seasonal’ 11. 194s

Canada’s High Living Standard Result of F ree Enterprise ' e "A Says President of Mutual Life of Canada

‘Wise Planning and Spending Will

Help Control inllotionory

.. Trend —'Cl|emcter of People Notion‘: Reel Wealth and Hope

_: MUTUAL LIFE or CANADA AGAIN ssnnususs reborn

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yylisrioo, 0nt., l-‘eb. 5th.

Professional standard of service given by Company's representatives ‘

stating that vigilance and wise spending on_ the part o! all cltlearls 14 eswntlal to prevent the spiral of inflation in Oanad-a, Louis L. Lang, J-trcsldellt of The Mutual Life of Canada, when addressing the ~78th Animal Meeting of Pollcyholders today called on Canadians to follow ‘the practices and precepts of the pioneers in order to help overcome the difficulties that today face Canada and other parts of the world.

Mr. Lang stated that existing signs indicate a continued high voi- ume of production, distribution and work for Canadians in supplying moods needed not only at home but particularly in devastatedcoun- ‘mes. with a continuation of free enterprise, so dearly bought through 1m, years, and its benefits-of freedom of action and personal initiative. jun-l a eontlnuim recognition of the importance of reel stand-orb and ‘yslucs. Canada should be able to meet and overcome any problems of

hhc future. stated Mr. Lani?-

mrsrrlng specifically to the progress of The lliiiutual Life of Canada, 11,, pointed out that for the second year in succession sales of new life iirlsurance exceeded one hundred millions, the Conlipany operating almost entirely in Canada and Newfoundland. I A condensation of Mr. Lang's address follows:

RANGE ' COMBATS INFLATION

There can be no national stabil- liv ivitholit a sound economy and the greatest threat to the orderly resumption of peacetime conditions lies in the continuing upward irenrl of the inflation spiral.

This is caused partly by the pressure of an inflated national in- i-orho to secure possession of an insufficient supply of product-a The quickest and surest method of re- lieiirig this pressure is to syphon l! much of the national income as possible into channels other than the purchase of commodities. The largely increased amount which is being entrusted to life insurance companies nccmnpllshesrthis object in a substantial, effective and per- inatirnt formf rnornssrom. arlNnAItDs 0!‘

SERVICE

The distribution of life insurance is no longer mPFely the selling-OI i commodity, but hnsvhccome a professional service. making Dro- vl-lsil for financial security. indi- ridual, family and business. cover- irig not only the hazards of today lfltl tomorrow but also extending into the years- which lie beyond. The ndeouate trainingof. field re- pfttllttfili?! requires, not only thoughtful direction from the Home Office but concentrated nu- pliralion and serious study on the part cf managers and agents in the field. fOHNLEIII-ZNSIVI-l BENEFITS Till’. INDUSTRIAL WORKERS

l‘! ziviilg attention to the stead- ily rsirig needs of humanity gen- rrrll; it is only natural that life lr‘='.l"".ll"€ should extend the scope of its operations to include in grcairr numbers industrial Wurli- trs. Recent years have‘ seen I marked development of group in- surance, based on the employer- omployee relation, which enables us to provide insurance coverage it a lower cost than is possible under individual solicitation and roller-lion. The group life coverage we provide now eroceeds 805.000.- 000. and is growing rapidly. In nddition, our group contracts pro- vide benefits for employees other than life insurance. such as pro- tection in the event of accident. sickness or disability. and provis- ion for the cost of medical‘ care. nursery and hospitalization. Retire-

ILIPP.‘ I-NSU

mént and annuity benefits ere also 5

furnished in very manycases.

MORTGAGE LOAN INVI-JsTMENTS INCREASE

Ii is gratifying to note e sub- itarlilal increase in the Company's mortgage loan investments. As in ihc past, we are continuing totake lfl active part in NatlonalHousing Act projects. Our investment in- ierest in Prairie farms is now but u fraction of whet it formerly was We continue to make this type of investment but find the demand for farm mortgage loans is limited. The enioymentlby farmers of a Mmfortable living, with some- thing to spare, is so important to our Canadian economy that I hope this condition will continue. lllGII DEMAND F08. MANUFACTURED GOODS

m Cillllll, production in new» hqiunng. culture. mlninmum- bering and hing should continufl

It 111th leveie during ‘i048. I Molt countries are without luxuries ‘all’ tven comforts, and ‘many ere I i - Iiibrt of the heel-little: of’ life. Tlnir p ea crequire immense uooliu of reed. clotiiinl. furnit- "N. end anally other. manufactured articles. The dllnlfl done by thl wir to material , things, ‘such as buildingsfireotorlefs and transport-

rtion system, 1g rqlgoed only in‘

I small extent. ‘Vast ‘amounts .01’ machinery, building groundnut! will. are needed to compltil this llllfl- The foreete and jfilllll must continue to supply riw materials. Moat Canadian factor-lee ere etili behind with their ‘orders, ovvlfll to the accumulated demand for their Products." In Canada, we ‘are try- "II in do two things simultan- loueiy. We ere narrowing the Ill! between the neede of the people of Iur own country and the available llllipiies of ell kinds. In addition, WI are quantities of food IM loode u. countries on the greetlirjefly » huwnl. Th"! are many ladies in that this ooulileteebwill be ooutinu .

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4i l‘ f _- - m“ l l iodloeteeon- tilillbu " '

of this country. How ioiig this situation‘ will last "is a matter of intense interest and consideration, but is quite incapable of definite prediction. _ PATIENCE REQUIRED WITII UNITED NATIONS PROGRESS There is widespread disappoint- ment that the international mach- inery set up by the United Nations has not produced better results. Its achievements to date ere deiln~ itely below what was expected. The magnitude of the task must be taken into account. At best. what degree of world government could have been attained in less than three years? Wisdom. Mu-

sge, patience and toieranm l-Ic peeded to achieve even smal. measures of success in so vast an un ertaking.

I spite of difficulties, some pro- gress has been made during the year. In the meantime. Canada, vitally affected by external decis- ions and events, must take an iii- telllgent interest in world affairs and co-operate with other coun- tries in dealing with them. SCARCITY 0F GOODS AND IIIGII DEMAND HELP CREATE IIIGII PRICES

Prices are still rising and, unless something unforeseen interferes. they will probably continue to rise for some months. ‘There is nothing strange about this. Priccsalweys rise during and after a great war. In war, enormous numbers of me.l and women are taken away from their regular work and their ener- gies are ‘transferred to the armed service and to tile temporary oc- cupations required to supply thesi: services, Large numbers lose their lives or are badly injured. Great damage and loss are inflicted, not only on the combatant nations. but on all the rest of the world. These terrible and accumulated disc-tern. combine to create and maintain scarcitles of all products. When products become scarce they be- come dear and they stay dear un- til scarcity is replaced by‘ plenty through the revival of production. Articlesbecame more coerce than was necessary during the past twi

years because of the very human desire of people, following the nus- feritiee of war. to bllend their money. of which they had conaid arable amounts. on anything that they could get. Witlumony "i" ‘ for inadequate supplier». prices were bid up unduly. we would be in a" bettu" D°§ition to- day if we had‘ exercised more re- straint since the end of the war- If we d not preetise self-denial where ble, the well-meaning but heavy and inept hand of 80V‘ einmenta will force action which. in the end, la only too likely t0 J" more harm than good. SECUIITY POI. WORKERS Wages ere. of oihlrse. the great factor in coats of all products an.‘ services. uurtunateiy, there are en- couraglng signs that ma!!! W0" end‘ salary earners are Iettlnf tired of chasing the Iylrfl “award 5114,“; ‘ICIIII greater value on the advantages of steady employ meat and lower prion 1°!’ i" things which’ they have to bill'- ‘They are realizing also that their beet hope of urity lathe ele- etlon and me tenence of W80 end work schedules which will keep plants in constant operation end in a sound f‘ nciel position. IOCIALIBTIC ‘IIIOIIIQ IN OPERATION DIING L058 0|‘ Milli‘! AND CPIOITUNIT! {The history ‘of the world shows that socielietie theories when put into effect on a lam wile w" l” maintained only 5190110! It!“ methods, ‘dictatorship, loss of lib- may-sud opportunity and dearly!- ‘etion’ of‘ the 90°01! Nlilll-llll "l l reduced standard of livinl- 50"" out ‘eueh conditions with. the re- uoreeot whet ceaseless lisve- mh~ loved. min a very lmlli vermi- ‘ q|_ tliejwqrldb population. stead‘ liilh in» Pm‘ leg gttglnrnefl relilofl. ll ', lion abdilcelal welfare, and silo in materiel-fields,‘ which have bro- vided one of the. lukhect etenderde‘ of-iiving in the world." ' ‘ , m’ “r w on'°hiii'i'iiw”wl' t exten ~- free me '_ duel enter- ; “which novice: .mo;rtunlti9r‘ 6f: - ' ' i '

‘ 0900b within the‘ bouoderiee '

lrwo years mummy in hi!!! plecee ini Goyflnriient‘, "labour sod ‘m, .4 in ‘visual-y in the coma ‘flfllepfl e lingual}:- I .. m _ ‘ (when wee. an»

i. . . .1 t lobe. new need statement

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persons who urge that it is better to give up hlgher-peemlunflnsur- nice, re-invostltl cuh value and buy term insurance for protection. Certain articles have been wrrittnzl advocating the purchases of term insurance to the exclusion of all other plane. For. temporary needs term insurance is very use- ful; but as protection of a temp- orary character for a period of from ten to twenty years, term insurance may be expensive as compared other permanent

to demand, and tn secure immedi- ate change in the work week from 48_ hours to 40 hours or lees. They even stated that the real problem was to learn how to live 50% bet- ter, while working less. They ap- parently fearcd over production. The results of the last two years have proved how wrong these poorly-informed prophets were Perhaps if they had been permit-- ted to do all the planning for us, we would have had less employ

merit, and certainly even less pru- ductlon.

EXCESSIVE INFLATION MUST BE AVOIDED

The people of the United States and Canada have never known such apparent prosperity as they witness today. There never has been such n. large national income though our dollar -is seriously de- preciated, nor such an immense production, nor so much work a: high wages. Part of this Sltllfltith. is due to the strategic position they occupied during the war, their freedom from invasion and cle- struction and their immense l-c-' serves of men, machines, materials and food. But part of it is due to inflation, which, in the nature of things, is artificial and temporary. Inflation in Canada, however, scri- ous as it is, is really slight in com» parison with the degrees of ir- fiation which have swept through other countries during and sinc; the war. A moderate inflation is not an unmixed evil. To some ex- cnt, it is n. punishment for pas’. errors and a remedy for their rc-

mlrilal. LIFE PIIESIDENT /

Louis L. Lang

President of tile Mili-ual Life of Canada, who addressed the 78th Annual Meeting of policyholders. h?“ at Waterloo, on Thursday. February 5th.

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STATEMENTs ANALYZEI) asp ' PROGRESS REVIEWED BY MIL W. I-I. SOMERVILLE, VICE-PRESIDENT AND GENERAL MANAGER When analyzlnzjhe Staten-mm, {oil- l947,_ 2 W. H. Somervllic. ce-Presidellt and General Mali- 8-891‘. stated that the Company's

suits. But we must make every ef- fort to avoid following the road of excessive inflation to the ex- treme degrec which would dimin- ish greatly or wipe our property values, and would reduce much employment and real lnOOTll€S.lli all fields of Canada activity.

PROBLEMS Oi!‘ EXCHANGE AND

INTERNATIONAL BALANCES

One of our chief problems h‘ financial. which is a direct rc- sult of international developments. Briefly, we are not getting paid for the greater part of the pro- ducts which are being sent out oi this country to other countries and it is problematical if we ever will be paid for considerable quan~ titles of these goods. Such goods have been erroneously described as exports but they are really noth- ing of the kind. Real exports, as we have always understood tire word, are goods which are hilildlCJ "in the ordinary channels of truth: and are paid for. This is respons- ible for the vcry serious problem

_ tech due" im

of exchange and international oai nnces which is now concerning tni. people of Canada and will be a matter of grave moment for them until it is solved. Lct us remem- ber that one of thc causes of ris- ing prices is our help to other countries. We must continue to do our part in helping other coun- tries because that policy ‘i: right and also because it is wise. The Marshall plan should help Europe, South America. the United States and Canada when it is put into operation. We should co-operatc with this plan to the limit of our ability but, while doing thin, we should realize that our own proo- lems will be solved chiefly b)‘ 0-11‘ own thinking and efforts and act accordingly. VIGILANCE AND WISE SPENDING NECESSARY

The people of Canada. as in other countries. are in the shad- ows of uncertainties but this is e very dangerous world and catas- tmphcs are many and unexpected. It,would be dangerous to regard the swollen " “ which have been appearing during the Pail» few years as indicating e normal state of affairs. They have created an inaccurate impression and are partly responsible for the spec- tacles of waste and extravallmil which are all too evident in the United states and Canada. Some people have been throwing money about recklessly. Their minds ap- pear to be filled with material things as though they are "M" the impression that. bcvlwfl the! are handling a lot of Palm‘ mllnl-‘l’; they have arrived at a state o. permanent prosperity- CCIOPERATION 1N ALL- srrntncs REQUIRED OI‘ CANADIANS ' k

m the present year, let us wor hard u individuals. 1011mm: the precepts and practices of ‘our en- ceators and improving upon them- We should support and oil-OPE?!“ with our governments, Dominion, Provincial and Municipal. which in their ‘turn should leave us freo to do so, and also with the gov- ernments of other countries and with the United Nations. Canad- iens should strive to increase pro- duction, to maintain employment, to improve s ial conditions. to develop new mes of sum!!!" .from out national resources. snoop-rage immigration. to reduce

bll expenditures E§3°°‘,l‘.‘$. ‘i: ‘ivithhold cun- tel public works for riode of

lesser activity. and to vifiilnt and wise in ell public and private business.

ITIINGTIIENIN 0|‘ SPIRITUAL VAL ESSENTIAL Most l orient of ell, Canad-

iins shoul uphold the conception of spiritual values. Materialism:

hllosophiea 'perish with material-

tic nations which they‘ have mis- guided. The characters of peoples ere their reel wealth and hope. Two worldJrel-l and the interven- ing world depression were severe touts of fortitude vbut the people of canede; endured and won through and l! Canadians ‘continue to at» p tence to reel sten- some and n uee, they should be able. to meet

assets had increased during the Ye" by 818,445,600. to a total of $305,238,178. Surplus Earnings, which constitute the source of pfg- mium refunds. or ‘dividends, to DOi-kyliolders, were vcry satisfact- °YY Ht $5,432,440. A total of $4,- 194300 was paid ill Dividends to libli-cyholders in tile ndst year. In. eluded in the Liabilities is provi- sicn for payment of Dividends to policyholders in i918 amounting t: 847503.000. an increase of $250000.

Hi9 Uflfi-‘Sllilled Contingency‘ Fund was increased by $988.24) to 93.401713. This sum, with L1,; General Investment Reserve of $3.- btlllllell, represents 5.51"; of Tami Assets. ~ ‘

INTEREST INCOME lamest" Income amounted l-J 810883.673, an, increase of $347,416 over i946.

POLICY LOANS Policy Loans re-prescnt 5.80m’ of Total Assets and total $17,535,176.

RATE OI" INTEREST The gross rate oi‘ interest earl‘.- cd on invested assets was 3.84’..- as compared with 3.96G- ili i0l6.

DIOBTGAGES ltNll SALE

‘ AGREEMENTS ~ MOPESRKCS and‘ Sale Agrcciuellls at $38,5N,402. on increase of $6,- 197,374 for the yczll‘, now com- prise‘l2.6'?i» of Total Assris. At the end of 1947 total City and National Housing Act Loans were $37,082,018 and $8,816,760 respect- lvflly. ,Mo es on farms am- ounted to $1. 0.713. The amount invested in National Housing Ac: Mortgages increased by $2,608,266 and comprise 22.0% of the mori- gage, portfolio as compared with 10.2% a year ago. 3.256 new mort- gages. amounting to $12,474,094. were accepted in i047.

BONDS Bondskomprise 75% of the Com- pany's Total Assets and amount ‘to 3335393570. Dominion of Canada Direct and Guaranteed Debentures "Waived by amass to $112,- 913,896; other Government, Pru- vlnclal and Municipal Bonds, m. creased by 86,699,345 to $40352,- 910 (B "1378! Dart of the increase being purchases or! U. s. ‘treasury Securities) and Public Utility, In- dustria and_ Other Bonds total $15,383”.

STOCKS

Holdings of Preferred and Coni- mon Stocks increased by $284,002 t0 37.883360. The market value of m’ 0° - y‘: Common Stocks W" slightly more than n million dollars greater than the Book Value.

AMOUNTS ON DEPOSIT

Policy Proceeds, Dividends Oil Other Amounts on Deposit with the Company amount to $45,824.- 388. en increase of 9.162.039 over a year ego.

DEATH CLAIMS

General mortality experience was very favourable. the ratio of aci- usl to expected mortality being lower then in i046. but there was an increase in the actual to ex- pected Double Indemnity Claims in. 1047. A sharp increase in accl- dents as the cause of death was reported.

_ I TERMINATION!

Of the total of $000,381,460 ex- posed ic termination during m1 actual terminations from all causes amounted to only“ 832,136,721 o: 3.51%. Mr. Somervllle pointed out that one-third of the Terminations each year result from Death Claims, Maturity of Endowments. or Term policies completing their period of covere ; one-quarter arc

their each values. The remainder represent policies continued in force for abort periods of n few months to under two years and than terminated for various reas- ons: it wee pointed out that thc erroneous irn on is sometimes given that t ese "lapses" prc-

t- e loss of the face amou t of

e insurance to the persons to whom the policies were issued. The loss incurred is limited-to the prc- miurnl or the fractional remlums peld lees the value of large amount protection furnished. The Company endeavours to keep spleo-endaurrendm alto-to a m nimuln through increased atten- tion to the quality of business written

bk. ‘lomerville estd. ‘The et- fortl of‘ our field men in endeav-

of the heyerisefrom

purity.

outing to keep business in force ‘ill’! nude more difficult by those

caused when po cy holders claim’

plans which may be surrendered when no longer required. The crit- icism of permanent plans is, how- ever, usually based on unsound arguments and charges erei made against the good faith of life in- surance companies in. the treat- ment of other than term plans. As these charges are without founda- tion, the comparisons which are made do not indicate the true ad- vantages or disadvantages of eith- er. One such argument is that on the death of the assured the cesil surrender value should be paid in addition to the sum assured; but in calculating the premiums the cost each year is based on the face

serve, so that no greater premium is charged than is necessary to pay the sum assured at death, and ilot the sum assured plus the sur- render value, which is based on the reserve. The cash surrender value is the alternative settlement which an assured person has the option of taking if he does not wish to continue an endowment policy to maturity or one of the life plans until death." EXPANSION 0i‘ LIFE INSURANCE I Regarding the expansion of iifei insurance, Mr. Somerville said that the years since the beginning of World War II have seen a steady expansion in most lines of busin- css, and life insurance has follow- ed this general trend, but a com- parison of the total amount paid as premiums in Canada to all life insurance companies with the t0tal_ of personal income payments m Canada published by the Dominion] Bureau of Statistics shows that the. ratio decreased from 5% in i038 to 2.9% in i945. The necessary, figures are not available for l946| and i947 but estimates indicate only a slight rise in this ratio! Thus. a much smaller portion of, the earnings of Canadians is now- out into life insurance than was| the case before the war. Higher income taxes and the ‘ ‘ of savings in government securities may account largely for the de-, crease. It seems to indicate, liow-, over, that life insurance is not in advance of. but perhaps a little

behind. the general expansion: thc’ increase in population. the large num r of new families and the

rise in the cost. of living all createi new llecds for insurance protec-i tioii.

r0110 OUTBREAK Inrs _.\‘EW zr-zansun nrssonrs .