The Providence news. (Providence [R.I.]) 1891-1906, 1894-11-05

Washington that is in litigation, the al
legation being made that che company's
title In fraudulent. Agents OF the concern
scattered I'll over the country owe ABOUT
hve thousand dollars, but IL would very
difficult to collect oil the money. Inc
only other available assets are the hxtures
of the compeny's offices in this city. Inc
claims amount TO sSa 600.
Deputy Attorney General Q. w. Francis
said he wsuid consent that the receiver be
relieved OF his trust asa that the bond oil
360, 600 he haa fursishss be cs0csied.
Judge Rsrrstt granted tho motion and
declared That the circumsbsnces seemed
very suspicious. Ho diverted that the am
davfts made by the effcsrs OF the com
pnny in opposition 10 the motion Tor re-
eeiver should bs sealed and locked up IN
the county clerks safe, so tknt they may
be used 81 evidence before the grand jury
II further examination justires the max
ing OF charge OF perjury.
The Last Bluff
The disclosures were begun when the
New York superintendent OF insurance
demanded $40, 600 made good in the capital
stock by which amount the superintend-
eRt claimed the capital Was impaired.
There followed q brief struggle by Dun
ham In the face OF this situation and
finally il was announced with great
heurish OF trunpets hat "s600, 900 instead
OF f76, ZOO has been paid in, and that the
Commercial Alliance was now thestrong-
est insurance company on earth" Policy
holders were begged 70 keep on paying
their premiums, new business was solicited
and stsckholders were pleaded with to
brace up their stock.
Superintendent Pierce, however, pricked
the bubble by calmly stating that he
knew nothing about the 100000, but
had only ''ssen an agreement under which
b. I'M ta4a rriaI Allsa % a Mt inn tO
make good its deficiency by borrowing
money" And added, 1T in no way re-
lieves them"
Reckless "Business" Methods.
According to the report of the invest
igating officials the Commercinll Alliance
management made favorites of two pic
turssqus methods of doing business.
First-To buy out other concerns. as
the Columbia originally bought out the
Commercial Alliance. This schsme was
designed TO secure large accessions of
policy holders In a block without the ne
cessity OF the ordinary but tedious meth
DDS OF individual solicitation.
SscoHd-To " freeze out rs many OF
the policy holders ss possible. thus maxi
ing heap OF nonsy through "lspses."
The frst method worked disastrously.
The second proved risky, but faisly profit
able.
The purchase OF old established COM
panies involved hsavy commission paid
10 interested parties 20 the deal. 1t also
brought to the company nsmb bership
without re~exsminatien, but this was APP
psrsntly not so risky for the rsinsurod
pelicy holders could be frozen out
with fair security.
The sexsmisersto tound very little business
on the Com nnsrcial Aili6uco BOOK except
what had been insured thTsuRh tire pur-
chase by wholesale ef other compaAies.
With one exception these companies were
assess ment or beneficial Hsssciatiens," and
in order to replace the eertificEtes held by
the members OF ths rsinEuring sssocia-
tions with fixed contract, the
Commercial Alliance has been compelled
TO Issue policies payabis ia rnsst cases,
by bi-monthiy premiums. The result of
this has been to cause considerable confu-
sion between the corpers lon sf4a- the in
sured, resulting from, disputes between
the two as to whether premiums were paid
when due. In csrtain OF the associations
reineurcd mcra bers have esen led to
believe they We're entitled to q Certain
grace in the psynsnt OF their
pren,iarns. This grace was for
eial Ailisnc. and subsequently, With
drawn. The effect of this WAS TO produce
further confusion in the payment OF prem
iuns The policy registers OF the COM
psny clearly show the difficulty attendant
hpen the collections OF these BIZ onthly
ptsniams. Pslieiss arc Elapsed" "re-
stored, !" and snbssq usntly A." iapssd" only
again 10 be q rsstored all within
relatively limited periods OF time. Tho
vhoie ,ystern of collecting rrs@!uns is q
fcvryish and unhsalthy one, resulting in
almost constant litigation or threa tened
litigation, growing out OF questions of
uncertainty iavolvsd in the alleged pay
ment or on-payment of these premiums,
M n ha VI ksv haat.h 90
have occurred"
Money Paid For Nothing.
The result OF the attempted purchase of
these associations was disastrous, as
stated bove.
For the Msins and New Brunswick AS
sociatien, for example, coumi,sion Of
S35, 900 was paid TO iststssted parties TO
the ssal-and the Commercial Allis 1ce
dldc't get the association after nIl, for q
large number Of the mem bsrs thereof
kicked In the courts.
The es5,00O was gone forever, though.
aud so was S29,o69 more, representing
death losses and expenses TO mem bers OK
the Maine asS New Brunswick, Hho ru-
insured In the Comrsrcisi Alliance. II
appears that everybody in the Maine and
New Brunsvick who was about to die
took pains TO get iAto the Commercial
Alliance before the collapse OF the deal
came. The $4,000 originally thrown
away was charged on to "commuted COM
mission account"
The examiners say in reference to this:
"Other sums hsve been paid ort in Ike manner
and charged TO the sarls rccount though that
which may have been commuted II 10 impossible 10
ascertain. In other words, 10 disbursinR
tpce moueys,-the corror4tien-hn hns
received no value therefor nor is
IL likely 10 derive asy rsturs from these pay
others Of more or less sirsliar ohraoser eonsti-
tute very considerable snr of money that this
corporation has disbatsed without return oi any
ssTt 40 far ss your exsns,rs escsrts In from a
inspectisn of the conpsuys accounts"
The "Frecyizg Out" Process.
In addition TO tho nopkey business
which wss made possible sy the conflict
of methods resulting from ro-issurirg
assessment policies under en- "old line0
insurance system, the New York exam
iners ran across indications ot anot her
edifying method of "ireezing out" policy
holders. As follows:
ENDLESS d hculty srriseI in the settlement OF
death losses from smother source, manly; Al
legged misrepreseptstion. in the application. or
health ccrtincste where II IL restored policy At
all even,s the corporation has adopted a
system Of undertaking To compromise,