being about $200,000, or about $30,000 for each failing
bank. The total loss has been about 1/5 of 1 per cent of total
deposits.]

[Footnote 9: The Federal Reserve Act, by making it possible for loans
to be had at any time (through member banks) on good security, should
reduce the danger of runs on savings banks.]

[Footnote 10: The author saw in operation a new machine of this kind
which had been installed in a German public school as early as 1910.]

[Footnote 11: See Vol. I, pp. 290, 297-298, 484, and 486.]

[Footnote 12: The figures here given and the description of methods
apply to the "local" building and loan associations. The success of
this kind led to the organization of other associations which took the
name "National" building and loan associations, to carry on a business
in a larger field. The number of these has always been comparatively
small, and their operation is less simple, democratic, and economical
than the local associations. They have borne more of the nature of
ordinary profit-making enterprises. They should not be confused with
the local associations.]

[Footnote 13: On these economies, see Vol. I, p. 298.]

[Footnote 14: See ch. 17, sec. 4.]

[Footnote 15: Since this was written the Federal Rural Credits Act has
been passed, embodying the main idea here described.]

CHAPTER 12

PRINCIPLES OF INSURANCE

Sec. 1. Chance, unavoidable and average. Sec. 2. Uneconomic character of
gambling. Sec. 3. Borderland of gambling. Sec. 4. Insurance: definition and
kinds. Sec. 5. Insurance viewed as a wager. Sec. 6. Insurance as mutual
protection. Sec. 7. Conditions of sound insurance. Sec. 8. Purpose of life
insurance. Sec. 9. Assessment plan. Sec. 10. The reserve plan. Sec. 11. The
mortality table. Sec. 12. The single premium for any term. Sec. 13. Level
annual premiums and reserves. Sec. 14. Different features of policies.
Sec. 15. Insurance assets and investments as savings. Sec. 16. Excessive
costs of insurance operation.

Sec. 1. #Chance, unavoidable and average.# Every action and every
movement in life has in it some element of chance. There are what
may be called natural chances, arising from the uncertainties of the
seasons, or from rainfall, heat, hail, storm, flood, lightning, or
land-slides. Such chances must be taken both by the small enterpriser
and by the large. In earlier conditions of society natural chance
dominated industry, and it still remains and mu