New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-10-05
]. A. MCALL TESTIFIES.
Continued from second page.

Continued from second page.
nsHcent system was adopted and fitted to in
surance by Henry B. Hyde. because. Mr.. McCaA
thought the Equitable, new company, would
have had hard work to compete with the oloer
companies en- their own schemes of dividing
the surplus. The New-York Life had no pure
confines now ne went on; it had modified the
svstem into the present deferred dividend pol
ieies Said he:
The present plsn Of deferred dividend policies mas
NO more relation. if you will, TO the original Ton
tine plan than whole life policy oGla h ave, 70 bs
deferred dividend plan OF to-day in the CONTRACT
nost nberaf r 1s Afer"in fact
company, if may speak Of thatIatt,eI one Se@ co.
feiture whatever relating the ccntract ltseI SO
thaS a man Win IoaunS puiies borr1vr on I how
much he get cash surrender value II there Is
will-he makes his contract with you that ne WI.
pay for twenty years, and YOU ElSAe 80 a. The
erd of that there will be certain lVlslon oI
s4o an nsmra me lF coarsc and he finds that he
go TO that company after two pay.nert rs arlo
tended Insurance. and. in fact he IS EtEen nnen
paid in than any law in the United States provides
as surrender value.
REPORTS FOR GERMANY.
In reports By the New-York Life to the Ger
man government Mr. McKeen found that the
surplus amounts set aside each year for divl-'
dends were itemized. In the year Immediately
preceding the expiration Of the period he found
that the surplus set aside was much greater
than for any other year in the period. MI Nc
Call said that was because of the adjustment
iron, other years" he supposed, but confessed
his inability TO determine the figures The actu-
srv would have TO do that. he added. Answering
Mr.. NcKeen's question. he admitted that the
present system permitted the rolling up of
large fund which the company could use as 1t
liked until the time for dividends came. Never
theIess he said, in accordance with the law,
every dollar Of all the excess was apportioned to
classes reserve, liability or surplus
Mr. McKeen then read a letter from policy
holder inquiring about transfer of ST 100000
from the surplus fund to the reserve fund. This,
Nj. Mccall explained. was TO bring up the re-
serve fund above the amount required by this
State TO the highest amount required by any
State. Mr. Mccall declared that his company
made no Determinations in favor of Germans
in the military service, and had never been so
reasonable" as to insure Spaniards in the Span
ish American War. Loans to pocyholders were
the regulation note affairs, explained Mr.. Nc
Call-the policyholder drew his note at per
cent interest, and deposited il with the company.
! IF he defaulted his payments, the company sold
due sent him the balance. The company loaned
something like $4,000, 600 he thought. The
Practice was general among insurance compan-
les as usually II was a choice between the sur
render value of the policy and the loan, where
The loan continued the policy in effect. while
the other method closed the transaction.
Mr. weekes was called to explain about the
large surplus shown by the reports to the Prus-
sian government. Interim allotments and final
1.,rs-
other. Each year estimate made Of how
much the minimum dividend should be. De-
ferred dividends were much better than annual
dividends, Mr. weekes thought. They were
more attractive TO the poIcyhoIder. and the
agents could sell that form Of policy much
easier than any other. Still. he could not ex-
plain why the agents received more commission
for this easy selling form of policy than for any
other save that the market conditions de-
manded it.
Mr. Hughes took a hand at the examination
here Mr.. Weekes would not admit that new
business resulted in borrowing from the surplus.
Said he:
Al shouldn't put It that way. should say we
That happens with every company when It takes
o-Is there time conceivable when this sort of
thing would hurt the old policyholders? A-1es.
the new business.
81 is5s You state that the total expense charge
able to the expenses of getting new business is
IS 564s00 for commissions and S2Z1,S95 for other
expenses. Without the receipts your new business
costs 81 700 600 and you have not included the
eral expenses of the management, have you2 A
no, sir.
end are going pay them every year You had
seoo0545 expenses in 1904 of which the direct
pense of writing business was Sl,Go0G00. The
other expense amounted to only 100000 The
man who is in and has got to pay premiums has
got pay that expense, and he is interested VIII
the men that pay get even by other new men COM
n A II
ness the loading renewal premiums would make
up the amount.
would decrease your expenses from 100000 to
81 100000 You would keep receiving from your
estimates about 100000 The expense of getting
new business comes out Of money that would other
wise be distributed. If in a given year you don't
increase your surplus there is nothing made that
year which go to feed the fund that will ult,
would not follow that nothing would be earned.
EXPLAINS THE DIVIDENDS.
After recess Mr.. Weekes explained that, al
though there was a large increase in receipts in
1904 over 1903, the small increase in dividends
was because Of the method of declaring the de-
ferred dividends. There was no consultation
among the actuaries Of the different companies
as to the amount to be paid he said. He
couldn't say that he never had told Mr.. Van
Cise. of the Equitable, that 1t was desirable to
make a substantial showing.
An apparent decrease in the surplus in 1904
was because 100000 increase in the market
value Of securities over the book value had not
been taken. The book value had been used
The actual loss on bonds in 1902 was 100000
Mr. Weexes