The sun., 1873-08-23

To hs Editor OF The Sun.
SIR: An advertisement has lately been
inserted In several Of our leading newspapers,
the intent Of which Is chiefly TO injure the Equi.
table Life Assurance Society.
Inasmuch a. reference is made to the last re-
port Of the company a. Its Actuary feel 1t nv
duty to notice II. The advertisement, COM
mencing with some general remarks on life in
surance, soon enters into a comparison Of the
mutual ard Joint stock systems, much to the adj
vantage Of the former, and then goes on to
comparison Of results, taking the Mutual Life
Insurance Company OF this city as an example of
the mutual system, and the Equitable Life as an
example of the joint stock system making 1t
appear by necessary implication that the Equita-
BILE is subject to all the evils which have just
been asserted to belong to the Joint stock class
Of companies.
In reply to this, II may be stated that in the
year 1883 the Legislature, in their wisdom. and
after experience of dangers attending the simple
mutual system, passed law that no new life
Insurance company should be started without
fret depositing with the state one hundred thou
sand dollars guarantee for their policies. This,
In eject, prevented the formation thereafter of
any purely mutual company, and no company
hh seen founded since, in the state, without q
stock capital.
when the Equitable Society was founded, this
law was In force, and Its promoters had to raise
the amount named by the State 10y means of a
stock capital; but, to make It clear that profit
on their stock was not their motive in starting
the company, they adopted the principle in
their charter-a principle not adopted by any
company previously formed, and by very few
formed sincc-th that the dividends upon their
stock, which, in obedience to the enacted wis
dom Of the state, they pledged as a guarantee Of
their good faith, should draw legal interest only
(which by Investment 1t reproducesl, thus cut
ting themselves OH from any large dividends
thereafter and securing 10 the policy holders all
the benefits that could arise from the mutual
system. with the added advantages Of an out
side amount pledged for their security, and the
/ prudent management OF the society.
In respect to the numerical comparison made
In the advertisement, 1t Is to be remembered
that ratios of income and expenditure are af-
fcctcd very materially by the comparative ace.
extent Of business, aud other circumstances Il
the two companie compared. The Equitable
Society las for several years past done more
now business than any other life company in the
world. and tts expenses should be larger, com
paratiyey, I'll IN those uf other companies whose
new business bears much less proportion to
their old. But it is to he remembered that,
while n Large new businer, is expensive In the
obtaining, II forms the foundation for substan-
tial growth. md "a permanent reduction Of ex-
pen~es Ia the future. The Equitable Is less than
half as old rs the Mutual Life, and brief COM
iaris'n between It's present state and the state
of the Mutual at the same axe will perhaps
show more clearly the relative success If the
two companies, aud give a slight glimmering Of
what will be the condition Of the Equitable
when IL has attained the present mature age II
tie Mutual. Let VS. consider the standing and
results 20 IN" two companies, when each had
pccf In operation about thirteen wears: