, 1877-07-08

/ APPOINTMENT OF l. RECEIVER.
The expected climax in the affairs OF the
Chicago Lue-Insurance Company came yestcr-
day, and petition was filed against it by the
Auditor OF State to have it closed up. The
Auditor states that lie has caused the Com
pany's affairs to be examined, aud is Of the
| opinion that the corporation can not longer do
business without hazard to the insured, aud he
| has so certified to tile Attorney-General. He
| therefore asks that q Receiver be appointed
with the usual powers to close up its business,
and for an injunction to prevent its officers from
interfering further in its business.
| Flied with the petition is q copy Of the
| REPORT OF ROBERT ~ WOODS,
| the Examiner OF the Insurance Department,
| fled ut Springfield Friday, which is as follows:
s7He Hon. T. .. Needles, dndaor-s1R:
| In pcrsua,ec Of your directions Of the 18th ul-
! timo, have 1nade an examination of the condi-
ton and a11airs vi the Chicago Liic-Insurance
Company ot tue city Of Chicago.
l find that the Company fias been doing q
looslng business Tor several years Its incomc
has been suall, and constantly decreasing, yet
its salaries and office expenses have been large
aud it mas mauc large annual dividends to its
stockholders. which were unwarEanted By tile
condition of the Company. The interest on its
securities is largely in arrears, and no interest
appears to have been collected on the securities
upun which the capital stock Is based, thus de-
priving the Company Of its needed revenue
1.-The loans for the Company appear to have
been made through syndicate composed Of
Mir. Secretary Ctapp, and Mr. J. 4. Barry, i
capitalist, in the following manner: These
parties purchased securities, aud from time to
time, when the Company had money to pay for
them, would turn them over to the Company.
1n like manner the syndicate loaned money pre-
sumably from their own private funds. bur TIC ]
notes, trust-dccds, ctc., were taken In tho name
Of tile Company, and as fast as the Company !
mad
oyer to the Company.
s'This manner vi doing business was pursued !
fort~o reasons: Firstly, because it enabled !!
the syndicate to make . percentage on the |
anu q commission on the loans thus |
made; and, secondly, because it enabled tic |
management to represent the mortgages, trust
deeds, antl notes thus nale In the nane Of tile |
Chicago life-1nsuranee Company as the bona
tide property OF the Company TO any examining /
committee Of the Board OF Directors, Or to any |
State Insurance Examiner. who might inyesti-
gate fhc last annual statement to your off,
Ger contaius S6!,ooO worth OF these securities
which did not belong to the company at tie
time, Ss,000 Of which hive, however, been traus-
tcrsed to the Company since. The Company /
also hoius mortgage which has been included |
jn The annual statements since 1872 of $l5,Q30
from ". +. Tucker, for which no value received
appears to have been given.
Alter my examination had progressed week
Or ten days, and when had arrived at that stare
which maize it necessary to trace the assets
through the cash, and see If the Company held
valid title to all the assets claimed, the Secrc-
tary, Mr.. John W. Clapp, disappeared. No
trace OF him has been discovered up to the pres
eat time. This rendered the worl; of exa1niua-
ton laborious and perplexing. Col. Kellogg
and myself made as thorough 4 search through
the books and accounts Us our limited time
would allow, and succeeded in unearthinc the
facts aoove-nainea, aud asccrtaining the condi-
ton Of the Company, which is given below.
The accounts show Mir. Clapp to be Indebted to
the Company to the amount of IS, 042.S7, but a
critical examination Of the account for a series
OF years n1ght prove his Indebtedness to be
much larger. The accounts OF all other offi-
cers aud employees seem to becorrect aud proper.
The following are the assets and liabilities Of
the Company, as Of date, Juue l, 1877:
AsSETs. |
Loans on mortgages and trust deeds. go. S181, 4o1
Loans on coitutcrats. 81 Gnn !
Interest due and accrnpd 3H9 |