National Life Crash

Biggest insurance crash of the Depression was Missouri State Life with nearly $1,000,000,000 of policies in force. Second biggest until last week was Illinois Life. Then, with $55,000,000 of assets and nearly $200,000,000 of policies in force, National Life Insurance Co. of the U. S. A.* was placed in the hands of a receiver at the request of Illinois' Superintendent of Insurance Ernest Palmer.

As in the case of Illinois Life, insurance men blamed the State's inadequate laws for the failure. But the immediate cause was poor financial management. Among National Life's assets was a huge block of Continental Illinois National Bank & Trust stock--11,050 shares carried on the books at $336 a share, now selling for $25 (TIME, Oct. 23), Shrinkage in this stock alone had more than wiped out National Life's capital, surplus and contingency fund. Observers were quick to point out, however, that if National Life had not paid a 100% dividend in 1929 and 50% in 1930 (total: $3,000,000), had not paid its chairman and its president $84,000 each annually (until this year when Superintendent Palmer made them take a cut to $12,000), National Life would probably have survived even its staggering investment losses.

Largest life company in Illinois and the only life company in the U. S. originally organized Bunder a special act of Congress (1868), National is a stock company almost entirely owned by Chairman Albert M. Johnson & family. Superintendent Palmer announced last week that either new capital would be obtained for a reorganization or the policies turned over to another company.

* Not to be confused with rock-sound National Life Insurance Co. of Montpelier, Vt., one of whose founders was Statesman Henry Clay.

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