Daily Kennebec journal., 1889-01-30

and card from Clerk announces this D.
cisiea- Let the Lord be pfaised-
LsosAnD SwErT."
The telegram rsfefs to the famous litiga-
ton between our Company and the heirs Of
the late Hon. Stephen A. Douglass, Who
claimed that the property having been
slienated from the uses for which il vss
first intended, it reverted 70 them, and rot to
the Insurance Company. The decision Of
the Court referred to above (which n .
unanimous decision Of the whole court sets
aside such claims, and established an asso-
Int title in our Company to this valuable
and that With the University proper, have
through this decision of the Court been
placed in position to sell this property, and
put the proceeds at interest for the benefit
Of the policy holders, as we'll as relieve the ex-
pense account Of the Company from what has
been heavy burden
The policy -holders are under great OBJ
legations TO the Comptny's counsel. Messrs.
Leonard s~ett and James L. High, for the
ability care and skill, with which they have
managed this litigation which has beer SO
desperately pressed BY the opposite parties.
FISAscIAL PoLicr.
The policy OF the Company of late year.
ha. been TO accumulate q large proportion of
its funds in what are known ~ quick as
sets" namely, bonds. stocks and other Sc
curitles Of like kind nearly one-half Of its
present sssets being now composed Of these
securities: and il 10 worthy Of note that not
q single one of these investments held by the
Company 10 in default of its interest; and
Notwithstanding the large decline IN securitle.
-. Il 4..~f .bl tn r.4fn
that the increased market value of securities
over cost during 1885, above book value for
1887. was s35 ,4ss "a. This includes the in
creased market value in lses over 1857 of
bonds 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 con-
solidstion, and that end having been attained
it is intended to apply future energies largely
TO the procuratlon of new business; which
in its turn means increased assets, etc, and
the statements Of the company herewith ap-
pended show how fully this expectation has
been realized by the business done by the
Company in 1888.
DIviDEsDs.
The diyii iiend question in Life Insurance
seems to be very little understood by policy
holders. The basis of all Life Insurance
eontract-old line companies-is fixed by
Law. One of the essential feature 10, that a
certain portion Of each premium paid into the
Company shall be laid aside and accumulated
At four per cent. compound interest, SO that
BY an accumulation of reserve-fund from
the premiums paid and interest earned, the
4 -. IL. hapa tn "
creased.
Iwelse OF fifteen years ago SIX per cent
city bonds sold below par and many OF them
are now selling at from twenty to sixt! per
/ cent. premium; railway bonds yielding seven
and eight per cent. were selling below par,
and now sell (if they have long time Il
run from fifteen to forty light per cent. pre-
um. making the net income realized from
these bones III many cases less than four per
cent, very few first class railway bonds, and
I n, hrst-class city bonds can now be pur
chased to pay a rate of interest much above
four per ceLt. while bonds of such cities as
New York and Boston sell at price that
Yields the investor two and three quarters to
three and three quarters per cent. per snnum
/ Only about twelve or fifteen years age
mortgages could be placed in New York al
seven per cent aud IN the west at from nine
10 twelve per cent. whereas now, tirst-clas.
mortgages in New York are placed al foui
and one-half per cent, aud 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 deposltor.
far differently from what it is by policy hold
ers of Life Insurance Company, and for
this reason: Assuming that twelve 10 tiftcei
year, ago "a Life Insurance Company receive,
on its western investments eight per cent ant
within year that rate was reduced to sever
pei cent then, as the insurance company
has to lay aside four per cent. of this sever
per cent. for a reserve, the reduction ot u
dividend paying power has been--not one
eighth, but one-fourth Then if the mex
year, interest dropped to SIX per cent the
dividend paying power of the Company wouit
be reduced-n0t one-fOurth but one-half
Then next year, if the interest dropped tt
five per cent, the dividend paying power OF
the Company, from profits from this source
would be reduced tree fourths, not three
eiphths ~ the ras,. of the JSagilgss BaQk
be thls The Savings Bank would be ablt
to dHsie among lis deposltors five per cent
interest receipts, making it a round DIVIDEND
OF five per cent upon the deposits while the
depositor in a Life Insurance Company
namely, the policy holder, would have tn.
bene iit Of the same five per cent, but foul
per cent of it would 60 to the reserve fund
and ouy the remaining one per cent be avail
able for dividend paying purposes.
A reduction of two per cent on interes
income from the above causes on the asset,
of this company would amount to abou
Sl20.000, and that of Itself would make
nearly twenty per cent. divide nd OH premium,
paid by cur policy holders
The OUTLOOK.