New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-01-17
INSURANCE DISCLOSURES.
THE FRAUDS IN I.

THE FRAUDS IN THE SECURITY.
| AsrOSIsuMENr CAUSED BY THE DEPUTY SUpFRIN-
TENDEYr's REPORT-COMMENTs on sUPEnNTFN-
DENT suYnI.
The report of Deputy Insurance SupeTinten-
dent Mccall showing the condition In which lie found
the security Life Insurance and Annuity Company, as
published yesterday, was subject OF general com
n!ent and asCnishment among insurance men yes
terIay II was everywhere regarded the worst state
mtrt that has ever been made public In this country
and for the sake OF legitimate life insurance. ii Vas IN
sisted, ii for other the perpetrators OF the
and perjury there set forth should be brought to
prompt Judgment. Mr.. Mccall stated yesterday
that the Wliamsbridge property was incumbcred
by additional mortgage OF $4,000 not included III
his report the that the department appraisers
who yered the lien reported it to superintendent
smyti Albany, while his tMcCalfs) statement was
made up III this city and also forwarded from here. This
would leave the real estate OF the company ncumbcre
over and its full appraised value, $3.50 instead
OF there being surplus OF S1I,24l
In conversation with TRIBUNE reporter yesterday,
Isaac H. Alien the secretary OF the company said tnaT
whatever fraud and deception had been practced by tho
Other officers OF the company he IS not c0tilIan OF ~
the time The failure Of the company had been as much
OF an sstonihmept TO him could havc been 10 any
one Ii was true that secretary he mad had
charge of the books aud accounts, including tie
cash receipts and disbursements and had
signed the reports made the different insurance
prents after the close each year, but 1t was lu-
possible for him to know the details OF every department
of the company OF his Own department. 40 far
"a he knew the accounts correctly kept and hay
ing confidence in his associates he supposed everything
was right Mr. Allen failed 10 explain, however, Why
tie cash in bank and Office" was reported Mt
the close OF 1875 at $2057oS 65, when,
az Mt Mccall states i'll his report the books were made
show a balance, including the receipts up 10 Jan 20
1910, Of only $55,70S s. and only small portion OF
this was probably ~ any time subject TO The cheek OF
the officers neither did he give any explanation Of the
Fictitious credit premium receipts and otner a!si-
cations mentioned iu the report
Robert l. Case, the President, and Theodore X Wet
more sident have not been to the Office OF tue
Security for seine time, and could ROT he found
Yesterday in the city DR. Case resides at New
bnrg and Mr. WctmOre ut New Hamburg, ia this state
Tie following is tee published list OF the directors OF
the company Francis T. Walker, william Hubbard.
Edward Wood, James NJ. Drake, John W. Graydon,
Robert Brow me- Sidney Wintrinsham. Robert L. Case,
Theodore r. Wetmore II. Allen, j. Nelson Tappan,
Edmund Titus Chas. BelloTs, Reuben h. Underh, Cas
H. swords John G. Willcts A. Il. Weiinore aud Henry
Rogers of Nev-York Edward e. Jones OF Ncw-3ed'
ford; Nath b. Weed OF Darien, Conn George Inuis OF
poughl eepsie, Sanford T. KNAPP OF Peeksai Henry H.
Wilson OF Baltimore and John W. Fletcher of Boston
SUPERINTENDENT SMITHS VIEWS
Actin. Supcrin 3inyh said las; evening that
ouc.haf the fraud perpotra.od by the officers OF the
company had rot yet been tcd. In conversation with
the Off ers during the progress ~ tie examination they
frankly admitted to him that tho practice OF
making false statements to the department, and
other manipulations of the accounts OF tho company,
had existed tor several years, and the only excuse tey
red for their course that all the other companies
did the same thing. Mr.. smyth said there was no room
for doubt that al the officers oi the company were ecgni
znn OF its condition from year 20 year and II appeared
inat the secretary had been IL he hapt OF making up
tie annual statements 10 the department IN the
way they had beeu presented, and IL such manner ~
10 cover up the tine the many SlicdionS OF ac-
counts Inc best evidence, he continued. that the
~" settlements of the Security Life il found
in the result of the examination OF the United
nave been recently examined and which were found in
excellent condition after the most searching and com
nntc Investigation. AS TO criminal proceedings that
may hc taken against the officers OF the Security, MI
Sy ia sad NJ laid the condition OF the company fully
when the latter replied INA the case belonged
to him. and he would Sc In, mat IL was
pressed uJubt that Mr. fairchi!d would fulfil bis
promise Any Eerson he S1lt had right TO appear Dc
the matter but undcr existing circumstances he Thought
the belonged especially 10 Mf Iafehlu VINO eould
call upon (Ar. Smyh or any OF bis deputies FOR eVl-
Attorney General Fairchd said yesterday to a TRIB-
UNE reporter that his visit To The city had no reference
To he Security lfe Insurance Company Nhen the com
pany declared insoyent nc caused receiver 20 De
apn1nte by the court, aud there his responsibility
III ~ ,n' ,ce si1o 900 NOT pacsd ia the hands ot
the company to deposit that amount vita the
snprrinendet the Insurance Depart ent In order TO
secur. die policy hoidcrs This done IN the Eclectic
ease years ago, and by precedent had become te
legal custom Mr. FaiIchd criticised the insurance
laws "a very crude. The whole question OF the dsoI
ton OF insurance companies In confused state
The statutes should be revised and made hsr
nfon,ons system. The supervision OF the Gov.
crnInent over insurance companies ana say
ings banks should be- abolished. Tue present system
of giving SlOO,OiO 10 securc million dollars OF ab
ties was a mere trap delude tue people Every uan
aoud deal with companies ON the strength OF
his own knowledge OF their integrity, The Government
could absolutely project policy holders could
only yuuch for the good character OF the men "a
| the employ Of company. To-day the GOV.
| eminent might assert Tie integrity Of
an insurance company, and tomorrow, when tie in
specng official had finished his investigation. the secnri
tes might scatere and the groSsest fraud committed
Tho Security Lite Insurance Conany had acapltal OF
SlIOO 900, and paid dividend oil 19 per cent scinian-
nuay From the examination IL appears, II is stated.
that no dividends earned aud IL s undclAtoo
that the Will begin suits Ia enforee the return
OF all dividends paid since l: WA apparent that the
| pany WAS insolvenL