The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-03-21
rNsuRANcE INYEsrMENrs.
Defence OF the COmpanies' Holdings In
Banks and Trust Companies.

Uo1onoo OF the hOtulHBb M
Banks n Trust Companies.
To THE EDITOR OF THE SuN-Sir; In the
columns Of your paper, asSwell as other news
papers Of this city, in articles relative TO the
insurance investigation. Armstrong report,
&C., particular attention has been called TO and
more or less criticism has been made upon
the fact OF the possession by the Equitable
and Mutual life insurance companies OF
large blocks of bank and trust company
stocks. The general impression oonVeyeu
has been that these securities, as well as other
stocks and bonds, are unsuitable for invest
ment of funds Of life insurance companies.
The savings banks of the United states
whose deposits represent the accumulation
Of people of moderate circumstances. have
always been regarded as ind itutions whose
Investments should be in every particular
above the slightest criticism az to their sound
ness. This standard has been carefully Kept
up by legislative enactment and restrictions
TO such an extent that the term Legal Tor
/savings Banks" is regarded rs representing
tho standard Of conservatism ana gilt edseo
investment.
As a pollcyholder in the Mutual, as we'll as
the Equitable, and indorsinr Mr.. Morton's
views In his letter to the insurance investi-
eating committee as to the investments OF
the companies mentioned. | desire to call
your attention to the fact, which does not
appear to be generally known. that the
laws OF the New England States auihorl2e
their savings banks to invest their funds In
banks and trust companies as well as bank
Ing companies, the institutions. however,
being restricted TO holding not more than
rs per cent. of the stock of any one institu-
ton. II would be interesting to ascertain
how many national banks doing business In
New England are controlled by the savings
banks through their ownership Of stock.
Savings banks are authorized to invest their
funds as follows:
Maine-In stock d any bank or banking asso-
citation incorporated under the authority of the
State of Maine. Alsoin any bank or banking asso-
citation incorporated under the authority OF the
United States, II located In the New England States
Holdings limited TO 20 per cent. OF the stock OF any
New Mampshire-In stock OF any bank, banding
association or. trust company, incorporated under
trust company In The New England States and
per cent. of stock Of any one Institution.
yermont-In stock q any national bank OF n tH ~
the cidts Of petroit, Chicago. St. PAU and Mime
apolls. In stock of any bank or banking ass9c,a-
saTs lP iS tRs sac G " Vermont rnS Hu'n GteiSlass In
toio per cent, Of stock Of any one institution; ,r,,s,
oomPany Incorporated under the laws q me state
Of Massachusetts and doing business therein. In
New England States and incorporated under the
authority of the United States. Holdings limited
England state, No limit stated as to percentage
v Connecucut-In stock OF any bank or trust com
pany located In the state OF Connecticut, or IN the
as to holdings.
In holdings Of bank. and trust company
stocks the low yield Of interest received, u
e1s @ By amy Inyyes aeTs' II The O% sHtloscksoiider usually
counts upon a yearly increase In the value
Of interest returned. In all conservative m
ft1Tu Instance shi one PASSENGER pFOmiaent New Il % York trust
company paid % per cent. in dividends last
year and earned 40 per cent. Another paid
difference, Of course, is transferred to the
surplus account Of the companies and Is
shown In the Increased book value Of the
which except In extraordinary conditions Is
usually figured on the earning power or the
company, not merely on the dividends paid,
There is not a particle OF doubt in the mlnds
Of any one as to the necessity Of new leglsla-
tion, In view OF the excuses that have orept
into the administration OF. insurance COM
| change the whole method OF the insurance
business. should be a matter OF the utmost
care and conservative action, and the men
business of the companies In common JUS
tiee should have a strong voice in such leg
Surely. the policyhold ers' interests are not
benefited by a forced sale. OF, securities
which in themselves are gilt edged invest
0ssnsa s The 20 ip 8sst sSst an E ss pTtn0i dnfs r GSRt
and Just that the making Of such laws should
not be left alone to a political body or Lesis-
l paSlie,o Sh9ss a pSIn whose 81 T memb Is sT yotes a Gy
governed by the attitude Of their constitu-
ents. who. In turn receive their impresslons
f f. r. t d r constant nrss nniSrspresenWts e. g SG printed
NEW York. March 10.