Ohio Life Insurance and Trust Company

(noun)

A banking institution based in Cincinnati, Ohio, which existed from 1830 to 1857. The Panic of 1857, an economic depression, resulted after the company's New York City offices ceased operations due to bad investments, especially in agricultural-related businesses.

Related Terms

Examples of Ohio Life Insurance and Trust Company in the following topics:

  • The Panic of 1857

    • After the failure of Ohio Life Insurance and Trust Company, the Panic quickly spread as businesses failed and the stock market began to plummet.
    • Railroads and factories began to borrow and invest with generous bank loans.
    • Numerous western railroad companies began to fail—further decreasing the value of railroad securities, stocks, and bonds.
    • The Panic of 1857 was set into motion with the failure of Ohio Life Insurance and Trust Company, which had large mortgage holdings and ties to national investment banks.
    • The failure of Ohio Life brought attention to the financial state of the railroad industry and land markets and brought the financial panic to the forefront of public issues.

  • Conclusion: The Increasing Inevitability of War

    • This prompted a series of measures, known popularly as the "Compromise of 1850," designed to appease both Northern and Southern congressmen and establish a more equitable balance of power.
    • Republicans supported western expansion (for independent non-slave owning farmers), the development of infrastructure and Northern industry, and the restriction of slavery in new territories.
    • The Lecompton Constitution guaranteed the protection of slavery in the region and received the support of President Buchanan and the Southern Democrats.
    • The Panic of 1857 began after the failure of Ohio Life Insurance and Trust Company in September 1857 and lasted until the Civil War.
    • Brown believed that through violence and bloodshed, he could purge the South of its wickedness and eradicate American slavery.

  • Rockefeller and the Oil Industry

    • John Davison Rockefeller was the founder of the Standard Oil Company, a business trust which dominated the oil industry.
    • He was the founder of the Standard Oil Company, which dominated the oil industry and was the first great U.S. business trust.
    • In 1870, Rockefeller incorporated Standard Oil in Ohio.
    • For example, Standard created the first synthetic competitor for beeswax and bought the company that invented and produced Vaseline, the Chesebrough Manufacturing Company, which was a Standard company only from 1908 until 1911.
    • The company grew by increasing sales and also through acquisitions.

  • From Competition to Consolidation

    • In 1886, he reorganized the Philadelphia & Reading and, in 1888, the Chesapeake & Ohio.
    • Rockefeller organized his Standard Oil of Ohio as a common-law trust .
    • Trustees were given corporate stock certificates of various companies; by combining numerous corporations into the trust, the trustees could effectively manage and control an entire industry.
    • Within a decade, the Cotton Trust, Lead Trust, Sugar Trust, and Whiskey Trust, along with oil, telephone, steel, and tobacco trusts, had become, or were in the process of becoming, monopolies.
    • The result was the Sherman Antitrust Act of 1890, sponsored by Senator John Sherman, of Ohio.

  • Market Actors

    • Market actors include individual retail investors, mutual funds, banks, insurance companies, hedge funds, and corporations.
    • Issuers may be domestic or foreign governments, corporations, or investment trusts.
    • Pension funds are important shareholders of listed and private companies.
    • Insurance companies are generally classified as either mutual or proprietary companies.
    • There are three types of U.S. mutual funds: open-end, unit investment trust, and closed-end.

  • The Role of Government

    • The fund may be a not-for-profit trust, which pays out for health care according to common rules established by the members or by some other democratic form.
    • In the private model, the rights of access are subject to contractual obligations between an insurer and an insurance company.
    • The latter seeks to make a profit by managing the flow of funds between funders and providers of health care services.
    • Insurance may cover other benefits as well as health.
    • Most western industrial countries have a system of social insurance based on the principle of social solidarity covers eligible people from bearing the direct burden of most healthcare expenditure, funded by taxation during their working life.

  • Robber Barons and the Captains of Industry

    • He was the founder of the Standard Oil Company, which dominated the oil industry and was the first great U.S. business trust.
    • After financing the creation of the Federal Steel Company, he merged in 1901 with the Carnegie Steel Company and several other steel and iron businesses, including Consolidated Steel and Wire Company, to form the United States Steel Corporation.
    • Rockefeller organized his Standard Oil of Ohio as a common-law trust.
    • Trustees were given corporate stock certificates of various companies; by combining numerous corporations into the trust, the trustees could effectively manage and control an entire industry.
    • Within a decade, the Cotton Trust, Lead Trust, Sugar Trust, and Whiskey Trust—along with oil, telephone, steel, and tobacco trusts—had become, or were in the process of becoming, monopolies.

  • The Muckrakers

    • Wells (1862–1931) — an author of a series of articles concerning Jim Crow laws and the Chesapeake and Ohio Railroad in 1884, and co-owned the newspaper The Free Speech in Memphis in which she began an anti-lynching campaign.
    • Ida Tarbell published The Rise of the Standard Oil Company in 1902, providing insight into the manipulation of trusts.
    • One trust they manipulated was with Christopher Dunn Co.
    • His work forced a crackdown on a number of other patents and fraudulent schemes of medicinal companies.
    • Hendrick (1870–1949) — "The Story of Life Insurance" May - November 1906 McClure's Frances Kellor (1873–1952) — studied chronic unemployment in her book Out of Work (1904) Thomas William Lawson (1857–1924) Frenzied Finance (1906) on Amalgamated Copper stock scandal Gustavus Myers (1872–1942) - documented corruption in his first book "The History of Tammany Hall" (1901) unpublished, Revised edition, Boni and Liveright, 1917.

  • Contractual Saving

    • Contractual saving institutions are insurance companies and pension funds.
    • Insurance companies provide protection for people who buy insurance policies.Insurance policy prevents financial hardship, such as a medical emergency, car accident, or the death of a family member.Insurance companies are financial intermediaries because they link the funds from the policyholders to the financial markets.Policyholders make periodical payments to the insurance company called premiums.Insurance company will invest the premiums in the financial
    • Insurance companies use the law of large numbers as they insure a large number of people.On average, statisticians can predict an insurance company's pay out in claims because they, on average, accurately predict the rates of death, illness, injury, and property damage for an entire country.Statisticians do not know which specific individuals will experience hardship, but they can predict how often it occurs.Unfortunately, insurance companies have two problems, when selling insurance policies: Adverse selection and moral hazard.Adverse selection means a person buying insurance has more information than the insurance company.For example, a person knows he has a heart problem and decides to buy a very large life insurance policy, and he hides this information.Moral hazard means people buying insurance becomes more careless than when they did not have insurance.For instance, a person buys theft insurance for his home,and this person stops locking his windows and doors when he leaves, increasing the risk a burglar will break into his home.
    • Insurance companies use two strategies to combat moral hazard and adverse selection.First, insurance companies gather information about the policyholders, such as driving records, medical records, and credit histories.Consequently, the insurance company charges a higher premium to a person who is likely to file a claim, which we call a risk-based premium.Second, insurance companies use a deductible.When a person makes a claim, the person must pay the first portion.For example, a person buys health insurance with a $500 deductible.After this person has paid the first $500 to a doctor, then the insurance company pays the remainder of the claim.This passes some of the responsibility to the person holding the insurance policy.Finally, a person could buy insurance with smaller premiums but with a greater deductible.
    • First type of insurance company is a life insurance company.These companies purchase long-term corporate bonds and commercial mortgages because they can predict future payments with high accuracy.Furthermore, the insurance companies are organized in two ways: Mutual company or stock company.Insurance policyholders own a mutual company because the insurance policy functions as corporate stock, while a stock company is a corporation that issues stock.Thus, the shareholders own the company, while the insurance policyholders do not.Stock company is more common because a stock company has more funding sources.They receive funding by selling stock to shareholders, and receive revenue by selling insurance policies.Most policies issued are called term life policies.Person buying the life insurance must pay the premium for the rest of his life.These policies are popular because the policyholder can borrow against the value of the life insurance policy, when he retires.Borrowing against insurance is an annuity.An annuity pays a retired person a specific amount of money each year.

  • Regulation

    • Presidents Theodore Roosevelt and William Howard Taft supported trust-busting.
    • President Theodore Roosevelt sued 45 companies under the Sherman Act, and William Howard Taft sued 75.
    • One of the most well-known trusts was the Standard Oil Company; John D.
    • It broke the monopoly into three dozen separate competing companies, including Standard Oil of New Jersey (later known as Exxon and now ExxonMobil), Standard Oil of Indiana (Amoco), Standard Oil Company of New York (Mobil, which later merged with Exxon to form ExxonMobil), and so on.
    • Not all big companies, and not all monopolies, are evil; and the courts (not the executive branch) are to make that decision.