The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1900-03-08

liable appraisal in a dull market may be
illustrated by the fact that one parcel was
appraised al $500: half OF Il has since
been sold for $4,000 cash. for uses which
increase the value of the remainder. We
have several pieces. some very Na!uaole,
which now cost US nothing they are
what remain after selling enough 10 more
than return the cost of the parcels OF
which they were a part None or tRese
We're appraised. Many pieces on winch
We may reasonably expect some gain We're
not appraised; some on which We may
lose were not appraised. The quesuon
therefore. presented itself What account,
II any. should be taken of the shrinKage
so estimated by the commissioner?
a leaf frcm our own experience IN these
matters may be Instructive: IN loi9 the
commissioner made an examination ana
appraisal Of every piece OF property Iore-
closed or likely 70 he foreclnsed. Insee
properties cost us 81. 597, s9S. The commits
sioner valued them at only Slo@SS.S1V.
shrinkage of 81 $50 los. Out OF this We have
since sold for S9,2lS 2l6'4. what cost as
valued at only $3.50 49,. -; that Is. We got
S,429 i57.CS more than the property cost,
ana s3,SSS. l122 more than the commits
sioners valuation That the remainder Of
those properties VIII sell at equal afvan-
tage We do not expect. While some VII
make gain, some are certain 10 make
more or less OF a loss from causes ~ de-
probation that occurred long ago On the
other hand, the properties forcclosed since
lS1 ought not to suffer any very nedVy
shrinkage. We do not know why. IS
We carry our foreclosed real estate on
our books at its original cost We clnnot
tell what ii is worth until We sell It. Ilav-
ing always had proven reasons Tor beieV-
ing 1t worth its cost a whole, We have
never by appraisals anticipated either gain
or loss. We have taken each as 1t came.
We could not in justice to ourselves mark
some pieces down TO an appraisal without
marking others up to an appraisal This
would cause annual changes In book values
based on mere changing opinion instead OF
81 - 4 d N
temptation at least TO mark up rather than
down. Our present method we do not deem
IL wise to change.
But. in order to give fair recognition TO
the fact OF a probable loss on some OF the
foreclosed properties and the uncert ain
amount of gain on others, and. in view Of
our ample surplus, the office OF which IN
part is TO protect us against such con-
tingency, We have decided TO add % per
cent to the shrinkage estimated by the
commissioner, making sum IN round num-
bers of $4,000. ald. for the present, carry
that as a memorandum liability under The
title OF Contingent Real Estate Deprecia-
ticn Account" 1t does not affect the actual
value Of our property. Providing AGAINST
possible loss which cannot be measured
till IL comes. does not cause a loss. This
leaves our accounts uudisturbed while 1t
relieves our surplus OF what might other
wise, in view OF the commissioners esti-
mate, be regarded as possible padding with
uncertain values. SO long II is lee-nsd
expedent to carry this item of provfsi Snal
liability the balance Of Il. deduc,ing any
losses made on sales. win be shown each
year.
The Amount of Surplus.
The surplus. December 81 1904 WAS
sT.@s.S4l SO by our own standard u sol
vency. which is much higher than the legal
standard, the latter being based on the as
sumption OF earning per cent annual In
terest;, on all business written since April
], 1852. We calculate our liability on the
assumption Of earning only per cent in
terest. This makes our reserve liability
higher and our surplus lower by s2i04 7lS
than they would be we're that business has
ed on the legal per cent, standard In
which case the surplus would stand az So
Slso4459. For greater future safety. the
company voluntarily carries a reserve 81
i04. 10S greater than that required on busl-
ness based on the legal standard.
Real Estate Sales.
During 1899 we sold for s54o.sf0 30 fore
closed properties that had cost s55t sfa 40
on some OF the pieces there was "A loss OF
si3 2Ss IS. on the rest there was a gain Of
Sl0l 9S0& leaving a net gain OF SIS son o.
II was throughout a duh year for real
estate
To December 81 1899. the ne, gains on
real estate sales from year 10 year aggre-
gated 81 sos. 1894
Property Purchased.
The present home office Of the company
was built thirty years ago, with llttle am
ticipation in plan ana accommodation Tor
the great increase IN the work Of coming
years. in which We have long been put 10
great inconvenience ana disadvantages An
opportunity offered to buy an adjoining
piece OF land well suited TO connect with
the present building. We shall probably
improve q during the year by plain but
substantial and thoroughly modern office
building, giving us needed space and con- .
Yenience, and TO tenants attractive bust
ness quarters.
The signs of the Times.
I, is with no little satisfaction that We
note IN some Of our competitors tho
dawn OF lung-deferrsd recognition Of
the vital importance of some Of those
things which the Connecticut Mutual has
all along insisted were essential 10 safety
essential 70 Just Interpretation and admin
isiration " the mutual principle, and es-
sential 10 the best and permanent welfare
Of those henetoiaries for whom alone life
Insurance IL designed and for whom n
should have single eye.
Others Adopting the Connecticut Mu-
tuar. Iatere. Assumption.
The judgment which led US eighteen
years ago TO anticipate the great fAl I'M
interest rates and to provide against tts
effect by then assuming 3 per cent. rate
was decFied - counsel ~ tlmidity and
weakness. That assumption has given US
Incompatible strength with great Al.
vantage 10 The business based on the
per cent rate. and Without cort 20 the
older per cent business. and the reia-
lions between the two have been sef-
adjusting. The DAY f0reseeu having corns
most If the companies are forced 10
change their assumption. and some of ihs
largest End themselves with vast amount
% business on The per cent basis "a bout
which there is an appearance ~ anxiety.
Tor the Per cent. reserves on i are he
ing reinforced hy heavy appropriations
thereto from NprpluseN accumulated from,
and supposed 90 be held for future DIVE
ion among me various tontine cr invsst-
ruenf schemes
Growing Alarm ut the Expense ae-
coant.
one Of the strspEest Developments la lie
INSURANCE. % ..e last iwentS -ave yvnrs hAs