The Sun.
London, England, 1856-08-09 00:00:00

LONDON LIFE ASSOOIATION.

The following letters are from an auditorand a director
of the London Life Association :

"Sir,—As you invite a reply to the following para-
graph in your city article of the eth inst., on the Lon-
don Life question, namely—' The simple question is,
will the fulfilment of the promises held out to the new
members be in any way jeopardised by the contemplated
act ? ' I will give you an answer in as plain a manner
and in as few words as I can, and without the possibi-
lity of contradiction by any director.
"I. I deny that any promises have been held out to
new members as to the amount of the abatement of pre-
mium, and if any director has done so he has exceeded
the limits of his authority. All he could do, or, I be-
lieve, has done, is to invite his friends to insure at this
office, as the abatement of premium, after 50 years' ex-
perience, has been 70 per cent. for the last five years.

" 2. I mast emphatically, air, declare that the dividing
the 230,0001. as proposed, will not, in the slightest de-
gree, affect the 70 per cent., but it may in a slight de-
gree affect the last increase of 4 per cent, abatement de-
clarad by the directors since this question has been agi-
tated.

"I do believe that the chief motive of the directors
for givino, this increased 4 per cent. has been that it ab-
stracted 92,000/, from the surplus, so that they may say,
by a quibble, the whole 230,0001. does not exist as a
surplus, though it did when our resolution was first car-
ried in the general court, notwithstanding it was a fact
they denied.—l am, Sir, yours faithfully,
" Jorm ALLNUTT, Auditor of London Life.
" Clapham common, Aug. 7.
"P.S.—The foregoing was written before I read your
paper of to-day, and I think what I have said fully an-
swers what is there repeated. But I feel it a duty to
make a remark, both for your information and on account
of the ignorance of your correspondent, by whom there-
fore you are misled as to the practice of the Equitable
Society. The truth is, we are only proposing to follow
their example, by the just disposal of the surplus, by
giving it to those who had created it."

" S:r, —As you have allowed Mr. Baxter to state the
grounds on which he proposes to divide a large i:urn, part
of the capital of this association, I hope that you will per-
mit me, one of the directors of the company, to point out
that such a division of capital would be unjust and illegal.
Mr. Baxter says that the association, founded upon the
avowed principle of applying all profits yearly to the re-
ductions of the annual premiums, has, in consequence of
that principle not having been carried out, become pos-
sessed of an accumulated capital arising from over-pay-
ments of the members' premiums (chiefly within the last
30 years) to the extent of between 400,0001. and
500,000/.'
" I say that this sum of nearly halfa-million exists
only in the imagination of the gentlemen who are pro-
posing to divide it. I write with the last balance-sheet
of the society before me, a copy of which may be ob-
tained at the office, and I say that, excepting a sum of
37,4681. reserved by our laws for claims which might
have accrued, but were not ascertained; and for claims
which might accrue between the time of making up the
account and the Ist of July last,' all our profits have
been divided in providing for the past, and securing the
future reduction in the premiums. Ido not include a
doubtful sum, depending on the value to be placed on
our stock. Mr. Baxter believes it to be properly valued; I
differ with him on that point. This year the premiums of
all members who have been insured seven years are re-
duced 74 per cent. To secure this reduction a sum of
1,702,0001. in present money is required. Mr. Baxter
wishes to take 230,0001. of this cap:tal, and divide it by a
new law, under which the value of every policy in the
association will be changed. He says that the directors
propose to divide the same sum in a different manner.
This I deny. The directors have already applied this
capital in reduction of the premiums of the members.
We cannot continue the present reduction of premiums
74 per cent. and pay our policies in full if this sum be
divided. But, Sir, there is a class of members with re-
gard to whom this division of capital would be a spolia-
tion not yet witnessed on this side of the Atlantic.
Early in the year the society represented that the accu-
mulation of their capital was so large that new members
must be content to take out policies on the terms of hav-
ing 10 per cent, less reduction in their premiums than
the older members might receive.
" Large amounts have been insured on these terms,
but now it is actually proposed, horresco referent, to di-
vide the very sum which is necessary to secure Ithe old
members this reduction of 10 per cent.

" Those who joined the society on the faith of its ac-
cumulated capital may finl that very capital divided by
and among those who held it out as an inducement for
parties to join the society !
" I say therefore that the proposed division is illegal,
unjust, and cannot be carried out. Changes have been
lately made in our laws for the benefit of, the (Ador mem-
bers—other changes are now under consideration. To
make those changes legal they must relate only t o future
profits—to make them just they must be such as; all the
members may have a chance of enjoying them in their
turn.
" I have the honour to be your faithful servant,
" WILLIAM 0 MIZE.

"August 7.7