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‘One of our chief problems last year was the investment of our funds at reasonable rates and the safe guardâ€" ing of investments already made. Financial policies in effect have been such as to insure an ample supply of reasonably cheap money available wherever credit was desired and warâ€" ranted. ‘There was a sharp rise in commodity prices in general and wheat in particular, whereas in the security markets, in which the Comâ€" pany is always greatly interested by reason of our accumulating funds which must constantly be invested, the past year witnessed an improveâ€" ment in the prices of practically all groups of Canadian bonds with the exception of Western Provincial Govâ€" ernment obligations which were adâ€" versely affected by Alberta legislaâ€" tion and of the bonds of some deâ€" faulting municipalities. it. The year 1936 ‘was an eventful and in many ways an encouraging one. With the exception of some large areas in the Prairie Provinces and the construction industry, there has been a general economic imâ€" provement. Our national income has substantially increased. Federal re venues were much higher ‘by reason of increasing income taxes, customs, excise and sales taxes, etc. Gains have been made in most industries, in mining and tourist traffic and there is a return of confidence which is essential to prosperity., The available yield from long term Federa} and Eastern Provincial Govâ€" ernment bonds declined about 139 during the year. ‘The Corporation Eond market was extremely active and borrowing corporations were enâ€" abled to call 5¢, and 67, bonds and redeem them with the proceeds of new 3% and 49, issues at prices which yielded from about %@, to 4‘>0, to the investors. "The record of the Company for the past year, as shown by the Diâ€" rectors‘ ‘Report, must, I am sure, be very gratifying to you. Through the year just closed the Company has maintained the steady progress and the successful operation which has characterized it since its foundation sixtyâ€"eight years ago. The Balance Sheet discloses a position of excepâ€" tional strength. As the General Manager has dealt with the main features of the financial statement, I will not make further comment on It is naturally difficult for institnâ€" tional investors in high grade corâ€" porate securities to be enthusiastic about the tow coupons placed on the various refunding issues reaching the market. The sales exceeded the 1935 figure by three quarters of a million dollars. The number of policyholders was increased to 155,000, and the number of policies to 228,000. Policyholders Take Additional Insurance 45% of the insurance sold was on the lives of people who already owned policies with the Company. $3,500,000 Dividends to Policyholders The total amount paid during the year to the policyholders, who are the owners of the Company and receive all the surplus earnings, was $15,983,000, which includes $3,500,000 in Diviâ€" dends. Total payments in Dividends since the Company was established in 1869 amount to $66,000,000, and payments to policyholders for all purposes exceed $215,000,000. * Assets Increase It was reported that the Company‘s assets increased during the year by $8,475,000 and now total $161,000,000. Reserves Increased The total of Special Reserves and Surplus Funds was inâ€" creased by $1,200,860 to a total of $13,753,903. The full text of the President‘s adâ€" dress follows: It will be admitted that it was deâ€" sirable to ease the burden of interest for Government, municipality, comâ€" pany and other debtors but I think it is most important that the crediâ€" tors, comprising large numbers of our successful and thrifty citizens, should not be forgotten. It is their future as well as existing investâ€" ments upon which we must depend for the financing required to conduct the businesses which carry our pay: rolls. In the attempt to keep the debtor solvent, we might have to face a sitnation where another class of peopleâ€"the creditorâ€"might be seriously injured. It will be readily understood how this would come about when it is considered how finâ€" ancial institutions have continued to carry on their business and invest their funds at the prevailing high prices of good bonds and that if there shoukd be a return of interest rates, even in part, to those which preâ€" vailed say from 1920 to 1930, market values of portfolios would be reduced to an extent which might easily prove embarrassing to many comâ€" panies. Fortunately for us, life insurâ€" ance companies by selecting maturiâ€" ties can avoid the necessity of liqniâ€" dating securities before maturity. One of the outstanding features of the reports presented to policyholders of The Mutual Life of Canada by Mr. R. 0. MeCulloch, President, and Mr. W. H. Somerville, General Manâ€" ager, at the Annual Meeting held at the Head Office here today was that for the 67th year in succession the Company has closed its books with more insurance in foree than at the beâ€" ginning of the year. The Company was established in 1869. ‘ 19,000 New Policies Over 19,000 policies for insurance totalling $49,000,000 were issued and revived during 1986, bringing the total insurâ€" ance in force (excluding annuities) to $537,895,000, 97% of which is in force in Canada. Sales Last Year Exceeded Those of 1935 by Threeâ€" quarters of a Million. Pelicyholders Take Addiâ€" tional Insurance. $3,500,000 Dividends to Policyâ€" hoiders. Assets and Reserves Increased. Big Problem of Insurance is Security. Easy money has reduced the earnâ€" inga of all thrift acoumulations. Our bnsiness is mainly thrift and, as a writer has said, there must be a living wage for money if thrift is to persiat. The thrifty are conanmers of goods and servicea and the offeet to reduction in their e@arninga mmat Mhe in lower pricea for the necessi tles of life ‘There has of late been wideapread and not infrequently just, sympathy for debtors and at the same time Over 19,000 New Policies in 1936 Bring the Total Insurance in Force to Sum of $537,865,000 Sales Show Increase Over 1936 Waterloo, Ont., February 4, 1937. At our Annual Meeting on the 7th of February, 1935, [ stated it would be the Company‘s policy to continue to offer special assistance to its farm borrowers. In pursuit of this policy the circumstances of each borrower have been considered. Many adjustâ€" ments have been made in the amount owing, the rate of interest and terms of repayment, to insure that the deâ€" serving farmer can continue ‘with a reasonable prospect of success, much illâ€"founded abuse of creditors and, while it is unnecessary for me to comment on this much discussed question at any length, I would like to throw in the weight of my opinion with those who advocate a just conâ€" sideration of the rights of each. While the farm investments offthe Company represent only a small proâ€" portion of its assets, (approximately 5%), the importance of the steady recovery in Western agriculture to our national prosperity impels us to take a personal interest in each inâ€" dividual farm account. The security for these investments consists of the farm homes and lands of approximately three thousand farâ€" mers and their families. Since 1929, due chiefly to lack of markets and acverse climatic conditions, many farmers, through cireumstances beâ€" yond their control, have been unable to make ends meet. Some have beâ€" come discouraged but most of them have bravely carried on. ‘The results have fbeen gratifying. Many farm accounts previously in an unsatisfactory state have been placed upon what the Company feels is a sound investment basis; the farâ€" mer feels more secure, his morale has been improved, and the relations between the Company and its borâ€" rower maintained on a friendly and satisfactory basis. To secure the best results, many Western farmers require to recondiâ€" tion their farm buildings, equipment and houses, which have been alâ€" Jlowed to serionsly deteriorate, and unâ€" fortunately their financial position is ao serions that more than one prosâ€" perons year will be required to renew their purchasing power and provide funds for these necessary improveâ€" ‘ menta The price relationship between what the farmers buy and sell is graâ€" dually _ becoming more â€" equitably established. Since 1980 production costs have been cut to a very low fignre and farm practices greatly imâ€" proved . Funds to finance these essential needs in the meantime and to rehah |itate these farms where necessary can he best obtained through credit facilitie@ that have ‘heen tried and teated through years of experience, and I hope that Weatern agricultural recovery will not be further impeded Life Closes 67 Years in & acqu _ Companies with farm mortgage Joans in Manitoba voluntarily took action similar to the arrangement made in Saskatchewan. Any action of like nature in Alberta has not been possible up to the present time beâ€" cause of the enactment by the Alâ€" berta Government of the illâ€"conceived Reduction and ‘Settlement of Debt Act and other credit damaging legisâ€" lailon. As this Act deals with interâ€" est rates, which, under our constituâ€" tion, are within the exclusive jurisâ€" diction of the ‘Dominion Parliament, legal counsel have advised that it is invalid and this question. is now beâ€" fore the courts in Alberta. Until this question is disposed of, the adjustâ€" ment of farm mortgages in Alberta remains in abeyance. It should also be pointed out that the Alberta Reduction and Settlement of Debts Act applies to urban mortâ€" gages as well as rural although our experience of city mortgages in Western Canada through the deâ€" pression has been equally satisfacâ€" tory with that of Eastern Canada and indicates no necessity for adjustâ€" ment of indebtedness even in isolated cases. | am very glad to be able to report that there has been no disâ€" position on the part of our mortgaâ€" gors in Alberta to take advantage of the provisions of this legislation and while mortgage collections in the Province have been curtailed to some extent as a result of the uncertainty regarding the validity of the legisâ€" lation, our collection experience through the four months following the enactment of the Act in question indicates that the large majority of Alberta citizens do not desire to evade their obligations and have shown a willingness to negotiate a reasonable adjustment of their mortâ€" gage indebtedness. . A plan for the voluntary reduction of debts in the drought area in Sasâ€" katchewan on an extensive scale is being proceeded with as a result of negotiations between the Dominion Covernment, the Saskatchewan Govâ€" ernment, the rural municipalities and the lending institutions. ‘The ‘Domâ€" inion and Provincial Governments have arranged for the cancellation of relief and seed grain indebtedness incurred prior to January lst, 1935 Arrears of taxes were reduced.to the approximate average of two years. Lending institutions agreed to make a general reduction in outstanding arrears of interest in the drought areas and in addition the rates of inâ€" terest on all farm loans throughout the Province were reduced to 6%. I regret to observe that an effort is upparently being made in certain quarters to stir up opposition to this plan. This is most unfortunate as, while it is clearly impossible to satisâ€" fy everyone, I believe the Saskatcheâ€" wan plan contains the nearest posâ€" sible solution of a most difficult probâ€" lem of very great magnitude. It cannot be too strongly emphaâ€" sized that much of the relief already effected was provided at the expense of hundreds of thousands of policyâ€" holders located throughout (Canada While I think that our policyholders generally would approve the contriâ€" bution already made, there is a limit beyond which institutions such as ours, operated solely for the purpose of the economic and social welfare of its members and dependents, canâ€" not be expected to go. by hastily conceived measures or acâ€" tions which might further damage Western credit and retard the recovâ€" ery which has now commenced. The relief which is really required in the West is a national obligation which _ the â€" Federal _ Government should deal with and it should not be thrown disproportionately on some of our citizens merely because they happen to have made investâ€" ments there. Funds to provide these essential needs for the West must be provided _ By reason of the stand which our Federal Government has President, Mutual Life Assurance Company of Canada, who pointed to the difficulties of sound investâ€" ment at the annual meeting. Who was agrin reâ€"elected ms first viceâ€"president of Ahe Mutual Life Assurance Company of Canada at the annual meeting. R. 0. MeCULLOCH LOUIS L. LANG PBB W AR Comment on the Statements which have been presented of the ‘Comâ€" pany‘s business for the year 1936 may profitably commence with an analyâ€" sis of our iProfit and Loss Account, making some comparisons with the preceding year, as this Account gives the most accurate analysis of the year‘s operations for the purpose of following the progress and condition o‘ the Company. Premium Income in 1936, $17,950,â€" 182.34, was greater than that of 1935 by $236,927.95. There is, unfortunately, a seemingâ€" ly popular conception that the assets and income of life insurance comâ€" panies belong to a few and that the companies are big institutions whose interests are inimical to the public weal. That such a conception is definitely erroneous has often been stated by officials of the companies but the fact that the assets and the income of the life companies are trust funds held in safeâ€"keeping for many thousands of individuals is one that cannot be overâ€"emphasized. In initiating action harmful to the inâ€" terest of the companies by repudiâ€" ating contractual obligations, damâ€" age is not being done to the soâ€"called big interests but to the rights and property of the great number of citiâ€" zens who by their prudence are enâ€" deavoring to provide through their insurance policies security for themâ€" selves and their dependents. It seems that it is often overlooked that these people who pursue "the even tenor of their way" form the backâ€" thone of the nation. If legislators would listen less to the demands of agitators and those who seek the limelight by urging some untried system and ‘would have more regard for the large body of our citizens who, attending to their business, have less time to give pubâ€" licity to their needs, a greater contriâ€" bution to our welfare would be made. The debtor who is in genuine need of relief must be helped but there are those well able to meet their ob ligations who find it profitable to agiâ€" tate for and support measures deâ€" signed to reduce their liabilities. It is not by the enforced reduction of Some discussion has taken place recently with regard to immigration. It may be said that if the growth of population is to be determined by natural increase, the development of ‘our country will be extremely slow and the burden of debt arising from the provision in the past for a large population will be yvery heavy on our citizens for many years to come. Our experience in agriculture in the past fifteen years has proved that the smaller quartér and half section farm units show a stronger resistance to depression than the large farms. The areas of ‘Western Canada suitable for grain and mixed farming now under cultivation are capable of supâ€" porting a large increase in populaâ€" t‘on, the purchasing power of which would assist in supporting surroundâ€" ing municipalities as well as ensurâ€" ing steady employment to the inâ€" dustrial areas of the East. Experâ€" ience has shown that men brought up in the urban districts cannot be exâ€" pected to adjust themselves to the hours of labor and living conditions found on the prairie farms and if our Western areas are to be adequately populated within a reasonable period, it seems to me that we should look It is again a great pleasure to acâ€" knowledge the very efficient services of our office and field forces during the past year and I wish to express the thanks of your Directors for their continued loyalty, efficiency and coâ€" operation. the amounts we owe one another, which decreases income as well as expenditure, but (by increasing proâ€" duction and the exchange of comâ€" modities and services amongst our‘ selves and with other nations that a> major contribution to our well being will be made. Mr.Somerville‘s Address The General Manager of the Comâ€" pany, Mr. /W. H. Somerville, in the following _ comprehensive â€" address dealt with the Companys‘ Annual Statement and Investments: Income from Interest, Dividends and Rents at $7.116.8%70.70 increased $184.319.89. to the densely populated areas of Northern ‘Burope for our agricultural recruits. It is probable that the unâ€" rest in Europe at the present time might provide suitable immigration and I think that a definite policy by the Federal Government at the presâ€" ent time would not ‘be considered premature, In conclusion, the period of deâ€" pression is definitely passing; a re turn of confidence is manifest in many directions and I think we are justified in believing that the imâ€" provement which has already been made will be continued and that 1987 will be perity The sum of $49,233.54, of which $34,840.40 was Profit on Bonds sold, is taken into Income as Profit and Appreciation _ on Ledger _ Assets, against $139,590.43 in 1935; but in 1926 the total Profit realized from Sales of Securities was $1,276,669.85. Irstead of taking these entire Profits into Income to increase the Surplus Earnings for the year, it was consldâ€" ered that it would be of greater beneâ€" fit to our policyholders to write down the cost price of new investâ€" ments; and to the extent of $941,â€" 15436 these Profits were used for this purpose. ‘The increased yield therehy obtained will thus be re ceived over a period of yeara; and in view of the enrrept _ high pricea of bonds and the £.w ylalda obtained from an inveatméept in them, the losa which would reault from a later rise in basic intereat rates will, in aame measure, be provided for In the 19%5 Profit and Losa State ment a provision of $645,746.66 was charged against the Surplus ®arnâ€" On the other hand, some of our Provinces are so hard pressed by conditions beyond their control that although (except for the unnecessary default of |Alberta) no actual default has been made in meeting public obâ€" ligations, their existing conditions bave prevented them from obtaining the benefit of lower jnterest rates. taken throughout the depression in regard to its Anancial obligations and also as a result of our favorable trade balances of the past few years, Canâ€" ada enjoys a credit position which makes her securities greatly sought in investment cireles and enables her to refund existing obligations and arrange new borrowings at exâ€" ceptionally low rates of interest in the face of a heavy national debt and a still unbakanced budget. a year of increasing prosâ€" The Surplus Karnings for the year, $4,701,711.93, are $286,786.41 less than in 1935; but, as has been pointed out, since some of the Profits on Sale of Securities were used to cover any necessary depreciation in the book value of securities, the net amount transferred to Surplus Funds, $4,â€" 455.376.29, is greater by $436,194.57 than the net amount transferred to Surplus Funds in 1936. ‘The provision for Loss and Depreâ€" ciation on Ledger Assets of $368,â€" 957.20 and an addition of $92,415.64 to bring the Special Reserve against Loss of iPrincipal on Mortgages and Sale Agreements to $1,147,863.51, is deemed adequate for these purposes. Under Expenditures and Reserves, it will be observed that Disburseâ€" ments in respect of Life Assurance and Annuity Contracts comprise the two amounts of $12,646,138.91 for Claims, and $3,256,409.47 for Surplus. ‘The corresponding Cash Disburse ments for Death and Disability Claims were $3,586,813.90; for Maâ€" tured Endowments, $1,759,489.78; for Purchased Policies, $5,106,917.11; for Surplus to ‘Policyholders, $3,490,â€" 581.72; and for Annuities, $108,470.09, the total being $14,051,223.30. ings for the year for depreciation in the value of bonds. it was not necesâ€" sary to make a uw Charge in 1986 because the corresponding provision in 1998 was $300,075.09, this sum was realized from the Profit on Bale of Becurities, to which reference has already been OTHER BONDS Public Utility, Industrial, etc. â€" HEAD OFFICE PREMISES At cost, less amounts written off OTHER REAL ESTATE =â€"â€"* STOCKS e TOTAL LIABILITIES AND SPECIAL FUNDS W. H. SOMERVILLE, A.L.A. â€"_ General Manager J. M. LAING, A.LA., FAS. 2002 20â€" Actuary H. HOLMES, A.l.A., FA.S. â€"_ Associate Actwary J M. LIVINGSTON, M.D. _ â€" _ Medical Direetor A complete report of the Proceedings of the Company, Waterloo, Ont.. on Thursday, Februa MORTGAGE LOANS AND SALE AGREEMENTS GOVERNMENT AND MUNICIPAL BONDS CASH AT HEAD OFFICE AND IN BANKS _ . . . . . PREMIUMS Due but not yet paid, also unpaid semiâ€"annual and quarterly instalments s s\ s 0s a) a) a\ â€" m W. 6. WaATSON . . . T. A. RUSSELL, LL.D. . _ ISAAC PITBLADO, K.C., LL.D. E. 6. LONG, K.C. .0. _ C.F.M§E . . . . . OTHER LIABILITIES s ~ +0 s s s s SPECIAL RESERVES AND SURPLUS FUNDS, as follows: Dividends allotted deferred dividend policies _ â€" $ | Provision for interim dividends under quinquenmnial _ LOANS TO POLICYHOLDERS POLICY RESERVES INTEREST Due and accrued on invested assets PAYMENTS DUE From Reâ€"assuring Companies â€" _ â€" TOTAL ASSETS «+ % Ryg but not yet paid TAXES UNPAID POLICY CLAIMS Provision for taxes, payable in 1937, computed on business of 1936 PREMIUMS AND INTEREST Paid in advance 00e n n s s n n 5) g DIVIDENDS AND OTHER AMOUNTS ON DEPOSIT WITH THE COMPANY DIVIDENDS TO POLICYHOLDERS R. 0. MeCULLOCH President, Galt sale agreements . â€" â€" . . . Policy Reserve Adjustment Fund _ â€" _ â€" General Investment Reserve _ â€" â€" . Free Surplus available for contingencies â€" All Canadian The market value of bond and stock holdings is substantially in excess of the book values shown above. ~ policies a s e e e Provision for staff pensions â€" _ â€" _ â€" Provision for dividends payable in 1937 Specific Depreciation I{)osorvo on mort Fully secured by the cash value of policies of this Company â€" _ â€" The Department of Insurance (Dominiqn of Canada), under whose supervision this Company operates, requires the maintenance of a reserve fund sufficient to guarantee payment of claims as they arise under assurance contracts. Which include death and disability claims awaiting proof, matured endowâ€" ments awaiting payment and provision for death and disability claims of current year not yet reported = > > = * # w # = JUTUAL [IFE Assurance Company 67Tth Annual Statement _ December 31st, 1936 MAJ. GEN. HON. S. C. MEWBURN, K.C., CM.G. OF CANADA by $1,219,906.82 to $7.734,39883; and if reference is nulotot.h-ho Sheet, where it will he observed that ‘Special Reserves are carried for "Dividends \Allotted for Referred Dividend _ Policies", _ $66§3,733.69; "Provision for Interim Dividends unâ€" der Quinquennial Policies", $808,â€" 186.45; "Provision for Staff Penâ€" s‘ons", $604,698.00; "Provision for Dtâ€" vidends ‘Payable in 1987", $3,500,000; and "Specific Depreciation Reserve on Mortgages and Sale Agreements", $1,147,863.51, it will be found that the sum of the Surplus Funds and the Special ‘Reserve total $13,753,903.23, an increase for the year of $1,200,â€" 860.94. roceeding: of the Ammwal Mesting held at the Head Office of the _ Thursday, February 4th, 1937, may be abtained from the Head Office or any o’.h Campany‘s Branch Offices. G. BLAIR GORDON BOARD OF DIRECTORS â€" _ Toronto â€" Toronto â€" _ Winnipeg â€" _ Toronto â€" Montreal 2nd Viceâ€"President, Hamition W. H. SOMERVILLE General Manager, Waterino LIABILITIES OFFICERS mortgages and THE W. G. MURRIN _ â€" GLYN OSLER, K.C. J. FRED FRASER . J. E. PERRAULT. K.C L. @UY, FA.S E. PEQUEGNAT, AJ.A., FA.S $ §63,733.89 3,500,000.00 1,147,063.51 900,000.00 2,000,000.00 4,834,022.38 Position > The cash Disbursement for Comâ€" missions, Taxes and General Exâ€" penses, $3,337,972.41, is $18,366.60 greater than in 1935, but the ratio of Expenses to ‘Total Income in 1986 is 11.82% against 11.90% in 1936. General Manager, Mutual Life Assurance Company, who roKortod sharp progress in 1986 at the anâ€" nual meeting. F.A.S. â€"__â€" Secretary Superintendent of Agencies e Treasurer LL.D Ist Vieeâ€"President, Kitchener LOUIS LaCOURSE LANG Assistant General Manager (Continued on Page 6) W. H. SOMERVILLE 13,753,903.23 $161,106,207.82 $161,106,207.82 â€" _ Vancouver, B.C $ 36,597,649.179 $128,360,201.00 Arthabaska, Que Chatham, Ont 65,274,363.57 27,657,895.98 982,016.17 16,481,092.04 16,988,952.14 645,517.01 4,726,446.178 3,545,638.52 2,783,910.41 2,400,935.85 958,427.76 273,694.45 143,043.59 408,525.10 219,460.55 10,741.70 Halifax