Investing in Life: Insurance in Antebellum America

Essay on Sources

e s s a y o n s o u r c e s Upon entering graduate school, I intended to focus my research on nineteenth-century financial institutions. I was particularly interested in the interaction of commercial and savings banks with both their immediate clientele and with American society at large. As I began exploring this area of inquiry, my advisor (Mark Thomas at the University of Virginia) mentioned my interests to banking historian Eugene White at Rutgers University. It was White who initially suggested that I instead consider studying life insurance, an important financial intermediary whose history had heretofore been overlooked by most academics. Intrigued by the idea of applying my original set of research questions to a similar yet largely unexplored industry, I immediately obtained the few major academic works on the history of life insurance: J. Owen Stalson’s 1942 tome Marketing Life Insurance: Its History in America (Cambridge, MA: Harvard University Press) and Viviana A. Rotman Zelizer’s 1979 sociological analysis Morals and Markets: The Development of Life Insurance in the United States (New York: Columbia University Press). Both of these studies begin with the premise that life insurance was an unpopular, unsuccessful industry prior to its sudden ascendancy in the 1840s. While Stalson argues that the innovative marketing techniques of newly established mutual life insurance companies accounted for this shift, Zelizer attributes this reversal to a cultural revolution in the public’s attitude toward underwriting lives—largely fueled by religious beliefs that initially proscribed but then (around 1843) abruptly started to promote the industry. When I read these studies in conjunction with the numerous corporate histories of specific life insurance companies, most of which were written during the 1940s and 1950s to commemorate the centennial anniversaries of extant institutions, I too was convinced of this general time line, and it seemed any useful study of nineteenth-century life insurance would necessarily focus on the second half of the century. More recent scholarship has explored the unique regulatory history of the insurance industry as a whole, especially its contribution to Gilded Age scandals and Progressive Era reforms . Most notable among these works are The Life Insurance Enterprise, 1885–1910: A Study in the Limits of Corporate Power by Morton Keller (Cambridge, MA: Belknap, 1963), Insurance Reform: Consumer Action in the Progressive Era by H. Roger Grant (Ames: Iowa State 374 Essay on Sources University Press, 1988), and “Going National: The Life Insurance Industry’s Campaign for Federal Regulation after the Civil War” by Philip L. Merkel (Business History Review 1991). In his 1952 article “Capital Accumulation in Life Insurance between the Civil War and the Investigation of 1905,” Douglass North offers the first financial analysis of the importance of postbellum life insurance (in William Miller, ed., Men in Business: Essays on the Historical Role of the Entrepreneur, New York: Harper & Row), while B. Michael Pritchett’s 1977 dissertation (republished in 1985 as Financing Growth: A Financial History of American Life Insurance through 1900, Philadelphia: S. S. Huebner Foundation for Insurance Education) utilizes early computer technology to quantify the impact of the industry on specific areas of the economy. Finally, Roger L. Ransom and Richard Sutch’s 1987 article in the Journal of Economic History, “Tontine Insurance and the Armstrong Investigation: A Case of Stifled Innovation, 1868– 1905,” details one instance in which Progressive Era reforms directly hindered the financial advancement of the industry. These works further convinced me that the most important developments in life insurance occurred during the postbellum period. With this historiography under my belt, I had a working research plan. I would examine the regulatory and financial histories of life insurance within a larger social and cultural framework in order to create a comprehensive postbellum account of life insurance through the 1920s. On one hand, I would employ the traditional tools of the business historian to identify the managerial, marketing, and financial developments of the major firms and their interaction with the various political, economic, and social events of the day. On the other, I would analyze the people who were actually buying and selling life insurance to understand why this industry became so successful. With these goals in mind, I excitedly marched into Baker Library at Harvard Business School and began poring over its collections—including the Hyde Collection, containing Equitable Life Assurance Society of New York records, and the Historic Corporate Reports Collection, with its numerous brochures from various companies —and the library’s copies of the United States Insurance...