Morning journal and courier., 1882-04-03
Monday Morning, April 3. 1882.
THE TNTEEEsTP PROBLENI.

i One of the Hartford life insurance compa-
 nies has decided upon a very important change in regard to the conduct of it's future
 business. Up to the present time the life | insurance contracts have been based upon the assumption, established before 1850, that money invested will surely per cent. Hereafter, all new insurance contracts en- tered into by this company will be on the assumption that the money invested will earn per cent. The company at the same time changes it's calculation of the rate of | mortality. Heretofore the English tables | have been used We have now American statistics, ampler than those the English tables are based upon, and, of course, better applicable to American calculations. These show less rate of mortality than the English tables, and modify somewhat the scale of charges for insurance.
 The President of the company Colonel Jacob L. Greene, wrote a letter to the di- rectors recommending 9 per cent cacula- tion of the rate of interest, and he said some things in it which are interesting to all who engage in active business or have money to invest. He referred to the radical changes which have taken place since 1916 in all our conditions as to population, production, transportation, commerce, manufactures, credit accumulated and accommodating wealth, and said
 The result as to the rate of interest on that class of capital which, like ours, seeks the safest investments, has been very great reduction. While still able to investin manJ good securities at rates above 4 per cent, and likely tO he for tO many of those most desirable for long in vestment, on account of safety, either yielding less, as United States and some state bonds of best repute; or from nothing above that rate to very little above as most state bonds, municipal bonds of best repute, and railway bonds of the highest class; and the strength with which they are held is most significant. Real estate loans have experienced as great relative change; the present actual rate on best securities ranging low as 1 per cent in the largest eastern cities.
 The national debt is being rapidly paid; State debts as whole decreasing fast; m 1nicipal bonds of the best class are deereas- ing and thus vast body of funds is being forced out of those investments, and, with the increase of wealth since liquidation, is seeking safe investments faster than they can be provided by legitimate enterprises. This intensifes the present effect of other CduSSS upon luS Edt0 OI lutSISSIs duu ID 1lhSlJ to have an important effect on prices of real estate.
 Outside our own peculiar resources Is the important element of foreign capital, coming in increasing amounts. The whole world is becoming very familiar with us, and has growing faith in the substantial basis of our legitimate undertakings, and in their conl- parative exemption from political dangers This tends toward a reduction of our interest rate to that Of the country with which we are in most intimate connection.
 The contingencies are not few which may check the increase of our own surplus wealth and of foreign investment here, and the con sequent downward drift of interest, and set 1t the other way for longer or shorter per iods and we cannot doubt their operation to a considerable extent. But we must calculate not by years, but by generations; and the seemingly permanent and controlling condi- tions for average steady increase of that class of capital which seeks perfectly safe and long investment, are clearly visible in our growing population, production and com merce; and their possible effect is most clearly shown by the course of financial events since liquidation began in 1873. No present reason can be assigned for their per manent failure to act. It seems prudent to regard these chiefly; and to regard the backsets and fluctuations from contingent though probable speculations infatioDs, losses, bad years, political disturbances, wars, etc, as eddies on the main stream. certain to come and go in the course of years, but so long as the sources of the stream continue, likely to produce but a limited effect. Our financial history from 1861 to 1873 must be regarded as an episode of an entirely ab- normal character. Through liquidation, in- dustry and thrift We have returned to com- paratively normal but new conditions.
 Considering these and other circumstances, he believes that it is simply reasonable pru- dence to base the reserves of the company upon the assumption of per cent. interest, as the highest rate on which it is perfectly safe to reckon; as the only one reasonably sure of allowing full liberty of selection among the best investments and to yield at least some margin of actual interest earned.