The Birmingham age-herald., 1907-07-04

lion at a reasonable rate of interest for a satisfactory period. with which to im- prove by the erection of a handsome structir TO a vacant lot near the business center of our city. Upon legal advice the lean was declined, and the project has been for the time being abandoned
 Failure to secure this money has se- riously affecte~ the business interests of the city in more ways than can be here mentao4-ed.
 4e county of Jefferson. as I am in iormed, Is shortly expected to pay one fifth ot the total taxes of the state of Alabap.a-that Is, when the revised as- sessments now under consideration by the state board of assessors have becoms effective. the taxes derived from the county will approach an amount equal to about or9e-ffth of that of the whole state.
 I mention this with pardonable pride for the benefit of those not already im- pressed with the importance of Jefferson county, in the modest belief that we are not violating the laws of propriety, should we appear to be using mega phone in our efforts to make ourselves heard or this all important financial ques- ton.
 When it is considered that the present indicated annual growth of population of tne county of Jefferson is in excess of 10000. it must be plain that Tremendous business activity is prevailing on every hand. T- keep step with this lively progress need for large sums of money on the part of the citizens of Jefferson county is only a reasonable deduction. That this same need is felt in every portion of the state, where progress is being made is likewise true. and there should be no divergence of opinion upon this question, as there is practically none in the matter of ocallty interest. Ger tainly no spirit of envy will find place in the mind or heart of any true citi- zen of Alabama oy reason of the greater development of any one portion of the state over another. As an example of the compensating law of mutual interest it can be readily seen that the growth of the large cities of Alabama will con- tinpe to furnish on an increasing scale a profitable outlet for the marketable pro- ducts of those engaged in agricultural pursuits IS well as other lines.
 Longtime Loans.
 Just here in connection with the sub ject of foreign loans 1t will be well to conside, the source initio de facto from which this money is primarily derived. Investigation of the subject has led ne to the conclusion that more than 75 per cent of the funds available for long time loans or real estate mortgages finds Its origin in life insurance trust funds. This being true, the treatment of this sub ject will be incomplete should we not deal with the proposed legislation, which has been suggested by prominent state officials, having for its purpose the reg ulatiol of the investment by each life insurance company of a certain portion of US legal reserve on it's Alabama pol 1eies.
 = bill of this nature was recently pass ed in the state of Texas, and immediate ly thereafter the life insurance companies closed tteir offices and retired from the state. Now, if it our purpose to make an effort to shape legislation to the end that outside capital may freely enter Alabama fully assured of protection at the hands of its citizens, and to dis prove the allegation that the citizens of Alabama are unfairly disposed to outside capital, in my opinion such effort wIli be effectually nullifed by the passage of such law as has been suggested in connection with life insurance invest ments.
 The reason usually back of such legis- lation Is the prevalent belief that life insurance companies drain the state of large sums of money, that by law they should be required to return . tte state. That this view Is not borne out by the facts surrounding the matter, I propose to here show as a result of a recent in- airy upon the subject at the office of one of the three largest American life insurance companies
 Lack of Understanding.
 As much legislation is asked for by the people in this connection. as a result of the lack of a correct understanding of all sides of the question, it would seem n matter of regret that the actual facts surrounding the operations of life insurance companies cannot be laid clear ly before all those interested. The fig UT ] l give, while being those of only one company, are fairly representative or all life insurance companies doing business in this state, in proportion to tie business done.
 IAis company received last year from it's Alabama policyholders $56S, ,1S2. There was paid on deatl losses and matured policies to the Alabama polieyholders the sum of $322, ,S9S or $1>9,069 in excess o1 the reserve set aside from the pre- miums of the year to meet the increase ih legal reserve 1t also paid taxes in the sum of $697e, and under the new law for this and subsequent years this payment will be largely increased In addition to these payments the company has leaned to its policyholders in Ala bama on the sole security of their poli- eies, the sum of Ss4o,161, and under the policy contracts with the insured it can be called upon for loans to the amount of the entire reserve. This the policy contracts require.
 Besides this the company owns Alabama securities as follows: Municipal, state and county bonds, par value, $565 356; railroad bonds secured by mortgages on roads in Alabama, approximately according to mileage. A,137000; collateral trust bonds S,1I3000; collateral trust equipment bonds which according to the nature of the se- eurities cannot be apportloned to mileage as in the foregoing list, yet they are ob- ligations Of railroads operating in Ala bama, and have bearing on it's com merce, S,66o,0o0, making a total present investment within the state of Alabama of which the state practically gets the benefit. of s14,056517, or more than four times the legal reserve on Alabama poli- cles
 Further Examination.
 Further examination of this companys investments discloses the fact that where as about IA per cent of the company's in- surance is on the lives of people residing within the state of New York, the com panys investments are widely scattered, and the state of Alabama gets far more than its proportionate share of these in- vestments.
 It is thus fairly well shown that the popular reasons for demanding such leg islation are not we'll founded. While as a matter of fact those against it are con vincing and practically unanswerable-a few of which I will here give.
 l. The premiums on life insurance are determined by mathmetical calculations