There have also been issued seven installment certificates upon which the annual payments will be $5.391.69. Two hundred and seventy-six deaths have occurred, the liability upon which has been $1,005,843.00. Two hundred and forty-two endowments have matured, amounting to $649,644.00. The sum of $678,789.85 has been distributed among the insured as surplus upon payment of premiums, and a credit of $172,229.00 has been made upon policies as additions thereto. The earnings in interest upon the investments belonging to the Company have been $1,355,493.58. The total amount of insurance now outstanding is $118,654.728.00 upon 38,626 policies. The annual payment to annuitants is $57.713.50. The accumulated fund belonging to the insured is $33.404,482.49 at the present value of the securities embraced therein, an increase of $2,767,706.21 since the beginning of the year. The capital of the Company added to the sum named above makes the sum of $34,404,482.49, all of which is liable for the outstanding insurance. The liabilities have been carefully computed and are found to be $30,036,605.47. The surplus belonging to the insured after deducting death claims not yet matured and other debts is ascertained to be $3.367,877.02. The capital increases this amount to $4.367.877.02. There is, therefore, $1.14% to pay every dollar now owing by the Company. The total amount paid out upon death claims has now reached the sum of.. $11,586,941.94 The distribution of Surplus has been.. The sum of Surrender Values...... Making an aggregate from the begin- 7,358,981.32 3,020,664.24 5,408,500.01 468,143.47 $27,843,230.98 The business of the year shows a healthy and stimulating increase. It is a million and a half greater than that of the one which preceded it. It is to be regretted that the competition for new business is unabated. It has resulted in an unwarrantable increase in the rate of commission to Agents. It is conceded that it is desirable that every year there. should be an addition to the membership of the Company of sound lives, to take the place of members whose policies have ceased by death, maturity and in other ways, to prevent an increase in the death rate. But the rapid increase in the membership beyond this necessity, if attained at a cost beyond what is anticipated in the calculation of premium is more likely to be an injury than a benefit. This is not a theory; it has been abundantly demonstrated by the serious which have been most conspicuous in their efforts to write an enormous amount of new business. It will surely be that the loss of all or nearly all of the first premium paid upon a Policy will find an answer in the increased cost at which the business is transacted. This extravagant and permanent subtraction from the sum which is needed for the fulfillment of the company's obligations will be felt in lessened security and diminished assets. The indirect results of this costly method are felt in many directions. The same disposition is shown in the erection of extravagant offices in most of the great cities of the country, and in the annual outgo of other expenses and incidental charges. The desire to excel and surpass others in the race compels a constantly ascending scale of expenditure. The Provident Life and Trust Company of Philadelphia has ever stood as a synonym for economy and prudence in its expenditure. It will not waver in its course for the sake of being foremost in this struggle for gain in the annual out-put of policies. The "summum bonum" in the business of Life Insurance is the union of absolute security with a minimum of cost. What matters it to the insured if the company in which he is insured is able to announce its hundreds of millions, if he is not to be the gainer thereby? The Mortality list of the Company during the past year is still in consonance with its previous record. The loss by death in 1897 is more that $100,000 less than that of the previous year. One of the principal features in the gain to the accumulations of a company transacting the business of Life Insurance is the yearly additions from the earnings by interest or profit to the fund set apart for the payment of its losses. For a long period of years succeeding the Civil War these gains were large. The securities in which the moneys of the various Companies were invested were constantly rising in value and the interest earned by them was often in excess of six per cent. By judicious sales a large profit was often realized and the money was re-invested in others of like character and value at a smaller cost. The rate fixed by law in most of the States as that by which the computations of the Companies should be made was four and one-half per cent. In recent years this was reduced to four per cent. In either case, the amount earned was generally in excess of the rates determined by the statutes. During the past ten years these conditions have seriously changed. It has become increasingly difficult to invest moneys at more than four per cent. in sound and marketable securities. In the case of United States bonds and those issued by the older States and the large cities of the country, it has fallen so far below even this diminished return, that three per cent. is considered the standard. This mulations of the companies, demands, and must receive the earnest consideration of all charged with the duty of superintendence over their affairs. So important has it become that three of the largest companies engaged in the business have announced their intention to compute their reserves hereafter upon a materially lower basis. Such a change in computation, however useful it may be in preventing any misconceptions of the true relations between the accumulated fund and the amount for which the Companies are liable cannot really determine anything beyond the conditions of the companies for the time being. The fixed allegiance of the Companies to sound principles of business can alone be relied upon to preserve and maintain their solvency. Fortunately, the margin at the present rates of premium is so considerable that only fraudulent or negligent misuse of their funds can bring disaster. Perhaps a few words may be allowed upon the meaning of the reserve which the law requires to be maintained. To the student of life insurance such a statement may be considered elementary. To the uninformed, it is of great importance if he wishes to understand the facts which lie at the very basis of the system. The cost of insurance increases with every year of the duration of the policy. It is obviously for the convenience of the insured that the premium should |