New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-01-31

have been intended to remain rs sucn uh'ii
the mortgageor might be able to remove them
by payment. Have We properly considered
what wOuld be the effect upon the
mortgaged interest, AMI by consequence
upon our whole community, II poHcy
were pursued leading to the liquidation Oh
the life insurance companies, the calling III
aud collection of the loans made up0n Doha
and mortgage, and the transmission OF tue
proceeds to tine other States and countries
from which they were darivcd1 Inc law
yers of the companies would be benehted'
and court receivers might obtain large ices'
Bnt the distress throughout the commu-
nifty would far transcend all the evn
which I'D to this time has grown out OF inc
misconduct of those who have had in charge
the weak and ill-managed companies which
have already gone down. Any coh''uei"oio
amount of forced sales upon foreclosure during
the present times would bankrupt the 'o'''
gageors in almost every instance, ana tne per-
manent Transmission out OF the State Oh sucn
an enormous sum would injure Its materia'
interests beyond tho power OF recupefa'ioh
during the present generation.
And yet the life insurance alarmists' DOM
interested and disinterestcd, honest and as
honest, are working to bring this trouble
shorply uuon us. Much depends upon. the
Legislature and the State insurance officials
"a 10 how and how soon it may be avcrted
If the examinations of the companies WHICH
have 40 properly been commenced, DE cur
ricd or with discretion ard discrlmiha-
ton, so rs to test with care anu
reason the condition OF the COM
panies, and the safety with which the pup
lie may deal with them; and if the bond ana
mortgage investments, especially upon fhrmlnS
property, be estimated in reasonable slnrit,
and tested by the good faith of the original
loan. and the suiciency of the security when
the loan was made, rather than by the present
anomalous standard of cash values, the public ana
the insurer will he satisfied. Should, however
the State officials in making their apprasaIs,
estimate the value of the bonds ana mort
cages bv a calculation of what so many NIL
lions of real estate thrust into the market Ill
this juncture would bring, they would inevlta-
bly, show necessity for the wholesale wlhd-
ing up of companies and general foreclosure
ofmortgages. A condition of dlstress might thus
be brought on such as has never been experienced
in the history ~ this State. AS Il rule, loans
upon farms or city property have been made
upon margins so liberal to carry them
safely over times of commercial distress Ike
the present, without need for slaughter under
foreclosure sales. Times like these, OF course,
diminish the margins, but in general the
actual value of the real estate still meets the
requirements of safety. Meanwhile the bad
times cannot continue always, and revival
must presently reinstate the original ample
margins.
The same consideration should also caution
the State officials against policy which would
require, under penalty of foreclosure, n general
calling in of portion of each loan, so rs still
to keep the loan with the same proportion below
the present cash value of the property as when
originally made farmer who has mOrtgaged
his land FOR the purchase money, or to provide
for its permanent improvement. does not often
have . reserve Of cash in bank ready to pay
as an instalment on the PRINCIPAL of his loan,
whenever called for. The calling in of snch
an installnient. even il his farm were in ord
nary times worth twice the amount OF the
mortgage, would result in ruin Tor himself and
family.
We think also that assuming the general
condition Of TIE company Itself to he mainly
and substantially Sound, the Superintendent
should arrive at his determinations i'm full
view of the feet that the tendency III orr COM
panics under wise management Is toward I'M
provement of their condition. The rate of in
terest which is taken as the basis of their
transactions is four and half per cent AS
the companies are receiving seven per
cent upon their mortgage securities, the
margin of interest is always working in
their favor. OF course this suggestion would
not apply TO companies which may be found
to be greatly impaired, but it should be
adopted in all cases OF substantial sOundness
as against policy tending to destroy con-
fdence and drive companies without any
absolute necessity into the hands of receivers,
mt the expense and TO the loss and injury of
innocent insurers. We commend this subject
TO the careful consideration of the State insur-
ance officials, the members of the Legislature,
and their policy holding constituents
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THE IASOLFENT LIFE COMPiNIES.
Long MS is The report of the receiver Of the
Il g., Ine