The New York herald., 1877-07-07
AMERICAN POPULAR LIFE.


SOME OF THE DISCLOSURES EEAcHED By
RECEIVER NEUTRALITY-SUSPICIOUS. METHODS
or RUNNING LIFE INSURANCE COMPANY.
The American Popular Lilo Insurance Company ha.
been regarded and particularly It's failure
as very remarkable institution. Such opinion
JUSTIFIED BY the Official report OF Its examination In
which many Of the characterics of its novel manage
,nent MADE apparent. since the receiver took
charge OF the concern. be has been making some
tended explorations. and the writer yesterday called
on thai oicer Mr. Z. c. Lawrence 10 inq ure into tue
nature and extent of bis discoveries He said he had
found many probematc matters on the books. soao o
which he had mastered, while others seemed to anlos.
battle explanation. In mauy branches OF the business
an extraordinary system Of lnancisring had been
pursued, and the books fIsd with promis-
onous entries OF thesc transactions, which could
net fail 70 attract Suspicion, while they werc
dnicult to trace To illustrate his meaning ME Law
renee allowed tho writer 10 inspect some OF these
records, and they certainly presented curious mud
die II was noticeable IN each years. accounts that
the business accomplished in December preceding Tho
annual statement to the Insurance department, =
extravasanty large, and mostly on the debit side,
while N January following there corresponding
expenditure OF imposing sums. In fact, hasty glance
at the pages Of the cash book Is sufficient TO show that
affairs were ''lxed for making up these statements
NOVEL nisTginUTIoS OF PgoFiys.
The manner III which the capital stock was "nursed"
ana the profits divided is especially worthy OF aen
ton In each year debit entries are 10 be iound OF
way was increased IRON 100000 In 1872 10 over
$3O0.000 in 1871 On the credit side
cross entire. 10 The purchase Of son.
amount which IN some instances correspond Win
the supposedly received or The sale ot stock
For example, under date OF December al. 1872, there
is record purporng TO be the sale OF 800 shares Of
capital stock ior s300 000. OF this stock DIR. ". Ii.
Dwpele is credited with Gfty shares, John y. Trow
V-ilv shares. MCrcau Morris with Ny
Dr. I. $ Lambert, the president with l25 sharca
Under date OF January 81 lS13 The month succeeding
this purchase single itcm Of expenditure o 10000
for conditional certificates The amount had been
written IN INK while tnat for which IL was paid was
afterward interlined In pencil Tho person who made
up this account and known as one OF the acluaries Of
tue company stated yesterday that both OF the entries
given we're made at the order ol Mr. Lambert when
asked with regard to The pencil entry he said the
hau not written II IN INK IN the hrst place
was that be mad nos been told by ME Lam
bert tho precise name OF the account 10
which the charge belonged. From other statements
made by him. and IRON the appearance OF the account
Itself ii is safe infer that memorandum checks
given for stock gong into tue annual
s'cash hani," aud beng returned III the following
mon hs conditional certificates Of prccarious value
Between December, lS72 and December, 1876, The
purchases capital stock aggregated $l97 0UO and
tue same period tho OF the entries 10 cpuditiopal
certificates and purchased pocy accounts produced an
exact amount to balance
These ''condtona certificates" are a somewhat sim
gular contrvancc and peculiar 10 the American Popu-
lar their issue beug permitted by It's charter. At
meeting OF tho directors September % 1873 President
Lambert report IN winch he referred TO the ex
sting Of State providug for the division
OF SO large profits as system OF lite insurance al
forded- Upon this Mr. Naston Brooks moved The ap-
pointnent of committee to consider this portion OF the
lrcsident's report, which was termed 'The Select
Committee for the Distribution Of Profits, &o and OF
which the following directors were made nembers:-
reported at u meeting held october 30, 1872, in favor
OF per cent rated ages as basis for the
81 ssoss expenses sn M n
to be divided among the stockholders The
committee favored the issuing OF conditional oertih
each stockhoder tor his pro rata proportion OF
this amount which certificates were to 0e exchanged
Tor additional shares OF stock. This plan was adopted
aud aiterward extensively, shown by the books
MYTHICAL STOCKS AND DoNpa
In a statement made 10 the Insurance Department
in December, 1874, rs schedule OF STOCK and bonds
ned by the company, oi which, IS Ihought
were never In possession. or this probably ilc
tious property there were New York Bounty bonds,
SlO675; Ninth National Bank stock, 81, 800; American
Exchange National Bank STOCK, $780, and STOCK of
the National Trust Company. $40 600
one o the most recent transactions with the stock
no dcrs was just before the Official examination in
Aprh last, when SAC, 900 paid Tor the above
described conditional certificates. The date Of
payment is mentioned the cash book but checks
we're given the stockholders which we're not found
tn the Office by the examiners. To illustrate
the loose method OF conducthg the compa
ny's business 1t may be noticed from the
statement Of December, 1874 thai whiio
he total premium income ior the ycar was Sl65. 000
the amount of unsolicited and deferred premiums WAS
sl4l. 600 Notwithstanding the condition OF affairs
(Which must Tor the past three years have been known
TO some OF the officers at least dividends were ie
clarcd regularly and immense profits spoken Of Re-
ceiver Laurence has interested himself IN this portion
Of business may be inferred from the following
circular issued to each Of the stockhoiders:-
Upon examination 6nd you have received. dividends
stocs, the sum Of .as per statement annexed
ihe Company having been insovont the divdens have
gaily paid, and will have TO be refunded prompt
set tic m ent Of within before she july
1877 will avoid the ega proceedings Tor
the recovery Of IL same. Yours resp ectfully,
Il. u. Lac RENEE. Receiver.
Attached to this rs statement OF the various dv-
dcnus paid TO each shareholder and copy OF the order
appoutIng the receiver. The total amount ol divl-
deuds TO be recovered s74,5S3, with interest
amounting TO Sl7, H.
President Lambert recently made statement that
the receiver was iudulging in hostility toward him
personally When asked ON this point yesterday, Mr.
Laurence said he had never soen President Lambert
but twice. ana was not at all acquainted with
him. He had animosity TO any OF them.