Evening journal. [volume] (Wilmington, Del.) 1888-1932, 1892-02-04

absolute loss to us, the efore, was approx
we charged OF and entered the property in
our annual statement at the cost of the pres
ent building and ground. The figures Sa29,-
O66 the appraiser Of the Insurance Depart
ment refused TO accept $4,000 was
named instead and entered In the Insurance
Departments findings. 1t is proper to
add that on our present basis OF rentai'
this property will yield, when fully rented,
net income of six and n half per cent.
on the value placed upon 1t by the In
snrance Department, and would yield lit
tie more than four Yer cent. on our valuation
(S729 Qd6l. 1 do not desire to evade full re-
sponsibility for myself and the finance cora
mittee IN this matter. The claim of infall
billy In the investment and the rainvest.
ment of hundreds of millions Of dollars Is one
nave ney.r set up -.-s-.--....
EsH The Park Property.
This property swas purchased some years
/ ago under the supervision Of our chairman Of
our finance committee, who was on the
ground at the time. His investigations as to
the value OF the property were most search
/. e, and the purchase was made with all due
care. That the rental value Of the property
has since deprecated Is true and that there
I is an apparent loss Is true. butif the Super
intendent had not only secured an appraisal
1 OF the value Of ithe property,sas it now stands
| but also had investigated the value of the
| property when II was purchased, he cou q
/ have fully satisfied his duty MS an examiner.
and at the same time eould have given you
! a satisfactory reason for the original price
paid. But no such Investigation was made.
| And aa his indlngs.eeem TO do MS an injustice,
| not only as above cited. but also in the value
| placed upon the property now, the matter
| viii bear word more In explanation.s
1t was brought to my notice. during the
/ Superintendent's investigation that the fig
urea supplied by the Department OF Taxa
| tion Of the FrenchGavernment on the request
represented valves fixed solely for its par
| ticular purposes. Our manager at Paris with
| o great deal Of difficulty succeeded In getting
the Credit FOncier, the largest Institution OF
/ hFnnFa a
| tion OF which IS well known throughout Eu-
rope, to have valuation made OF our prop
erty This Valuation WAS made with the
greatest care BY two Of the most competent
and experienced inspectors.
The estimate OF the inspectors exeee the
! figures Of the French Government by $4,000
| and their estimate Of its prospective value,
| based on improvements certain to be made
by the city Of Paris, exceeds the figures
| adopted by the superintendent by 1880 %. As
| ! understand i, the variation IN the superin-
| tendents figures from the actual value OF
this property y similar TO the loss which
| would appear If the home Office building of
the Equitable Lite Assurance zoe ETY. should
| be entered in a schedule of ita ass cts at three
| millions eight hundred thousand dollars, its
| value for purposes OF taxation, and not at
fifteen millions, it's books value. To place he
! property of The Equitable in schedule of it's
| eleven millions three hundred and forty
/ thousand dollars would be so unjust as to be-
come absurd, yet an exactly similsr thing
| seems to have been done In this case.
| OuE WbhteEn buildings
The report Of the superintendent of Insur-
rnce values The office buildings recently
erected ly US in Minneapolis. St. Paul Kan
sas City and Omaha at their cost to sthe COM
pany, but as his opinion Of the wis iom OF the
investment seems to be uncertain, as this
language indicates: "There 10 no immediate
prospect that they (the buildingsl Will prove
as profitable "a the Investments OF life tnsur-
anee companies should" desire to offer a
word In hat come ton. There ara two rea-
sons why the immediate income from these
properties is sma ller than we may fairly ex-
peot to receive Ia the future. First the
buildings were begun under normal condi-
| tons, but were completed in the midst of a
period, of business depression in the -four
cities mentioned, a4d accordingly we have
had fewer tenants and lower rents than We
may reasonably expect hereafter. Second
the buildings were located with q view 10
cities. Amy one who has observed the rapid
| growth Of the West will appreciate sht
necessity Of considering the future even more
than the preaentin the location Of an Once
| building. Present revenue WAS. therefore
not so much OF consideration as that
the building should be so located that
| the future may tend constantly to increase
and not TO d crease, the rent producing power
and value Of the properties. Gou Will under.
stand, of course that investments OF thi.
I character are valuable because the element
I Of risk In REIMBURSEMENT is practically elm T.
mated. The none expended IN this way Is
: | fixed Item fora very long period OF years. IhS
. fun wisdom, or folly, OF such transaction 4
/ developed only by time 10 will be inter.
| ested to know. however, that one Of these
| on D. e money invested, and am further Ad-
I vised by compe ent authority that since The
date OF our purchase of the real estate Oh
which these buildings are situated, there has
been net appreciation in its selling value OF
five hundred thousand dollars, as shown 10y
appraisala made at the close of 1870. and by
, purchase OF adjO ming property siuce made b.
other people IN entering these properties OF
. our books and In submitting our estimate @
Vsfa1f
accepted, we did not take tlts evident inCceas
4 | into account. AS evidence that the erection
/ Of this chain Of Western buildings was vel
! consider rad point you to the fact that tn
Z investment was entered upon after discussion
! and approval by the Board Of trustees. 1t /
/ my theory that il is only fair to the member
of company Ike this, the nature Of who's
business makes large accumulatiOns Of none
necessary, that the money to be inve tel
should 20 as far as ID practicable to theses sec
? lions of the country whence 1t emanates. Il
this ca q a part OF the money received was In
We. ted among the people who pad It..
The only theory on which theee building
can be Patsd as bad or even doubtful invest
menta Is one which discredits the futur
! growth Of the Western states. The repor
, notices that las advertisements Of Nhe CON
pany they Uhe butldings) no doabt have
Z considerable value y This Is eminantly true
The territory in which these buildings SO v
! especially 70 advertise the con pany include
I the States OF Minnesota, North and out
J | Dakota, Montana. Iowa, Nebraska, Kansas
: Missouri, Tex a. and Indian Territory.
E The people Of these states have cOnstan
I bushes and social intercourse with one O
? more OF the cities IN which the uildings hay
I ! been placed. The buildings have, therefor
become widely known for, as the Superin
tendent's report says; Zach II them form
| one Of the attractions Of the city In which
is located" Their influence upon the com
pany's business is extremely important.
value OF the Buildings.
I In 1888, the year before the buildings wei
4 begun, the aggregate new insurance write
! by the company in the territory In questio
1 | was ss.o47,2OO This aggregate has stesdil
I increased, until for the year 1891 II amounte
to s2s q,a54, which is the largest bushes
: that was secured IN that field during the yes
j BY any life insurance company And, NJ
= only was the quantity Of the business r.
8 markable. but its quality was such as TO Mah
| III most desirable in every way. Without N
. | buildings, II Is safe TO say such results COul
. not have been obtained.
Q may add by way Of general CONNER
q on real estate matters, that while the supe
= intendent notices that the company owns OF
2 hundred and forty seven parcels or rel
IS estate and has nine hundred other pare
Y under mortgage, and the further fac thu
4 these properties are scattered not o
y through many States OF this country, bl
r over two continents the nature OF his dut
II made II necessary, perhaps, 70 omit co mel
an the real estate G. ansactions in whiC
profits have be- realized and to contne hin
le self practically TO the our parcels which
K | discusses but your intt rests reach turtle
= and YOU will be naturally pleased to learn
y this way not only the rel ton of the item
J. criticized 20 the Companys total holding
IN but also the circumstances surrounding ee'
i case. IL these related fQcis tell you anythil
IL is the probable existence to-day or 81
r plus largely in excess OF Sl6UO,O00. We 9
1f accent the superintendent's figures, yet rs "
, and are peculiarly Interested IN the who
case we are permitted between ourselves
view the possible effect OF these facts Su
pofe for example. that the Superintende