The morning news. [volume] (Savannah, Ga.) 1887-1900, 1891-06-26
SPECIAL NOTICES.
SPECIAL NOTICE.

1
From The Spectator, Ne1 York. June is, 1891.
Great publicity was given Ia the daily press
last week to the fact that Julio Merzbacher had
embezzled funds aggregating 1870, 900 belonging
to the New York Life Insurance Company, and
| had fed. From the mass of sensational reports
OF the matter we print a summary Of facts in
| our news columns this week. Merzbacher was
partner of Joaquin Sanchez. which firm had
| full charge of the South American and West
Indian business of the company, and under
| their management il had been developed into
splendid proportions. They employed an army
| OF agents and solicitors, all of whom reported
directly to them. sending all the premiums col
| lected to them and transacting all business
through them. Some idea of the magnitude of
this can be gathered from the fact that at the
beginning OF the present year the company had
IL 400 policies inforce insuring $685. 1885, ASS in the
territory controlled by Sanchez & Merzb Lcher,
and its premium receipts from this field for
the year 1890 were S3,052, 459. liberal com
| mission is paid by the company upon this bust
ness, and. as the firm has been active and ener-
getic, they have enjoyed large income there
from. 1t has been said that the company was
at fault for allowing the firm to retain so much
money belonging to it, but il is well known in
commercial circles that collections in these
W,
habits of the people and insufficient mail facili-
ties, and greater leniency has to be shown to
debtors than is customary in the north While
the policyholders. doubtless, paid their pre-
mums promptly to the numerous local agents
these we're not so prompt in renting to San
chez & Merzbacher, and. consequently, the COM
pany was in the habit of giving them time in
which to make their settlements, but careful
watch was always kept of their accounts so that
their Indebtedness should always be within
their contract 1t. therefore, became possible
for the dishonest member of the firm, in the ab-
sence of his partner. to hold back payments and
to squander the money in wild speculation in
Wall street. During the financial stringency at
the close of last year, Merzbacher was badly
caught. losing not only all his own money, but
some of his partners and $370 600 that should
have been paid to the company. Vice President
WEIGH says distinctly that the company will
not lose dollar because of this embezzlement,
as all the commissions to which the firm of San
chez & Merzbacher would be entitled in the fu-
ture will be applied to cancelng this indebted
ness, which will take between two and three
years. Mr.. Sanchez continues as a manager of
the business of the firm, and is. of course, re-
sponsible for it's indebtedness. He has already
gone to Barcelona to establish the headquarters
of the South American agency, and some $50, 900
of the amount embezzled has been paid to the
the company. One criticism made regarding
this unfortunate affair is that if Mr. Sanchez can
refund SO large an amount out of his commits
sions in the space of three years, the company
must be paying large price for its business
This is true; but competition in life assurance
has run so high of late years that men who can
control large volumes of business are at pre-
MUM, and can command large compensation.
IL - L..
that these men worked in q field that had been
almost uncultivated previously; that they took
all the chances Of collections from hundreds of
agents scattered all over their territory; all pre-
miums due the company were charged to them,
and the company held them responsible there
for. Their pecuniary liability was very great
and for this, and for their knowledge and
efficiency. they were entitled to liberal compen
sation. Again the rates charged for assurance
in South America and the West Indies are about
25 per cent higher than in this country which
largely increases the margin OF profit to such
successful agents as Sanchez & Merzbacher. In
short, the business was theirs, and they sold it
to the New York Life at price other companies
would gladly have paid for it, 1t is conceded
among life assurance men that the amount of
money paid for the obtaining of over SO, 00G 600
of premiums is not large; in fact, a well known
u
sentative of The Spectator that there would
probably be no difficulty in forming syndicate
to pay its check to the New York Life Insurance
Company for the sum of money stolen if the
New York Life and Mr.. Sanchez would agree
to the making of contract with sucha syndi-
cate, handing over to it the control of the
Spanish Anne rican business. While the amount
of money purloined is large per Sc, relatively
considered in connection withithe enormous as
sets and annual income of the institution the
sum is small. The theft has been treated in GER
tain of the daily papers from the standpoint OF
a sensation rather than from that of the interest
of the company and it's poIicyhoiders. AS the
amount of money does not figure in the official
reports. either in the assets or the surplus, so
far as the interests of the poAcyholders and the
sovency of the company are concerned, the
theft does not enter into consideration. The
annual income of the New York Life Insurance
Company, according to the last annual report.
is shown to be $31, 800, 600 The total admitted
assets exceed BIS, 100000. OF this amount more
than S106, 900 900 is shown to constitute net or
invested assets The sworn statement of the
company shows that the market value of bonds
and stocks over cost amounts to $3, $50, 000
Criticisms upon management which, while it
was not able to forestall theft of S372. 000 had
carefully guarded itself against any loss, should
not fail to note the ability of the same manage
ment in taking care Of the vast amount OF assets
owned and the substantial increase noted in the
market value of securities over and above their
cost 60 the company. AS a matter of fact the
theft amounts to barely three-tenths of per
cent. of the total assets of the corporation. AS
| the policyholders have only paid what their
| contracts called for, and as the company is pro-
| tected by its contract with the firm of Sanchez
| & Merzbacher, the real loser by the Merzbaeher
! embezzlement appears to be Mr.. Sanchez who
will have to sacrifice several years commissions
| to make good the stoalings of his partner.
| Merzbacher was simply defaulter TO the firm
| OF which he was member, not to the New
| York Life Insurance Company. The affair ia
one greatly to be regretted, not so much on &C
| count OF the sum involved of the criticism
| aud reproach that minimizing persons will cast
upon life assurance in general
THE TITLE GUARANTEES AND LOAN
COMPANY OF SAVANNAH