no stock shall be sold unless permission is obtained from a designated state official. To obtain this permission the exact status of the corporation and its prospects must be submitted and sworn to under oath.

Summary. Merchandising is one of the chief employments of our people. Good merchandising consists in giving full value and giving it in a pleasant manner. The seller of an article should benefit and so should the purchaser. Supplying goods in the quantity in which they are desired and at the time they are desired is the function of a dealer. Storing goods when they are plentiful and selling them when they are scarce is an economic service. The high cost of selling is the result of demands from the public for increased service. Advertising is a legitimate business expense. The purchaser pays for advertising, but the cost is usually slight to each purchaser. The legal principle of caveat emptor means that the purchaser must be on his guard. This does not justify misrepresentation.

TOPICS FOR DISCUSSION, DEBATE, AND SPECIAL REPORTS I. What are the advantages of "chain stores"? What are the disadvantages?

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Why have the mail-order houses been able to do such a large business? What advantages do they have over the local dealer in a small town? Is it fair to local dealers to patronize mail-order houses?

Give some personal experiences in dealing with good salesmen; with poor salesmen.

Secure a copy of a popular magazine and show what advertisements you consider the best. Show why they are better than others.

5. Write a suitable advertisement for a real-estate development near your city. Write an advertisement for a toilet-soap. 6. Advertisers wish to know what sort of advertising is most profitable. How can they get this information?

7. In the State of New York any one is at liberty to remove advertising signs which are placed upon public property

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along the public roads. Give your reasons for approving or condemning this legislation.

8. What advertising do you think is harmful to a community? Most physicians and dentists consider that it is undignified for them to advertise. Show why you agree or disagree with them.

IO. Should churches advertise? Write an advertisement which you would consider proper for a church.

CHAPTER XV

INSURANCE

What is Insurance?-Insurance is a protection against risk. Financial loss caused by death, accident, illness, fire, flood, theft, and other perils may be partially or wholly avoided by insurance. Insurance secures freedom from anxiety. A man whose house is insured benefits though his house does not burn. A man whose life is insured has a knowledge that those who are dependent upon him will not suffer from poverty if he should die. This is worth what it costs.

Insurance has sometimes been compared to gambling. It has been alleged that if a person insures his life for $1,000 by paying a premium of thirty dollars a year, he is betting thirty dollars against $1,000 that he will die during the year. This is incorrect. He is purchasing protection and he receives it. This is an economic service and gambling never renders an economic service.

Fire Insurance. In its modern form, Nicholas Barbon of London originated fire insurance. This was in the year 1667, one year after the great fire in London. Barbon insured buildings only. Richard Povey, also of London, in 1706 added protection of goods. At first the business was conducted by individuals, but in 1720 the London Assurance and the Royal Exchange Assurance were granted corporate charters. The first American company was

organized in Charleston, South Carolina, in 1735. However, it survived only a few years. The Philadelphia Contributionship was founded in 1752. Benjamin Franklin was interested in this company and served as a director for several years. By the beginning of the nineteenth century the country was well supplied with fire-insurance companies. Many of them failed through incompetent management. As a result the state governments undertook to exercise supervision over the conduct of insurance corporations.

Most insurance against loss by fire is carried by large companies doing business over the entire country. This spreading of risks over a large field eliminates the danger that a company may become bankrupt by a great local fire. To protect itself further against a local loss, a company finding itself carrying too many risks in one locality will reinsure some of them in another company.

The Contract.-A fire-insurance contract is known as a policy. This policy describes the property insured, states terms and rates, and how long the insurance is to last. The rate charged depends upon the nature of the property, upon the character of the neighboring buildings, and upon the protection against fire furnished by the community. Fire-insurance contracts generally run for three years. Companies will insure for three years for twice the amount charged for one year.

Prevention of Fire. The losses by fire in the United States are annually greater than those in any European country. It would be unfair to draw the conclusion that Americans are less careful in preventing fires than are Europeans, because there are few wooden houses in Europe,

and private houses are less thoroughly heated there than in America. The economic loss by fire is very great; in one year (1917) the fire losses in the United States amounted to $250,753,640; during the year 1917 in New York City alone there were 14,053 fires, with a loss of $14,278,523. Doubtless a large proportion of this loss could have been prevented by greater care in regard to flues, keeping live coals from contact with wood, and cleaning away rubbish. In some cities there is a day each year set apart as "fire-prevention day." On this day citizens are asked to inspect stoves and flues, clean closets and cellars, and to see that danger from fire is reduced as much as possible.

Lloyds. A man whose name was Lloyds kept a coffeehouse in London in the seventeenth century. This place became a resort for men engaged in shipping and foreign trade. Marine, or sea, insurance grew to be a part of the business transacted, and the famous organization known as Lloyds perpetuates the name.

Lloyds does not insure property of any kind but furnishes headquarters for individuals and companies engaged in the insurance business. It has a system for the inspection of ships with agents in every important port all over the world. The persons who do business at Lloyds specialize in marine insurance but write every variety of insurance. At Lloyds a person who is planning to give a pageant may be protected against rain, a dealer in court costumes may be insured against the court going into mourning, or the risk of war may be the object of a policy.

Life Insurance. The first real life insurance company was the "Old Equitable" of London, organized in 1762.