The herald., 1898-03-19
M INGALLS, REASONS
He Co1rMENDS COMMISSIONER
CLUNIE's COURSE
MHY INVESTORS ARE SHY
OF California fnvestments-The Mort
gage Tax Law-1nterest Rates
and Increased Reserve

John A. McCall, presioent "a '"e A~S"
York Life Insurance company. one OF the
three largest financial institutions OF the
kind In the world, arrived in this city on
Thursday evening, and was seen yesterday
by a representative OF The Herald at the
van Nuys hotel where he is stopping Tor
q few days.
The Views of man who is at the head OF
: company having such widely extended
and diversified interests as the New YORK
Life, with assets amounting to upwards
of two hundred millions of dollars IN tne
shape of investments in bonds, mortgages
real estate and loans scattered all over the
country, are naturally matter OF pupiic
interest. and the fact that his company
has three hundred thousand policy holders
at the present time shows that the public
concern in its welfare is pretty widely
spread.
President Mccall explained that he had
come to this coast on a trip of pleasure
and business combined; that he had come
by way of Chicago and through the great
northwest, visiting Seattle. Tacoma and
other cities in that extensive territory
where, including Chicago. the company
has about fifty-two million dollars invested
In bonds, securities and buildings.
He was last in Los Angeles just year
ago, and expressed his pleasure at having
already been able to note the evidences Oh
continued prosperity exhibited on every
side. One object of his visit was to close
a deal. which will probably be made, under
which his company will make consider
able investment in the bonds of the Los
Angeles Railway company. He had care
fully investigated the management pres
ent business and prospects of the road and
expressed himself as highly satisfied with
everything he had learned. The deal for
the bonds, II made. will be consummated
during his stay here.
AGAINST CALIFORNIA INVESTMENTS
Asked az to the reason why his company
had not made loan investments in Califor-
nia,. Mr.. Mccall said that the single OBJ
stacle that acted as an effectual barrier to
the carrying out of any such idea on his
part was the existence of the California
mortgage law. under which the lender is
obligated to pay the taxes on the mort
rage. He argued that in contract be-
tween parties there must be absolute GER
tainty as to its terms, that the imposition
of the mortgage tax introduces an element
of uncertainty into the contract, the lender
not being able to know what his net inter-
est will amount to. Great harm has been
done to infant manufactures and indus
tries of this state by reason Of this law
without it, there would have been an un-
interrupted flow of capital from eastern
and other sources, and interest might now
have been as low here as it is anywhere.
Until this existing condition is altered.
eastern capitalists will be shy of Califor-
MIA investments.
DECLINE OF INTEREST
Asked as to the criticisms that have been
made in certain quarters upon the action
Of the New York Life Insurance company
In putting its reserve on the per cent
basis, to do which the company set aside
SIG, 195, 1926 in addition to the 1854, ,95e.079 re-
quired by the New York law which called
Tor a per cent valuation. Mr.. Mccall said
that he had not heard of any criticisms
coming from quarter that would deserve
attention. On the contrary. he Mad not
heard a single word of dissatisfaction or
complaint from any one of their policy
holders. The net surplus of the company
after voluntarily setting aside the above
required by law. amounted on the 3lst OF
December last to 317, ,176, 105.
Mr.. Mccall said: II regard the move we
have made in putting the company on
per cent basis as the greatest hit we have
ever achieved. The rate of interest is de
clining everywhere. and our action is sim
ply anticipatory Of events that are bound
to take place. We have not waited until
We were obligated to take this step, but we
have done so in advance. The move is one
that adds materially to our financial
strength, and the people will see in due
course of time that we were justified in
the step we have taken. The setting aside
Of this sixteen million dollars does not take
It out of the pockets of the policy holders
1t is simply that much added to their Sc
curity and increases accordingly the solid
ity of the company. 1t would, indeed be q
curious process of reasoning that would
deduce an impairment of strength in any
business from the fact that a certain
amount had been set aside out OF an earned
surplus to meet future liabilities"
CLUNIE'S COURSE
1nterrogated as to his opinion on the
aggressive attitude of Insurance Commits
sioner Clunie, who is stirring up both the
fire and life insurance companies in this
state and who is endeavoring to revive GER
tain statutes affecting insurance compan-
les which have ever since their passage
been considered dead letter, Mr.. Mccall
said: II am naturally interested in the
hight that is being made by the commits
sioner and took the opportunity on my way
down here to have a talk with him so as to
get an idea Of his plans and purposes. Mr..
Clunie had been represented to me under
different aspects. on the one hand as a
politician who was simply making trouble
for selfish ends, and on the other hand as
an honest man who was endeayoring to
.arry out the duties imposed upon his
office without fear or favor I must saw
that the impression gained of Mr.. Clunie
is an entirely favorable one He appea re
to me to be actuated by a strict sense of
duty. He has found upon coming into office
number of laws upon the statute book
relating to insurance companies, which
laws have not been enforced, and he is
simply carrying out his ideas of duty in
putting them in action. You know II has
been said that the best way to get rid of an
obnoxious law is to enforce it. Mr.. Clunie
tells me that he is endeavoring to carry out
me provisions OF the law as he finds them
mat ne did r"' -'~'-" $50 law. but that il