THE A.M.P. IN LONDON.

Evening Star, Issue 14787, 31 January 1912, Page 8

THE A.M.P. IN LONDON.

MR PROCTOR.S INDICTMENT. ''MAGNTFJCKXT SILBNGIv, OF ALTOORATIO BOARD.'' Mr Proed-or, in tho columns of the Sydney 'Sini,' as.se. vera Lex that (•in: A.M.P. Sockly haw lost. ;u lca.st £50.0C0 by reason j of the- extension of their huxiiK'a;" to Lou- ; don. and make.- this strong indictment:---- ■ The premiums, commissions, and imvlical I few for the. business transacted in Great j Britain may not have- totalled £50.000. | but. . . . Mr 'LVece ha.s £27.000.000 to j coyxt this jrrwov-orablo deiieiuny'. 'l'his j l>a.s been made, thonu'n in an. exceptional way. and. it, i. s oriverexl bv tiie ample Auktralkin fund.s. And, fniiht-r. the loss of ihousandf. a year i.s continuing, ajid i.s always covered in t li«i .same wav. Let me ; briefly this. In the. society'.-.baJ;intn-«he«-.t, lor \9QQ t >T>!n< > thurt l>o to re" it. Yiim anniiiinced thai, the ofiiex. proposed to KO to ICriijlaiid. ;i sum of £1.00.000' appcar.s j ior the litvit time, representing a, purchase j <tf Hn'tish t'-orcioks—,it. th.it, time about 95. Why tin* l»oard should have gono away from Australia, to invest , : o large; a. sum iii a security that, did not yield 7> )>er ecnt., and thorofoiv left an ab.solute I«« of more ' than 4 por cent., beiny; eo much siiort of the reserves required 'for pidieies, or a loss of more, than j:or eent. as compared Mith tho a.verage, rate carnej] on invejitmonte in Australasia, i.s for the Iwaix] to explain. Was it not intended to pave the way- to good eri-dit for an exle.n.sioii of its business to Bngkuid'.' It has been a very c-ostly ad\'ertisi:.inent. '1 'his pttrchafie is n.*jnarkable, U'eauso liriti.sh eoini«nie.s thousrht tliC6-e Consols so poor an investment that many of them Lul none in their bniance-sheet.s, and the total in vestments of all the British ordinarv companies, then alwut £2-10.000,000. only in- ■ eluded £6.000.C00, or 2k per cent." lint tho Australian iitlico invested in them £IOO.OOO, or a Unit 50 j.er a nt. of the reserves on British policies, thru of (lie fact, value- of £690.000. These £IOO.OOO Contois have, on the average., yielded barely 2if per cent, on the purchase price, and during tlw 11 year.- or more hi which thev have been held here have left a loss of about 1 : | |.e.i' rvni. \wv annum, as roiiipare.ii with tho average earnings of the Australian investment* of the society—which have averaged over per cent. 'l'he aggregate less from interest is equal in the period to about, £21,500, and if the loss of principal represented by the. difference between the purchase, prico and the present market, price be added, as well :is the Joss in respect of ether Cons-ok- ithe balanee-t-heet in showing aji aggregat;> of £116.800). I don't, j think i shall Ik- tar short of the £50.000 I : have affirmed as lost, by the acquisition of I this London busiiaw. ' j "If we, add U> this the amount of the j compen-iition paid to tho London agents j for giving up t'lieir busine.-*; a.s the. re.sult j of arliitra.tio:], and the other items of re- | latively gre«r,ei- t-0.-t, .-,([ dungs considered, • ■ including four directoir.' tie*, salaries, j I travelling expense,-, rent, etc., etc.. 1 do 1 not entertain murh dnubt that my efti- i j niatv <■>!' £50,000 woubl ho. exeeedc-d! And ' j as to the £5.000 a year continuous loss, the, j ; amount is, neatly equalled by the intere.-i j j at. Qi, |M>r cent., the average ea.rnings on j • that £50,000. Uigetlur with the annua! ' ! .short-iiii of interest, on Briiisti fuiul.s as : ; compiled witii the average ic.ium un Au.-?- ! ; tralasiai: invefiiau'iits." j j " Kqually easy i> it for Senator Walker," ' j .Mr I'rocte;- inoeoivdi. "to say that I am ' ! altogether wrong, a.nd that 1 do not know ' : v. hat- lam talking alx»ut. That only reprv- * j sent.- a continuauco of the ' niagnilicent si- • jleuce' of iho i«>jr«l. True, he says t!ie • j London bu-ines.- is jiayiug. bm he otfeis ; jno pr<«:if of it. It might he paying and j • still leave a i-onsidei-aliie b>-s as c<i\n- ] pared with a r-oriespouding .iiuouut of Alls. ' traiian bu.-inci,.-. I.'his returns a, inru'e ; ' surplus in Cie. way of bonus. The j : F.nglis'n huK.ine.-s may in time, if con- \ I timiod. yiehl suflkient to u'ive th<> face i : value of the |H)lici,-s. Tlieiefore »Sena,tor j I Walker may say it pays ; but it does not j | now. nor can be expected under any known | j conditions, yieid so murh to the general I ■ fund as; the Australian business. At- pre- ) ; sent, its jn-olitableness i& being n-duced by I j its holdings of low-price*! securities. I | I shoukl think Soiiator Walker is capable of j j bets on a certainty. I have never made I "■ a bet in my life, us [ have been iauc;lit it ' I was wicked. Hut 1 should feel a kind of ' ! wicked pleasuie in seeing our friend called j upon to pay £25 to a chaiity. I extend! | the ehal!ei"-e as ;i soft snap to Mr Tcece. ! | "(July I..at. .Messrs Tew and Walker j i both proclaim my ignorance, 1 pKfhaj'A j j Mould not till this" little stoty. When T\l i* j Tecco was about to initiate this extension . movement in London for (In- s-ei-ond timf. | ten years ago. he told me what he eontentI plated, and said he exp< Amy support as j a financial writer, as I had "'wen it, before ] jin the position 1 oecupi.d. T was sur- ! i prised at, the. ant!-cuui.-emeni. but told Ii;;u : j I thoii_dit Anglo-Australian financial condi-I tions and relations were changed. He n- j p!b<i jocularly: 'lf yon df.n't I'll polen,\e I you.' Surely I must ha.ve greatly change!, i only now to he able t<> writ.- 'trivialities' I and ' va]wings'! "Well I r:id not support- him. and he was defeated. And his party only won on the third occasion by ippui'ng a circular- containing a number of .■nitdeading statements. Kverythhig that has occurred sine."* has shown that a serious mistake was made. This was acknowledged by Mr T--ece when h-> got back fi-om j F.uudaiid ; and it has been proved at every { successive meeting. Of course th" losses j on the Knglish V):i.-ine.~.- need not Ik> made ! public, and that is wlc ie an autocratic ! board have us by the hip." I .Mr Proot-or abo asserts thnt "no insurI ance company is accustomed to take a lisk | j of more than'£lo.ooo on the life of a single individual, and thai. when, for example, I there is a policy tor £50.000. £40.000 .'.- I laid oil' with other companies." Wa.s :(• not in the hope of getting som ■ of this business that tbe extension to London was carried out''—" Most, certainly. That was i Iho reason for the ste|i ; and a vci-y risky, i dangerous thing it i.s. this business on heavily-insured lives." !