The Sun.
London, England, 1861-08-05 00:00:00

DIVIDEND AND BONUS.

"The state of the accounts for the year and the condition
cif the company generally having occupied the attention of
the directors, they have arrived at the determination to re-
commend a dividend of 3s. per share, and a bonus of 4s. per
share, together 7s. per share, free of income tax.
"CHARLES TURNER, Chairman.
"July 27, 1861."

_ .
The CHAIRMAN said—Gentlemen, the business of
the company, for the year 1860, as detailed in the
report which you have just heard read, does not, I
think, call for any especial remark, beyond that of
congratulation on its continued rapid progress in all
'lB branches. (Hear.) The amount at the credit of
_nProfit and loss on the 31st of December, 1860,
4na anted to £^l 000 from which, •T
i , , 1 you approve
t.),,f:l,l!,calii.vidend of 35., and the bonus of 4s.
torntn7,,,e,. making together is. per share, re-
deductut'll (1 by the, directors, you must
of i'37,ooLeo a.runt of £34,000, leaving a balance
wid, coositlterithse carried on to this year's account;
the year 18g0, ,g , that there was, at the end of
advisingarrieunt at the credit of the re-
serve fund of
£166,x00, the directors . have no hesi-
tation Nihatever in
416nd recommended in th_„, you to make the divi-
I.:sir report, inasmuch as the
reserve hind
profit anrl_ loss of the,
still amount, after the divide , together will
£203,091.
occurrence
recommenda-
(frear•)` They make has been paid to
tion, notwithstanding the
f th‘e teat
fire, which is alluded to in the.re:pc:,.°
,which
does not come into the ealculationoilleostann
unexarnplec: in
Tit; except as a matter of prfcautionan- , looking for-
ward to the future. That tire wag
maLmitude, and in the extent of tho loss which it
inflicted ou the insurance companies. I believethat

no occurrence of eimilar magnitude, or inflicting a
similar amount of loss, had happened for nearly 200
years. (Hear, hear,) But the event, lamentable
as it is, demonstrates very clearly the necessity of
an ample reserve fund in carrying on the business
of an insurance company, and amply justifies those
warnings, alluded to in this report, which have
been given by the board from time to time in the
reports of previous years. (Hear, hear.) I have
already alluded to the uncertain nature of an insu-
rance business, when we look only at a single year,
or at one or two years together ; and although I
quite agree with the remark made in the report,
that, looking at a large number of years, no busi-
ness proves safer, I also feel that,- looking at a few
years only, a reserve fund is absolutely necessary
to give permanence and stability to the dividend,
the very nature of the business being such, that
the losses of one year may sweep away the profits
of a great many years preceding. (Hear, hear.)
The position, gentlemen, obtained by the Royal
Insurance Company, and the promptitude with
which it provided funds for the payment of its
late losses, as alluded to in the report, has not
only added to its reputation, but has already given
an impetus to its progress, and its business has
considerably increased, especially in London.
(Hear, hear.) You will have seen, gentlemen, in
the newspapers, reports of meetings held by the
insurance offices from time to time, for the pur-
pose of considering the position in •whofichthothlaetye
were placed, by an event of the nature
dnieseastetdrowuisthfirelerOcannrilekiansgsuinratno etehse,iralblustihneesosfficoones-
found that the premiums received,
engaged in that business, in the
tpaokritnogftLhoonadvoenr.,
aver-
age of the last 10 or 12 years, vverenotot athdoequateto
the risks incurred ; and they came
conclu-
sion, which I think was a very natural one, that
the premiums should be brouhgehatr.)moTrehouypodnid no
a part
with those risks. (Hear,
attempt—as some of the Le
.rates
nmerchants seem to
have supposed—to raise the of premium, for
the purpose of creating a fund for the payment
of past losses. (Hear.) That did not enter into
their calculation, nor do I think it ought. (Hear,
hear.) But they were certainly justified in looking
to the future, and in taking care, that as far as
possible, the premiums charged, in that particular
department of their business, should be adequate to
the risks which the offices were called on to incur.
(Hear, hear.) Now, gentlemen, without reference
to the great fire at all, the premiums previously
received were found not to have been sufficient to
cover the risk, and to pay the past losses, and if
they were not sufficient, when that fire was ex-
cluded from consideration, the insufficiency was, of
course, considerably greater when it was taken into
account. (Hear, hear.) The rates, therefore, have
been readjusted, with the view, if possible, of in-
ducing parties who have produce in the port of
London to classify that produce, and those who
have warehouses to build those warehouses with
better provision for the security of the produce
placed in them. (Hear, hear.) That is the basis
on which the increased premiums were calculated.
(Hear, hear.) The representatives of the insurance
offices subsequently held a meeting, and came to
the conclusion that those premiums might be modi-
fied. (Hear, hear.) They have modified them to
some extent, and I believe our excellent manager,
Mr. Dove, is of opinion that the modified rates will
be found sufficient. (Hear, hear.) I need scarcely
say, either of him or of the board, that we have
no wish to charge exaggerated premiums. (Hear,
hear.) Such has never been our policy ; but we do
think, as I have already said, that the amount paid
by the merchants should be adjusted to the risks
incarred. (Hear, hear.) Gentlemen, it is a happy
thing perhaps that a good many of the weak offices
in this country had withdrawn from business before
the occurrence of the late fire. If not, one or two
things must have occurred ; either those weak
offices would not have been enabled to pay their
proportion of the loss, and so the insured would
have suffered ; or, if the proprietors had been able
to meet their liabilities, large calls must have been
made upon them, and great misery must, in all pro-
bability, have been endured. (Hear, hear.) As it
is, I believe nothing of the kind has occurred, or is
likely to occur. (Hear.) You have heard some-
thing, no doubt, of a contemplated new office; and a
good deal was said lately, at a meeting of the mer-
chants of London, about the exorbitant rates of
premium demanded by the insurance offices, and
about the great success which some offices have
achieved. That there have been such successes is
no doubt true ; but there was one thing which these
gentlemen kept carefully out of sight—l allude to
the number of offices which, within the last 20
years, have given up business—some of them abso-
lutely ruined, others because they found themselves
on the high road to ruin. Now, in looking at
what has been accomplished by successful offices,
the fact ought never to be lost sight of that there
have been other offices which have been utterly
unsuccessful ; and the only proper mode of coming
to a correct conclusion is to take them all into ac-
count, and look at the average result. (Hear, hear.)
Upon this point I have some very important and
remarkable statistics, which I should like briefly to
bring before you. One of the larger London offices,
the Sun, publishes annually a list of offices discon-
tinuing business. (Hear, hear.) The last issue of
that company announces the total number of these,
during a lengthened period not precisely specified,
as 95 ; while the number of existing companies is
52. But, gentlemen, taking a certain definite period,
which perhaps will be the most satisfactory course,
I find from other sources that, within the last 17
years, 48 new offices have been established, of which
only 12 now continue in existence, showing that
the fire insurance business has, not been successful
with all offices, at all events. (Hear, hear.)
This, gentlemen, refers to fire offices only; but if
the life offices are included the fate of the larger
number of these offices must be considered most
extraordinary. I am quite sure you are not pre-
pared for the statistics which I am about to read
to you. During the 17 years to which I have
referred, 580 new insurance companies have been
projected, of which 233 have ceased to exist,
having altogether gone out of being ; 11 have
amalgamated with other companies; 134 have sus-
pended their business ; and 42 are winding up in
Chancery. (Hear.) I have thought it right to bring
this matter before you, because a great deal of op-
probrium has been thrown upon companies for hav-
ing raised their premiums as though they were en-
deavouring to extort a large amount of money from
the public to which they are not entitled. I think
the facts which I have given you are sufficient to
show that that imputation has no reasonable founda-
tion. (Hear.) I do not know that I have any further
remarks to make, but I shall be happy to answer
any questions which any proprietor may wish to
put, and I now beg leave to move " That the report
now read be received and adopted, and printed for
circulation amongst the proprietors."
Mr. SAMUEL iiOLME—Mr. Chairman and gentle-
men,—l should consider myself guilty of great
presumption, in a large meeting like this, in rising
to second the resolution which has been put from
the chair, had it not been for the circumstance
that first I had been requested by several gentle-
men to do so, and next that I had been connected
with this institution from its very commencement.
Sir, I do not look upon the seconding of the resolu-
tion as the mere formal matter which it is some-
times held to be ; because I admit the responsibility
of it, and I say that every person who sanctions a
rtpiibnoerat indorses it, and sends it forth to the world
With his imprimatur; and the public have a right
assured that the report we send forth so sanc-
tioned
auopt
and adopted,
.. is one which is a symbol of the
and tmeoapinions of the meeting who do so
this
Now, sir, from the com-
mencementhave ever had a
or e Life Assurance Association we
deed, unless fully sort of objection to receiving divi-
sured that such dividend has
Becausea I hold that our first duty
been warranted.
—without reference to
(13sehelilnliary consideration
wyshall be seen
of our own—is this—thatn
to the assured, and that next itashafillsbtegivle security
placed upon
leso to
such a basis as that there
do
assurancebel believe,
the assurers, together with a fair and reasonyaba
hin
considerable
fit for the risk which the assurers re_ufnat.
sir, from an intimate knowledge
company, and from an acquaintance
acquaintance, though I am not a director, with its
details, that the Royal Assurance does offer this in
faith and in sincerity, and that n o dividend has ever
yet been paid by this society which has not been fully
warranted by the state of its accounts. (Hear.) Sir,
reputation in public companies is just as necessary to
eventual success as the reputation of an individual ;
and unlimited confidence must be placed by the pub-
lic in an association of gentlemen, who not only give
a-guarantee for the security of the property, but
likewise give a guarantee that this security shall be
perpetual, as far as human security can be made,
for life assurance in some cases may not be payable
for forty years, or in some fifty years to come ; and
hence the necessity that it should be placed upon a
foundation which is undeniable and secure. Now,
sir, my confidence in the Royal is unabated; prin-
cipally on account of knowing the state of its affairs,
and more so from the open, plain, and straightfor-
ward statements which are continually put forth.
And I may just say here that I rejoiced when Mr.
Dove sent forth that pamphlet to the world, clear
and logical as it was, appealing to facts and not to
assertions, throwing clown the gauntlet, as it were,
to the, world, challenging opinion and criticism—if
criticism were possible—and challenging contradic-
tion to the facts—if contradiction were possible—
which were there put forth. Sir, we have just had
to contend with a calamity, unprecedented, I be-
lieve, since the great fire in London in 1666 ; and
it has swept away a large sum—the report states
£70,000 or £75,000. It may be the latter, and this
shows us the wisdom and
the security of having a
reserve farad—(hear, hear)—not a reserve fund

which has been created by calling upon us for addi-
tional subscriptions, not a reserve fund which is
taken out of subscribed capital, but a reserve fund
amounting now to £166,000, which has been fairly
and honourably created out of the profits of the
concern, out of the premiums paid by the company.
Therefore, sir, I assert that is a large foundation,
and one upon which we may congratulate ourselves.
With these few remarks I beg most cordially to
second the resolution. (Applause.)
The resolution for the adoption of the report was
then put and carried unanimously.
The CHAIRMAN next moved—" That this meet-
ing approves of the declaration by the directors of
e.dividend of 3s. per share, and a bonus of 4s. per
share, out of the profits of the company to the 31st
December, 1860, the same to be payable on or after
the 12th day of August inst., free of income tax."
Mr. C. MOZLEY, in seconding the motion, said—
The resolution is one which usually elicits the kindly
and sympathetic feeling of a meeting of shareholders,
and which is invariably received with consideration
and with regard. (Hear.) But in seconding a reso-
lution of this kind, under somewhat peculiar cir-
cumstances, I feel that it may be needful that I
should preface it by .a few remarks. They shall be
but few; but, inasmuch as some objections may pos-
sibly be taken to the amount of dividend proposed,
I think it due to myself to say that I am the last
man to come forward in this meeting, or in any
other,and to recommend a dividend to be paid which
I did not think the finances of the company would
justify. (Hear.) True it is, Sir, that a very severe
loss has been suffered by this company, in common
with many others, owing to the recent calamity in
London; but the able remarks which have been made
by the chairman, and followed up by Mr. Alderman
Holme, must have convinced the shareholders that
while security is given to the assured, it is not ne-
cessary that we should deprive those who have been
the assurers, by means of their property invested in
this company, of that natural return which they
have a right to look for from their investment.
(Hear.) A remark may naturally be made that the
business of the company, however great and pros-
perous, shows only an amount to the credit of profit
and loss of £71,000, while the loss by the recent
fire was £75,000. I have heard it mooted out of
doors that it is considered trenching too far to as-
sign a dividend to the shareholders when the profit
of the company has been already absorbed. But
what I contend for is that, by the results of our
business up to the present period, and by the judi-
cious arrangement of our funds, we have made a re-
serve of £166,000 up to Christmas last, and that even
when the dividend and bonus which you are now
asked to give have been paid, you will still be add-
ing to that reserve fund a sum of £37,000, making
its total amount £203,000. Now, unless we are to
believe that calamities of this kind are to be con-
tinuous, I think that reserve is ample, not only, to
meet the contingency which has just occurred, but
to enable the directors to give a dividend to the
shareholders which will yield them the interest for
which they are entitled to look upon the capital
they have embarked. (Hear, hear.) On these
grounds I approve of the dividend proposed by the
directors. (Hear, hear.) The reserve fund you
look to, not only to give security to the assured,
which is a more important consideration than any
other, but you look to it also to equalise the divi-
dend which you give to the shareholders, so long
as the resources of the company, the state of the
reserve, and the progress of your business shall be
sufficient and ample to justify it. (Hear, hear.)
The resolution, after a short discussion, was un-
animously carried.
Mr. JOHNSTON then moved the following resolu-
tion :—" It being stated that the following directors
retire by rotation at this meeting, but were eligible
for re-election, namely :—Michael Belcher, Esq.,
Thomas Bouch, Esq., G. H. Horsfall, Esq,, R. L.
Jones, Esq., E. T. Kearsley, Esq., William Smith,
Esq., and Charles Turner, Esq. ; resolved, that the
retiring directors be re-elected directors of this
company." Mr. Johnston remarked that all the
retiring directors were well known to the share-
holders, who were equally aware of the efficient
manner in which they and the other directors had
conducted the company's business.
Mr. LANCASTER (of London) seconded the reso-
lution.
The CHAIRMAN, in putting the resolution, hoped
that Mr. Titherington would not next year move,
and that Mr. Younghusband would not second, any
addition to the dividend. He did not think it would
be wise to declare any additional dividend until the
reserve fund (after calculating for the £75,000 loss)
amounted to something like £200,000. They should
certainly not look forward to an increased dividend
for next year, and probably not for the year after.
The resolution was then put and carried.
The CHAIRMAN, in moving the re-election of the
auditors, said—lt is not for me, as chairman, to say
anything about the auditors, who are put there to
see that the accounts are kept correctly, and that
the finances are properly applied, but as far as the
opinion of the board is concerned, the auditors fully
do their duty to the proprietors. (Hear, hear.) The
following is the resolution :—" That Wm. Tither-
ington, Esq., and John Dickinson, Esq., be re-elected
auditors for the ensuing year."
Mr. CORBALLY seconded the resolution, which
was unanimously adopted,
Mr. CARTER inquired what was the amount of
the reserve fund ?
The CHAIRMAN—It was £166,000 on the 31st of
December last ; and the £37,000 which will remain
at the credit of profit and loss, after payment of the
dividend, will raise it to £203,000. Against that
must be set the loss of the £75,000, and the other
losses ofthe year. These losses are primarily charge-
able upon the profits of the present year ; but the
loss of the £75,000 is an exceptional and extraor-
dinary occurrence, and the business of this year will,
in all human probability, show a certain amount of
loss.

Mr. CARTER—Does the amount received for pre
miums, as stated in the roport, represent a net
amount, after providing for re-assurances ?
The CHAIRMAN certainly. _ _ _

Mr. TITHERINGTON—In acknowledging your
kind confidence in re-electing my colleague and my-
self, I assure you that to the best of our ability we
have discharged our duties faithfully in the audit-
ing of these accounts. Our position is somewhat
like that of detectives ; at all events we are here to
see that everything is right. (Hear, hear, and
laughter.) We have, in reply to the summons of
your manager, which I think it is but right in
justice to him should be read, had access to every
document connected with the company. Mr.
Titherin4ton here read the letter;—
"Royal Insurance• office, Royal Insurance-buildings,
North John-street, Dale-street, Liverpool,
June 25, 1861.

" Dear Sir,—Will you oblige Me by your attendance to
audit the accounts of the company for the second half of the
past year, at:your earliest convenience?
" Referring to our letters on former occasions asking for
the strictest scrutiny iato the accounts and examination of
the securities held by the company for loans and invest-
ments and cash vouchers, 1 shall be much gratified by your
examination of these documents on this occasion, and, in-
deed, on the occasion of every future audit likewise.
" I trust you will be enabled to name an early day for the
commencement of this work.—l am, dear Sir, yours truly,
(Signed) "PERCY M. DOVE, Manager.
" Wm. Titherington, Esq."
I should wish it to go forth (he said) that we have
access here—ready access, willing access—given to
us to every document connected with the company,
and we have passed again under examination every
Toucher, every deed, and every certificate (and it is
matter, I assure you, of no light moment togo through
them all in the case of a property represent-
ing something like £850,000), and I have
great pleasure in testifying to you and the proprie-
tors present that we found everything in the most
perfect order, and perfectly correct. (Applause.) I
only regret, gentlemen, that I had to take excep-
tion ; but it was merely out of good feeling, and
knowing that the company could afford a little
more money.
The CHAlRMAN—Gentlemen, I should like to say
one word. I can assure you that the directors feel
very sensibly the able and efficient manner in which
Mr. Dove has discharged his duties, under very
trying circumstances, during the past year, and
particularly at the period of the late fire, when his
opinion and his judgment were looked up to very
much by the associated companies. Allow me to
move that the thanks of the proprietors be given
to
ef
theth e manager,company,
deputy
but
particularlymanager, t
and
eMr. Dore, other
fe
officers
for
the able and excellent manner in which they have
managed the company's affairs. (Applause.)
which Nl Il rr .
was
1 tucNyG
carried H r
ouos
Tne
Ean rra
eD i m s
ee
uc
so
lnyd. ed the resolution,
Mr. Chairman, and t.coteosataThicineodhgn—epfir Irres
meppmaer mai
it obligedremarks
se
forwhitchht
eo
chyoaomvu
e_,
1 l
falleni in e n
ft r paidem t
the
eo
as
s chairman
respects o
thenly company servelnaree
Iyaerits.muatnurdreefecriaormlei
career
rhthoett
its loss of £75,000.Pe May, ina
ways, be useful in securingm
increasedma prosperity. (Hear.) Let the true principles
and uses of a reserved fund and the necessity of its
being fully anip!e once be fixed, as it will be after the
day's proceedings, on the minds of the proprietDrs,and
I am satisfied the company will continue to be one of
nl yt
royn. e '3
If
the
mm
oosstt ,
have no doubt, I say, t in future years, and
fisrume
el ye s es scut ai b
cl ios
mh epda,
hat nai se
si ti
ni s
tcheer teaoi
un
through a lengthened period fir beyond what any
of us shall live to see, it will be second to none in
its permanent hold OH the confidence of the com-
munity. (Hear.) Without entering on the pro-
cesses by which it is calculated the end may be at.
tained, -I may venture to state that long and re-
peated reflection on the position of the company
since the great fire has brought conviction to my
mind that the prospects of the future were never so
bright for us as they are now. The fire branch, as
you have heard, has arrived at a magnitude which