On the Rationale of certain Actuarial Estimates

Some three or four years ago, I submitted to the members of the Institute a few observations on the valuation of property held for life and in reversion, and on the due apportionment of it when questions arise between the life tenant and the owner of the fee. I was induced to bring this subject under the notice of the members from observing the great difference of opinion prevailing in regard to it generally, and especially in the discussions on the subject of church leases and of other property similarly circumstanced—in which discussions no sort of agreement appears to have been come to as to the true principles upon which the value of the interests of the several parties concerned should be estimated. In the paper in question, I endeavoured to point out some of these principles; and my object now is to enlarge somewhat on the arguments therein laid down, to show that the question at issue almost always resolves itself into one whether a property is to be bought or sold, to call attention to the vast difference in value which arises under the two conditions, and to point out the imperative character of the causes, from which this difference originates; finally, to urge the necessity of great care and circumspection in dealing with the questions submitted to us, so that all risk of confounding one of the conditions above referred to with the other may be avoided.