The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-11-03
LIFE INSURANCE FLAWS.
1HE OAKs IND rHE MUSHROOMs-
THEIR PRECISE STATUS.

distrust IN tho public mind concerning an inter-
Get which Is vital IN its connection with scores
Of thousands OF families throughout the ltnd.
A representative OF THE SUS called on Messrs
Winston and Hyde as two men In whose state
ments the public feel interest, In relation to the
subject OF life insurance in general, with the
following result.
Mr.. Frederick :. Winston was found sitting
In his cosy once, benevolently beaming on
disappointed applicant for modest loan OF
$1,000 on go 90 bit VI property. In response
TO n series OF pertinent questions. Mr.. Winston
said: " rnere can be no such feeling In the
management Of a great company like this, a.
delight at the misfortune or nj shlp Of another
company We naturally wish well to all insttu-
items that are properly managed. We have a
great interest In the general success Of life Ia
snraDce. and are not blind to the fict that in
certain quarters It Il threatened with serious
disaster. This is time Of unusual depression
IN business. and 1t Ia very lively work, even or
the beet situated companies. to keep up their
Hne OF tr de. This IS due to two causes.
l. The want OF cash from premiums on new
policies.
20. The greater extent to which policy holders
are compelled to sell their policies for bread and
butter for their families.
"FOr instance. last quarter we paid over al mil
lion and quarter Of dollars for surrendered
pcncles lnere was mover anything ike IL. III
this way better than any other you get an idea
Of the condition u the country. The stsgna-
ton In business and want OF employment are
felt all over me country. IL Will be seen that
the funds OF this and other companies increase
more slowly than In other Years. Why.
actually di counting all our obligations. incud-
Ing endowment policies due ~ the mex. hvs
years, at the rate Of seven per cent. per annum.
Here 10 our circular to that effect:
CIRCULAR.
This company Is prepared to discount at seven per
suce pyhces wnicn are regularly ncid and wnIcn cal
IL viii also discount those endo sment assurances
when mature ~Rn me next I'VE years char ing the
estimated AZ net rae and dlseounting at seven per
fSs tns ns me- 81 pS p9Sy iq Pe. mo-
"This ia known as a @ sh company, that Ia. we
take nothing but casa for premiums. At the
end Of the year we declare our dividends, as all
purely mutual companies do, ~ that the policy
FOLDERS cuilly oenent 10y All the profit made.
Last year we divided si,OoOOO0."
H-porter-DO the policy hO.ders always take
the money IN money!
Mr.. winston--Ah. that's point TO which 1
wisn to call your attention. they have the op-
ton OF taxing II IN cash to pay their pre-
NUNS with, or Of purchasing new insurance
with IL, which IL added to the sum In.
sured. Ordin iriy, small proportion take
the money for their premiums, but the
sncs. During the past three years, aud increas-
ingiy eacn year. they have used the dividends
TO pay their premiums with. Ihe consequence
Is that tue company gets less cash. and tnere is
smaller addition to the general fund Ibis.
a. bave said, Is "a mutual company, aud no ono
j. Interested in All ifs to the amount Of Que
dollar outside Of its pOllcy holders. therefore,
We desire to secure perfect equity In all our
dealings, and VIII, these people who are pressed
to sell their policies come To US, We ave them
fir ana equitable surrender value or those
who sell, very many are In good health: Of
course. a man in poor health would not sell
unless compelled to bv nscessi ty, aud our pur-
chase OF their policies reduces somewhat the
standard OF our insured lives. should say tnHt
nj least 70 per cent. Of tuose who sell are realty
In good health, auu THESE careful purchase,
Ngh naN an AZ n san IA ia
lessen the accumulatiDns. Very lew con yars
tveiy stop without paying premiums. D IT In
creased accumulations are compardtivey loss in
Increase tn an they 10. lnerly were, though they
are stll very great. Last year thr accumulation
- 2oi ,5l2. tue yeaf before SjIvt,JOJ, SIN al
difference to De sure, nut usually the Inference
l. greatly the otnsr ws, Tue reason Is, tnat
holders largely used their dividends for present
premium demands. instead u getting audi-
tioDa assurance, aud tue large SUN PAID Tor the
purchase Of SURE ndered policies.
Reporters tue general business lessf
Mr. MInston-Our general business was never
on more so,,d or more saost,"tid bass taan
piYs funds are less in proportion 10 our assets
than ever before.
tut u,sh under your control. How do you III
vest II, AMI Is there any difference between your
methods and that u the companies Ia whom
pdbnc confidence Is lessenedf -
lar. WInston-Well. We have SsO,OOVOO IN
bones anu mortgages. Of when amount over
t1OOOOO are on properly IN and aDout New
YORK. OF tins $6l,UJOVO only ABOUT SlO,VbVD
were invested IN tue years ls56-1s. About
SIUuIIUJ In United states stocks. We are also
holders Of bosom, Providence, aud Siu Fran
cisco stocks. On the bonds aud mortgages We
place an added security u $JOVO'Uv hre insu-
rance. Now, as TO the difference. Our charter
limits us In loans to ~ per cent. OF the
value OF the property offered but since specu'
lative values began to tie placed on property, We
resolved not to loan ON unimproved property.and
reduced the sfOportion of loans - ~ Dor cent.
ins.ead Of 81 per cent ihis mas been our stand
ard for six years, anu nothin. Is on,idered an
less IL be not only improved. but likely 10 rise in
value. Other comp mics may loan more money
on less valuable prOeprtN-nence, trouble III tue
hour OF need, ana emuhirassmeht always
have been compelled to ioreclOse good de i
although 1t Is the pOicy OF tue COMPANY % alu'
rather than inJdfe, aud 70 vat III ctsos whsrs
interest IS pAl. and delay can be Uenenciai-anu
our most recent examination SHOWS that
we owned OF tUrecloHed pfopofty nut seven
e,vhts Of one per cent. Of the amount
10 ned. 1t Is possible, indeed probao'e' that II
(lture f1rseiOsures We may nave to pure las e
but do not believe tue proportion VIII Dc IL
Kepurtcr " Lat per cent do YOU get on loans
MIR. Winston-Aii our loans uat W per cent
The accounts are made up seuI-annuailY, ane
~ the sent .luDer cole tlun 90 Der cent Mas
prompth PAID, aud "A RE balance Is good. ~
course grant tine when II Is sensible sne
proper. In order To keep ali our surplus em-
IlOVed we have been urged . charge less 10
Ierest, but DelieFe thcse hard lnes re not e
last when business REEVES tuere viii be de-
uIand for all tuc money there Is. 80 We became
heavy purchasers OF stocks. aud tue Increase,
valua " what We hOld, over what we gave Il
{lI6,NH.l9 our total assets are uVet eiguty
Reporter Vel u one probably has any doub
as 10 the old Mutual, Dut NOW bout tne wlle
spread dstiustf - yod believe AL other CON
games are ~ careful, AID mat ~ more than 4
per cent. can pe ND on pr'"ertif
Mr.. Winston-N ell, tue lHws permit them I.
loan twU-thirus on bond and NOR = ige. aoih'
have taken advantage ~ TIM, nd nav IA
yauoed ueYOnd tue present value ~ properly
Tue prudenty managed companies have NO
zone bsYJuu - per cen
Reporter Do you an ,iclpate many disasters o
Mr. Wnston-when entered this Occupation
twenty four wears $50 WAS YerS enthusiastic
tfDIt IA la "a ~ iah