The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-04-14
NEW JERSEY MUTUAL.
What Was the Origin Of Its Decline and
Who Is Responsible!
A SPECIMEN OF AMALGAMATIoN.
Statement of a Prominent Director---A
ForIorn Hope.

The inquiry Of the Newark Grand Jury into tho rail-
oi the Now Jersey Mutual Life Insurance Company
will undoubtedly result in somo Interesting develop
menia. That city feels deep pride In its financial
Institutions and this is represented to DO the rst fail
ure OF any rank that has occurred among them. BY
entering fully Into this investigation the Grand Jury
may ascertain many Ubiquitous turns and many fauliy
Official acts; but tho Of Limitation will prevent
any indictments by them. The New Jersey Mutual
mas been found wholly insolvent and questions
to BIO determined are, when did tho decline begin and
who arc the parties deserving OF blame? The idea
that such decline was brought about by strngcncy
In the business world practically iorcgone and in Its
place Is the 1rm conviction that mismanagcment and
possibly fraud have been the cause Of decay.
Up TO the time Of the Hope reinsurance in October.
1872, the New Jersey Mutual was generally considered
to be in sound condition Since that point the
Of tho trouble Dated and whether occurred at the
time OF this amagamation under more recent
management is something to be determined. No
doubt there is some money improperly distracted, and
some that must DO repaid to the policy holders There
arc many men who have been individually dragged bc-
fore the public in the matter and each combination of
interests is struggling to make other tho scape
goat The theory that the company has been srug-
Cling since 1872 to make up the loss IT then sustained
through the Hope reinsurance Is now under examine
ton. That this transaction was a poor ono for tho
policy holders Of both companies cannot be
doubted, and that 1t was temporarily profitable ore
TO certain ring OF officials is apparently evdont To
ascertain who received these illegal benefits is
now the work Of the Grand Jury. The New Jer-
sey Mutuas directors at tho time were mainly OF
high character and this fact gives greater impetus to
the investigation. No matter how conscientiousy
Of them may have acted, If it is shown that they
daI m hair sfO ch tai In
upon which the company did business, taking pay
ment securities belonging their policy holders, their
liability on civil action Is hardly TO be doubted. Should
such case be found to exist Receiver Parker will
probably commence suits to recover from the indvid
ual stockholders an aggregate amount OF nearly
$780, 0O0 The Grand Jury appears to BIO consde raby
complexcd and has adjourned It's deliberations tho
case tuesday next One OF tho causes Of its ON.
barrassment is said DO that two OF It's members
Mr. George Peters, Of Newark, and Mr.. Aaron Carter
OF Orange formerly directors the New Jersey
company. Both John q. Dimick and David A. Hayes,
attorneys for tho companies at the time OF the einsur
DIRECTORS EXPLANATION
The HERALD representative had a protracted inter-
view with Mr.. John A. Kase cashier OF the second
the Finance Committee OF the New Jersey Mutual
He one OF the committee appointed TO consider
proposition OF from the Hope and examine
Into its standing. He had been u director from the
origin OF the company and said It's standing excel
lent at the time OF tho amalgamation number of
proposals Tor reinsurance had been made, and that
from tho Hope was made by President Plummer him
self at a meeting Of the New Jersey directors. Tho
Board took time to consider It, and tho commit
tee thereon, Of which ho was member
mLde the strictest investi CATION into the matter In
describing the work of this committee Mr. Kasc SAID
that they inquired only into tho condition OF the
Hope. but INTO the personal character OF its officers
One Of them he said, waited upon Mr. Sheppard
Romans and finally obtained his written opinlon TO
the effect that the Hope corporation was good
diton and fully able TO protect the New Jersey policy
holders. II may here be stated that n r. Homans
PLANTATION of this statement will be found in
terview below.
FAIRLY GOOD THING.
Mr. Kase, continuing, stated the New Jersey Mutual
directors finally concluded that they had alry good
thing and thinking could be dono without prejudice
to their policy holders concluded to accept They
to be paid fifty per cent premium for their Stock
ard alter Mr. Plummer had produced Sl5oOoO in in
dividual checks from the Hopo stockholders and
pressed wish on the part OF the Hope to
tain all the cash II could, the New Jersey
pany for their stock. He presumed that tho checks
presented by Mr.. Pummcr were good and went
into the Now Jersey treasury to replace tho mortgages
taken out Excepting Mr. Lathrop VINO had been
called upon to answer for himself before the Grand
Jury, Mr. Kase emphaticaly denied that any director
OF the New Jersey Mutual received any bonus for the
transaction. Mr.. Lathro2 had como recommended TO
them as good insurance man, and he had always be-
@ % as a. s
mortgages they took we're on property IN the vicinity
OF Newark. and the recipients were familiar with them
and their value The New Jersey stock, he thought,
subsequent decline OF the company, Mr.. Kase had
little In way OF explanation In 1874 satisfactory
examination made by Messrs. Elizur Wright
and w. =. McMichaels Ho always had faith in tho
character Of its management after he left until tho
sory OF tho Avene mortgages appeared In the HERALD
He expressed an opinion that tho company had prop
erty missing which, If recovered, would ma
terIally alter It's condition.
STATEMENT OF SHEPPARD ROMANS.
Mr.. sheppard Homans in reply 10 The statement
that he had given a full Endorsement al the REIN
surancc between the Hope anu the New Jersey Mutual
yesterday informed the writer that he made
official examination OF the Hope, and therefore never
could have given official analysis OF lis condition.
Al tho time OF the projected reinsurance OF the New
Jersey Mutual he was the consulting actuary OF tho
Hope Company, and resigned from that position when
they introduced their Objectionable Decennial plan
OF policy. He said he consulted by Mr. O. g.
Lathrop vice president OF the New Jersey Mutual, In
regard TO the proposed and his suggestions
had been impressional only. II Q showed the writer
hts written reply TO Mr. Lathrop, in
which he stated that the Hope company
had reported to the Massachusetts department
plus If $1IS which would be increased by the New
York standard His remarks to Mr. iathrop were 10
the effect that without actual investigation OF the mat
tor he presumed the Hope 10 be IN solvent condition.
we'll differed and capable Of protecting the New Jersey
Mutual policy holders In case of a reinsurance.
Mr.. Romans, when further questioned by the writer
respecting his OPINION OF the arnalg amaton replied
That he believed the transaction to have been open
serious criticism, and had himself owner OF Hope
stock, been badly deceived Ho thought the reinsur
effected by tho payment OF moneys certain
men OF both companies, but had no individual knowl-
edge as to the identity Of the vena parties.