Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1892-02-03

on various forms, under various contracts.
! (which, however," were always subject to
| our approval. Against the commissions
| earned, and to be earned, the members of
this firm drew advances for living expenses.
| as before referred to, and advances on ac-
/! count were made to some sub-agents, but at
! no time has the amount OF money advanced
| to L. C. vanuxem & Co. exceeded the value
| OF their entire business. Under this system
of organization it has been possible for q
single firm to
Handle Large Territory,
and by creating renewal interest "in this
| case of very large proportion" We have
avoided frequent changes in general agents
] and have largely escaped the danger OF
| having our business carried to other COM
| panies by an agent whose interest in any
given policy ceased with the flrst year of its
existence In this way Messrs. L.C. Vanuxem
4 Co. have done for years larger business
eral Of the smaller life insurance COM
panies and the largest business
Of any single agency in the United States.
pense and the cost OF its procurement has
| been included each year in the disburse-
ments OF the company. The whole theory OF
this organization and the purpose Of the ad-
! and secondly, to create an inceD tive for the
general agent or manager to procure bust
ness at the lowest possible. cost, in order
that after period OF years he may begin to
realize return commensurate with the
work done.
Sub-Ledger Needed
As the'cost of the business is charged of
each year, it becomes necessary to keep
with the manager a blotter or sub-ledger,
and the items are all brought forward from
time to time. OF course, this under the
illustration would show for an office doing
twenty millions of new business in year
and for series OF years, large apparent
debt and the superintendent Of insurance,
instead of viewing the business as we
have done as simply business paid for.
decided to go into this sub-ledger and
spread before you the apparent debt. 1t is
OF first Importance that you understand
clearly that this money is not due from L.
c. Vanuxem & Co. In the ordinary accept.
ance of the word (debt) it is due under the
terms of their contract at such time as the
commissions earned on the business done
will liQuidate the money advanced from
time to time for the conduct Of the business
1t has not been squandered by them nor re-
tanned by them. 1t has not benefited them
personally. and never can until as stated
the earnings OF their business have liqut-
dated all moneys drawn for every purpose,
under the contract, including advances and
agency expenses of every kind, and here let
me call your attention to
An Extremely Important Fact
which applies to all discussion of agency
matters by the superintendent, and which
he forgot to mention, namely: That these ad-
vances, in every case, were charged to ex-
penses in the company's books when the
advances were made. and that the company
has never counted them as O part Of its
assets or surplus. The superintendent,
therefore, instead of unearthing with great
difficulty something the company desired to
conceal, as he states, practically set up an
arbitrary standard of what he thought our
business ought to cost in any given year, and
charged up as debt the differences between
his opinion and ours. 1t would be scarcely
10oe sr1Uk % huA r lnr rad
in any given year, that the aggregate amount
paid Tor the procurement Of the business Of
that year was one or two millions too large,
ana ,r in IN his report had set this up as , sum
Right here desire to state, and state it
with all due respect for the opinion of the
official with whose conclusions differ, that
in matters of this character the conclusions
of men who have had 80 years. experience
in this business as to the propriety of pay
ing given sum for q given volume OF busi-
ness they alone being conversant with the
surrounding circumstances and contingen-
cfes) are as likely to be correct and In the
interests of policy holders as the opinion Of
gentleman who, while eninently qualified
for the duties OF his Office cannot be cred
tied with special knowledge in the particu-
lar interests now under discussion.
spanish-American Department..
The Superintendent naturally treats at
some length the affairs of the Spanish Amer
ican department.. The invitation extended
to him by our board of trustees to examine
the condition of this company was called
statement relative to an alleged defalcation |
by one of its managers, for which the COM |
pany, it was stated, alone must suffer. 1 |
shall refer principally in the matters dis |
cussed by the Superintendent under this |
head, to this central and to you most i'm |
portant question. 1t is q fact that Mr.. j. |
Merzbacher, one OF the managers at that
time of the Spanish-American department.. |
became a defaulter for large amount. |
The statement as originally published, that |
Mr.. Merzbacher defaulted direct to the COM
pany,was an error. Under the contract which |
we had with the two managers of the Span
ish- American department, each became re-
spons1ble for the actions OF both, and Mr..
Of the other, general manager at
American department at the present time,
accepted, under the terms of his contract, |
full responsibility for the Merzbacher short
direct theft by Mr. Merzbacher from MIR. |
of s419, So 80, and sl19,059 10 which |
was an overpayment by Mr.. Merzbacher to
the former general manager OF the Spanish
department"
Some OF the Shortage Made Up.
Since the date on which the accounts were
made up and the shortage definitely deter
mined, the item of s11s,O59 10 has been con-
pany by accrued renewal commissions re-
tained by Mr.. Sanchez, and by him turned
over to the company In cash. The larger |
item, representing the money appropriated |
for his personal use by Mr. Merzb bacher, has |
been reduced since December 81. 1890, by |
sl66,671 SO, leaving balance due January l,
1892, of $253, ,15l 0S. The actual net profits for
the year 1891 to this department have
not yet been fully determined, but its
balance sheet shows that they will not fall
short of 100000. This leaves the balance
1ue the company on this account on this
late sum but little excess of $3.50, 900, for
which the company also holds abundant
The superintendent closes his re-
view of the SpanishAmerican department
With these words: From the foregoing
acts, we must conclude that Sanchez and
Merzbacher were treated with degree OF
inconsistent with the best inter- |
,sts of the company. That conclusion is
lot correct. The department has always
been eminently successful, and it's business
las been obtained at normal cost.
As to s. L. DinkelspieI.
The superintendent expresses the opinion
hat S. L. Dinkelspiel was retained too long
Is an agent of the company. Mr.. Dinkel-
piel secured for us a large amount OF de-
irable business. The men whom he insured
we're among the wealthiest and most infiu-
initial in the cities where he worked 1t
,ame to my knowledge however after
ime that his business methods were objec-
ionable, and for that reason, i'll the year
$50, his agency terminated. Mr.. Dinkel-
piel's contract comes under the gen
raj illustration cited above except |
hat he was personal solicitor ONLY and |