The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1899-02-01

The circumstances attending the ac-
quirement Of this property by the Com
pany are well understood by the public
and need not be repcated in this report.
1t is sufficient 10 tate that its ownership
was ocossioned IS a necessity TO secure
the Company against a large loss for
money loaned by il In good faith many
years ago.
Early In lsgs IL WAS decided by your
Board of Directors that the time had come
when the property should he improved
and converted So that It would become
an income-bearipR asset Accordingly,
under supervision Of the Chicago mem
Der of your Board Of Directors, Mr.. David
G. Hamilton. thirty houses have been
erected, and viii, within a few months,
be entirely completed aud conveyed by
sale to purchaser. thus changing some
1850, 900 from uuproduetive property into
income-bearlng securities. We believe
this would have already been accom-
plished except for uncomfortable strikes,
which interrupted the progress OF the
work Of construction thus delaying the
completion Of this houses and the sale Of
the property several months.
With the present increasing demand for
real estate IN Chicago, ana the constantly
approaching value Of this class of prep.
erty. this temporary postponement T.
likely to prove an advantage rather than
u disadvantage in the final disposition q
this real estate. II Is confidently expsctel
that within "a short time the thirty houses
sbout completed will lie sold, and that
the remaining hfty-thres lots will be i'm
proved and marketed by pursuing with
them the policy adopted to convert the
portion OF the property already in process
of Improvement
Tho history Of institutions created for
the purpose OF holding in trust, investing
and controlling funas belonging to
numerous individuals or estates, has IS
tablished and demon strated the principle
that the !. uardans of such property that
have secured the greatest prosperity to
the in clients whose possessions they have
held in trust are such as have adhered to
the well-dehned rule OF safety, first; CON
vertibility, second; and income third.
We are aware that In periods Of plente-
Gus money, commercial expansion, adj
vancing prices and extending credits, con
seryative investors become unduly credu.
lous, pnd sometimes are influenced by
their uesiro TO accumulate large profits,
to invest in "a class OF securities which,
thoulh promising to yield high rate of
income. afterwards become improbable,
and perhaps worthless, by a change which
reyerses general business conditions
Just at present this country is enjoying
an almost unprecedented season OF good
business, abundant money and rapidly
increasing value Of properties of every
description. High grade securities like
United States bonds, bonds issued by
states and municipalities, or first liens
upon railroads that have earned dividends
upon their stocks for many years without
interruption. command "a price in the
market which necessarily makes the in
vestmenb yield an income far below the
four per cent basis The temptation IS,
therefore, great to depart from the rule
which has proved so wise in the past, and
seek Investment ~ trust funds in mort
Cages upon farms. which tor the past two
years have been raising inmense crops.
marketable at double the price Of such
products four years ago
1t is true that, unlike savings banks
Life Insurance companies are not in dan
ger of withdrawal of assets by patrons
who lose confidence in the ability Of the
institution holding their money to i'm
mediately convert the same in way TO
promptly IN TT outstanding obligations
Regarding only the present 1t is appar
emit that larger income Gamble derived by
disposing of the high-2rade securities
held, and investing the proceeds in credits
that yield larger rate of interest. As
suming that IL is essential 10 provide for
obligations which may not mature for u
decade, 1t seems probable that within that
period the time will come when Govern
ment bonds will command about the
same price at which they ale selling to-
day, and speculative securities, which
now seem so attractive, can he acquired
at perhaps one half the money for which
they are now available TO investors.
1t is the policy OF your management,
in providing for the present, TO bear in
mind that "history repeats itself" and
to so invest the income belonging TO the
Policy holders of the Company that the
latter may rely with confidence that
whatever changes may occur in the Imam
cial and commercial conditions of the
country, the premiums they shall have
paid fo- Insurance will be so invested
that all maturing obligations shall he
honored in accordance with outstanding
contracts.
Respectfully submitted
FRED L. RICHARDS
President,
ARTHUR L. BATES.
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