The New York herald., 1877-01-11
SOLVENT OR INSOLVEN72
A Critical Period in the New Jersey
Mutual'S Examination.
$S5,OOO OF WORTHLESS ASSETS.
A View Of Life Insurance That is Far from
ReaSSuring.

Jersey Mutual, of Newark. For weeks past its name
has figured prominently in the HERALD because OF It's
compcity with that most fraudulent of concerns-tho
Continental 1t shown IN these columns that tho
Now Jersey Mutual was seeking TO obtain the risks OF
tho Contln ent under circumstances Of suspicious
character and upon terms that promised little benefit
to the policy holders Of either The very connection
of the Newark corporation with the Continental failure
was regarded in itself sufficient evidence OF corrup
ton in the former. While insolvency would not be
charged the revelations made IN the HERALD OF the
amagamation with the Hope and the fabulous Avenei
mortgages placed the New Jersey Mutual In ycry DIS
creditablc position Yet II asserted itself more loudly
than before the public and pointed magnifcentiy
to It's surplus $500 600 in favor of policy holders
EXAMINATION COMMENCED
After a time It became evident to the managers oil
the New Jersey Mutual that rigid examination OF Its
affairs would soon be undertaken by the New York
Insurance Department Preierring to invite inspec-
ton from the department OF It's own State the COM
pany appealed TO Mr. Henry Kelsey Secretary o state
Of New Jersey, to make examination OF It's con-
dltion. Such invitation was probably supcrhnous as
Mr. Kelsey had previously begun such an examina-
tion and doubtless would have continued IL unasked
At any rate the New York department was Obliged,
from courtesy to desist for from pressing It's
examination. Mr. Kelsey appointed Mr. d. p Fack-
ler prominent attorney Of this city, to inspect the
books and accounts OF the company.
BEEN DISCLOSED
Mr. Facklcr has been engaged in his work Tor several
weeks and has not yet concluded. For o low days
past he has been waiting for tho yearly statement to
be made up, and is by comparison with this that
the real condition Of tho concern will be asccrtained.
In spite OF tho secrecy with which such examinations
are conducted few facts leaked out which gave risc
TO serious rumors OF insolvency. A HERALD repre-.
sentative who called upon Mr.. Fackler was unable
uhofxy
transpirng. But through various other channels aa-
vices have reached writer which confirm the sus-
picons that have been entertained of the companys
trouble TO begin with, the New Jersey Mutual was
supposed to have provided itself with sufficient
meet this examination Whether true or not. 1t IS
certain that it was claimed to be- in possession OF
securities which Its officers were very reluctant to
present. Several hitches occurred in the examination
| from such causes, and occasion the difficulty
was so serious that Mr. Kelsey elt obliged to confer
with the Attorney General OF his State 10 the means
to be pursued with the company. At the same time
articles costing much line, appeared in the news
papers, IN which the examining officers were COM
| planned of and other appointments solicited. FROM
these mutterings IL apparent that the examination
was becoming Of critical Importance to the company
The writer, TOO, informed on excellent authority
that Henry W. Baldwin, manager of the New jersey
Mutual's middle department, was negotiating for
transfer OF his services to another concern
DEFICIENCIES REPORTED.
Friday last special meeting OF the directors was
held and William NJ. Force was elected Vice Presi-
| dent This gentleman wealthy CITIZEN OF newark,
| and formerly President OF the New Jersey Mu-
tual In tins first capacity 1t Is asserted with now
much truth cannot be vouchsaed) that he was very
munincently rewarded. 1t Is now claimed, with con-
siderable confidence that his reelection was Tor the
purpose OF aording him an opportunity TO contribute
| sOmethny to the insufficient assets
1t be said with safety that the condition OF the
company impaired, but 10 what amount Is only
known to the officers inspectors. 1t has been de-
| cIared by persons who are have been connected
with the that II necessary 500 OUO or S300oo0
| will be paid in to repair its assets. 1t was supposed
thntc Omanc ncfIo On
directors at their annual meeting held on tuesday
last. Whether they did so or not cannot be asccr.
taincd or course the feasibility OF this method OF
main tanning the company's existence would depend
upon The extent OF the deficiency to be made good II
this done the company may perhaps be put IN bet
condition than ever; not there seems TO be but
one course remaining--that Of bankruptcy.
FORMER BAD MANAGEMENT.
The New Jersey Mutual Life Insurance Company
was organized January l, 1865 with capital stock OF
100000 Like most other young companies OF that
tme though perhaps in a less degree its early man
agement appears TO have been short sighted Expenses
future liabilities were little thought OF 10 the scramble
Tor business Any kind of contract that brought
in large premium at its and helped 10 swell
the Immediate assets OF the company was eagerly
sought for. Tho well established and Interchangeable
laws upon which alone life insurance can DO safely
| conducted were forgotten and disregardcd.
OF course the effects OF such course soon began to
cramp the concern in different ways un til its officers
either from necessity for personal advantages en-
tered into projects OF speculative and
character, TO save the stockholders schemes wcrc
devised which were lar from equitable 10 the policy
holders In fact, the company became dvested Of
ranks of scapcgrace corporations. For long time It
remained in evil hands and made power al in
pcment for improper transactions and ring aggran-
AMALGAMArrxG THE HOPE.
Some three years tho New Jersey Mutual COM
menced tor the transfer assets
Hope Mutual Lille Insurance CompaDy-a corporation
then suffering from the same irresponsible manage
mcut 1t was OF the blind leading the blind, for
both poor condition. and the object OF such
amalgamaton but TO save tho stockholders at the
real expense of the policy holders Arrangements were
finally agreed upon, ana in consideration Of $500 600
the assets OF the New Jersey Mutual sold to tho
Hope The former management retired ana the officers
of the Hope controlled both institutions 1t was alter
ward decided that the Hope should be dissolved and
lis stock gwen certificates by the New Jcr
sey Mutual IN exchange for their stock. These have
never PAID did the holders receive any shares
OF inc New Jersey Mutual stock which had been pur-
chased with their money. The ring manipulated the
New Jersey Mutual successfully Tor n time and then
suffered the control to pass into its present hands
Jersey Mutual really belongs to these much abused
ARM IN ARM WITH THE CONTINENTAL
In many ways the New Jersey Mutual became
allied TO the Continental until upon the failure OF the
latter the former undertook 10 secure the atter's
business There seems little To doubt that there
was direct completely coluson In that dissolution.
opeu amagamation had become unpopu'ar WIN IN IN.
instance the results should be accomplished with
out attending publicity: The presidents oi tho awe
ami after the dissolution the Continental agents with
singular unanmity became tho representatives OF the
New Jersey Mutual. a large number OF the Contncn
mi noicies had been transferred TO the New Jersey
Mutual at loss doubt TO the holders, when tht
HERALD inves igatcd the matter, and gave tho public
tho benefit of such truths as u could ascertain
consequences The process was partially u not Wholly
checked Policy holders OF the Continental. wcro ad
vsed these columns not 10 assign Their con
tracts to the New Jersey concern aud, as The
present shows the word was timely given
. THE FABULOUS MORTGAGES.
Another valuable revelation made by the HERALr
in relation to the New Jersey Mutual was the story o
thr fabulous mortgages which were ssucd TO the cx
, tent of nearly 100000 on property in Mddlese'
+ county New Jersey worth, perhaps, sl6,OOO Thes'
hoeus documents were manufactured In very crcui
tous method by Daniel j. Noyes, the attorney OF Tho
company, and after many changes OF title were as
s,oncd TO the conCcrn.
They are now, or were upon December 81, 1873, !.
, be found among the assets OF the New Jersey Mutual
a. shown by their list OF bonds mortgages fled
Albany They included in said list, as recorded II
MiddIcsex county, in tho following terms-
Vdiuc Of