VALUATION OF INSURANCE SE

Evening Post, Volume LXXV, Issue 24, 29 January 1908, Page 3

VALUATION OF INSURANCE SE-

CURITIES.— A nice point has arisen in connection with the big three Now York insurance societies (Equitable, Mutual, and N.Y. Life), which graphically illustrates the danger of ill-digested State interference. Under the new insurance laws the companies aro expected to value their feeuritics at tho market price ruling at the cloao of each year. Well, at the close of last year all securities in New York were terribly depreciated, and it is not at all improbablo that somo of the companies will fiad if they adhere strictly to the law that all their surplus has been eaten up. Of course no one-^would imagine that this is really tho ease except on paper, but if the surplus is gone even from the books only, v/hero are the profits? And if there are no profits where aro th" bonuses to come from? This law operating conversely will probably next year materially raise tho paper purplus if tho value of securities recovers from the prcpont extreme depression, which is likely. We Ehall then witnoss the curious sight of these companies with practically no profits one year, and with possibly enormous profits next. As from its verynature an insurance company is rarely forced to soil its securities in a bad market, the position into which they havo been forced is unsatisfactory in tho extreme. THE STEEL TRUST.-In well-inform-ed quarters it is stated that there aro indications that tho existing international arrangement in the steel rail trade will rsquire to be modified or the agreement itself will be broken up. The great American steel trusts complain that their action is fettered by the limitations imposed Dy the combine, and they no longer regard the minimum prico at ports of shipment as reasonable in the present condition of'tho markets. Owing to the collapse in the demand for rails, -which has been accelerated by the financial crisis, a large proportion of American mills are idle, and immeneo stocks have accumulated, both of raw material nnd finished rails. Tho trusts consequently want a wider field for exploitation, and are prepared to dispose of their surplus stocks at lower prices than' tbo=o allowed by international agreement. Ropresontativps from the United >State 3 have Been the leading British manufacturers in London, and aro now in Germany endeavouring to obtain a revision of the agreement giving greater elasticity both as to Dricos and trading ppherep.