The Washington herald., 1920-04-17
BOND BUYERS
BARGAIN DAY
Life Insurance Companies
Take Advantage of Pres
ent Situation.

Life Insurance companies hnv.
ten per cent. or more Of their a.
sets invested In Government securi-
ties, and Il 10 obvious that they and
tseir policy-holders are now d.
recuy concerned in everythins
which affects the price Of such ~.
curitiea Prospects OF new is,ues
that might depress the prices Of
those already outstanding; ineorns
or other taxation affecting the de-
mand for the bonds: individual ex,
travagance that causes bondholdert
70 part with their investment,
governmental extravagancs thai
Keeps up the volume Of the publts
debt: these and all other pertinent
factors are of Importance 20 the IN
surance companies and 70 the hold.
ers Of their millions Of policies.
II is by no means true, however
that the holders Of insurance an
keenly interested in government
finance. merely because ten per cenf
OF the companieF assets are in gov
ernment bonds. The value OF all A.
sets is distinctly affected by nsc.
and financial policies Of governmeo.
tai bodies. In current discussion1
Of the per cent gross Yields 70 In
vestors that such substantial rail-
roads as the Pennsylvanis and ths
New York Central are having 20 pay
In recent Issues Of bonds and eouip.
ment trust notes. respectively. thu
important bearing Of the incoms
tax on the net yield must always be
emphasized. These roads are psy.l
ing per cent 70 investors not be-
cause capital Of itself needs q pea
cent. attraction TO induce Il ts
come forth but because capital
taxed all the way from q few PES
cent to two-thirds Of its income
must seek q large gross yield ~ NET
yield Is to be a reasonable amount
The poorest investor whose invest,
ment takes the form Of an insur.
ance policy. therefore. comes q
have equal proportionate interer
with the richest in government eco.
nomics and in a sound economic
structure. by very reason Of his in.
vestment in insurance and his in.
terest in the value Of those asset
Of his insurance company which hii
own and thousands OF othei
premium payments make possible
Increased Insurance Assets.
There was during 1919 an in.
crease OF nearly a quarter Of a bill.
lion dollars in the admitted asseti
Of the life insurance companies op.
Grating in New York State. The
figure would have been larger but
for a conservative treatment Of booh
values OF Investments. The growth
was from s5,sII.ooo 900 TO 36.1sa..
100000. OF the assets in 1914
almost exactly 90 per cent were in.
T.
per cent in mortgage loans, another
IL per cent being represented By
loans to policyholders. Such ngur1
as these make clear the investment
demand represented by the insur.
snce companies. and taken in con.
nection with what we have already
seen. as to the growth OF insurance
writings in the last few years. show
collection OF small savings. cur.
rent and prospective. quite com
parable with those in our saving
banks.
Holdings Of Government Bonds.
In this connection. il is Of in
terest to note one feature OF the
| life insurance companies invest.
ment assets, their holdings Of
United States government securi-
ties. On December 81. 1916. the psI
value OF government bonds held By
the companies operating in New
/ York State was only S3Ss.oOo. Tho
reason for this was the obvious one
that the yield was too small to per
init large scale investment by com.
psnies doing business on a 5ik pc
cent mortality-table basis. TIVE
years later. their holdings hae
grown 70 nearly Sl75.o0o. 900 - IN,
exact figures are sI75.sl27s.