New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-04-24
THE CONTINENTAL LIFE FRAUDS.

WILLIAM ALIEN BUTiE's EEPoRr-CKMlNAL CON
DUCr OF THE OFFICERs-PRoCEEDiAGs BEFORE
JUDGE WEsTBEoOE.
William Alien Butler filed yesterday his re-
port on the accounts Of D. j. Anderson The first receiver
of the Continental Life Insurance Company and on the
assets and property Of the company. He reports that
all The assets received 10y Mr. Anderson have been trans
ferred by him 10 his successor VIM r. Grace. These
sets are onehalf the building at Nassau and Cedarsts
cost sG76Os7 90 valued SI2J.OOO; bonds ana mort
cages face vaNe ~ $50. mated value 81 100000
cash and cshites 500 600; United bonds, 1856.
BOO premium loans nominal value Sl2OO0OO, estimated
value 81 600 OOO-otal, S26s1,5O0. There are other
nssets of no value" temporary loans" $llOA4S 3d.
and "agents open accounts" Sl,000,0OO There are
smaller items from which something may be realized but
this believed by the referee to he fair statement The
liabilities are S5,sOO,000 lie recommends that the
MORTGAGES he at called in. He believes the assets
are safe with and viii he iudiciousy managed by Mr.
Grace Mr. Buer then alludes to he proceeding before
Judge westbrook and suggests TO avoid expensive ti
CATION that Mr. Grace be confirmed as receiver III ta
proceeding and that Legislature pass further act
defining the method OF winding up corporation oI TINS
Kind says that in ten years during which nail the
assets OF the company lost examination of tLis
company was made by the Insurance Department.
Reviewing the history OF the company the referee says
The evidence shows that from the outset the affairs OF
the company were managed almost eAciusNtN, ny .le
officers. Tue directors gave HIe tle vi on 10 ,ie
business Tcy relied the statements OF the officers III
Rord 70
made no personal investigation in regard to them The
policy hoders never had the benefit 81 any auch scrutiny
any dgrce of attention have disclosed the insolvency OF
The compauy long before its open failure. Daring the
Rogers The secretary had the chief executive control
subsequently Luther ". Frost and the secretary Lad
the entire management, until Rufus &. Frost became
acting prosideut when they all eC0ncrditd III course
OF management which soon deprived the COMPANY OF
the means of continuing its business. Nj. B. Wynko0p
was yice-presideut but had little or no part IN me
business Enlargement, ana was succeeded III the slthg
~ h. \
secretary and vice president Shortly aftct inc alpont
ana Rufus C. Frost lcit this state have ever since
concealed their respective places OF abode James l.
Rogers nonresident of this state. Rejecting ever
thing that doubtful, ana permitting ITO hlicatitn
from fact Of the flight silence of the parties
involved enough IS disclosed TO exhibit q sistl8hc
Of fragrant and criminal abuse Of trust on tier
part in the management OF the Affairs of the company.
Examining IN detail the methods OF the officers Mr.
Butler points that in the report Of 1876 there
items OF cash deposited ia bank s45O377 A. when the
depot wac really less than 0C0 OF loans secured
on Government bonds" when the company had not
dollar Of bonds; premium notes loans liens
policies force" 1857 %, when they could not
have been more than 81 45O 900 and net amount
collected and deferred premiums, sG06.22l 81, when
they could NOT have been than 100000. On the
other hand the liabilities understatcd. Mr.. Butler
then refers TO system OF paying the officers committed
annutes there being evidence that the words allowing
them were inteIpOlated in the directors resolution
Increasing salaries without the directors knowing
st. Under this head Jusus Lawrence received
s3s,470 rs; L. W. Frost, $il,l20 0S; j. r. Rogers,
S3O6Gs IT T. C. Frost 1924 6S 6s aud other officers
smaller sums Yesthese continued 10 be carried
cash on hand until after the appointment Of receiver
when they were entered as "cash paid" s15514G 0S.
ne eadiDg officers Of the Empire Mutual Life
Company and Of the Continental Life Insurance Com
napq were the same. There deficiency In the
assets OF the former company OF S3oooOo yet the Con-
tnents Company took It's business. assuming its ab
,es and redeemed its stock mostly at par or above
some of the purchase money for this stock Was called
"tAmporary Ioans;" other portions were carried as
aeash itns" This contract was not authorized ny Tie
directors Large loans on ~ own STOCK were aue os
the company 10 it's own officers.
w. Frost, before be vas president WIS iH""As'' VI