiums.

2. By eliminating the cost of actuarial services and general medical supervision, this work being done by the State Actuary and State Medical Director for all savings insurance banks, without charge to the bank.

3. By utilizing the high net earning capacity of the savingsbanks for investing funds.

4. By substituting for the paid solicitor and collector numerous unpaid agencies through which applications for insurance and annuities may be made and at which premiums may be paid.

Under the savings-bank insurance and annuity act the goodwill, organization, and efficiency of the savings-banks, developed in nearly a century of honorable service, are applied in furnishing opportunities for the other forms of saving more recently developed; namely, life insurance and old age annuities.

The Massachusetts savings-banks have no stockholders. Their trustees generally men of high character and of large experience serve substantially without pay, recognizing that the business of collecting and investing the savings of persons of small means is a quasi-public trust. The savings-banks are conducted by their officials as beneficent and not as selfish money-making institutions. They have a long record of large earnings on deposits and of small expenses of management. Though the character of permissible investments is narrowly limited by law to insure safety, these banks earned gross during the last ten years an average of 4.65 per cent. on deposits, while the average expense of management was less than of 1 per cent.

The opportunities for safe and profitable investment afforded by the savings-banks have done much to make saving popular in Massachusetts, and account in a large degree for the pros

perity of the Commonwealth. With a population of little more than three million people, Massachusetts has developed in her 189 savings-banks 1,973,926 separate deposit accounts, aggregating $709,519,730, the average amount of each account being $359.45. It is expected that the insurance department of the banks will in time become equally popular. The essential conditions under which the two departments are conducted are the same. In each department all the profits are applied to or for the benefit solely of those who intrust their savings to the bank.

Each savings-bank, through its trustees and incorporators, decides for itself whether it will extend its functions so as to include the issuance of annuities and life insurance. Likewise, each bank decides for itself whether it will engage in the annuity and insurance business on its own account or consent to act as agent for some other bank.

It is probable that for the present only a few of the savingsbanks will establish an independent insurance department, and that the larger number of banks will act merely as agencies, because of the special guaranty fund provisions in the law.

No savings-bank may establish an insurance department until there has been provided for it a special guaranty fund to an amount approved by the State Actuary, which may not be less than $25,000 for any bank. This guaranty fund, which would have to be raised by contributions from public-spirited persons, is placed at the risk of the business, to be repaid ultimately out of profits of the insurance department, with interest at the same rate as is paid by the savings-bank upon its savings deposits. Besides this special guaranty fund of the individual savings insurance bank, the law provides for a general guaranty fund derived through an assessment of 4 per cent. upon all premiums received by any of the banks. The funds so contributed are held as a guaranty for all obligations on policies or annuity contracts of the insurance departments of any of the savings and insurance banks. The safety of the insurance and annuity contracts is thus assured not only by the efficient supervision of