New-York tribune., 1880-10-28
WTLLTAM r. GRACE'S RECORD.
BAD FEArrREs OF HIS ctRErR.

tHt New / Olk l0derWrltFi5 n iIild0. / ne
record OF Illegal and fraudulent operations 10y
which the insurance companies suffered. and
which Mr.. Grace apparently took 40 pains 20
prevent, IS long and IisGrlceful one.
Additional details concerning the cases
OF vessels in regard ID which fraud ~ alleged
to have been p1ctised are given below, ard
these facts, with those published in TIE
| TRIBUNE yesterday. leave no room for sur
prise that the Marine Insurance managers of
New-Y0rk, including wen-kuown Demo-
Gratis rs well as Republicans. desired
no more of such services "a those of Mr.
Grlce's agency. Nr. Grlce'4 brief but *
tiavaeant receIver7hp OF the Continental Lie
Insurance Company is also Illustrated further.
THE FRAUD, AT CALLAO.
MORE VESSELS or WHICH TIE N,vEtNCE cOMpA-
NIEs L ST HEiyILY-THE PERUVIAN G0vrRS-
MrNr FORCED 10 TAKE ACTioN-PLACI>G Bot
TOMRY BONDS APPARENTLY TO NE. GRAcEs
ADVANTAGE
The port of CalaO, where William Z. Grace grew
rich mas a bad record Among slilowners and
commercial men generally, it Is regarded % place
ful of tucksters and sharper. Who fleece captains.
owners and merchants. AGoag .he business men
of Calao are a numbcr who have BED from tho
United States. and some vd0 have been expc led ~
vigilance committees. An o ,lun for such
men from TINS aud other couuuie. Il came
TO be known II insurance circles as
kind of pirates ha-b0r. The insurance
companies were evidently regarded as corporations
without souls and tuey were made o. suffer accord
Ingy. They are rich and can sand H." said
Lewis one of the men who was cngag d iu the busl-
ness of making money our OF tle companies by send
iug vessels to sea CD sink The losses Of the nsr-
ance companies OF this city were only part of the
total losses at that port as foreign companies were
also heavily mucted. The marine insurance COM
panies Of Peru from experience and know edge had
ceased to take risks Clllao without careful inves-
t.gation. The underwriters Of this cty supposed
mat their interests would be pr)crred by thclr
agent William K. Grace bur how badlg they we're
deceived investigation has shown After suffering
losses which were enormous II proportion 20 their
business at that port amounting IN one year 20 naf
a million dollars the companies made an luyestlga-
tion. After careful. conscientious consideration Of
the evidence laid before them. the Board of Marine
Underwriters OF this city ,c-oDer >. 1871,
adopted he following preamble audrosolution:
That whereas serious dssltisfactlon has been ex-
pressed with the conduct of t0c agent Ji the Board
ai CalaO, ana whereas the grounds lOr the same
lrhc CHARGES against the AZ. Hll have been sub
Eeoirsd That the authority Of the agent. William
r. Grace be revoked, aud THAI he b. requested to
return MS commission forthwith.
This was the verdict aglius, Mr. Grace. gwen by
a body OF such eminent citizens rs Daniel Drake
Smith president Of the Commercial Mutual Marine
Insurance Company; John H. Lyell, president Of the
New-Yorll Mutual Mar re Insurance Company
Join : Tappen. vice-prcsidcnt o. he Union Mutual
Marine Insurance Company. aud other insurance
presidents and vice-presileurs. At the time
tins action was taken, al the evidence that
Is now known To exist against 3lr Grace
had not arrived in this country. Neyerthe-
less the Underwriters had ample proof to
Justify them in the couIse they pursued They
farther expressed ia wiring their belief IN the
petcness of the evidence presented against Mr..
Grace. This paper was signed by ncn whose iuteg-
uty - not qJcst0ned-some of them prominent
Democrats and some OF them Republicans.
THE SYSTEM or FRAUDS AT CALLAO
Next 10 the insurance companies perhaps the
heaviest loser by the operations a5 Caliao the
Peruvian Government The vessels were laden
with carg0es Of guano and nitrate which be-
longed to the Government, and when "bCttomry'
bonds or respondenta placed the vessels
the Peruvian Government suffered II consequence,
oftentimes losing the entire cargo Ii was prac-
tee TO load vessels " sOund and seaworthy' and
send them 70 sea. when something would happen
sails were lost. LEAKS appeared or something oc-
Cured which gave the captains excuse 10 return
To port hen the vesscl was eT.Enrl bv "a Board
OF survey Ia COLLISION with th- pain and Others
Interested, and the vessel vas condemned uusca-
worthy until repairs We're made. large b.il Tor
repairs was the result, the charges 10 many IN
stances being fcutIou-. The money to pay this
bill was raised by bOttomry bonds the
vessel and respOudeniia the cargo. the losers
being the insurance companies An enormously
high rate of interest was charged the bonds. the
burden of which the insurance companies an! the
owners of the cargo had % share. The cargo was
stored IN the meantime for which ano,her heavy
charge was made. AZ the expense OF the Peruvian
Government. By such transactions these large
sums of money were gained.
These swindmg operations centred in tho
port Of CallJo, and they grew so
nagrant as to attract the attention Of the
Peruvian Government in such a manner that even
the influence. OF Henry Meiggs could not prevent
action hcng taken. The case winch bronsht mat
ters to a CLIMAX was that OF the ship Washin gton
IIbbev TINS vessel sailed from CallaO with a cargo
of cuano and returned IN distress. TIE ship was
condemned and sold for a mere nominal price. %
the disgust of the insurance companies IN this
country, WHO lost heavily. The cargo trans
f,rred a1d a respondentIa O0nd FOR the OF
Sl253+ 0S WAS placed on It. MS bond va. held.
Ike many others. By Nr. GTace's cashier and
dummy. Manuel L.agun,. After going through the
farce OF repairs the vessel sailed Tor san
Francisco. where Mr. Grace has another
house and when she reached thar port
she was found b. the Customs officers TO have
board In place of stones tor ballast over 2J0 tons
of guano stolen from the Peruvian Government
The vessel was seized by the United States Govern
mcut These swlnd.ng operations IN The ease OF tho
Liobey took place in Callaoand Mr.. Craze did moth
inc TO prevent them lthougn his duty g. pro-
tect the underwriters whose agent he His own
cashier loaned 81 900 at high rate Of interest on
the cargo winch was insured. Mr. Grace made no
arr. .n u.t.ct the nnderM u era md tleN sn III an