The daily morning journal and courier., 1902-02-04

, | than our usual standard. This dl1ler- ence will disappear as the property which has caused it is disposed or, The ratio for 1901 was less than that for l9OO.
 Real Estate, Interest and investments. For the seven years prior to l9Ol fore- closures of mortgages were in consider
 able excess of sales, During the last , year, however the situation has
 changed; we took in properties costing
 us S2l7 814.35 and sold properties that
 had cost $S6S, ,379.26 Some of these sold
 at a profit and some at less than origi- nal cost. Many of the properties sold
 were among our older holdings in To- calities where changes of business cen ters had permanently appreciated val ues. We still have some properties in like situation, which will probably sell ! for something less than cost and it is our purpose to dispose of them as 1t can be done without unnecessary loss, and so improve income and reduce expense. Upon the greater body of our holdings, however, we may reasonably expect some gain in fair market We have made good deal of money on the whole on foreclosed real estate
 The large addition to the Home Office building referred to in our last report is nearing completion, and is being fol- lowed by changes in and additions to the old which will bring the two advan- tageously together, with a good pros pect of a satisfactory financial result.
 The interest rate on desirable loans and securities has tended to still fur ther decline, with a growing scarcity of satisfactory investments for funds in the nature of trust. We have consid- erably reduced loans on real estate and increased our holdings of frst-class railway securities.
 The balance or net profit of the year upon changes in securities and sale of real estate was $SS609.75.
 The market value of our securities has increased considerably during the year; and they are of a character to be least unfavorably affected by market fluctuations.
 Surplus and Dividends.
 As the cost of a mans policy in mu- tual insurance company is the differ ence between the premiums charged and the amount returned to him by way of dividend, the surplus earned and the surplus divided become very impor tant factors in his experience with his company. Surplus can be earned legit- imately in only three ways: 1, by smaller expenses than the premium provides for; 3, by less mortality than is provided for; 3, by a higher rate of interest than is assumed as probable in computing premiums and reserves.
 For many years the competition has I had a bad effect upon the expense &C., count of most companies it has also | led to a good deal of apparently doubt ! ful experimentation in the selection of risks and in dealing with hazards and the steady decline in the interest rate has eaten away much of a very impor- tant item of possible surplus.
 The matter is of somewhat special in- terest to us at this time because the dlsagreeable task of cutting dividends has been in recent years and is still be- ing quite largely performed by some companies; and any reference to their reduced dividends in comparison with the increasing sale maintained by The Connecticut Mutual for now twenty-one years, is met by the assertion that this company, too, must presently cut down its returns; that the rate of interest is
  ready diminishing. We have never undertaken to prophe- l sy. We do not try to prejudge events, We prefer to meet them and our duty to you under them, without pressure or prejudice from wrong preconCeptons, or from having put ourselves in a false | position When we can no longer earn | the surplus we are dividing and can no longer safely trench upon the large eX- | isting surplus, kept up for the purpose, | to maintain the present rate of divi- | dend, we shall not hesitate to say so and to act as the facts may require.
 History of Our Surplus. We only wish to call the attention of | those in any manner interested to few | pertinent facts:
 For many years this company has | been governed by the idea that while | surplus should be quite closely divided | each year so as to make a mans pay | ments as small as possible, yet, as it is impossible that an absolutely complete division can be made, and as a gradual | if small annual reduction in payment | tends to the persistence of the business, it is desirable in unusually good years to accumulate such margins of surplus as may be earned over and above ordi- nary surplus earning capacity, to be used in maintaining the dividend rate in the years when the margins may fall below. It greatly helps the premium payer, and, the proper adjustment by post mortem dividend being made, it works no inequity to any one.
 During the decade 1S70-S0, the compa- ny had occasion to trench very largely on accumulated surplus in this manner. In 1881 it's surplus was $3,351 ,155, which was 6.77 per cent. of it's assets. The conditions being untoward, it was deci- ded to reduce the dividend scale to the apparent actual earning capacity From this point we began to earn small items of surplus above the amount an- nually divided, In 1882 we recast the premiums and reserves for all future business on basis of instead of per cent interest, which cut down the mar gin for expenses and increased the amount required for reserve. Notwith- standing, in 1892, the surplus had crept up to $6, 059 156 It was then deemed proper to literally revise the scale of division; but the surplus continued to increase until 1893, when it stood at ST. | 52190 Since then it has been some what drawn upon each year to main |