The Portland daily press., 1889-01-30
NEW ADVERTISEMENTS.

N
penslve to the Company, 1t has now through
ILLS uecislOn OF the Court been placed In
position 70 sell this property. and put the
proceeds at interest for the benefit of the
poilcy-noiders, as well as relieve the expense
account OF tne Company from what has here
tod0re been heavy burden.
a., Inc poncy-holders are under great obliga-
lions 10 the company's counsel, Messrs.
Leonard SWEET and James L. High, for the
aDinty, care and skill, with which they have
managed this litigation which has been so
desperately pressed by the opposite parties.
FINANCIAL POLICY.
The policy Of the Company of late years
nas Deen 70 accumulate large proportion of
lts FUNDS In what are known as "quick as
sets namely, bonds, stocks and other securi-
Ties OF IKE kind, nearly one-half OF its present
assets being now composed of these securi-
YES ana Is worthy Of note that not sin
gie one OF these Investments held by the
company Is in default Of its interest; and not
Mltnstanding the large decline in securities
IN general during 1888, we are able to report
tnat tne increased market value of securities
I Sss1 Cost curing 1l 1883, above bookvalue for
creased market value in 1888 over 1887 OF
ponds sold and purchased during the year.
FUTURE BUSINESS.
AS we remarked last year, the policy pur-
sued by the present administration as out
lined above, has been directed to inherent
consolidation, and that end having been at
talned T. Is intended to apply future energies
largely to the procuration of new business I;
which IN Its turn means increased assets,
ETC., and the statements of the Company
herewith appended show how fully this ex-
pectation has been realized by the business
done by the Company In 1888.
DIVIDENDS.
The dividend question in Life Insurance
seems to be very little understood by policy
holders. The basis of all Life Insurance
contracts-old line companies-is fixed by
law. One OF the essential features Is, that a
certain portion of each premium paid into
the Company shall be laid aside and accumu-
lated at four per cent. compound interest. so
that by AN accumulation Of reserve-fund
from the premiums paid and interest earned,
the premium charge will not have to be in
| creased.
Twelve or fifteen years ago six per cent.
city bonds sold below par, and many OF
them are now selling at from twenty to sixty
per cent. premium; railway bonds yielding
| seven and eight per cent. were selling below
| par, and now sell Qf they have a long time
| to rum from fifteen to forty weight per cent
premium. making the net income realized
from these bonds in many cases less than
| four per cent; very few first-class railway
bonds, and no frst-class city bonds can now
be purchased to pay rate Of interest much
aDove TOUR per cent, while bonds Of such
SAsAOo 40 wow lOlh anu DOoLUU sell at n pTlcf
| that yields the investor two and three. quar-.
| annum.
Only about twelve or fifteen years age
| mortgages could be placed In New York al
seven per cent; and In the west at from nine
mortgages in New York are placed at fouI
and one-half per cent, and in the west al
| from five to six per cent. generally.
In the case Of Savings Banks this reduc-
| ton OF interest would be felt by depositer:
| Tar differently from what 1t Is by p0licy-hold
| ers OF Life Insurance Company, and fol
this reason: Assuming that twelve or fifteen
years ago Life Insurance Company re
| ceived on It's western Investments eight per
| cent and within year that rate was re-
duced to seven per cent; then, as the insur
ance company has TO lay aside four per cent
| OF this seven per cent. for reserve, the re
| duction of Its dividend raying power has
been-not one-eighth, but one-fourth. Then
| II the next year, interest dropped to six pei
cent. the dividend paying power of the
but one-half. Then next year, II the inter.
est dropped to five per cent, the dividend
| paying power of the Company, from profits
from this source, would be reduced three
fourths, not three-eights, as in the
position of the two institutions would b
this: The Savings Bank would be able Il
| divide among its depositors five per cent. in
| terest receipts, making 1t round dividend
| OF five per cent upon the deposits
| while the depositor in a Life Insurance
| Company, namely: the policy-holder, would
have the benefit Of the same five per cent
but four per cent of it would 20 to the
| reserve fund, and only the remaining one
| per cent. be available for dividend paying
| purposes.
Areduction of two per cent. on Interest
| income from the above causes on the asset:
| of this Company would amount to abou
S120, 10000, and that of itself would make
| nearly twenty per cent. dividend on pre-
miums paid by our policy-holders.
THE OUTLOOK.
Finally, the result of the past years bust
| ness evidences strong financial condition
| The increased income from premiums, the
increased volume of insurance in force, the
mortality experience being largely inside
| the Table Rates." and the sales of rea
| estate and other securities at prices in exces:
| Of the book valuation of December 81, 1887
are all proofs Of careful management of the
| Company's affairs in each of It's depart
ments.
On this record we go before our policy
holders, feeling we shall have their unquaii
| fed endorsement of our management of the
Company in the past. and their hearty Co
operation in still further extending the use
fulness of the Company. by large additions
| in 1889 to the already handsome business on
| the books of the Union Mutual.