Part 2
The Philadelphia delegation wielded considerable influence at the Chicago convention.  Not only was Philadelphia selected as the site of the next annual meeting of the national body, but the group's leader, Everett H. Plummer, was elected president of the NALU.

Plummer called a meeting of the Executive Committee on March 20, 1895, at the Shoreham House in Washington, D.C.  Sixteen members attended.  A committee was formed, with Plummer acting as chairman, to devise a plan for securing an agreement between the life insurance companies and the National Association to put an end to rebating.  The compact proposed that the companies pledge neither to engage nor retain agents guilty of rebating.  For its part, the NALU, through its membership in local associations, was to pledge its full support and cooperation to enforcing the terms of the agreement.  During the ensuing weeks Plummer spent considerable time making the rounds to company home offices.  Most quickly gave assurance of their willingness to sign "as soon as the Big Three did."

Years later—just before his death in 1918—Plummer told a later NALU president, Charles Scovel, of one experience at the New York office.  The incident tells us as much about Plummer's character as it does about the extent and bitterness of company rivalry at the time.  As Scovel related the story:

You should have heard Mr. Plummer telling me...about the reception he got from a former executive of one of the Big Three, on showing him the anti-rebate contract.  Having read just far enough to see that it was something for him to sign in concord with his hated rivals—he flushed purple and flung it on the floor! "I was white as a sheet," said Mr. Plummer, "but I managed to hold in while I picked up the paper and told him, with freezing politeness, that he could reach me at the hotel if he wanted his company to appear with all the rest, and then got out of the door.  Within two hours his messenger came, asking me to return; but," and the dear fellow chuckled reminiscently, "I replied that the association had come to him once, and now it was his turn.  He came!" [xi]

"By sheer personal force," Scovel added, "the plucky young president got his contract approved by the three giant companies."

Meanwhile, pressure had been mounting from other quarters and events soon overtook Plummer's scheme.  Proschansky tells what happened:

A new development, however, gave pause to the NALU.  George S. Merrill, Insurance Commissioner of Massachusetts, had sent out a circular letter on September 4, 1895, to every life insurance company doing business in Massachusetts, asking them to form a committee, consisting of an executive officer of each company, with adequate financial contributions to ensure that such committee would be enabled to investigate and prosecute any violation of the anti-rebate laws.  As a result of the replies received, Commissioner Merrill called a meeting of life insurance companies in New York City on October 12, 1895, at which an anti-rebate agreement was signed by thirty companies, including the Big Three.

It was agreed that a referee would be appointed to investigate any charges of rebating preferred against a company or agent.  Any company party to the agreements promised to dismiss an agent found guilty by the referee of rebating; he was not to be employed by any of the signatory companies for at least one year after such conviction.  The referee was also empowered to bring to the attention of the proper state authorities situations involving criminal violation of its anti-rebate laws.  A fund of $10,000 was made available by the companies to meet any expenses involved in the implementation of the anti-rebate compact.  This fund was to be continuously maintained by assessment on the companies.[xii]

William E. Russell, former Governor of Massachusetts, agreed to act as referee for the companies.

When the delegates convened in the New Century Drawing Room in Philadelphia a few weeks later for the NALU's sixth annual convention, Plummer recommended that in the face of this development, the NALU withdraw its proposed agreement with the companies and endorse Commissioner Merrill's anti-rebate compact.  "The National Association," he declared, "stands ready...and the companies can rely upon its earnest support in making the agreement effective."  If Plummer ever felt uncertain abut the local members' support of his efforts, it was soon dispelled.  "The president's address," the recorder commented, "was listened to with the closest attention.  During its delivery he was frequently interrupted by applause, and at its conclusion was loudly cheered."

Considerable debate followed the reading of the compact.  Some objected that it was impossible to enforce, arguing that the only way to eliminate the practice was to hire agents of good character in the first place.  In the end, however, the agents voted to support its stipulations.  The Executive Committee was assigned the task of carrying out the Association's pledge of cooperation.

Plummer also touched on matters of a personal nature in his message to the delegates.  "For the first time in the history of this association," he said, "it becomes our duty to record the death of two members who were prominently identified with this association movement. This association has lost an earnest, conscientious, faithful and loyal member, one who loved and believed in mankind." Speaking of Ratcliffe, the NALU's first treasurer, Plummer said, "He was faithful in the discharge of his duties, and so won the confidence and esteem of his associates that he was elected to the office for four consecutive years."

The delegates elected Eli D. Weeks of Litchfield, Connecticut, to replace Ratcliffe. "Uncle Eli," as he came to be known, retained this office until 1913.  He was eighty-two when he resigned.

The principal speaker of the morning was Samuel R. Shipely, president of the Provident Life and Trust Company of Philadelphia.  (This marked the first instance of a company president formally addressing a business session at an NALU convention.)  In view of the events of the last several weeks Shipley's topic was singularly appropriate.  He spoke of the Ideal Life Insurance Company," which he defined as one that "performs most perfectly the functions involved in the collection, the proper use and the right distribution of monies paid into it by its policyholders.

"We must assume," he said, "that it conducts its business on a somewhat altruistic principle.  The distinctly selfish view can have no place in such a company as we imagine.  The generous and manly recognition of the rights of all who do business with it must be uppermost."

Shipley insisted that both the officers and the agents must be people of high moral character.  "Only men of blameless lives are fit for office of trust," he declared.  "Everyone associated with the company, from the agent who initiates the business to the highest official, must have so borne himself as to have earned the approbation of his fellowmen.  It must be admitted, we think, that the agent bears no small part in the work of building up the company and of earning for it the reputation to which it aspires.  If he be a manly and right-minded man, he can do nothing which will not serve to make character: character for the company which he represents as well as character for himself.  His statements, both concerning his own company and its rivals, will be truth itself."

For formality and splendor, the closing banquet in Philadelphia must have been the most elegant one ever given at an NALU convention.  Held in the banqueting hall of the Continental Hotel, it was attended by about 250 delegates and guests.  "Hundreds of electric lights and candles entwined with and shaded by masses of flowers diffused a soft glow over the tables," the reporter noted.  A string orchestra played throughout the dinner, which was a splendid one, offering such delicacies as Lynn Haven oysters, clear turtle soup and grilled Spanish mackerel.

Among those contributing to the intellectual part of the feast was the prominient Philadelphia merchant, John Wanamaker. Alluding to claims that he was the largest policyholder in the country, he said that he purchased his sixty-two policies over the years because he realized that life insurance "enabled a man to give away all he wished during his life time and still make such an estate as he cared to leave."

Ben Calef succeeded Plummer as president of the NALU.  When the National Association met for its seventh convention at the Arlington Hotel in Washington, D.C., on October 7-9, 1896, the delegates chose David S. Hendrick of Washington as president for the 1896-97 term.  Although several sites were considered for the next convention, including Nashville, Indianapolis and Cleveland, Milwaukee was ultimately selected.

On the first afternoon of the convention, members enjoyed an excursion down the Potomac to Mount Vernon and Marshall Hall.  For many the experience was as much a pilgrimage as a pleasure trip.  In the "Preface" to the Proceedings, the reporter commented, "The associations, which this trip brought to those delegates who had not visited Washington since the war, will not soon be forgotten." The reference to events occuring thirty years before is another reminder of how many of the NALU's founders were veterans; officers who received their commissions during the Civil War.

It was at this convention that William H. Dyer proposed the adoption of Reed's Parliamentary Rules for governing the NALU's proceedings.  Thomas B. Reed, Republican congressman from Maine, was an acknowledged authority on parliamentary procedure.  As speaker of the House of Representatives he had distinguished himself for his brilliant and impartial management of the House.  Rarely outmaneuvered, few members risked challenging his authority.  "Czar Reed", his enemies called him. (Reed, incidentally, had accepted the post of referee for the insurance companies' anti-rebate compact in July after the death of William Russell, the original referee.)

The NALU had need of Reed.  It was not that the members had become less courteous; the meeting had simply become unwieldy with the growth in membership and the increasing number of controversial issues demanding attention.  With so many delegates attempting to have their say on every question, confusion about precedence and procedures was unavoidable.

Expedience demanded that the NALU find some way to conduct business with more dispatch and fairness.

Though they might express themselves in the politest of terms, the delegates sometimes encased sharp verbal instruments in their formal debates.  There arose an awful tempest-in-a-teapot over a point of local prestige the year before at the Philadelphia convention when Dyer proposed a resolution to make Robert L. Douglas an honorary member.  Promptly seconded by Collin Ford of Cincinnati, this resolution was the opening shot signaling the long campaign waged by the Cincinnati Association to gain recognition as a pioneer in the life underwriters association movement.  While it was true that an association existed in Cincinnati prior to the founding of the Boston Association, it had failed to endure.  Moreover, the re-formed Cincinnati Association had not taken part in the organization of the National Association in 1890.

In any case, Dyer's resolution did not set well with Ashbrook who opposed any move that would detract from the preeminence of the Boston Association and Colonel Ransom.  Evidently, he and most of the founders of the NALU regarded Cincinnati's pretensions as having little merit.  "Honorary membership in this association," he protested, "is the greatest distinction which it can confer, and it ought always to be done with deliberation by my friend, Mr. Dyer... But on the presentation of a name previously utterly unknown, for us to proceed to act on it would establish a very bad precedent for the future."

Since Ashbrook was a member of the Executive Committee, but not a member of the Philadelphia delegation, Dyer countered by questioning his right to interfere in this way:

If I understand the situation of affairs here, this is a convention of delegates from the different local associations, and no man, excepting a delegate from a local association has any rights upon this floor—no right to speak, no right to make a motion,  no right to be heard on this floor, except by the courtesy of the convention, and I do not understand that the gentleman who made this motion is a member in any sense of this convention...

In his sarcastic response to Dyer's attack, Ashbrook's indignation is unmistakable:

I hope the point of order made by Mr. Dyer will be met.  I am interested in that.  I had supposed that I was a member of this convention.  The president of this convention is not a delegate under the new definition—the remarkable definition with which we have been honored by Mr. Dyer; the secretary is not a member of this association; the treasurer is not a member of this association; the members of the Executive Committee are not members of this association; and the president, vice-president, secretary, treasurer and members of the Executive Committee are intruders here and have no place in this hall unless they are permitted through courtesy to remain.  Why let the issue be dodged? I protest Mr. Dyer's point must be met.  If, after having given valuable time for years without a selfish purpose, to promote the interests of this association—as I supposed in an official capacity—I have no right to a seat upon the floor, I have no right to be heard, I am going to be informed of it.  Mr. Dyer raises a very interesting point.

This evoked prolonged applause.  But Dyer pursued his point for a moment longer. "I have never read a line that gives the Executive Committee a right to this floor," he said. "God knows they have got rights enough!  We cannot do a thing unless they say so.  They have got it all in their hands."

Elaborating on his reasons for proposing the resolution, Dyer continued:

I did not raise this question, Mr. President, out of unkind feelings towards Mr. Ashbrook or the Executive Committee.  But Mr. Ashbrook showed a lamentable ignorance of current affairs when he said he did not know of Robert L. Douglas, that nobody knew of Robert L. Douglas, that nobody knew of the Cincinnati Life Underwriters' Association, that nobody knew of the Ohio Association.  Those associations...did work that this association has never done, and held meetings that this association has possibly equaled but never surpassed...It is because of what Mr. Douglas did... and not because he was or was not acquainted with Mr. Ashbrook, that I brought this matter before this meeting.  However, I rather regret that I called up the question of Mr. Ashbrook's right to make a motion.  I rather regret I made the point of order.  I did it rather hastily.  I would rather withdraw it than have any contention in the convention.

Throughout this exchange, Plummer remained unperturbed.  Waiving aside the constitution question of the officers' right to participate in conventions, he suggested Dyer's resolution be disposed of immediately by a simple majority vote.  The motion was defeated—with one dissenting vote.

But this expedient proved only temporary.  The issue flared up again later when James T. Phelps of Boston said, "The name, offered in good faith...should have fair consideration."  Plummer explained that there was no provision in the constitution for naming honorary members, Ransom having been given that distinction by special dispensation.  Ashbrook reiterated Plummer's view:  "There is no provision whatever in the constitution for the election of an honorary member, and in order to elect Colonel Ransome it was necessary to amend the constitution.  It was done at the first convention in Boston.  I had the honor to propose the name of Colonel Ransom on that occasion."

At this juncture, William Tolman of Pittsfield, Massachusetts, said he believed they were all being entirely too rigid in the matter.  "I claim, sir, that this house of representatives of the insurance interests and the insurance men of the United States of America," he declared, "have a right now to elect twenty-five men...and place them on the honorary list, without any amendments to our constitution. I wish to state that our whole action in regard to the election of Mr. Douglas this morning was altogether unparliamentary."

Thomas H. Bowles of Milwaukee probably reflected the general impatience with the discussion when he observed at this point,

I have no prejudice in this matter; I do not know the gentleman.  I only rise to ask for a bit of information.  It was always my understanding that Father Ransom of Boston was the founder of these associations.  [Great applause.]  If I am not correct and the honor belongs to Mr. Douglas, or Mr. Smith, or Mr. Jones, or somebody else, I would be more than happy to vote for the man who merits this distinction, and I would ask that the chair, or whoever is familiar with the history of these organizations, give me the information on this point, whether Mr. Ransom is the founder or someone else.[xiii]

Sitting there with his long beard stretching almost to the waist, Ransom, during the entire debate, said nothing.  Finally, it was agreed to leave the matter to the Executive Committee and the issue was dropped.

By the time of the Washington convention it became obvious to everyone that a rift was developing within the NALU.  Leading the opposition was Dyer; Ashbrook seemed destined to become the spokesman for the establishment.  When Dyer proposed the adoption of Reed's rules, Ashbrook again offered opposition.  "Mr. President," he said, "I hope some strong school for teaching parliamentary practice."

Ultimately, Dyer got his way.  However, If the association leaders thought adopting Reeds Rules would appease the disaffected delegates and stifle criticism, they faced disappointment.  Another dispute arose over the manner of electing officers.  Some insisted that names be submitted to a nominating committee beforehand, as had always been done.  But D.B. Shideler, an Indiana delegate, asserted that one ought to be allowed to make nominations from the floor.  Ashbrook then argued at length on the merits of having a committee to handle nominations, pointing out that this method of choosing officers was both efficient and fair, since the committee was composed of representatives from all the associations.  Even under the present system, he said there had been a regrettable amount of electioneering.  "I am very much afraid,"  Ashbrook cautioned, "that the plan proposed by the gentleman from Indiana will have the effect of involving us in confusion and adding greatly to the excitement...

"The gentleman has given no reason why we should depart from a practice which has worked successfully since the foundation of this association.  It has all the force of powerful precedent.  It is incumbent upon him to give this association some very weighty reason indeed why we should abandon it," he concluded.

The debate dragged on.  In the end twenty-two delegations voted against Shideler's amendment; two voted for it.

The growing discontent with how the national association was being managed became more apparent when the delegates convened in Milwaukee on the morning of September 15, 1897. This was the convention that Ransom chose to distribute his paper on the "Original and Growth, Presented Future of Life Underwriters' Associations." In recounting the history of the NALU's first meeting in 1890, Ransom took occasion to defend the wide discretionary powers of the Executive Committee:

An important feature of the convention was the work performed by the committee on the constitution and bylaws, consisting of Messrs. Joseph Ashbrook, C. H. Ferguson, Gilford Morse, J. F. Huntsman, M. Early, George P. Dewey and E. A. Spencer.  The committee expended a vast amount of labor in preparing this document, realizing how closely it would bear on the future of the association.  It was intended to provide an organization which would allow freedom of discussion on topics pertaining to agency work, rather than create machinery for useless legislation.  In drafting Article 5, which in recent years has occasioned so much discussion by parties having little or no interest in the affairs of the association, it was intended to impose upon the Executive Committee, which it was supposed would be composed of the best representative men in the national body, the labor of considering the merits of resolutions and propositions presented at conventions, with a view to saving the time of the delegates from useless discussions of measures productive of no good, leaving, however, in the hands of the association itself, the right at any time to call up any question for immediate discussion without reference to the Executive Committee.  The wisdom of this article has been verified in numerous instances.[xiv]

Ransom had good reason to take so defensive a stand.  As Proschansky points out, "There was deep rooted dissatisfaction with the manner in which the affairs of the organization were conducted.... It was felt, and increasingly expressed by many critics, that the machinery of the NALU was conducive to undemocratic methods in running the organization.  Charges were made that the central body was dominated by alleged cliques..., more interested in playing politics and in junketing than in genuine reform of the demoralizing marketing practices then in vogue.

"As the decade rolled on, the criticism became more and more intense, the critics more and more numerous.  The most frequent object of criticism was the Executive Committee which, through Article 5 of the constitution and bylaws, had been entrusted with large powers.  The following portion of the article created the most controversy:

The Executive Committee shall first consider all business presented, and shall report upon the same and unless by a vote of the association, all propositions, resolutions and other business relating to the future action of the association shall be first referred to the Executive Committee without debate.

"Reflected in the mounting criticism of the Executive Committee was a notion that the large eastern life insurance companies were governing the actions of the NALU through the men in their employ who were on the Executive Committee and who served as officers of the association. ...Ransom, the so-called 'father' of the NALU, understandably enough, could not remain idle while his offspring was under such savage fire. ..."[xv] Although the hierarchical structure of the NALU remained intact, as Prochansky notes, Ransom failed to forestall the attacks:

At the 1897 convention, William H. Dyer, an outspoken delegate from Boston, offered a resolution amending Article 5 to eliminate the necessity of referring business propositions and resolutions to the Executive Committee.  The committee was reluctant to yield any of its extensive powers and empowered Ben Williams, its chairman and one of the original organizers of the NALU, to issue a statement that it would be "inexpedient" to make any change in the article, since it was claimed that ample opportunity was afforded for immediate consideration of any matter coming before a convention. A majority vote by the members was all that was required to effect this.  The subsequent defeat of the resolution certainly did not make for greater harmony among the members.  It may well have been the deciding factor in inducing some of the delegates to leave the ranks of the NALU.[xvi]

The conduct of elections that year provoked further criticism:

The spirited contest for the presidency in 1897, in which Thomas H. Bowles of Milwaukee was the successful candidate, also was productive of controversy in regard to the methods employed.  Those critical of the NALU cited it as an example of the alleged electioneering methods that were deemed unseemly and undignified.  The Chicago Life Underwriters' Association, at its monthly meeting on October 28, 1897, adopted a resolution calling for an end to political wire-pulling in the filling of high offices in the NALU.[xvii]

Agents in Philadelphia passed a similar resolution deprecating all "quasi-political or electioneering methods in securing a choice of officers...of the national association."  In seconding the motion to hold the next NALU convention in Minneapolis, William Scott, president of the Philadelphia association, took occasion to comment on the "spirited contest":

We have all heard the past year of strife that has been made for the honorable position that has been filled this morning by this convention. ...We admire the men who made the fight, but we deprecate the methods, because it lowers the standard of this national association, and we beg of you that you will not present any candidate for the presidency at our next annual convention. Let...the position be open at the time and let the office seek the man, rather than the man the office, [Applause.][xviii]

Part 1

Part 2

Part 3

Part 4

Part 5

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

Book Marks

[xi] LAN, November 1918, p. 148

[xii] Proschansky, Op.cit., pp. 125-126

[xiii] Cf Proceedings, 1897, pp49-53 and 62-65

[xiv] Proceedings, 1897, pp. 35-36

[xv] Proschansky, Op. Cit., pp. 141-143

[xvi] Ibid.,p. 148

[xvii] Ibid., p. 144.

[xviii] Proceedings, 1897, p. 138

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