New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1885-05-13
AN ENGLISH OPINION.
FIFTEEN PENCE FOR A TwELvE-PENNY
ARTICLE
CONNECTICUT MUTUAL LIFE INSURANCE COM
PANY OF HARTFORD.

From TIE RssieV. London, April 20, 1885.
On June ii, 1882, we published an article on
this company under the title "A New American De-
parture. IN which ventured to suggest that the
cent conversion of the to the necessity OF
per cent basis for their valuations which
read at first sight, being uncommony prudent step
TO ake but yet that it possible that there two
SIDES TO the question. II undoubtedly appeared most
far-sighted manGuvre to adopt the per cent basis
because 1t looked II the Connecticut Mutual
was anticipating I'm the not remote future
possibility OF being unable to get than
3 per cent interest its Investments; and from
this point of view the proposed in the system
OF valuation looked both sagacous and prudent 1t is
true that this hardly harmonzed with the principle
upon which the company had been making its invest
mens, principally out West, when considerably over
per cent aimed with the result of correspond
ing diminutOn in security. We submitted at the time
however with all Difference the experts who then sd
vised the Connecticut. that impossible to
that for the next fifty years rate of per cent I'M
obtanabe on investments in the United
States. We further ventured to state that no
financial authority In the United States
would express opposite opinion that then enunci
ated by ourselves Yet there point raised which
the policy OF the Of the Connecticut Mutual
made ineligible. 1t perfectly certain that the
policy-holders in the Office would find their bonuses
down very considerably indeed. and expressed an
opinion that the persons who took out life policies
In tile Connecticut Mutual would he persons OF
ceponaly happy and cOntouted dispositions, as they
would have to be cOntented with getting
less amount back for their money THAI they
would get in most American life Offices. Yet
We more than indicated that tho new policy holders
might be only too happy to consider that they help
ing to make the deficits caused by the past financial
administration Of this office, and further, that perhaps
when these deficits made up. large and ex-
cessve reserves might be accumulated for the benefit Of
their heirs, administrators and assigns But 1t was
doubtful whether the American people would care 10
TO pay ftren pence for twelve pennywOrh OF insurance.
and we In conclusion announced that we would await
the deveopment OF this phase OF the business. and
what its results might be the progress of the nst
tuition.
or course we are quite prepared to admit that 1t IA far
safer to wait until a thing has actually or before
one begins to prophesy about IL but the other hand.
there are some things which, In the cOlOquia language
OF acme OF modern authors, are dead sure" One
OF the surest things that had heard OF that
date was. that the business OF tho Connecticut
Mutual was most emphaticaly to be sdcr freed 10y the
adoption Of this most remarkable step backwards. We
think however that 1t nc all inproba that the
basis OF valuation OF the Connecticut Mutual
might have TO be- reduced considerably be-
low per cent, IN order to insure
the sovency of the office for it is apparent that
the company has been compelled to realize and In a
most Improbable manner upon large proportion OF
of s assets In real estate upon which is calculated
that not than pig cent Of the invested
can be reaizad every year, must necessarily make up
the deficiency from other source and what other
source can ne so ready to hand the premiums of
policy hOlders I These financial lambs tO he
brought into the od by the prospects held TO them
In increase Of sOvency OF hf Connecticut Mutual be
brought about by the adoption OF such excessively
safe basis Of valuation that ~ per cent. That
the new pocyhOders conspicuous by their absence
to-day is attributable to that feature human
pence for twelvepenny article. The puOlic 20
elsewhere for their insutances, and the mana
gers OF the Connecticut Mutual wringng
| their hands their unrealizable assets. and
/ their per cent system OF valuation.
Why under these circumstances the Connecticut Mutt
uHl-a company which l. rapidly slipping down the hill
which fails To ob,'in aPPrrcianie amount of new
buSnCss, which II known g. be loaded with vast guam
ti;y Of unreliable assetsshOud make up is mud "a
let out freely at u number OF prosperous New York
life offices IL OF those thin which IL Is impossible "a
understand. The only Ineligible explanation Is, that
Colonel Green anticipated that in the inevitable re-
oinder, his company would obtain % certain amount OF
cheap adveriiSng and 50 long a. his company was
talked about somehow. he practically indifferent to
what was thought Of 1t.