New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1891-06-30
INSURANCE MEN ACCUSED.
OFFICERS OF A ROCHESTER, COMPANY IN
TROUBLE.
RESULT OF Az INVESTIGATION INTO TIT
AFFAIRS OF THE FLOUR CITY LIFE AS
socIATIoy-rHREE INDICTMENTS
Sam tn HAVE DFEN FOUND.
SAID TO HAVE BEEN FOUND.

SAID TO HAVE BEEN fOONb'
Rochester. lime 90 (Spcc!aD.-some prominent In
surance men Of this city, ii is said have been III
dcted by the Grand Jury. For some time the actions
Of certain officials Of the Flour CITY Life Association
have been under Discussion and investigation
The Flour CITY was incorporated on the assessment
plan I'm February 1887. II did regular business
till the fall Of the year named, when they placed
what they called Glass d in operation. From tns
time there appeared more or less pickering among uo
officers and in the summer of 1885, Frank j. Butler
the SECRETARY, was removed from office ana william A.
Chase brother-n-aw Of James McCSrgo, was elected
to the vacancy. The company seemed Caccoriing 10
rcports) to 90 ahead from the start. AZ the close
OF the first year. 1887 II reported 700 members, lia-
bilitles s5,573, and assets $3.G63 At the close OF
15Ss. 1892 members were reported, with HaDiI-
tics OF S17, ,754, and assets 1892. The year 1SSO
closed with a membership of 1867 and liabilities
OF S53.135 assets. $76.935. At the close OF $500
The roll called for s,6i5 with liabilities Of S7O75 and
assets Of 927.7s1. While the cfcal report gives
- O75 as liabilities for 1900 there standing out
against the company losses adjusted and "not yet
DUE S21 $50 ~: losses reported $50 COO The re-
port says: Total mortuary liabilities. 81 go 20.
TO this item find the following ridiculous plan OF
Offset: Nortuary assessment called. not yet Due SCI.
60 20: mortuary assessments due and unpaid prOb-
ably lapsed. $1,000 AMOUNT pledged by policy
holders per contract to meet losses In 1o01, est
racd T1rOOV). 1t IS apparent 10 every one thaI
the last item alone was intended to confuse policy.
holders, as well as the state officials, for no one
would consider the item OF anticipated assessments
for future year assets in report for year Just
closed
These inaccuracies, plain as they were were not the
features OF mismaEagement or crO0kedness Of the
concern. but they led to examinations that brought ont
other facts. The crOokedness dates from the fall Of
lass at which time the accused officers appropriated in
~ fr,tn tho an
mortuary funds in the different CLASSES to pay salaries
and other expenses in excess OF that allowed by the by
laws of the Association AbOut this time complaints
came in thick and fast that the officials were depicting
the mOtuary fund in Indiana and other places ana ap
plving the same to the salary and expense fund 1t also
appears that thousands Of do,hs Of the funds OF the
odd Peoples Class" had been diverted to the salary
expense channel II is al said that death claims
were paid at less than half their face
value and that full amounts reported on
the books Of the company. To balance these fc-
tous accounts bogus names and postofceS were used
and the accounts balanced.
In 1850 Robert A. Maxwell. Superintendent of In
surance, appointed Michael Shanuon and John y
Koran to examine affairs Of the company They re-
ported strange state Of things, in fact such conditions
shonld have caused the immediate closing up Of the
affairs of the company. That ii was not done may be
explained by the charge that the insurance COMPARES
were furnishing tile funds for Democratic campaigns
and therefore the Flour City was allowed an
existence of nearly two years and half
after 1t should have been wound up. An
other proof Of fraud that in last year the company
paid SlOh7O for expenses. and only SGO12J for dcalh
iosses. while at the time the members paid in
S1D6431. The last report Of the company was too
much even for the Insurance Department and an In.
vcsgatlon led 10 the indictments referred TO-. one OF
the indicted officers IS vcep!Sdent Of The Lie Union
understood. however that be has been requested to
resign from that company, but declines the invitation
Mr. Pierce state superintendent Of Insurance, was
seen at the Hoffman ITouse last evening by Tribune
reporter. lie said that he had not received any in
timaton whatever Of the action Of the Grand Jury
concerning the Indictment Of Of the officials o2
the Flour City Life Association. lie said IL have
been here with Mr. Shannon. giving personal at
fcnton to the investigation Of the affairs Of the New
York Life Insurance Company. II these gentlemen
in Rochester have been indicted 1t is probable there
IS a dispatch TO that effect awaiting me at nv Office
in Albany. The Flour City Life Association was in
vescated by Mr.. Maxwell, my predecessor but know
nothing about its affairs prior to my acceptance Of the
office / hold. Five six weeks ago | ordered
private Investigation to be Instituted in compliance
with the requests and complaints Of a number Of in
dviduals Tho representations Of these people Of
such a nature 10 induce me 10 have the invcstl-
cation conducted I'm a secret manner 80 that If there
was ANYTHING wrong in the affairs of the company the
innocent shareholders might be able to assume the
pOn>bility and save the money they had invested I'm
the concern. In the meantime they would also have
N opportunity to compel those persons who might
be Implicated in the alleged msippropria-
lion Of money TO make good the discrep-
anccs. ! have not received any Official report
vet but l have learned that there must be good
grounds for the complaints. l know the Dstrict-At-
torney has had the matter under aslvisement for
cral weeks but any action he may have taken Is not
due to any recommendation made by me. OF course.
Il thle had been lagrant violation Of the laws, |
should have called the matter to his attention, but
ordinarily il is not within the province Of my Office
10 act ,ctvc 10 ferret out and prosecute offenders
Of the lan. | have not done In this case. II il is
true, as reported don't Know what action Will be
taken BY until have considered the report Of the
examiners who are at work on the case
AGAINST SENATOR OUIY'S LEADERSHIP.