South Canterbury Times. TUESDAY, JUNE 16, 1885

South Canterbury Times, Issue 3804, 16 June 1885, Page 2

South Canterbury Times. TUESDAY, JUNE 16, 1885

The policy holders of the New Zealand Government Life Assurance Association, are now called upon to record their votes for or against the creation of local Boards for the management of the rapidly increasing and lucrative business. The Department has dealt very fairly in the matter. They have transmitted to every policy-holder in the colony, copies of the annual report, the report of the meeting of policyholders in Wellington, and the statement of arguments for and against the proposal. These are well worthy of pernsal, for in them the entire subject is exhaustively treated. The leading advocate of the local boards system is the Colonial Treasurer, Sir Julius Vogel ; its principal opponent, Mr George Fisher, M.H.R. The proposal is to establish at each of the three principal centres of the colony (viz., Auckland, Christchurch, and Dunedin) a local directory consisting of three persons, upon whom will devolve the important business of recommending investments for the consideration of the Department, and generally watching its interests in the districts ; each of these gentlemen to be paid £IOO per annum or £9OO in the aggregate. At the same time it is proposed that the department acquire splendid offices in all these centres. This proposal has the double objection (1) that it will if carried into effect entail extravagant departmental expenditure and (2) that it would divide and weaken the control there should always be over departmental business, and rob policy-holders of their bonuses. This last reasoning, it appears to us, is very poor, compared with that of the supporters of the proposal who very pointedly urge that the business of the Association would rest on a much broader foundation, if the Central Board were made aware from time to time of the exact value of investments. It stands to reason that three local men of standing, responsibility and business knowledge would

be able to render valuable aid to the Department, when it was desired to purchase or lend money on property in their provincial district. To say that an agent conld do all this is no argument at all. This is jnst a function which officers of the ntaff could not do anything like so well as a local Board would. The objectors instilnted rather an unfortunate comparison between the Department’s alleged lavish expenditure, and the line of action pursued by the “ Mutual Association.” Sir Julius Vogel's reply to that comparison is worthy of perusual for it explains the position

“ Mutual offices from time to time make a valuation of their assets and an actuarial estimate of the present value of their liabilities. The difference is what they call their profits, and these profits are divided, generally closely up to the hilt, with little or no reserve fund. Practically the mutual offices have no capital, and persons who insure in mutual offices combine the double operations of making a provision in case of their death, and participating in the profits of the institution. Of course this is very different from simple life assurance with the large offices which possess a vast amount of capital, and whoso security is impregnable, Persons who insure their lives have the right to decide whether they will go in simply for insurance without looking to any indirect profit, or whether they will embark on the double operation ; only there must be no mistake abont it.”

The next subject of discussion at the recent meeting in Wellington was the question of acquiring new and palatial buildings at the three different centres. With the proposal to acquire “palatial offices ” we have but little sympathy. We do not think the Department is justified in making so expensive yet so retrograde a step. The New Zealand Government Insurance Association ! ( Why, the display of this reassuring title alone would attract insurers. Any rash purchases would be strongly disapproved of by the generality of the policy holders, and quite wisely. Of course we cannot complain of the acquirement by the Association of good town sections on advantageous terras. The investment is a good one, and one of the duties of the Local Boards would be to assist the Association to suitable investments. If the Boards do their work fairly well they will easily save the Association far more than their cost (£3OO each Board), therefore the policy holders should think well before they negative a proposal so obviously practical.

Mr Sutter’s anxiety about the spare blocks in the block-yard is not very well fonnded. He is of opinion that the Board should not require the contractor to leave the yard full of blocks at the expiration of their contract, because the expense of making them, something over £2OOO, would be greater than the Board would be justified in incurring, where there could be no revenue. The Board’s money would be eunk in concrete blocks which would yield no return. From the standpoint of a financier this reasoning is sound enough, but there is another aspect to this case besides the financial one. It is most probable the work will be proceeded with and six or eight months seasoning will do the blocks no barm but all the good in the world. A yard full of seasoned blocks would be an excellent instrument then. But besides this, it is very certain that if the, yard is cleared of blocks and left entirely open a really rough sea would fill it up with shingle. All things considered, we fancy the Board would not have done wisely bad they followed the advice of Mr Butter in this matter.