INTRODUCTORY. The Trustees of the Penn Mutual Life Insurance Corn- j pany of Philadelphia have thought well to place in perma- nent form a record of the pro- ceedings incident to the celebra- tion of the Fiftieth Anniversary of its entrance upon business life, which occurred May 25, 1897; and this record is prepared un- der the supervision of the corn- mittee having in charge the ar- rangements for such celebration, consisting of the President and Vice-President of the company and the chairmen of the various standing committees. The report of this committee, appearing on pages 188-192, in general terms alludes to the principal features of the celebration; to the interest manifested by all the participants; to the thoughtful character of the various addresses made; to the spirit of loyalty shown by the representatives of the company; to the widespread and favorable notice received from the general press and from insurance news- papers; and to the salutary influence which such celebration may be expected to exert upon the future of the institution—an influ- ence already felt in an increased volume of business, and promis- ing much through the better equipment of the company's agents, which was one immediate result of the series of meetings held. Necessarily brief as this report is, it could only in the barest outline convey such information to the Board of Trustees touch- ing the proceedings and incidents of the celebration as would give a just understanding thereof, or enable non-participants to properly estimate the intelligent comprehension of life insurance, in its many varied phases, shown by those engaged in the diffusion of its
[blessing's, nor how great the anx- iety to have it in all things conform to the highest principles of justice, so that in its administration each should have all he pays for, but no more. To the addresses them- selves, to the various discussions, to the searching- questions and the full replies must we turn for evi- dence of those things which certify qualifications of those who have taken upon themselves the work of life insurance. In these we find something more. It does not suffice that one should know the right; with knowledge comes the responsibility of doing the right, and it is a source of sincere gratulation that, judged by words and acts, all associated in the management of the Penn Mutual are imbued with a lofty purpose commensurate with the trust-relationship which they occupy, and which is essential to the righteous conduct of a life insurance com- pany. Stenographers were engaged so that a complete report could be secured, and the various addresses, colloquies, discussions, etc., are taken from their notes with scarcely an alteration, except where necessary to preserve the meaning intended, so that as printed herein the report is accurate. Those addresses which were reduced to writing before their delivery are so named, while those which were impromptu or extemporaneous are designated as speeches. Where uncertainty existed as to phraseology or the intention of the speaker he has been consulted. A table of contents has been pre- pared, which, to a degree, may be of service, but opportunity has been absent for anything like an analysis of the views or recom- mendations of the speakers. An effort has been made to indicate the topics under consideration so that ready reference thereto may be had. It has seemed desirable in this connection to present a brief sketch of the company whose Fiftieth Anniversary was deemed worthy of a public and spirited celebration continuing throughout several days: That thoughts are things, and always precede action, was shown in the founding of the Penn Mutual Life Insurance Company of Phila- delphia. In the year 1845 John W. Hornor undertook to bring to Philadelphia what he conceived to be the highest expression of mutual life insurance, a knowledge of which had been derived from a study of the English companies, some of'which had existed for nearly a century prior to this date. He associated with him a number of leading merchants and pro- fessional men. His chief coadjutors in the formation of the com- pany were William Martin and Henry C. Townsend. To the lat- ter was entrusted the preparation of a proposed charter, and his admirable work in this direction found expression in the charter granted by the Legislature of the State of Pennsylvania, February 24th, 1847. It is a remarkable fact that Mr. Townsend's connec- tion beginning then has been continuous through all of fifty years as the counsel of the company. Mr. Hornor was enabled to begin business at No. 91 Walnut Street, Philadelphia, on May 25th of that year, having meanwhile secured a sufficient number of applica- tions for insurance to comply with the provisions of the charter. Preliminary to this, however, Daniel L. Miller was elected Presi- dent March I, 1847, and a board of twenty-seven trustees was chosen, embracing some of the most responsible and influential merchants and business men of the city. The plans of insurance adopted were few in number, mainly what are known as the "ordinary life" and the "term" policies, and were modeled after those in use by stock organizations, except that a system of note or credit settlements was adopted. The basis for the premium charge was the Carlisle rates, with some additions XV111 policies and loading for expenses more than sufficient to meet any ordinary contingency. The trustees were elected by direct vote of the policyholders, the num- votes allowed each being contingent upon the amount of his premium. Progress was very slow during the earlier years. The statement which was made, December 31, 1848, covering a period of nineteen-months, showed receipts of $44,158.03; the payment of the first death loss of $5000 on the life of William B. Cooper, and total disbursements of $12,301.01, leaving a balance in the treasury of $31,858.02. There had been issued to this date but 418 policies, of which 379 were then in force. There was declared a scrip dividend of 80 per cent. upon the re- ceipts named, and for several years there were similar declarations. Toward the close of 1849, during which year the receipts had approximated $75,000, the company purchased the property at the northeast corner Third and Dock Streets, and set about the erec- tion of the first iron building in the city of Philadelphia, to which removal was made in April, 1851. The first traveling agent of the company, Rodolphus Kent, had been appointed in 1850, but it was not until February i8th, 1851, that medical examiners were regu- larly employed by the company. At this date the eminent physi- cians Dr. Edward Hartshorne and Dr. Francis Gurney Smith were employed at a salary of $200 each. Business came slowly, and it was not until the close of 1854 that the assets of the company ex- ceeded a half million dollars. Throughout these years the trustees annually declared dividends in scrip, ranging from 25 per cent. to 80 per cent. of the cash premiums of the prior year, and this scrip was available after a three years' interval in payment of premiums. In September, 1859, however, a considerable surplus having been accumulated an extra dividend of 15 per cent. was declared on all policies then in force, this dividend being calculated upon the gross premiums paid by each from the beginning of the company. This measure was regarded as the best recognition yet devised of the rights of policyholders to existing surplus, and foreshadowed the con- tribution system of apportioning dividends later adopted. By December of this year such progress had been made, the in- come now being in the neighbor- hood of $250,000 with a surplus on the work of the year of nearly $170,000, that the large property at 921-3 Chestnut Street was purchased at a cost of $55,000, and after some improvement removal thereto was effected August 27, 1860. At the close of 1861 there were 1870 policies in force, in- suring $4,609,711. The assets were for the first time in excess of a million dollars, being $1,071,128.02, and the aggregate losses paid were $434,817.00. On January i7th, 1862, President Miller resigned and James Traquair succeeded to the position. At the same date Mr. Hor- nor was advanced to the position of Assistant Vice-President and Actuary, and Horatio S. Stephens was elected Secretary. At the close of 1864 the assets reached the sum of $1,376,435.32, and the volume of new business was in excess of a million yearly. A spe- cial reserve fund was created this year. TRere was a rapid increase in volume of business transacted, so that in December, 1869, the assets were $3,024,471.94, and the receipts closely approximated a round million of dollars. On January nth, 1870, Samuel C. Huey was elected Presi- dent to succeed Mr. Traquair, and during the year the charter of the company was amended permitting the return of surplus premiums in The form of cash instead of scrip; also to require policyholders to present their votes in person. The total insurance in force was $22,774,896. The assets reached the sum of $3,492,295.88. On De- cember 6th of this year the half cash and half note premium was discarded as to future business. The statement of the year end- ing December 31, 1873, shows total receipts of $1,281,497.16, and Pay- ments to policyholders of $659,- 984.54. The assets were now $4,- 427,996.96; the liabilities, $3,738,- 462.43, and the net surplus was therefore $689,534.53. On May death of John W. Hornor occurred. He had twenty-six years in the service of the company, and the trustees by resolution spread upon their minutes, certified that Mr. Hornor "was a man of con- stant labor and inflexible disposition, energetic and untiring in his duties, firm and devoted in his purpose and unswerving in vindica- tion of whatever he believed would strenghten and redound to the common interests of the company." In January, 1876, the exhibit presented to the trustees by the officers was a particularly favorable one. The new issues of the preceding year reached the sum of $6,412,988, and the insurance in force was $28,389,243, showing a gain of nearly 50 per cent. of the total new issues. Following the hard times in the year 1877 the amount of new insurance written declined somewhat. At the beginning of 1879 the situation was more encouraging and some gains were made in that year. Samuel E. Stokes, who had been first elected as Trustee in 1847 and elected Senior Vice-President in 1851, died August l6th, 1879. In January, 1880, Edward M. Needles was elected Vice- president, and the work of the year showed favorable results. There was a substantial increase in insurance in force, and in as- sets, and a gain of something over $128,000 in net surplus. On January 21, 1884, Vice-President Stephens, elected to that office in January, 1873, was congratulated by the agents of the company upon his administration of the department, and pre- sented with a valuable service of silver, together with an elaborate testimonial touching the discharge of his duties. In January, 1885, new forms of policies were issued by the company, in which the limits of residence and travel were enlarged and regulations as to suicide and indisputability were embraced. The board after consideration, and with a view to admitting old members to the additional privileges now proposed for new en- trants, adopted the following: "Resolved, That on and after the first day of January, 1888, all members insured under policies then in force issued by this company prior to January i, 1885, be, and they are hereby declared, entitled to all the provisions or advan- tages as to suicide, residence, travel and employments embraced in the new forms of policies now issued by this company." The to1al income was now $2,370,213.00, and payments to policyholders $1,342,007. The new business written reached $8,- 430.635, and the total insurance outstanding was $47,989,223. The assets were $10,338,654, and the surplus, on 4 per cent. basis, was $1,370,751- On February n, 1886, Samuel C. Huey, then President of the company, died at Enterprise, Fla. His associates placed upon the minutes a tribute of respect, of which the following is an extract: "We have lost an officer whose recognized position as a represen- tative Philadelphia merchant materially assisted in obtaining for the company that confidence of the community so essential to its success, and whose devoted personal attention to its active manage- ment for thirty-five years has aided in establishing its reputation and securing its great prosperity. * * * In his decease the company has lost an intelligent, experienced, upright, and faithful officer, who brought to the discharge of his onerous duties great energy, good judgment, and strict integrity of character; and the officers and trustees have lost a personal friend endeared to them by long and intimate association." On March 2, 1886, Vice-president Needles was unanimously advanced to the position of President of the company, his long con-
nection with which and familiarity with the principles and methods of the business eminently qualified him for the office. On April 6th of this year the company decided to insure the lives of women "upon the same terms and conditions as it insured the lives of men." On December 31, 1891, five years after Mr. Needles had as- sumed the management of the company, the total income had ad- vanced to $5,001,508; total payments to policyholders were $2,- S12,0^- 'The new business written was $25,712,781.00, while the insurance outstanding- had advanced to $103,753,521. The assets had grown to $18,431,984.00, and the surplus reached the sum of $2,383,636. During this period the new building at 921-3-5 Chestnut Street had been erected, and was occupied on November 27, 1890. The years '92-'p5 exhibited considerable progress in every im- portant detail. The work of '93 and '94 was not particularly large; but notwithstanding the depressing business conditions, substantial gains were made. In 1895, however, there were large gains in income, assets, insurance in force, surplus, etc. In May, 1895, Vice-President Stephens resigned on account of age and failing health, but continued in the service of the company in an advisory capacity. Harry F. West was elected to fill the vacancy, and en- tered upon the duties of his office July i, 1895. Encouragement was given to every department to put forth its best efforts, and the result was shown by large additions to income and to the surplus of the company, the volume of new business transacted consider- ably exceeding that of the year 1894. The work of 1896, on the agency side, showed an increased new business larger by 728 policies for $1,442,048, than was ob- tained in 1895. The volume of insurance in force was advanced to $134,594,870, the gain being something in excess of $4,448,000. On the financial side there was shown an increase in income, the total reaching $6,959,739.41. The payments to policyholders amounted to $3,606,082, while there was added to reserve $1,949,- 876.00. The gross assets had advanced to $29,405,529.08, and the surplus was shown to be $3,594,126.79. On April 7th, 1897, President Needles tendered his resigna- THE PENN MUTUAL LIFE INSURANCE COMPANY. Xxiii tion to the Board of Trustees to take effect July ist. Strenuous efforts were made by the trustees and others to induce him to re- consider his decision, and it was not at once accepted. Mr. Needles, however, desired to be free from the responsibilities and vexations of official life, and the resignation was finally accepted, with the understanding that his counsel would yet be given to the company in the position of trustee. Following this resignation Vice-President West was unani- mously chosen to succeed Mr. Needles, to assume the duties of the presidency July ist. George K. Johnson, who has been a member of the Board of Trustees for many years, and is familiar with the operations of the company, was unanimously elected to succeed to the office of Vice-president. These promotions are in line with the settled policy of this conservative institution, and the new officers will enter upon their duties assured of the confidence and support of the policyholders, whose interests they serve. On the Fiftieth Anniversary of its first business day the com- pany finds itself transacting business in thirty-nine states, in all of which it has complied with the insurance laws and has agencies of some years' standing. The number of agents under direct con- tract with the company is now 125; while the number of special agents, sub-agents, canvassers, and others interested in pro- moting its business is very probably in excess of 1000. It has approximately a membership of 58,000, distributed throughout the healthy sections of the Union. Naturally its business is largest in Pennsylvania. Of the total insurance in force of $134,594,870, the amount on citizens of Pennsylvania is in excess of $46,492,340. In the New England States and New York the amount outstand- ing is, approximately, $29,158,000; in the central and far Western states the volume carried is in the neighborhood of $43,744,000; while the Southern field aggregates about $15,200,000. The gross assets of the company are $29,405,529.08; the liabilities, computed upon the most rigid standard, are $25,811,402.29, and the surplus $3>594J26.79. The income during the year 1896 was $6,659,- 739.41. Of this there was paid to policyholders in that year $3,- 606,082.12, and there was added to the reserve for the protection of members, $1,946,876.00.