An Era of Industrial Prosperity

During the era of industrial prosperity Mr. Fiske, in his eagerness to cover the entire field of providing security for wageearners, considered even the possibility of writing un­employment insurance. It was the one major hazard in the economic life of working people against which they were still unprotected.

Authority to write this new type of business required an amendment to the insurance law, and this the company did not obtain. Moreover, there were within the organization specialists on the subject whose studies convinced them that unemployment insurance was not an insurable risk within the framework of sound actuarial practice.

As a consequence, in spite of Mr. Fiske's solicitude for men and women threatened with this hazard, the company did not underwrite unemployment insurance, and thus it saved itself an unhappy experience in the depression which was to develop only a few years later.

One of the notable achievements of the company, as well as of the institution of life insurance during the decade, was the continued adherence to sound investment principles. In a period of seeming affluence the officers of the large majority of insurance companies rejected the blandishments of high returns held out by investments in stocks, and thus made their organizations immune to the speculative fever which was raging among people throughout the country.

It was this careful policy which contributed so largely to the ability of the Metropolitan and of other companies to weather the economic crisis. Mr. Ecker's sound investment program, which he lost no opportunity to expound and to popularize during the boom years, will remain one of the proudest pages in the company's history. He stood firm as the movement gained momentum to amend the laws to permit life insurance companies to make common stock investments.

In comment­ing on this trend in an address before the National Association of Life Underwriters on September 26, 1929, he said: "Speaking for myself, and with the background of an active contact with Life insurance investments of over 40 years, 1 am not prepared to advocate any substantial change in the limitations which now prevail in the laws of some of our principal States. ".. . Life insurance investments are held to insure faithful performance of the Life insurance contracts. So far as possible the element of chance should be eliminated, and the funds should not be subject to the hazard of speculation."

Mr. Ecker's insight into the situation at that time was prophetic. At the company's Annual Convention early in February 1929 he made the following observation:

"In the presentday movement, stocks are enjoying public favor. In­vestments in equities are regarded as leading to more profit than the interest paid on obligations or bonds which have heretofore been preferred for their greater security. Preference is now to be partners or stockholders in an enterprise at less interest returns than to be bondholders. The shares of the bestrated institutions are selling on a 2 or 3% basis in the expectation of richer future returns through the capitalizing of earnings in the business, and, to be sure, the experience of the last few years entirely justifies this position. It is characteristic of the American people, however, to do nothing by halves, but to go to extremes, and it may be that the pendulum swing in this cycle is reaching the end of its travel in that direction."

The accuracy of his prediction was evident to everyone before the year was over.