Clark and his associates pushed ahead with their education and conservation program. The Executive Council met in Philadelphia on December 17 at Bellevue-Stratford. One reason for meeting there was to consult with D. Solomon S. Huebner, professor of life insurance of the Wharton School of Finance and Commerce at the University of Pennsylvania, to hear his proposals for a textbook on insurance selling. This project was to be sponsored by the national organization and represents the NALU's first major step in elevating life insurance marketing to professional status.

Huebner was an ideal choice. A pioneer in insurance education, he began developing a core curriculum on the subject at the University of Pennsylvania immediately after taking his degree there in 1904. A dynamic and resourceful teacher, he quickly won the respect of his colleagues and the hearts of his students. It was through his nephew, Paul F. Clark, who was an enthusiastic pupil of Huebner's at the Wharton School that Ernest Clark became acquainted with Huebner . Clark recognized immediately that his innovative professor was exactly the man the NALU's Education and Conservation committee was looking for. Huebner proposed a textbook divided into four parts dealing with the nature and uses of life insurance, the various types of contracts, "the factors and assumptions underlying rate making, mortality tables, ascertainment of the net premium for the most important types of contracts," home office and agency management, as well as life insurance investments, taxation and government regulations. The last section of the book, as Clark reported to the Executive Committee, was to "furnish a classified statement of the essential legal principles governing life insurance in which the policy holders and agents are most interested." He explained:

Chief emphasis will be placed on the law relating to the beneficiary, assignment of policies and insurable interest. I may add that the purpose of the volume throughout, as determined at a pervious conference, shall be to furnish a statement of the essential facts, principles and practices as they exist in connection with the foregoing subjects, and that opinions and argumentative matter shall be excluded.[li]

The NALU Executive Committee voted to underwrite the project at its midyear meeting the following April and the arrangements were subsequently made for D. Appleton and Company of New York to publish the first edition of Life Insurance: A Textbook. (Woods became the financial guarantor for the book via his personal check for $10,000 drawn in favor of D. Appleton & Co.) When it came out in 1915, Huebner's book was an immediate success. For years it was the standard textbook in the field, going through many reprintings and several revisions.

For Clark it meant the fulfillment of a dream. Both he and Woods had long seen the need for a comprehensive textbook that would provide a sound theoretical basis for reducing the myriad ideas about the practical scholar. The absence of a corpus of textbook literature had proven a great stumbling block in the academic community. Universities were reluctant to institute courses on a subject that had not as yet merited sufficient attention form scholars. A survey conducted by Robert Lynn Cox of the Life President's Association in 1910 revealed that only thirty-three colleges or universities were teaching one or more special courses in life insurance, and these generally focused on insurance theory, viewed from a legal, historical or actuarial perspective. (There was, of course, a long tradition in a few departments of mathematics for the training of actuaries.) Very little attention was being given to sound marketing practices. Such a book, the Association leaders realized would not only facilitate the proper training of agents, but also help immeasurably in giving life insurance marketing legitimacy as a worthy subject for serious study.

As Stalson points out, "Life insurance had been sold, down to 1926 let us say, mostly on the appeal of burial costs, cut price (rebates), te promise of the large dividends---appeals which any clod could make; but after 1910 it was becoming constantly more clear that the task of selling life insurance for business, tax estate, and income purposes as one which called for sound general, business, and insurance training."[lii]

Traditionally, agent education was conducted on a learn-by–doing basis. Everything depended on the general agent who acted as s recruiter and mentor, usually training his agents informally one by one. Anything resembling organized instruction was rare. Large, well-run agencies where recruiting was selective and a regular training program that consistently produced knowledgeable agenda were the exception. According o Stalson, the pioneer agency training program was introduced in 1906 when L.A. Cerf, general agent of the Mutual benefit in New York City, started his "Cerf School of Salesmanship," making it part of his regular agency activities:

Cerf believed that selling could and should be taught. He deplored the industry's custom of putting untrained men into the field—to learn through pain and error, and destined also to alienate from life insurance many who suffered annoyance or worse at their hands…So far as I know, the Cerf School was the earliest case of modern class instruction in an agency.[liii]

At that time, "salesmanship" was emerging as a popular night-school study in trade schools, as well. Meanwhile, other general agents, such as Woods, were developing formal training programs along the lines of Cerf's school. In 1910 Charles Ives, the composer and a general agent for Mutual Life, along with his partner Julian Myrick, started the Ives & Myrick school for agents in New York City. Ives pioneered the concept of "estate planning," a form of needs selling, which was widely imitated. In 1912 the firm printed Ives' The Amount to Carry—Measuring the Prospect, which expounded the estate planing approach. It was widely circulated and reprinted many times.

To many, the life insurance companies appeared frustratingly slow in responding to the need for investing in a well-trained field force. As might be expected, it was the larger companies that made the first attempts to fill the gap. During the summers of 1902 through 1904 the Equitable offered courses in life insurance selling to promising graduates from several colleges. These courses lasted from thirty to sixty days. From 1904-1906 the Travelers gave six-week courses for new recruits in insurance principles and salesmanship, graduating a total of 267 men, three quarters of whom, it was reported, stayed in the business. Stalson notes that the Mutual Life made it a practice about this time to send one of its "educational staff" to lecture on life insurance at various colleges. One staff member was Jacob A. Jackson who lectured in 1905 at Northwestern, Chicago, Drake and Cornell. "The brief outline of his material which I have seen," Stalson comments, "does not indicate that he gave any attention to selling."[liv] The educational department began by Phoenix Mutual in 1906, however, was apparently intended primarily for the instruction of agents.

To those who had given the subject serious thought---men such as Clark, Woods, Scovel, Russell and Huebner—promoting life insurance was an activity more like teaching rather than selling a tangible product such as an automobile or house. It demanded a high level of rhetorical skill and extensive persuasive powers. Besides instructing the prospective buyer in the practical value of life insurance, the agent had to awaken feelings of concern for one's dependents and instill ideals of thrift, prudence, and fiscal responsibility. Though not the first to expound the idea and espouse its methods, they based their marketing concepts on needs selling, emphasizing the aggregate economic value of an individual's productive years. Should those years be reduced, through death or disability, a life insurance policy represented the ideal instrument for enabling the breadwinner's family to sustain financial loss.

Stalson mentions that one of the earliest references to the economic value of human life was made by life insurance pioneer Jacob L. Greene. John Marshall Holcombe, in a speech given at the NALU convention of 1900, had been one of the first to recognize the possibilities of this notion as a basis for marketing insurance when he pointed to its earliest expression in the petition submitted by the promoters of the Equitable of London for a royal charter in 1757. Three years later, when he had become president of Phoenix Mutual, Holcombe was invited to participate in Yale University's first course in insurance. He made it the subject of his first lecture there and again in an address before the Economic Club of Providence, Rhode Island, in January 1906.

The application of this concept to an individual's circumstances presents an excellent motive for purchasing a life insurance policy. Moreover, one's earning power provides an indication for the size of the policy. As Stalson observes, "Capitalizing earning power as a device for indicating a life value has become a most useful sales aid in the hands of life marketers; the concept lends itself to an infinite variety of treatments suited to the circumstances of individual insurance prospects."[lv]

One of the earliest practical demonstrations of needs selling to appear in print was Ernest Clark's brief article "How Much Is His Life Worth?" published in the March 1908, issue of Life Association News. "One of the strongest and most convincing arguments that can be advanced concerning the necessity of life insurance protection for a prospective applicant is his life value as based on his annual income," Clark asserted. To illustrate the point, he included a chart listing the average incomes of bankers, lawyers, railroad officials and people in other important occupations, taken from the Massachusetts Bureau of Statistics of Labor. "By capitalizing his [a prospect's] life on a 5 percent basis, or even a 4 percent basis, to be conservative," Clark explained, "it becomes an easy matter to demonstrate the irreparable financial loss which his family and the community sustain through his death, unless he makes definite provision against such loss; and this is possible only through the medium of life insurance."[lvi]

Edward A. Woods, whom Stalson says "probably originated or stimulated the development of more ideas for selling life insurance and training agents than any other man in the history of the business," repeatedly demonstrated applications of the human life value concept in lectures, speeches at NALU conventions and in articles in Life Association News and other publications. Showing agents the advantages of selling large policies to the rich, he advocated using the idea to sell life insurance for partnerships and other business purposes.

The textbook project brought Huebner, Clark and Woods closer together. During Clark's administration these three men, along with a number of their close associates in the NALU, formed a bond which was to have momentous implications for the future of professional life underwriters. Mildred F. Stone, in her history of the American College of Life Underwriters, proposed that during discussions of the proposed textbook, conversation often led to agent education generally:

In February 1914, Mr. Clark asked Dr. Huebner to speak to the Baltimore life underwriters on the general subject of life insurance education. There, for the first time publicity, Dr. Huebner referred to the idea of having a life insurance course of study on the college level leading to a professional degree, as did certified public accountants…

The reaction to Dr. Huebner's talk indicated that the strategic time had come to seek a larger audience. Earnest Clark…in the spring of 1914 recruited four key men form the Association to work actively on development of a brad-based professional course of study for life insurance salesmen. These men were Edward A. Woods, John Newton Russell, J. Stanley Edwards, and Franklin W. Ganse….

Through their influence, "Life Insurance Education" became the theme of the 1914 convention of the National Association in Cincinnati. Dr. Huebner was invited to give the keynote address.[lvii]

By the end of summer, all the major European nations were at war. Meeting in Cincinnati on September 15-17 the delegates to the NALU's 25th annual convention elected Hugh M. Willet of Atlanta president of the national organization. Held at the Hotel Gibson, insurance education and conservation of business dominated the sessions, although taxation of companies and lobbying techniques also received considerable attention. Commenting on the "splendid attendance" in its September 1914 number, Life Association News reported:

In his keynote address, Huebner told the agents, "life insurance salesmanship must be given the status of a profession—a high calling—both as regards the methods pursued and the quality of the service rendered." The national organization's magazine reported, "The address was remarkably free from vague or impracticable theories. He held the undivided attention of his audience from beginning to end and was wildly applauded as he resumed his seat."[lviii]

The Calef Loving Cup that year went to John R. McFee, an agent for Massachusetts Mutual in Chicago. Reflecting the associated agents' continuing interest in the consumer's viewpoint, needs selling and conservation of business, the subject selected for the prize essays was "Women's Interest and Influence in Life Insurance." The committee of judges, charied by the prominent author and dramatist Mary Roberts Rinehart, also included Dr. Huebner. In her report to the committee on prize essays, Mrs. Rinehart wrote:

Personally, I believe in life insurance. The American People have not the quality of thrift. A man thinks he deserves credit if he lives within his income. He saves little, and what he accumulates is prone to be diverted to the Get-Rich-Quick Wallingfords of this day and generation. But he will meet his insurance payments when he will save in no other way. As long as he can pay his premiums, he is a capitalist. In the words of the winning essay, "Capital may produce income; in life insurance income produces capital."[lix]

By the end of 1914 the organization was composed of one hundred nineteen local bodies with 5,355 members located in 42 states, the District of Columbia and the Canadian provinces. The National Association held its 1915 convention in August in San Francisco. For those in the East, a West coast convention provided another excuse to form special trains and make an excursion of it.

Despite the attractions of the Panama-pacific International Exposition going on at the same time, attendance at the business sessions was "all that could be desired." The NALU used the occasion well, as Barnes explains:

The Panama-Pacific International Exposition in 1915 afforded the National Association another opportunity to put its educational program into action. A permanent display at the exposition, featuring a striking "tax machine" attracted and impressed many fairgoers. Pamphlets and folders were distributed to all visitors. The exposition officials arranged as long series of conventions, culminating in the World's Insurance Congress, with representation from over a hundred national bodies. The congress organized the National Insurance Council, and the National Association was represented on the central board of both Congress and Counsel.[lx]

As expected, with Edward A. Woods at the helm, conservation and education remained very much in the forefront of NALU activity. Anyone acquainted with life insurance in America during this period new of his highly successful Pittsburgh agency, with over three hundred full-time agents.

His father, Dr. George Woods, who had been Chancellor of Western University of Pennsylvania, (which later became the University of Pittsburgh) took up life insurance in 1880 as a general agent in Pittsburgh for the Equitable. Within ten years his agency had $10 million in force. As an undergraduate, Edward worked as an office boy at his father'' office, and in 1883 gave up his studies at Western University to begin work as cashier and later on the sales staff. In 1886, he helped organize the Pittsburgh Life Underwriters Association.

Upon his father's retirement in 1890, Edward took over the business at the age of twenty-five. He brought a younger brother, Lawrence, who had just graduated from Princeton into the business. A few years later his brother Charles joined the firm. By 1910 the Woods agency could boast of having over $100 million of life insurance in force.

If any NALU president ever occupied a central place in the business it was Edward A. Woods. Stalson comments,

He assumed the presidency of the National Association in 1915 and the chairmanship of its new committee on scientific salesmanship in the same year. Woods had already progressed far into the ideology of informed selling and sales management; by 1915 he had been educating his colleagues to that ideology by his example and by his talks for at least a dozen years; nothing could have been more logical than he should use his high association offices to promote the advance of this cause to which he was so deeply devoted. As Association president—always a one-year incumbency—he got many things started; but it was his work as head of the committee on scientific salesmanship, a post he held for many years, that proved so valuable to agents….

His business and social contacts put him in touch with the leaders in many fields; his knowledge, imagination, and enthusiasm won him the friendship and support of many influential men.[lxi]

These contacts enabled Woods to involve the Association in projects close to his heart. With him as prime mover the Association helped organize the Bureau of Salesmanship Research at Carnegie Institute of Technology, and began the first explicit campaign against proselyting. Later, Woods led NALU's cooperation with the Association of Life Agency Officers and the Carnegie Bureau to form and joint committee on educational standards to spread the Carnegie course to other colleges and universities.

Woods, of course, knew he had plenty of support among the NALU leadership for his ideas. He had already persuaded a number of companies to join him in founding an institution to study scientific selling when he met with the NALU Executive Committee in Washington, D.C., at the Willard Hotel on February 24, 1916. Russell presided. As they discussed the need for better educated agents, Russell, Clark, Scovel, and J. Stanley Edwards expressed particular interest in introducing more life insurance courses at universities.

In May, Woods' plan for a study center on scientific selling became a reality when an organizational meeting was held in Pittsburgh. Fifteen business firms, four of them life insurance companies, agreed to support the project. As Stalson relates:

The new bureau of Salesmanship Research was to be affiliated with the Carnegie Institute of Technology, the director of which, Dr. A.A. Hamerschlag, declared the Bureau would "try to get away from the rule of thumb method of employing salesmen and show by carefully gathered data and statistics the proper method of employing and training salesmen and thereby do away with a large percentage of waste of time and money along this line." Dr. Walter Dill Scott, a prominent teacher of advertising and salesmanship at Northwestern University, was made director of the new bureau. Norval A. Hawkins, then well known as sales manager of the Ford Motor Co., took an active part in the organization of the bureau, as did Winslow Russell of the Phoenix Mutual.[lxii] *

By September the support of other companies had been secured. Woods told the delegates at the NALU convention in St. Louis, "Under the auspices of the National Association of Life Underwriters has been organized the Carnegie Bureau of Salesmanship Research, in which thirty of the largest, most aggressive and progressive corporations in the United States, including six life insurance organizations, are united for the purpose of ascertaining through the experience of these cooperating members and every other source possible, what are the characteristics of good salesmen, and later, how shall they be trained? There will also be included a complete study of sales methods not only of Life Insurance but of other professions through out the country. The work of this great institution and co-operation of these concerns with life insurance men cannot but have a permanent effect on all salesmanship as well as life insurance."[lxiii]

Underscoring the possibilities for cooperation with other businesses to develop more advanced marketing techniques, Woods and Winslow Russell participated in the World's Salesmanship Congress at Detroit in July. Woods, as head of the life insurance selection, addressed the gathering on "Selling Schools." Advocating efficiency and standardization, Russell told the Congress that the incredibly wasteful methods of hiring and firing agents in life insurance could be tolerated by no other industry. Rigorous standards in selection and careful training by expert teachers was an imperative need, Russell insisted. Russell knew precisely what he was about, as Stalson notes:

Taking advantage of the fact that a number of home office agency executives were attending the Congress, Russell advanced the idea of organizing them into a association of their own; discussions were informal but the response was favorable, and a date was fixed for actual organization. In agreement with those plans the agency men met in Chicago on October 16, 1916, and founded the Association of Life Agency Officers, electing Russell chairman of the executive committee.[lxiv]

The organization flourished to become a major arm of the industry's marketing efforts. Eventually the Association of Life Agency Officers merged with the Life Insurance Sales Research bureau. In 1946 the combined organization became known as the Life Insurance Agency Management Association (LIAMA). After 1974 the Organization was called the Life Insurance Marketing and Research Association (LIMRA). What has become an international resource for marketing insurance—a respected, indispensable tool for company management—is a monument to the foresight of Edward A. Woods and his colleagues.

Members of the St. Louis Association proved excellent hosts for the twenty-seventh convention. Sessions were held in the convention hall of the Planters Hotel, and some of the evening events took place at the Sunset Hill Country Club. President Woodrow Wilson, who was to have been the principal speaker, found it impossible to attend the meeting because of the death of his sister. Secretary of War Baker spoke in his place.

Interest in agent education dominated the convention. Stalson comments. "The Life Underwriters Association's annual meeting emphasized the need for training, and it was announced that many companies and large agencies which had not previously done so were soon to open course work. Woods drew attention to the value of keeping a record of calls; citing the experience of a group of his own agents who dept a rigid record of work, he assert the 21 calls per week would yield an average of 14 interviews and produce two applications. William Alexander, secretary of the Equitable of New York and author of several popular books on life insurance selling, was asked (by the NALU) to write a primer or elementary text book on life insurance… All these evidences of interest in the agent and his education got wide publicity in the industry during 1916."[lxv]

The election of Russell, who shared Woods' enthusiasm for agent training, as president, assured the continuation of the NALU's front-burner projects. A former secretary of the Pacific Mutual Life Insurance Company, Russell had long carried the torch in the west where his leadership was invaluable to the Association movement. An impressively tall man, prominent in Los Angeles business and social circles, he was fifty-two at the time. "Mr. Russell was born in Booneville, Missouri, June 5, 1864," Life Association News informed its readers, "and is a member of various Masonic bodies, a Knight Templar, a Shriner, and is also a member of the Society of the Sons of the American Revolution." Russell possessed considerable personal magnetism and, what was often helpful in advancing the cause of the Association, he exhibited more warmth than Woods. Holgar Johnson, who became important in Association affairs in the 1930's, saw Russell only once, but he left an indelible impression. "He was a great, tall man," Johnson recalls, "very attractive and good-looking; soft-spoken, very friendly and affable."

By February 22,1917, when the NALU Executive Committee held its midyear meeting (again at the Willard in Washington) the United States had broken off diplomatic relations with the German government, consequently, the nation was bracing itself for mobilization , which now seemed inevitable. Their first act was to pass a resolution proposed by Woods pledging support to the President of the United States "in maintaining the rights of Americans." Russell reported on loans for the next convention in New Orleans and A.C. Larson, Secretary of the NALU, reported on the flourishing condition of the central office and Life Association News, under the direction of Everett M. Ensign. Vice president Lawrence Priddy called attention to the fund underwritten by members of the Executive Committee to defray the expenses of a traveling secretary.

Foreword by Alan Press, 1988-1989 NALU President

Preface by Jack E. Bobo, 1989 NALU Executive Vice President

Introduction

Acknowledgements

Chapter 1

Laying the Foundation—A Meeting at the Parker House

Leading Figures—Ransom, Carpenter, Blodgett and Plummer

Conditions Leading to the Foundation of the NALU

Rise of Modern Life Insurance and the General Agency System

Issues and Accomplishments of the First 15 Years

Chapter 2

In the Wake of the Armstrong Investigation

A Royal Commission Investigates Life Insurance Operations in Canada

A Period of Growth and Visibility for the NALU Under Strong Leadership

The NALU Plays a Leading Role in Insurance Education

The NALU During World War I

Chapter 3

The Post-War Decade

The NALU's Extension of Activity

The Agents Move for Recognition

Chapter 4

The Depression and Aftermath

Annual Conventions and Midyear Meetings

The NALU Celebrates Its 50th Anniversary

Chapter 5

The Agents Earn Their Wings

World War II

The NALU Joins the Industry in Legislative Battles

The NALU Establishes the National Quality Award

Chapter 6

Controversies and Schisms (1946-1956)

The Foundation of LUTC

The Nola Patterson Affair

GAMC Formally Organized

Chapter 7

The NALU Goes to Washington

Dispute Over Minimum Deposit Insurance Plans

GAMC Stages First LAMP Meeting

The NALU Celebrates Its Diamond Jubilee Year

The NALU Increases Political Activity

U.S. Senate Antitrust and Monopoly Subcommittee Investigate Life Insurance

The NALU Responds to Consumerist Activism

Chapter 8

The NALU Reaches the Century Mark

FTC Releases a Study Critical of the Insurance Industry

Formation of the Women Life Underwriters Conference

Drop in Local Membership

The NALU Issues Statements on AIDS

The NALU Combats a New Wave of Attacks

The NALU Celebrates a Century of Service

Open Book

Short Takes

Book Marks

*The participating firms were: Carnegie Steel Co., Ford Motor Co., Equitable Life Assurance Society, Armstrong Cork Co., Metropolitan Life, H.J. Heinz Co., Westinghouse Electric and Manufacturing Co., Phoenix Mutual Life, Chalmers Motor Co., Page-Detroit Co., Prudential Insurance Co., Burroughs Adding Machine Co., Aluminum Co. of America, Pittsburgh Steel Co., Lilly & Co., and the Edward A. Woods Co..

[li] LAN, May 1914, p.11.

[lii] Stalson, Op. Cit., p. 583.

[liii] Ibid., p. 579.

[liv] Ibid., pp. 578-579.

[lv] Op. Cit., p. 582.

[lvi] Op. Cit., p. 5.

[lvii] Mildred F. Strone, CLU, A College and Its Calling, Richard D. Irwin, Inc., Homewood, Illinois, 1963, pp. 28-29.

[lviii] Op. Cit. P. 4.

[vix] Proceedings, 1914 , p. 132.

[lx] Op. Cit., p. 28.

[lxi] Op. Cit., pp.583-584.

[lxii] Op. Cit., p. 585.

[lxiii] LAN, September 1916, p. 15.

[lxiv] Op.cit., pp. 585-586.

[lxv] Ibid., p. 586.

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