Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1879-03-29
The Organization and Management of the
COmpany-The President and Nearest
Relatives Associated i'm the Man.
agement Of Affairs, and They
Receive Immense sal
aries.

Ine nGaOe. Inc report gives history of the
Giooe mutual lite insurance company from
Its organization in June, 1864. The act of
incorporation presents the anomaly that I'M
der sanction of the law the subscription of a
few individuals to fund of one hundred
Thousand dollars enables them to control, at
will, the trust funds of thousands of policy
holders without their intervention or consent.
The president. Pliny Freeman, founded the
institution, and associated with him in the
management of affairs his nearest relatives.
The report goes on to say that as to the Off
GERS OF the company their trust has been
willfully and shamefully abused, to their
own pecuniary benefit and to the great in =
jury of the policy-holders. The president
and other officers received large salaries and
percentage as commissions on receipts and
Accommodations, after deductlpg losses and
ex oenses. From the date of the company g
organization in 1864 until January /, 1878,
the principal officers have drawn out over
1915 200 IN salaries and commissions In
1873, 1874 and 1875 the sum of $3.50, 799 16
was paid to officers and agents for salaries
and commissions. Yet Mr.. M'Call says
he finds by entries on the company &
journal that the items composing this sum
went into the company's books and state
ments to the department as having been
''paid to policy holders for surrender ralue
Of their policies" The presidents salary
was twenty-five hundred dollars per annum,
but he drew out as salary and commissions
ninety-fve thousand dollars IN five years, by
agreement between him and the company.
The company acquired real estate to large
amount, but the appraisers who wers in
structed by the department to make fair and
equitable valuations of such property Ia 1878
placed the present value of the property at
three hundred and ninety FIVE thousand dol
lars less than the cost value. caused by the
reckless manner In which these investments
We manp The ranNrf on IN HISoinSp
the reckless character of the loans made by
the company On real estate.
UNFAIR TREATMENT OF POLICY-HOLDERS.
In December, 1871, a meeting OF agents
of the company was held at the home office,
at New TX, and plans were agreed upon
to change the old issue of policies to what is
known as the reserve dividend plan of in
surance." Liberal commissions were allowed
to agents IN changes thus made, and the
most glowing promises of what the future
was to bring forth was represented to the In
sured In pamphlet issued by the company.
The following, taken from the report of Mr.
NJ Call, Is copy of contract made by the
company with Messrs. Judah & Sturm,
agents, at Memphis, Tennessee.
OFFICE OF THE GLOBE MUTUAL LIFE ms Co., |
NEW YORK. August a. 1873.
1t Is understood that in the counties recently
Arkansas excepting Little Rock and Fort Smith, re-
newals, in future, vail be collected through the Mem
TENDER l, 1873, to lapse policies in the above
mentioned territory, during that time three years
neWal commissions Will be allowed on lapseS; al
the expiration of that time it is optional with the
Company to continue simil .r arrangement for an
mentioned, and in Arkansas. to be discontinued at
once. On policies, in the first year, that lapse in
Mis Issippf counties and Arkansas, the balance of
the first years commissions. making three full re-
newal commissions, will be allo~ed.
into by officials pledged under every sense of moral
law, to protect the interests of policy holders can
not be readily determined. What effect Ii had is
best told in the following correspondence:
AGENCY At MEMPHIS, TENN, November 10, 1873.
James NJ. freeman, Esq.,, Secretary:
DEAR SIR-IncloSed please find list of policies
lapsed in Objectionable counties, etc. great many
remit few days after the premium is due but 1 In
yarlably return the money II gives great deal Of
trouble, and unpleasantness arises in Consequence,
but your orders will be obeyed. 1 have included a
few who do not reside In the Objectionable counties
whose policies could have kept up, some by allow
ing small dividend. others by taking drafts or
lapse them on account of age, viz:
21,q1S. Mr.. Blackburn. 81 years old.
2l,9l9. Mrs Blackburn. "a years old.
23,6S4 .. Bates -----.---- 800. "a years old.
1920 6. W. Grimes "a years old.
If you prefer not to have those commissions
charged in the report until after the next annual
statement is made up, it will make no difference to
me- Yours truly, s STUkM, cashier.
AGENCY AT NATCHEz, MISS,
December II, 1873.
Messrs; Judah & stqrm, Memphis, Tenn:
an amount of questions L am compelled to answer
Say ed a I'M m T1 OF 2e f &
signing my agency, could be relieved from the
e enIg ana COMPLAINS that nave to listen to
character may suffer from it. 1t looks very hard,
to refuse to reinstate their iapSed poIicy6oidefs
after they are willing to comply with the understood
conditions OF the company; that Is good health etc
''In justice to Mr. UlIman. 1t should be stated that
he had no knowledge of the act with Judah q
Sturm. whereby that firm realized several thousand
dollars commissions Ior lapsing policies. This
Contracts were also made with John S. Rainey. who
operated In New Orleans with John G. Freeman,
phis, and Mr.. R. D. Winter. who worked in New
York State 1t was the duty Of these gentlemen to
districts assigned to them, stating their views as to
health, habits ETC., OF the assured. Their reports
dr6Rs ee cannot live Sso
coupled with the advice to lapse If possible The
registers Of the company, opposite the OF the
respective pOlicy-holders An effort to erase these
remarks-attempted before the examination of the
department commemorate in its purpose"
An APPEAL com missioner yesterday visit
ed the Office of Mr. Sturm, and received from
him the following communication IN explana-
ton of the above:
Mr.. Sturm's Statement.
EDIToRs APPEAL-In Justice to myself
must ask you to make the following explanation in
regard article published in the Insurance. Times
OF March. 1879, so far as 1t concerns me- Twas the
servant OF the Globe mutual life Insurance company
largely interested in that company, having pur-
chased in the year 1873 onehaIf interest in NJ $.
judah business: The Globe notified me, during the
yellowfeyer OF 1873, that all renewals not paid on
the day OF maturity must be returned at once the
money for the same RENTED to them, and allowing
deviation from this order. notified eyery policy
holder to this effect at that time informing them at
the same time that under the company's instruc
lions was not allowed to hold the company's re-
newal receipts for single day after maturity.
number OF policyholders RENTED by thirty, sixty
had not the means to carry them, L was compelled
to return the drafts and renewals The
about this time which dissatisfied a
great many policy-hOiders, and a number of them
them the usual annual dividend, which 1 could
not do, and therefore the policies were allowed to
lower counties of Mississippi very large, and
the company did not desire any benefits to be given
policies. My orders were strict that feared to
violate them. as was under ten thouSand-d0llar
Policy holders residing in the city visited by
myself and notified to pay promptly, as could not
reports of those paid and unpaid. By allowing three
years renewal commission on policies lapsed, the
ton m SaYng efs e res on ali p posr IN
force, which were taken under our management.
O 6e ga9 In b to
tunes OF this company. Respectfully, -
p Sin the case of E. Alderman, who died in
1873, OF yellow-fever, the company put me under
oath that received the premium on mis- policy on or
ceved 1t after twelve O'Clock they would have either
resisted the claim or made me pay live thousand
dollars, the amount OF the policy. Respectfully,
8. STURM.
Mr.. M'Call in his reports adds:
81 select, for your perusal, copies of two letters
one sent to the company by Mr.. Rainey, mentioned
above, who was engaged at "a salary OF six hundred
dollars per month, and all necessary travelling
expenses incurred by him.; and the other by the
president Ito Mr. Rainey about the date the inye5ti
cation of the COMPANY affairs was commenced.
AGENCY GLOBE MUTUAL LIFE ms. Co.,
NEW ORLEANS, December z, 1877. {
James NJ. Freeman, ESQ.,, New York City:
DEAR SIR-I beg to suggest In view of the compa-