New-York tribune., 1906-03-10

amended so as TO take effect al some specified
time which would give the companies opportu-
nifty to prepare for its effects.
Charles A. Peabody. OF the Mutual. said that
THE companies all recognized the value Of the
pending bills. which would be Of lasting benefit
10 the companies poicyholders. but. since the
committee human. three or four mistakes
had crept in which the companies hoped would
be recttfied.
IDE FOR SMALL COMPANIES.
George E. Ide. president Of the Home Life In
surance Company. spoke for committee OF
presidents OF the smaller companies. He SAID
that while they realized the wonderful scope OF
the legislation under consideration, they feared
IN important respect, Il would not accom-
rlish its purpose This was the contingency
reserve. based on a specific per cent of the net
value Of the policies. This provision, evidently
designed to help the smaller companies. he said
would not accomplish that purpose. and might
work grave danger 10 all. This WAS so vast q
subject that he thought 81 should have more
consideration than the committee had been able
10 give.
This provision. he said, established limit
beyond which the surplus might not be put
aside maximum contingency fund for a mar
gin Of safety. IT would do gross injustice to the
old policyholders. he said, I'm distinction from
those whose policies were written under the new
law. Its intent. he believed was TO compel the
distribution OF dividends policyholders. all of
whom should receive their share Of surplus. but
was carried out In improper fashion II was the
first law he ssi6 whereby limit was placed on
conservatism.
This bill said ne. makes il a misdemeanor
10 provide safety Who is responsible for the
ultimate judgment of how much we shall keep
as q safety fund for future times Of stress Are
the legislators willing to say they will free US
from responsibility? NO hard and fast rule
should he formulated"
He declared that in the panic of 1908 his COM
pany was protected by a fund created in 1900
and 1901. when they decided that the values of
4 securities were high Such fund he said,
would be illegal under the bill. If the New
York Life had had only q per cent reserve in
1903. as the section would allow. he said. it
would have been temporarily insolvent. An
other novel idea. he said, pertained 10 the dis
tribution Of dividends. Mr Ide declared that the
only way 10 dennonstrate the prosperity Of his
company 10 the average holder Of policy was
10 have a gradually increasing dividend rate,
which could not be maintained owing TO varying
conditions If there were annual distribution of
surplus. He declared that il should be left
the directors how much dividend should be paid
and how much surplus set aside as a safety
margin but, above all, the amount of reserve
should be limited
Mr.. VAN CISE'S APPEAL.
An impassioned appeal for the System which
has built up the business 10 heights undreamed
OF and carried blessing and comfort into thou
sands of homes was made by Joel c. Van Cise
actusry of the Equitable in opposing the sec
tion of the general bill relative deferred divi-
dends He declared that il not the deferred
dividends which had been responsible for the
acknowledgement of the companies. If the pro-
posed system were carried out, he went on. il
would be positive danger 10 the companies.
since il would reduce the surplus OF each and
contribute toward conditions like those thirty
years ago, when huge insurance panic swept
out OF existence scores of companies.
Mr.. Van Cse declared that since 1868 this
system Of deferred dividends had been in use
by the Equitable and mainly had been re-
sponsIbe for that companys rapid growth and
prosperity. lie went
oDesPotG Russia @ FORBADE @ the issue Of deferred div
and the British Empire Legislation Ike this would
not he thought OF in England. where the annua
OF London, known the model company OF he
yod Until 5 recently rec sd a. ten ten year dividend
elled after Russia or the freedom OF Japan and
Every one who has studied the history Of life in
surance knows that plan has popuarzed the busi-
first introduced. There to-day on the bool-s q
tracts issued on The deferred dTdend S 9n pS G0 Sn3
those contracts cover the vast amount of $ s00l-
T7so ThsJ so @ and those policies issued have
of homes and would he recrea-f a y 70 tI Ilioss
ae;;Gary and officer OF company If ] We're not
OF life assurance.
FOR DEFERRED DIVIDENDS.
,r3o somS @ say It i gsmblng contract That is not
tanj OF 3aEme G lS ss6D but if unSer
more 10 the annual dividend policy Than 10 the de-
dSpd o knows @aa ae4 ng Fse az rs9 annual
ave ca 1pfr @ % l,s.e 20 pay because his payments
e5a .e9en5 I 9f Of gameing gan bin man with deferred dvi-
or twenty years and he knows beforehand how
uc IL hc & is 10 10 pay There i no uncertainty about
1v p'e.IIm 70 haif of the amount. has a
which VIII b. declared UPON Ghai n6c Sg me dividend
Again II is said that estimates made some ,wentv
aend policies have not been realized The same is
there IS am bode a5 atyd9nd " 5 policies do
nss realized The dividends that sangufne agents
they would be- s'' promised he would have or that
sTsd q dgse1g 6s great 9 aTFents favor Of the de-
dent Of tR FIoa lns re as was stated by the presi-
no institution I'm the world for which il is more I'M
~ 1fnl II Ihai II should have surplus than is for
- - - insurance companies. These companies hold
dre6s y. 'aseS perhaps the entire savings Of hun
rave nTozieS L@usanas san Of hardworking people who
event 20 ,it LOT helr widows and orphans in the
accomplished T Tb dserg enc gfeatSr bulk OF this IS
- i"ue SAFER by the accumulation Of surplus
Assemblyman Wainwright interposed that the
policy holders had the option as to deferred or
annual dividends. Mr.. Van Cise said that the
bill simply made the Insurance companies banks
from which the policyholders could withdraw
iheir dividends whenever they chose Mr VAIN
wright wanted 10 know what objection there was
10 the po!cyholder's knowing each year what
dividend had been earned Mr.. Van else said Il
would reduce the surplus and entail huge labor.
he would prefer five year accounting
Senator Armstrong wanted TO know why after