New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-02-23
NETWORK DAILY TRIBUNE, TUESDAY, FEBRUARY 49, 1897

sioW' let the overdue interest on December 81
1896, on nearly S36.O0O.O0O OF mortgage loans
was only $50 4G6 a. about $4,000 of which
has since been received
NO new defaults have occurred on our bonds.
the only case now In default being that OF the
SlWOoo OF bonds Of the Detroit. Lansing and
Northern Railroad now In process of reorganiza-
ton.
Real Estate Lonns.
The amount of old loans paid off and OF new
loans made was much smaller than usual; a
natural result of the conditions which made 1t
hard to get money to pay WITH and also made
less use for borrowed money. Old loans were
paid amounting to 5000. 1910. and new loans
were made for SJ.202.219SI
Foreclosures md Sales.
Other results Of the hard times we're the pro-
longed inability Of many to pay interest, COM
polling t. take under foreclosures properties
costing 81 233 O2S0S. and also a great dead
ness in the real estate market by reason or
which comparatively few sales made.
many inquiries after property. but most or them
were made In the hope that the pressure OF the
times might dispose us to offer at low prices.
We fortunately able to hold our property
until usual conditions restore usual prices
The advantage Of being able to do this is well
illustrated in our own history. Since 1879 the
company has sold properties which it had then
acquired under foreclosure at cost or
1881 .6lS.3O. In an examination made tna'
year. the Insurance Commissioner valued these
properties at ONLY S644J 49, an apparent loss
OF 81 ,OSJ, S45.3O But we did not sell at those
figures. We waited and sold as the market
wanted It, for IS. 81. 6JG.31 or 1891 U}SOl more
than the property cost. and S2,4'6'es3.3l more
than the Commissioners valuation.
While some of our properties will not proba-
bly, sell for as much they cost others VIII
sell for more. and. judging from past expert
ence. reason to apprehend any loss
this item as a whole.
bond Transnctions and Holdings.
There were paid off sold during the year
municipal and railroad bonds which cost us
$S64 633.30. and other bonds purchased at
cost of S7s3G1O44. The market value of such
securities in general considerably less on
December 81. 1896 than on December 81, 1S?o
The shrnkage our holdings was, however
only two-thirds of / per cent. These holdings
are for S132S5.0O0 par value costing Sl3oOo.-
U3491. and worth at the above date, Hlf'ooo'Vo'
by entirely conservative valuation.
Profit and Loss.
small net loss of Sl3.1O5S7 on some OF the
real estate sales and sur dry items was onset
by net gain Of Sc. 2i662 mainly on transac-
tons in bonds leaving $50, HOO to the good
Mortality.
We paid to the families and estates Of de-
ceased members during the year Si1O -.
The value and timeliness of this great sum 70
its many recipients in their hour of need are
the measure of yearly service - the house
holds of our country It's helpfuIress can be
somewhat realized if one will but imagine that
amount being constantly distributed among
cases like some that will occur TO any OF us,
and will think what 1t has meant to them, or
would have meant - those who did not nave IT,
II is an unmixed good coming when the neces-
sty for such help is greatest.
our death losses were 50 far inside those ex
pected and provided for that the savings there
from were $i366S9.
1t should be always borne In mind that 1t is
not the amount of a company's death losses, nor
their proportion to its amount at risk nor TO
its income or its assets. which significant OF
their effect upon its prosperity. present or fut-
ure. The older It's business the longer II mas
been in force, the greater the average age or It's
members, the greater will be the proportion OF
deaths and the volume of losses The question
is not only what losses have occurred. but what
were expected? What losses were anticipated
when the premiums and reserves to meet them
were computed? Are the actual losses inside
or outside that expectation? That is the only
pertinent question In the matter.
Expenses.
The ratio OF expenses to income in 1896 was
1855 per cent: an increase over the usual aver
age Of about one-haf of per cent. This was
due to no increase in the cost of getting bust
increased cost of repairs to real estate taken
under foreclosure. and necessary 10 put ii in
proper order and to rightly protect our prop
crty. The same careful and systematic economy
which always distinguishes this company has
been rgdy maintained.
New Business.
In consequence of the unbroken business de-
pitssion Of 1896, and especially during the
months Of the political campaign. and because
we spent no money trying to overcome these OBJ
stacles we wrote about 10 per cent less new
business in 1896 than in 1880 The renewals of
old business were 50 well kept up however,
that we lost during the year on the whole
amount in force only S6l9 100.
We believe the persistency of the old business
Of the Connecticut Mutual is quite unique. 1t is
an element Of great strength and Of cheapness
well. 1t costs far less to take such of old
business as TO keep IL, than to get new TO replace
1t. And we are fortunately not in the position of
those companies whose heavy expenses be
met and whose extravagant representations Of
postponed accumulated dividends" to be paid
fifteen or twenty years hence fe fulfilled
only by the proceeds Of heavy forfeitures Of old
business every year.
The dividend paid on each policy in 1896 was
larger than the corresponding for 1895.
There will be a similar increase in dividends and
consequent decrease in the cost Of insurance on
policies renewed In 1897.
Surplus.
We call attention to those Items from which 1t
Is possible to derive surplus. and TO the manner
in which they have been applied during the year.
with a preliminary word OF explanation.
We agree to pay certain sums on the occur
renee of a certain event To do this we must
have premiums large enough TO pay running
penses the current death claims, and provide
reserve for the greater mortality that Will come
with the increasing age OF the business. We can
inf
So we assume a maximum death rate. a maxi
mum expense rate, and minimum rate OF inter-
est and calculate our premiums and the reserve
10 be laid aside out Of them on those three as
eumDtions II the death losses and expenses are
loss than we assumed. we save the difference
from the premium If the interest is more we
save that also There are sundry other Incl
dental items Here Is an exhibit OF the operation
of these Several factors in the Connecticut Mu-
tual in 1896:
Part Of premium provided for en-