AUSTRALIAN MUTUAL PROVIDENT SOCIETY.

New Zealand Mail, Issue 1265, 28 May 1896, Page 30

AUSTRALIAN MUTUAL PROVIDENT SOCIETY.

Gb/d/m./ M'jiniuj Ucml.l, of Ma-j Wh.j At tlie forty-seventh annual me, ting of the members of the Australian Mutual Provident. Sueicty, at the Y.M.C. Association’s 11. Ml, Sydney, there was,a very large attendance, and nm-mgst those pre.-ent, on the platform with : -The Hon Sir .1. P. Abbott, K.d.M.t!., M.L.A., chairman (in the eliair) ; ,Ves. .James K. Hill (deputy chairman), A. W. Meeks, J. T. Walker, Robert J. King, Joseph Abbott, Thomas Littlejohn, directors of the Head Office Board ; Richard Toceo, F. 1.A., F.F. A general manager and actuary ; Robert B. Cameron, secretary: A. Consett St'-phen, solicitor : and the following delegates from the branch boards :—The Hon Allred Deakin, M.L.A., of the Victoria Board ; the Hon E. Richardson, (J.M.C., M.L.C., of the New Zealand Board ; (he lion J. S. Turner, M.L.C., chairman of 1 lie Queensland Board ; tho Hon J. L. St’rling, M.I-.C..0f the South Australian Board; the Hon Sir P. O. Fysh, K.G.M.G., M.H.A., chairman of the Tasmanian Board. The chairman on reading the forth-soventh annual report said : - The constitution of the Australian Mutual Provident Society is such that the members have the complete control ot its management, and at least once a year its affairs have to bo submitted not only to the criticism of its members, but to that of tho general public. And now, as the mouthpiece of the board, it gives mu pleasure to meet, tiie members to present the report of the board -one which yon will, 1 think, admit, is of a very gratifying character. When addressing you last year I told you that the new business of JB‘J4 was some” AJDJ.’Oo less than that of 1893 ; but f added that there were indications that 1895 was likely to witness a. revival of business. The expectations ot the board have, as you will see from the report, been realised. The new business,for 1835

amounts to .£2,989,602, being a larger sum than wo completed cither in 1893 or 1891. Furthermore, while the net increase to the business in 1891 amounted to only £179,059 of the sums assured, the corresponding not increase last year was £571,806. In the matter of new business, therefore, the year just ended may be regarded as a fairly successful one. The claims of tho year, notwithstanding the increased sums at risks and the increased ages of the lives, have been £30,590 less than those of tho previous year—a fact largely duo to tho marked diminution in the mortality from j accidents and violence. Seeing how constant j lias been the rate of death from accidental causes throughout the period of our existence, this result can only be looked upon as a temporary fluctuation, and wo can scarcely expect so favourable a condition to continue. Wo have added £727,372 to our funds during the year, including tho reserve for securities. These funds now reach a total of over 13V millions sterling. As the result ot most careful and searching investigation into our securities in all tho colonies, wo have added a further amount to tho already existing reserve, bringing the total for that purpose up to £123,159. Wo have also written an additional amount off the oflice premises. The revenue account and balance-sheet arc presented with so much fulness of detail that I need not detain you with any dissertation on them. In the former you will observe that payments for taxes exceeded £1(1,000, which will this year probably bo increased by the new faxes in this colony to £15,060. This is a very heavy item to be borno by a society which is exerting such a wide and i potent influence in relieving tho various colonies from payments on account of charitable institutions' which they would otherwise lie compelled to make. 1 do not for one moment contend that societies oi t his character should lie entirely exempted from any payment for tho protection which, they enjoy from the State, but 1 do not hesitate to say that they arc unduly taxed. (Hear, hear.) In the colonics of Victoria and Western Australia the authorities and tho public are so deeply impressed with the value of the services rendered by life offices that they are entirely exempt from taxation. (Hear, hear.) The balance-sheet shows that tho amount held by tho banks has increased by nearly £120,006. When it is borne in mind that we have added over £700,000 of new money to our funds,and that tho difficulties of investment, which have presented themselves during the year arc very great, you will not be surprised at this. On the other hand, you will notice that we have increased our holdings of Government securities by £207,189. (Hear, hear.) Our desire is to keep our funds invested, and if we cannot obtain suitable mortgage securities we must look to Government 0 and in some degree to municipal debentures, both of which, though safe, are less profitable. As the year 1895 marks a triennial period, we have to furnish Hie Governments of most of the colonies. with somewhat voluminous returns. This is the reason why the actuary’s report is more extended than usual. The particulars regarding the valuation of tho liabilities are set forth with great fulness, and those of you whose tastes lie in that direction will find ample entertainment in studying the schedules. There are two points to which I would direct your attention, these arc tho considerable fall in the rate of interest and the small increase in tho rate of expense. With regard to the former I may say that it is due to the general fall in the value of money throughout the colonies. The decrease in tlio rate is also due in some measure to tho fact that we have had to take oyer a number of properties taken as security for mortgages, and to give time or make concessions in a number of other cases. In all such cases wo generally find that when the properties reach us they aro out of repair and that we have to spend some money in putting them in a condition to attract tenants or purchasers. In these cases our invariable practice is to deduct all such expenditure from the rentals before crediting anything to the interest account. The practice is one which must meet with your approval. Tho percentage of expenses shows a very slight increase over that of 1891, though it is less than that of 1893. The hoard at all times gives its careful attention to the question cf expenses, but the increasing difficulty of obtaining now business, tho gradually decreasing average of the sums assured under now policies tend in the direction of an increase, and render the task of reducing the expenditure a difficult one. The cash surplus to be divided as the result of tho year’H operations is £132,522 13s (id, a sum which will produce reversionary bonuses of about £860,000. This is a slightly larger amount than was distributed last year, but as Hie number who will share in it will be greater, and as the lives aro a year older, tho reversionary bonuses will ou the average be somewhat smaller than those of last year. In addressing you last year, I said, You will, of course, "bear in mind that continued reductions in the rate of interest will probably bo accompanied by corresponding reduction in the rate of bonus.” As there lias been a sensible reduction in the rate ol interest for the past year you must, naturally expect some r, d action in the rate of bonus. tbit allot her rea-on exists for this lvdnctiun. As the actuary explains, lie lias in his valuation of the policy liabilities assumed a rate of £3 12.-; (jd, instead of £3 15s per cent., the rate employed in 189!-. This step has increased the liabilities by about £161,060. 1, Inflows that if the rate of interest employe 1 in the valuation had been •!, per cent, as in 1891, the divisible surplus would have been about £160,000 more than it now is, and the individual bonuses consequently would have been much larger. Wo are, however (as 1 explained last year), gradually passing to the use of tho 3.1 per cent, rate, and we have determined to adopt that rate in December, 1897. Meanwhile, of course, there is a considerable sum being absorbed each year which would otherwise be divisible surplus. When we reach the 31 percent, rate this absorption will cease, and we shall lie able to declare an increased bonus, although our reserves will then bo calculated by a much more stringent standard than has hitherto been employed. A paragraph in the directors report intimates that you will he asked at this meeting to appoint a committee of lit policyholders to confer with tho board and a representative from each local board concerning some alterations m tho by-laws. Following the practice of recent years, wo have with us to-day a delegate from each local board, except that of Western Australia. viz. :—From Victoria, the Hon Alfred Deakin ; from New Zealand, the Hon h. KiehardsOii ; from Queensland, the Hon J. S. Turner : from South Australia, the Jfon L. Stirling; from Tasmania, Sir I'. O. 1 ysh. I ; regret vorv much that no director from . Western Australia has been able to attend. The board lias long been conscious that there . existed ,i necessity lor an alteration in a number of the by-laws, and they came to tho ; conclusion that the occasion of the annual

meeting, when representatives from the local boards are present, would be an opportune time for discussing these. Tho board was further of opinion that members outside of the office, viewing tho proposed amendments with a non official eye, would probably bo able to offer some valuable suggestions, and it accordingly determined to invite you to appoint a section of tho members to confer with it in dealing with tho question. I shall later on nominate 12 gentlemen, who have been invited and who have consented to act it' appointed, though of course it is quito open to anyone present to nominate other members in place of these if they think lit; and hereafter you will be called together to learn the result of their deliberations and to give effect to their recommendations whero they commend themselves to your approval. I don't think there are any other matters coming within the scope of our Society upon which I need address you, and 1 prefer to deal with the business of tho Society rather than enter on the economics of the world at large. I may add that at the close of the year wo had nearly 125,000 policy-holders ; that tho sums assured, including tho bonuses now about to be declared, willexceed 2518,000,000 ; ttiat the annual income is upwards of .82,000,000 ; and that these figures are in excess of those of any other mutual life office in the British Dominion. That, I think, is a result of which we may well bo proud. (Applause.) The Hon E. Richardson (New Zealand) supported the motion for the adoption of the report,. Ho said that, as the representative from flm New Zealand local board of cho Society, he would tell them what had been done by the Society in that Colony during the year 3895. The mew business transacted by the Society had been 2177 policies, assuring .8578,430. with a new annual premium revenue of .810,222. '1 his businoss exceeded that done during the previous year by .811.1115 in the sum assured, which lie thought could be regarded as a most satisfactory result, considering that most of tho other life offices transacting business in the same Colony, including the Government Lifo Insurance Department, bad completed considerably less new business foe tho period under review than they did during the previous vear. Tho total income of the New Zealand branch had now reached the large sum of 28:117,700 per annum, and this result had been accomplished in 2D, years. Of this amount 21115,781 represented the annual revenue from interest ou all classes of investment. Tho total increase in the revenue of the branch trom all sources at, tho close of the year was <812,828 per annum, which, lie thought, they would admit was a very handsome increase. Tho total invested funds of the branch at the close of the year reached the grand sum of .£1,971,488. Of this amount no less than .81,289,470 was invested in loans on mortgage on freehold properties within the colony, and tho average rate of interest on these loans was 2)5 18s 2d per cent., and lie had now to state that at the close of flm year not one penny of interest due within the year on this vast sum was unpaid—every penny paid up. (Applause.) The Society had only two properties on its hands at the present time acquired by foreclosure, and both of tlioso wero satisfactorily lot and yielding fair interest. When they considered that, most large monetary institutions within tho last few years, both in New Zealand and tho Australian colonies, had lost thousands, he might almost say millions, it was only natural that their local hoard and their chief executive officer, Mr Lowe, were proud of the position of tho Society’s New Zealand securities. _ Inconsequence of the increase in the Society s business and the cramped accommodation wherein to conduct it, the principal board, on tho recommendation of tho local board, had pur chased an additional piece of land adjoining the Society’s present promises, and _ wero about to erect a considerable addition in Wellington, which when completed would afford plenty of room tor some years to come. New Zealand was, he believed he might state without contradiction, the best assured country for its population in the world. Tho total lifo policies that wero in existence in the country at 31st December, 1894, taken from returns furnished to the Treasury, were (57,547, assuring 2518,297,501, with an annual premium revenue of 25550,899. To this had to he added revenue from interest on investments, amounting to 25249,411 per annum, making a grand total of -£810,313 per annum paid to lifo offices. Of this amount 25309,549, equal to 38 per cent., represented tho Society's revenue. When they considered that the estimated total European population of tho Colony was at the time only 08(5,128, it spoke volumes for the thrift and forethought of the breadwinners of New Zealand in providing to such extent for t hose dependent upon them. (Applause.) Iho lito offices were heavily taxed in New Zealand, and contributed in 1891 no loss than 2514,717 to tho revenue in the shape ot land and income tax. It was not a credit to tho Government of any colony to impose taxes on life office-, for it was nothing less than depriving the widows and orphans of a part of the saving made for them It represented no less than .8011,2(0 of further nsstiraneu taking Iho average ago of ;;i) years, so that they saw that tho Government diminished tho amount available to avert the poverty of the families of tlioso assured bv the above sum. (Applause )