The sun. [volume] (New York [N.Y.]) 1833-1916, 1877-08-22
VERY CROOKED INSURANCE.
yECRETfRY KEISEY's REPORT ABOUT
the NEW JERSEY MtItIL.
pnc hatch Of Fraudulent Mortgages An ON
GERS Large rroats Enough iiabiii,ie. aud
no Asscts- WIN the scmmp. be runishcdt


ppc Batch OF Fraudulent Mortgages An ON
cer'. Large rroats Enough tiabiiities aud
no Assets WIN the scnmps he runishcdf
Henry G.. Kelsey. Secretary of state of
New Jersey and Commissioner of Insurance
or that state. had made special report in adj
vance OF his regular report for the current
year, in which hc gives nm exposition OF thc
criminal management OF the deiunt New DER
soy Mutual Life Insurance Company. the re-
mort mentions the ca-e Of fraudulent mortgages
ON property in Mddlcsex county. New Jersey.
The property was sold 10y the Sheriff in August,
1873 for the obligations upon II. amounting io
tlg 500. hut Just before the sale the property
Wis conveyed to one George W. Thompson II
Brooklyn for nominal considr ration Of
100000 nhS'ots that had otherwise been dis
posed Of being excepted. Thorn pson made
conveyance " the property to eighteen differ
rnt persons the total consideration named be-
Ing tl77 $50. The "purchascrs' each made
mortgage aggrcgating $4,000, and they were
hl transferred to the New Jersey Mutual 10y
assignment.
Beside this fraud the company created large
balances when necessary by depositng checks
and drafts Of no value until the day the balance
wis needed had passed. when the paper
gas returned TO them In one instance paper
Of this kind enclosed in an envelope under seal.
endorsed M containing securlties' 10 the
amount Of 10000. was deposited in bank and
credited 10 the company. hut wis withdrawn
After il had served It's purpOsc-the fictitious
Increase " the balance in the bank. In
another instance this kind of paper was re-
ported as legitimate assets. The mortgages
aud assignments were duly executed and
recorded. and upon their face bore no evidence
Of fraud hut neither the m0rtgagors nor the
mortgages ever had any lc.dl titlc 10. nor
interest In the property.
On Dec. 81. 1873. the sworn statement OF the
company shows " cash in bank 500 $3.50" and
ca-h in compnny's office s7.s75.66" Their
actual balance in bank on Dee. /, 1875 was less
ays the report. than a. 600. and on Dec. 80 loss
han $1,000 and. again. six days later. on Jan.
l. 1880. while they were unable TO show that
hey hat any "cash in Office at all. OF the
lnltoi States bonds 1882 OOOl claimed and ex-
hlhlt,d ON Dec. 2G few. II any, Of them belonged
70 the company; a large part Of them. in addi-
ton 10 the $4,000 in hypothecation. having
been traced 10 the ownership OF the Continental
Company. BY tho reports of Mr.. Facklrr
Rfuary. and Mr. Stratton. accountant. flj0OOO
lahnu wcrr discovered and not reported
IT, sr'urr a loan mot reported of go 600 at the
Second National Bank " Newark. bonds and
mortgage ~ tine amount Of $liSoO were
report also states that Henry ". Baldwin who
WIS the New York agent Of the company. has
said that his income from the business of the
company exceeded 100000 a year which was
g. Ier cent OF their total cash premiums Us
The report further says that the National Cap
ioi Company which ieinsured the New Jersey
Mutual, Is wholly under the control of Ben
Noye-. has neither the ability nor the intention
b. pay any liabilities and has issued no new
pollri's under Moves administration. but j. IN
receipt Of renewal premiums from the policy
holders n tue company II had rrinsured.
w. the American National Life and Trust
Company" Of New Haven. which was also
koyos's company. and into which h. had pre-
..,rs' ~ wv. y. .s-... -,,
IhQse reinsured companies had deposits for
o. New YORK sioo DO nj AibSny the cS Se'.
cut companies. 800 600 AT Hartford in the shape
OF a mortgage in trust to the Treasurer OF Con-
necticut on the real estate at New Haven. now
claimed by Noyes a. the property Of the Nation
a. capitol Company, and these deposits are the
oil death or maturity in any manner OF their
policies.
The report said that it is grave scandal that
Noyes should be permitted 70 receive the pre-
mluMs on these policies. and II charges that in
some cases Noyes has attempted 10 settle claims
bonds which turned out to be worthless and in
luD'ly.
sey Mutual was one Of a chain Of ompanics
which had fallen into the control 81 an orsani-
zation 81 bold. unprincipled. and dangerous
men. He says:
Others Of this chain were the National Capt.
to and the New York and New Haven com
lanics. which il had previously reinsured the
Craftsmen's. Hercules, Hope. Commonwealth
and the Continental Noyes and his National
Capitol Company evidently were not taken into
or recognized by the combination until the very
last extremity. and then as u d1Tier ressOrt TO
escape the interposition ~ the courts and the
APPLICATION OF the law. The process of rein
surfing the Continental. Which was the only
one of the New York companies remaining. WAS
going on when hrgan the examination Of the
New Jersey Mutual. II was an audacious
scheme Of fraud. and an idea Of the consequent
eos OF It's success TO the people may be had 10y
Continental. / Ind 2i76s policies in force.
amounting 10 tjl,l79, 234 its premium income
~ 1919 was 81 All 242.i3 in cash. besides notes,
g.! 1868; It's total assets. 6.229 .is4 S3.
- Mr.. kelsey alleges IN the report that Henry
W. BALDWIN made t52 .jl5.2G out Of the rein
surance OF the Commonwealth OF New York in
30, and that he Is now paying newspapers in
NV jersey 20 publish articles in b defence
and against the Secretary 81 STATE. The report
g. n 'lud with an expression Of confidence that
u" guity person will be- brought 10 Justice.
The report states. however. that the examiners
wrr' deceived IN 1874, when Mr.. Kelsey upon
u"r report, certified that the com any was