The Portland daily press., 1873-08-28
MISCELLANEOUS NOTICES,

To the Editor of the Portland Press.
An advertisement has lately been inserted in
several of our leading newspapers, the intent of
which is chiefly to injure the Equitable Life
Assurance Society.
Inasmuch as reference is made to the last re-
port of the Company, as its Actuary l feel it
my duty to notice it. The advertisement, com
mepciDg with some general remarks on life in
surance, soon enters into comparison of the
mutual and joint stock systems, much to the
advantage of the former and then goes on to a
comparison of results, taking the Mutual Life
Insurance of this city as an example of the
joint stock system; making it appear by neces-
sary implication that the Equitable is subject
to all the evils which have just been asserted to
belong to the joint stock class of companies.
In reply to this, it may be stated That in the
year 1853 the Legislature, in their wisdom, and
after experience of dangers attending the SIM
pie mutual system, passed a law that no new
| life Insurance company should be started with
out first deposiring with the State one hundred
thousand dollars as guaranty for their poll
| ces. This in effect prevented the formation
| thereafter of any purely mutual company, and
no company has been founded since, in the
State, without stack capital
When then Equitable Society was founded,
this law was ia force, and its promoters had to
raise the amount named by the State by means
of stock capital; but, to make it clear that
profit on their stock was not their motive in
starting the Company they adopted the princi-
pie in their charter-a principle not adopted by
any company previously formed, and by very
few formed since-that the dividends upon
their stock. which, in obedience to the enacted
wisdom of the State, they pledged as glaran-
tee of theiI good faith, should draw legal inter.
est only (Which by investment it reproducesl,
thus cutting themselves off from any large div
i6enis thereafter, and securing to the policy
holders all the benefits that could arise from
the mutual system, with the added advantages
of an outside amount pledged for their security,
and the prudent management of the Society.
In respect t. the numerical comparison made
in the advertisement, it is to be remembered
that ratios of income and expenditure are af
fected very materially by the comparative age.
extent of business, and other circumstances of
the two companies compared. The Equitable
Society has for several years past done more
new business than any other life COMPANY in
the world, aud its expenses should be larger,
comparatively, than those of other companies
whose new business bears much less proper
ton to their old.
But it is to be remembered, that, while a
| large, new business is expensive in the obtain
| ing, it forms the foundation for substantial
! growth, and permanent reduction of expenses
| in the future. The Equitable is less than hall
| as old as the Mutual Life, and brief compari-
son between its present state and the state of
| the Mutual at the same age. will perhaps show
| more clearly the relative success of the two
companies, and give slight glimmering of
what will be the condition of the Equitable
| when it has attained the present mature age of
| the Mutual. Let us consider the standing and
| results of the two companies when each had
| been in operation about thirteen years: