A canions instance of the prevailing desire in the absence of better information to throw discredit on the institutions of Englishmen, away from England, has been recently exhibited in an attack on the China Insurance Com. panies, in the columns of the Times. The czisting cause was the discovery that in mutual Insurance Company the officers were permitted to hold shares, and to thereby be enabled under certain circumstances to derive a benefit, partly from the increased prosperity of the Company, but mainly from such business as they wore able to attract towards it It was made out by the writer that some indefinable wrong was thereby done to the body of Shareholders at large, and that the interests of the Company were more or less sacrificed to the private pelf of its employes, If it be wrong in princi~ ple that an employe should in any measure be benefitted by the prosperity of his employer, and that contracts between employer and employe which Secure tu the latter a share of profits, increased by lio own diligence, are in themselves immoral, the relations of such employes would as a matter of course be indefensible. We have never, however, heard of such relations being considered us of an immoral tendency, and we know for a fact that they have been found to work so beneficially that employes placed in a position of responsibility, are given for the most part the inducement of furthering their own by carefully looking after the interests of their employers. In many institutions the principle is carried so far that the chief, if not the only, remuneration of the employe is the dividend declared on the proportion of the nominal capital with which he is credited as the value of his labour, compared with the actual money of the capitalist with whom he has embarked. Ca-operative institutions, whatever has been thought of their policy, have never been set down as immoral, and by many economists this partnership of Inbour and capital has been put forward as the most satisfactory settlement of one of the great questions of the day. Having said so much in proof of the fundamental morality of the. relations' between the Companies and their officers, we may point' out certain direct advantages derived by the body of Shareholders, as well certain rules which avoid some of the temptations to which officers of company who are Shareholders may, under certain circumstances, be liable, The composition of the China Insurance Companies is essentially mutual; that is to sey that the main benefits are received by those whose contributions go to make up the profits of the concern. They thus practically reduce the risk and the expense of insurance to a minimum; the risk, because they have less teraptation to reduce rates below safe limits, and the expense because the greater part of the margin found advisable to secure stability is, when that position is attained and the risk been ran out, returned to the insurer himself. In order to meet both these conditions, the object of such a society is to extend itself over as wide a base as possible, and hence the number of shares permitted to be held by an individual is strictly limited, Moreover, as the main object of allotting shares is to increase business, the Companies exercise very efficient control over their allotment and transfer. The shares are thus not in the ordinary senso of the word held as investments; they are held to facilitate business, and to reduce to its lowest limits one of the principal items of expense in a trade where long voyages are the rale, namely insurance. The position of the Company towards its officers whom it permits to hold shares is this:—As 9 ce-operative institution it gives them the opportunity of gaining by the good working of the business, and by P exercising a wise caution in accepting risks, while at the same time in giving them sri interest in the business contributed, it makes it their interest to render the copartnery popular and to gain outside business. More, as by the coraposition of the Company those not Shareholders derive direct benefit, and as the number of Shareholders is necessarily limited it induces towards the Company a share of outside business by which all alike benefit. Individual contributions may thus be small, but in the aggregate they amount to considerable sums, and this business, it will be observed, adds not only to the immediate profits but tothe ultimate stability of the ce-operative body. One danger in the holding of shares by employes in a public Com. pany, it may be noted, does not exist in the case of the China Insurance Companies. It occasionally happens that where the dealing in stock of a Company is unrestricted, large operators, if employes, derive, from their knowledge of the internal affairs of the ea-partnery, an advantage over the outside world, and such a condition of affairs not unfrequently tends to the detriment of the institution. In the case of the China Insurance Companies this element of disturbance cannot be said to exist. The number of shares held is strictly limited, and their transfer needs the express sanction of the Directors, so that no object would be gained by any attempt to impart a speculative value to the -stock held. The advantage to be derived is to be gained from the successful working of the business not from any apparently clever speculations which would impart transient brilliancy to half-yearly reports.
Text read from the printed page and cleaned; old type leaves the occasional error.