The New York herald., 1877-11-18
Receivers History of the American
Popular Life Assurance Company.
INSOLVENT FROM THE START.
Fraudulent Management in Every
Department of Its Business.
@OUR SUPERIOR SYSTEM. I"
How Bonds Were Purchased and Not Pur.
chased-Capital Increased and
Not Increased

Not Increased.
The history OF the American Popular Life Assurance
Company has appeared In scraps from time to timc
since tho institution was placed IN the hands OF
cciver. An exhaustive analysis has now been pre-
pared by that officer, Mr. +. q. Laurenos. and con-
densed report of it is given oolow. 1t constitutes
erpose OF corruption and deceit which has seldom
been eauaed even among tho delauting class OF lie
New York, Row Is, 1877
In view OF the many applications made 10 me by the
policy holders creditors OF the American Popular
Life Assurance Company for information IN regard 10
its condition, desire TO submit the following brief
summary Of the auairs IN the nature Of preliminary
report 80. ..,
capital Of $780, O0 subscribed and paid Tor IN cash.
With this sum, and 81 06o addtona 500 900 United
States hve-twcnty bonds were purchased. which were
duly deposited with the superintendent OF Insurance
OF this state, as required by law where they nave
since remained
Alter organization and the adoption OF certain by
laws tho nrst action Of the company lind occasion
partcuarlze was taken by the finance board, COM
posed of principal officers Of the company aud Two
directors, when, IN accordance with resolution,
$4,000 borrowed from the National Bank u Salem.
October 81 1866 being the loan above referred TO- aua
may be added that this loan was not returned
until nearly two years thereafter.
AN AUsPicoUs BEGINNING
ON the oath OF April 1901, at meeting OF the Board
OF Directors dividend OF seven per cent per annum,
free Of government tax, Tor the cight months ending
December 81. 1866, was declared by unanimous vote,
the following named'gent!emen being preseat;r S :.
Lambert, Is. +. Bancroft, Erastus Brooks W. !. Cole
man, T. b. Buckley, " NJ. Rice, G. Ii. Frost and Emer
son w. Keyes. summary OF the financial CONDITION
OF inc company at TINS time taken from the books
and shows u loss instead OF profit The IS. 900 boz.
rowed of tho Bank of Saem however, gave an actual
cash balance OF S4677 10. and this agrees WIN me
company's cash book. The officers Of the COM
pauy doubtless figured up its prohts IN way 10
render this divdend thus declared upon positive
loss apparently justfabe but no copy OF the treas
urer's report upon winch 1t was based can now be
found. Tue nominal profits oil the company ior the
Hanna IN ha
result reached by credtins all premiums on the
books whether received or not TO proht ana ioss by
leaving credit to any account Tor the profession OF
policy holders by charging any portion oil iurni-
lure account and largo Item Tor wages TO proht
aud loss and making no allowance ior outstanding
bills against the company, which, as subsequent pay
ments snow, we've ~ the time considerabic VIII
here stale that tho system OF paying unearned dlv
dends mus inaugurated was continued year by year
until 1877, when the condition OF the company's af-
lars would not permit tho payment OF dividend lor
1876
in January 1868, it was resolved "tnat application
be made to the Legislature Tor authority 10 increase
the capital stock oil the company to S6OO,0oO Such
authority was obtained and acted upon Us wil here
alter appear
FROM DAD WORSE.
From this time system OF deception as to the fnan-
cia condition oil the company appears TO have been
opted. anu pcrsisently carried on until its collapse
Policy holders, stockholders aud Insurance Depart
ment, aKe deceived by the misrepresentation OF
both assets and liabilities From December 81, 1865
December 81, 1875, the ocai reports Of the com
pany sworn to by president aud secretary, snow
Trust Company credit Tor, and was carried as
cash in Office. Part OF apparent balances were
obtained by false entries cash book TO the amount
OF $270, 400 6J as loIIows:-
1S72 Dec 81, subscription TO capital stock ooo w
1873, Feb. g. subscription to capital stock. 500 90
1873 Dec. 81, subscription to capital Stock 2osoo W
1874 Dec 81, subscription 10 capital stock $500 w
1875 Dec II, subscription 10 capital Stock 222OO 10
1874, Jan. 81 proceeds oil various mag
mary bonds. 3O,S25 W
1875 April 26, proceeds vf various INA
eInary stocks. 3s, s25 90
1875, Dec. 81, proceeds OF conditional Ger.
thcates ............. si.o4e os
1915 Dec 81 proceeds oil imaginary stocks 5000 90
on the 2stn OF February, 1870, DR.. i. s. Lampers
was elected president ana b. i. Bancroft treasurer,
Offices held by them continuously to June 20 1871
the date OF my appointment as receiver.
January 25 1871, Mr. John 4. lrow was elected
member OF the Auditing Board. Tho duties and powers
OF Tins Board defined section 8, article 4 OF the
bylaws:--
four neither 0 whom shah DC member OF the
Y n .T With
through pcicy Two Of the members shall inspect dunng
close OF the year.
Mr. rrow lad financial transactions with the
pany, such distinctly forbidden in the article
above quoted, and is loiay de0t0r TO the company
AS member Of the Auditing Board he signed attesia-
tions company cash book to the eject that he
had examined the accounts and found them correct
Mr ". W. Sharpe. also member, had financial
transacuons with tho company during the period
when signature attests, he was audto borrow.
ing bond and mortgage 10 the extent OF $4,000.
INCREASE g OF CAPITAL
of Directors some resolutions were adopted which the
receiver quoted ia iu IN order To give clear under
standing Of the in which the capital stock OF
the company came TO be increased without any IN
Grease, except IN ono instance, OF It's cash capitol
Under these resolutions and others OF Ike tenor sub
seauenty adopted .Gonditiona ccrtncates were Is
sued to the OF S156 700 An Issue Of 500 900
capital stock authorized December y, 1871, SUD
scriDed and paid Tor by cuecks (some oi which were
paid others pot) December 81 1871. The capi
Ia stock became $l50,O00 IL Is now $500, 700
The annual reports TO The Insurance Department,
signed aud sworn TO by I. ). Lambert. presldent
James Cruikshank, secretary, anu, at times, oy A. j.
Reid secretary, state the several increases OF
stock actually paid Tor IN CASH" The Tact Is that
hey ond the 100000 named above, the company re-
ceived no money ior new stock at any time pre-
OF max ing payment ior The new Issues was car
RED on as follows ;--Unecks were taken IA nominal
payment Tor the stock; the makers OIL these
checks then exchanged Their new stock Tor like
amount OF conditional certificates Win the holders
thereof, and then exchanged the conditional certh
acquired with the company Tor the checks
originally given. The following is briei summary OF
oil checks received and conditional certificates
purchased AS above alluded to-
Stock receipts.
1872, December 81, received tor stock $4,000 0O
1879 February D, received or stock..... ~ sou OO
1875 December 81, received Tor sock. 70 800 w
1874 December 81, received for stock. So 500 90
lS75 December 81, received ior stock.. y, 200 90
1875 December u, received for stock.. Al, 049 90
c..,;6c,;.: %
1873 January 81 paid tor certificates $780, 900 90
1874 December 81 paid Tor ertcatcs. H. 500 90
1875. MAY 81, paid lor con- certncates... $4,000 90
1876 December 81, paid Tor con- certificates $4,000 10
ls16 DecemDer 81, pur. policy account... ol4y 90
1911 April 80 paid Tor con. cerhcaes.... 10000 90
$l97 749 %
The Two amounts this table which extend To the
scents" are evidently made to balance the account
CENTENNIAL DIVIDEND.
On the I'd Of December, 1875, The following fcsou-
tion adopted by Inc Executive Board under direct
authority oi the Board OF Directors:-
Resolved That where policies upon which a considerable
lie uuereu tlp