New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-04-11
PIRATICAL INSURANCE.
THE PROTEST OF FRATERNAL SOCIETIES
nrrTER THE LOUISIANA LOTTERY THAN THE
ASSESSMENT ENDOWMENT INSURANCE

tcrmine in the coming week will be
whether 1t will pas the Insurance Code !" us p''
ent abOmlnabe shape. containing modinca"o"' "
the present insurance laws Of the state WHICH es.
the vlllanous assessment endowment meu'a''o o"s
ness The insurance code has passed the Asseos anu
has been favorably reported every ones surprise.
the Senate Insurance COMMITTEES. II tue "Cooe -
passed by the Legislature In its present en"Po'
be hoped Notwithstanding 1t is an e5ceiieh' oo-,"s
ton Of existing Insurance laws, that "oVe'"o'
will veto IT, containing. II WILL such eao new '"
Under the existing insurance laws OF this stnte 'e,o
is no rccornton of assessment endowment orners ~
1883 the LEGISLATURE pa ssed general cooperative W
snr,nce Inv CHAPTER 175. This act In express ""-
grage prohibits the transaction OF endowment '"'
ance by assessment associations. III 100" ''c i"'.
associations desiring to be separated from '"e o""n
associations secured act Chapter 800 premiums
them TO do So The fact that this ACT ooes ho. ''''
the limiting provisions Of the laws Oh 100" n"' pe'
urred bv tho advocates Of the endowment ORDERS ~
recognition of their right to transact business III '
State under its provisions. TIE insurance Dep'''"'.
of This state has refused to place any SUCH
upon the act Of 1890. and while scVcra c"''""'0
orders have made Application Tor adih'S'o" !" " 60
business in this state under It's provisions not one a'
,ccened the invitation Of the department to test ths
legal correctness by mandamns proceedings OF us oe
csIon refusing to them certificate Of authority
Notwithstanding the fact that these endowment
orders are not recognized under the insurance laws "
his tate
hscise Of being fraternal" beneficiary orders esao-
ush.d srbordnate lodges in this state. While acting
without any legal authority being entirely without the
protection Of such supervision the Insurance Depart
ment might give them they have succeedcd III
securing membership OF possibly 2oOoo Ill tn's
| state It Is, OF course, impossible to get Mt the
| exact membership Of these concerns in Ncw-forA'
rs they make reports TO any of the state Depart
ments All of these orders which now illegally
transactlng business In New York report TO the Mass
cLusctts Department and 1t IS to the reports OF a'
department that one must 60 In order to obthh any
satisfactory understanding Of their condition ana az
| fairs From this point Of view the experience Vi
| the Commonwealth OF Massachusetts with these So
called "ateral' orders Is not only of great value
hut shoud he Of great interest TO the citizens OF ths
state Insurance Commissioner Merrill. Of Massachu-
sets has made q study Of assessment cndOwmeb' III
surancc and II there Is any one man In TINS country
able today TO discuss this question with intelligence
and with a thorough knowledge OF its ramhcatioNS oo
tained through personal experience, he having mao
supcryson Of a number Of them. II Is that olcmi'
Commissioner Merrill appeared before the JOINT Con-
mIttees OF Insurance OF the Senate ana Assembly, %
this state on March last. At that time he deHVereu
an exhaustive and convincing address. lie attempted
as lie expressed himself 10 present bit OF tle Cd
cc lesson which,. during the last six months W" nave
! had IN tho old commonwealth " Massachusetts IN
relation to the assessment endowment corporations
lie endeavoed 10 impress upon the committees that
they would be Informed by those Interested In these
endowment schemes that legislation asked 10? u'eii
WAS legislation In the interest Of the iratefhal Or
dcr, But" continued the Commissioner, "they
are In no sense Of the word fraternal orders
but IA combination which has stolen the white banner
of fraternity behind which 10 hide Its black fag and
carry on It's platcal operations lie referred To the
system upon which the assessment endowment BUSINESS
IS based as being the same rs the financial pan upon
which the famous Institution existing few years since
| I'm Massachusetts, called Mrs. 1lowes banK, WAS
originated This Institution received deposits OF money
promising an enormous rate OF interest, some 20 per
! cent quarterly. The promises Of such an enormous
! profit brought many victims For short tine Inc
everincreasng nccumulatons furnished funds for the
ayment OF this Interest but continued The Com
missioner, 81 the moment the swift multiplication OF
| membership ceased, the crash came, ana the dnpeS
were left minus the principal they bad deposited when
had gone to swell the profits Of the few early aud
| favored oncs.7
The experience OF Massachusetts with these con-
Germs was graphically described by the Commissioner
| IN the following language:
O the nuy.sx corporations chartered In Massachusetts,
eighteen within last six monhsevcy one which mas
rachod IL payng period has gone into the hands Of
assignee or receiver disastrous bankruptcy and ruin
Nor arc these al wha: termed the shot term orders
the Includes Of sN'months TERM eight OF one
ysar and onehof years onc three years three
OF ave years one OF years and two Of ten years
Fo-y thousand ccrtGcao-hoders in hcs' concerns IN
Massachusetts, alone who had contributed from $50 to
si40 aoh found themselves minus their entire payments
ana with no hope Of receiving from the roNen concerns
MOI, than pance possibly. upon the average eighteen
In twenty per cent. Fyo the are to-day In
the Suffolk County jan at least twenty have turned their
backs upon directed their steps 70 some
warmer cline and az least twenty NOR, have been indicted
bv tne Grand jury OF Suffolk County for uei7 haudu'en
transactions.
These remarks were made. ms before stated, on
March g. On iarch 10 Commissioners Merrill appeared
before the legislative committees Of his own stSc,
when the number Of failures had increased from egh'
teen to twenty and in his remarks at this last hearing
he furnished figures which ut ills Time are III
ter,sting and significant. lie said:
Now gentlemen OF TIRE committee how much do you
suruoe il. Massachusetts. It has cost tho ccrtihcatchod
r., tie working people. the ~ag@earners' " c'ry on
these nftvsN corporations during the year le9ll IL cost
Al 40 5lg almost - 900 OCO for the expense account
alone Of theso competitions and they collected less than
~ 500 eco for the endowment and disability 'nnd IL cost
s2oc OCO moro. to carry on these 'fIa'erhalS' Vh'So
roncal these ~, thee wagcorncrs' protective
,o,es IN do tho business ohan they collected OF Money
nom her ccncntc-hodcrs into the treasury for the hna
endowment for sickness Adj n this, II you please
! million stocn-I think am wohin bounds when say \
million stoen-by Operations which have gone down
and tell mo- gentlemen, II you can. why you should 90
asked to give protective legislation even 20 this class Of
| concerns.
When the character aud Size OF the endowment
| lobby which has been present at Albany ever since
the Insurance code has been under consideration. Is re-
! membercd this Item o. I'll sGO.jl3 for expenses Is
significant Il is mt all surprising that the pro-
moterS' special counsel and representative 'lc"'
(of Mas.achuscts) have been here in force Ihere
has not been hearing on the code ut which less ncn
| INV representatives u the cnd0wments nave urcn
| present and when the code wac under colsloelluon
In tho Assembly there was one Of the most powerful
lnbbicS numerically spending, which has appeared III
Albany this winter. The surprising feature was s ,'
the array Of talent present contained so many str'so
faces inquiry about som. Of the men present. ~ ,i h
time showed that the LEGISLATURE was not nhur,rcu ns
thc citizens II New York Sthe-cerhcate holders re
During protection, but by the interested onoeIs so oil
,hcsn concerns residents Of Massachusetts,, VINO were
de.rous NJ being permitted legally % rob, bnnco ana
fleece the citizens Of This satc Co@mcon"d MSr
| rls concluding rcWarHS n,io.,c INC 'o"''o '"''0'''
| Committee were most pointed;