The Guthrie daily leader. [volume] (Guthrie, Okla.) 1893-1996, 1905-12-23


state and municipal bonds We think
this rule TOO drastic. II no' impossible;
one objection being that 1.-sd States
government bonds do not earn a rae oi
interest equal to the basis assumed IN
computing premium charges. state or
municipal bonds earning a net revenue
equal to the basis upon which premium
charges are computed ought to be a fa-
vored form Of investment; and to his
we would add carefully selected farm
mortgages with margin between the
mortgage security and the value Of the
property Of at least fifty per cent; mort
cages upon improved city property oo-
cupied for business purposes with like
or greater margin Of value; railroad
bonds Of proven interest earning capac
ity. and loans upon their own policies.
We would exclude from the list, stocks
OF every kind. mortgages upon unim-
proved real estate or real estate used for
residence purposes solely. Industrial
bonds. railroad bonds not secured by
mortgage. and real estate other than
that actually necessary t5r the business
of the corporation. Provisions similar
TO these are to be found IN The Missouri
law as TO her own insurance companies,
No Investment ought to be permitted by
an Insurance. company that would in any
way inure TO the private advantage,
gain or profit Of any officer Of the conf
pany. and we might add, applying the
old familiar trust rule that no officer
ought TO be permitted to deal with the
company 10 his own profit. The restrle-
/ tions here suggested are very similar to
those now imposed by law upon the aav-
2 f..e-. ~ ftrE rINRr New
England states, and II is well IN this
connection 10 note the difference be-
tween the present condition OF the saw
ings banks OF New York and her insu-
rance companies. The savings BANKS,
with many millions OF demand liabil-
ties. have found II possible to conduct
a safe and highly profitable business
with cash reserves of almost infnites-
ima proportions, while the insurance
companies Of that state have thought il
necessary to maintain cash balances mill
lions more than we're admittedly
requisite 10 meet accruing obligations
Under the laws OF Massachusetts,, the
companies doing business ia ihat state
are required TO compute their premium
charges upon the basis Of an interest rate
of not greater than three and one-hall
per cent and the premium computations
OF practically an the companies arc
made with reference 10 this, or similar
enactmonts OF other states When
Therefore, a company keeps ten millioni
or more dollars upon deposit with IA
lorite banking Institutions at say, tw'
per cent interest or when il has othel
millions invested IN real estate return
. ing "a net rcvenue OF less than two pc
. cent there IS deficit IN earnings tina
must be made up from .ho earnings o
other Investments or added IN comput
ing premium charges; Ia the end thl
, burden Is added 10 the policy holders
either IN increased premium charges o
5 decreased dlyidends. n this connection
1t Is interesting to note that re-valu
( atien OF the assets OF one New Norl
company, recently made by the insu
Z rance Departments of that state, deyel
q oped a shrinkagn OF more than eight 81
. million dollars. AZ has been charged b