The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-04-16
TribulatiOns Of Its Former Managers
and Stockholders.
TWO DISGRACEFUL HISTORIES.
Policy Holders Completely Ignored
Some Actuarial Observations.

1871 II appears TO be generally conceded by lawyers
that these liable Tor the which they
ccived In mortgages for their stock tor such crin
nal liability may be found TO exist " Is protected by
the statute OF limitation Tho overhauIins oil this
old transaction has created considerable enmty be-
tween some OF tho most reputable and wealthy OF
Newark, each particular party Is strongly
deavoring TO lay the burden other shoulders.
Trouble predicted for Secretary OF State Kelsey who
IL SAID to be pushing the investigation, unless hc de-
sists IL Is claimed by tho retired stockholders that
before they took anything from the New
Jersey Mutual treasury the full amount TO
be paid them first put in by tho
Hope strong impression prevails that whatever
securities other than cash thus put In cats
and dogs" and such checks found their way to the
treasury found thor way back to the drawers
thereof 1t is asserted by one person that tho Hope
men who took these checks TO Newark brought them
back the day their individual owners II this
be the the New Jersey stockholders who realized
handsomely their stock, ieit the policy holders
Just $3.50 900 of than before. The theory ad-
vanced In the HERALD by Mr.. Lathrop that the Hope
could only hold mortgages on property within Atty
mile radius tho New Jersey took them In pay
mcnt Tor that reason. s somewhat frustrated by tho
information that the mortgages taken were all
nearly all, situated in Newark and vicinity.
DESPERATE FISASciERISG.
companies we're managed may be derived from a
versalion held by tho writer with who Is entirely
familiar with their single and wooded history lie de-
clared that the Hope insoIvcnt long before the
union, and the New Jersey but little short OF IT,
The Hope managers hadbeen at their wits ends pull
through examinations and whec overtures were made
to the New Jersey was $lsO0o0 short. Al this time
there was law for official examination OF life insur.
anco companies in Now Jersey, and they therefore
wanted to pour tho Hope into tho Newark company
II tho New York Insurance Department attempted an
examination Of the latter need only to retire from
the State. When they purchased the New Jersey at
ruinous prico the Hope virtually disposed Of
and 1t remained to rccupcrate the bought
rwo-thirds OF the amount paid tho Now Jersey
stockholders wiped of the list Of liabilities by
firing the capital stock for a time. Tho informant
asserted that the $50 said to have paid Mr.
G. c. Lathrop, charged upon the New Jersey
books In January, 1878, TO the purchased policy ac-
count He further said that the cashier would not
make that entry until President Plummer had given
the written order TO do Although the Hope
policies rapidly changed they had been deceived
regarding its assets, and great gap stl remained un
filled The New York examination OF December u,
1878, was n hard fence for the management climb
over. They negotiated In that month with Messrs.
Luther W. Frost and J. II. Stodwei for sale OF the
company but these gentlemen desired first their
annual statement Mr.. Piummer about artiuIly
to mako this up, and finally Mr.. Frost consented to
purchase the company for the sum OF $l.6, 000 OF
this amount 900 went to Dr. Brady and his friends
and $40 900 was given in mortgages for the payment
of the socaled debts of the New Jersey. The money
was taken In these sums IRON the Continental
conors and constitute the entries that gave so
trouble to tho recent Continental Investigators By
all these transactions the New Jersey hopelessly
failure.
THE hUDDLE SCIENTIFICALLY coSsDERED.
A gentleman connected with tho Hope, Al time,
furnished tho HERALD representative with a detailed
history OF the old troubles and their origin The Hope
he said, commenced business o novel and unsafe
system. 1t charged seventy and threeq uarter
per cent OF the usual mutual ratio, and in addition
margin, not bearing interest," equal to ono-hrd OF the
cash payment The company only entitled to
use OF these charges asset, whereas
II returned all OF thcm to tho department.
thus giving them credit for four their value
The cash portion OF the premiums only loaded
from i've to per cert instead OF forty per cent,
leaving the policies no r.cupcrative power. Al the
same time new business was sought with u commission
OF ory per cent for tho FIRST and ten por cent Tor the
second year. President Jones, tho informant said.
was lavish IN his expenditures ana utterly imprac-
ticabc IN hts Insurance schemes Tho consulting ac-
tuaries ADVISED them OF tho ruinous nature o. his
policy system, but was UNDECIDED. Hc finally con-
scned TO the introduction OF tonne policy, its
circulation was the only valuable business the COM
pany had In making up tho annual statement for be-
ccmber 81, 1870, device known as capatalizing
put up funds to advances TO agents. and made
tho company good In that why.
During 1871 the Hope contnued to do business. but
was ~ constant financial embarrassment. Tho Board
OF Directors, IN January 1872 requested Mr.. Jones
resign, he then becoming vice president, and Mr..
Tabcr WIS induced upon favorable reports to put
$4,000 OF the Hope new stock, aud IN addition to
purchase $50, 900 more from rctirng directors He
soon alter caused an examination 10 be made, found
he had been deceived and rctred from the company.
CLAIMING FICTITIOUS POSSESSIONS
In preparing report OF December 81 1871 state.
meni was found In the oicc representing some govern
ment bonds OF the value Of $4,000 Persistent
curry being made oil the Secretary to produce these
bonds, an envelope was presented containing orders
OF different directors on various banking houses,
which dshonorcd presentation. In
the interim between retirement OF President Plum
mcr anu the election OF Mr.. w. T.. fummer IN May.
1872 the aitsmen Lilo Insurance Company was ali.
sorbcd by the Hope basis OF payment to tho lat.
ter OF tho New York legal reserve less ortynve per
cent oil the total premiums Tor The
was calculated by Mcssrs. Sheppard Romans anu W. J.
Conin ut $3.50 600, from which deducted the
MISSION OF orty.hvo per cent and The deferred pre-
minus, which ieit about 100000 due tho Hope;
500, 900 OF this amount received ny the Hope in
government bonds deposited ut Albany me Hope
then issued ITS own policies IN the place OF the Gratis
mons but instead Of returning them as OF the old
date. they were reported 10 the department
policies, thus wipng oHt all reserve upon them. The
reserve fund thus reduced IN 1872 from $3.50 900
$4,000.
Mr.. Piummcr the informant related, was made pres
idcnt the strength OF his the manage
mcnt that he could advance the company SIOO 900
least out OF his own private fortune, TO tide the
pany over In OF emergency. But when called
upon, hc was only able 10 obtain So 0O0 and that
CURED another well known Endorsement.
In October. 1872, the Hope made arrangements with
the New Jersey Mutual for the purchase IT'S stock
The latter company had commenced business in lsJ5
with Hon. Joseph p Bradley, now Chief Justice as ITS
president It's class oil business, the informant says
peculiar aud Improbable. After live preln ums
had been paid on It's policies they could not lapse but
were kept IN force by an annually decreasing ratio Of
the reserve As result the reserve upon lapscd poll
ccs became nearly twice as largo Us during the lime
oil premium PAYMENTS These destructive policies
were issued until 1870, when they modified TO
little bcticr form.
AZ I'LL ADVISED MARRIAGE
The New Jersey Mutual, honestly managed but
with bad policy system, was IN poor coud ton yet
the existence OF this very class OF policies the in
fornant declared used by Wee President Lathrop
rs an argument to induce consolidation with the ope