The New York herald., 1872-12-10
Alleged Misapplicati0n Of Funds
by the President.
ARE THE TRUSTEES WHITEWAsHERs
Evils and Dangers of the Proxy
Vote System.
A STORY OF THREE POLICIES.
Stirring Appeal to Policy Holders Will
They Assert Themselves?

To THE POLICY HoLDERs:-
1t is wel for you that the late action Of the Mu
tual Life in reducing its rates has become subject
OF public discussion and aroused the attention o
Ats policy holders throughout the country for 1t Il
time that you looked after your interests there
with fidelity to yourselves and the determination
to discharge your own duty in the premises. The
temple was built by the pocy-holders. should be
dear to them and they should not allow 1t to be
pr0faned by unclean things. There is work to be
done, and you are the ones to do it; and as fel
low policy holder, who has strvcn earnestly
against what he knows to have been mismanage
ment and lnfdelity in that company, hope by this
communication to arouse your energetic co-opera
tion in proper efforts to rescue interests from
the control OF unworthy custodans.
shall speak to you only OF that which know
that which has been proven from the records Ol
the company and by witnesses under oath that OF
which possess the undoubted evidence, and which
can be established in any fair tribunal in the land
In the HERALD of Saturday last appeared letter
over the signature OF Mr.. George s. CSe, trustee
OF the company, wherein he the following
language in relation to charges ofin1deity against
President Winston:-
They have all been long since made the occasion
or the fullest Investigation by the trustees and by
Legislative committees, and have resulted IN
nothing sufficient to impair confidence in his
The trustees have again and again expressed this
opinion OF his fidelity.
The present eminent position of the Mutual Life
Company is in their opinion, the most unanswer
able testimonial OF his ZEAL fidelity and efficiency
as an officer. can only reanirm, in the strongest
terms, as an individual member, what the trustees
have unitedy done under their sgnat lures, that the
company Is In the best possible condition tOr the
security OF its members
The ''eminent position of the Mutual Life" is far
better evidence Of your iberality and prosperity
than or President Winstons eminent ability or
fidelity without you 1t would have been nothing;
without him you would have been better of, as
you will presently see and, being informed OF some
OF the facts which the investigations referred to
have disclosed. you will be able to determine for
yourselves what must be the standard of fidelity
and probity by which these trustees have measured
the character OF President Winston. President
Winston was charged with having Illegally loaned
trustee OF the company $4,000, and that he
had concealed the loaning by q false statement to
the Finance Committee,
twas proven that the $4,000 was furnished to
the trustee June 80, 1864, and returned by him.
with interest July 10, 1864, and that the transac
tion was for time concealed by means Of false
statement. prepared by clerk, under the direcA
ton OF President Winston and delivered to the
Finance Committee. President Winston claimed
the transaction to have been a purchase and re-
sale OF government securities; but the weight Of
evidence shows that from its inception to Its lqui-
dation it was temporary and illegal loan, and its
concealment gave evidence of conscious guilt.
1t was charged that he had furnished certain
State agents with large sums OF money without
authority and illegally, and had concealed the fact
by falsely representing the funds 80 used to be
leash in the cashiers drawer"
The facts that he made such Of the funds OF
the company in his individual capacity-at one
time to the extent of $1s,491 S6-that he had no
security other than the individual responsibility OF
the persons whose drafts he pald that no record
OF any kind appeared on the books of the Company
relating to those transactions, but that they
concealed In the manner charged, were oil fully
established.
When these things nrst became known they
were Investigated by Committee OF Trustees.
The facts were proven or admitted, yet the ma
jority whitewashed them. One member, however,
with courage and fidelity, denounced them as 'in-
tentlonal and designed deceptions," and 'deserv-
ing OF serious condemnation"
When unauthorized, illegal and secret transac-
tions were thus brought home to him when he not
only made false representations himself, but in
duced his subordinates to do the trustees should
surely have found therein evidence OF something
other than "fdelity as the custodian Of high
trust"
President Winston was charged, together with
other officers, with having received large sums as
''bonus" which were illegal and a grievous wrong
upon the policy holders, and concealed from them
by charging the payments to dividend account"
The statement In my possession, made and sworn
to by the bookkeeper OF the company, shows fhe
total payment OF such bonus during the years 1867
to 1870, inclusive, TO have been $lss,S22 a.
and it was proven tnat this enormous
iviJ
holders thereby concealing its payment from
them; from many, II not most Of the trustees
making an actual expense to the policy holders
appear to have been distributed profit to them
and fasfying the ratio OF expenses OF the company
or this sum Mr.. winston and his sons received
$s3,69u 80. Remembering that all this amount
was superadded TO the ample salaries paid the
onicers can you believe that any commensurate
service was rendered, or can you absolve the
trustees from severe censure for permitting your
money to be thus lavishy bestowed
It was charged that three policies OF insurance on
the life OF President winstons son were illegally
restored and paid after his death and that their
restoration was procured by Vice President Nc.
Curdy through q concealment OF the truth. The
facts, stated brieny, are these:-F. M. winston
formerly cashier OF the company insured hts life
July l. 1862 for $500 policy No. 22,146. On the
% OF October, 1882 he surrendered it and received
its cash surrender value.
On the 22d September, 1862, he insured again fol
$4,000 (policy No. 272s6,, which he surrendered
February Is, 1864 receiving the cash surrender
value.
Thus both OF these policies we're surrendered,
paid for and no longer binding in law or in equity
Again, on the same 18th February, 1864, he pro
cured policy for $1,000 tpolicy No. ao,9o4. on
this policy not one cent Of premium was ever paid
for the nrst quarterly premium was simply credited
by cash book entry to "premiums," and onset by a
debit OF the precise amount TO brokerage" and
no other premium was ever paid. This policy was
forfeited, as the record shows, on the 2sth Novem
Der, 1864, for non-payment OF premiums, and SO
entered in the policy register. On this 2sth day o
tnol ALL ia q a naicx q