The record-union., 1895-11-29
Commissioner Higgins Trying TO
Break Them Up.
Suits Begun Against six Assessment
Organizations to Have Them
Enioined.


the Ancient Order of Pendo, the Royal
F'raternal Guardians, the United Work
mems Alliance and the F'raternal Argo-
naut. This class of companies, it is
claimed, are at best mutual assessment
companies and conducted for the profit
Of their projectors.
Commissioner Higgins has been for
a long time seeking to put stop to this
business, which usually results in
heavy financial loss to those who place
their faith in the fallacious promises.
In his last report to the Governor he
called attention to the need of more
stringent legislation regarding assess
ment insurance. Nothing, however,
was done, and last April, after the adj
journment of the Legislature, he pro-
ceeded to procure evidence to be used
to put an end to the evil
Since then he has ransacked the State
and the result is that he has supplied
himself with great mass of material
from prOSpectuSeS to policies, which
will be used with good effect in the
courts. In spite of this he was for
long while unable to find a legal weak
spot in the armor of the assessment
companies. Finally, however, after con-
sultation with eX-Judge Carpenter and
Senator Bert his counsel in the matter,
Mr. Higgins discovered a means Of &C
complishing his purpose.
The law requires that assessment
companies shall make a deposit of
So, 600 from 200 or more applicants.
This has not been complied with The
practice has been for the owner of the
company to make the deposit himself
and then to count it as an asset instead
of a liability, as it is in fact. All phases
of the assessment insurance business
were presented to AttOrney-General
Fitzgerald, and on Wednesday suits
were filed in his name against the SIX
companies named, asking that they
should be enjoined and restrained from
carrying on business in this State, that
they should be dissolved and adJudged
to pay the costs Of action.
According to the San Francisco
| Chronicle, the American Benevolent
Legion was incorporated on June 13.
| 1894. and has its offices in the Mills
building in that city. James Y. Ryan is
! its Supreme Chancellor and reputed
owner, with II. Y. W. Dresser acting
as Supreme Secretary.
| The Ancient order Of Samaria only
| came into existence on November 10,
| 1898. 1t is located at u Powell street,
and its principal officers are: Supreme
! Recorder, A D. Cushing; Supreme
| High Priest, II. W. Pond, and Supreme
| Secretary, w. b. Shaut
|
more. recent creation, having been in
corporated on April 10, 1894. It's head
quarters are at 601 California street,
and its leading officers are Supreme
| Chancellor II. w Mathews and Su
preme Secretary Ernest Dudley.
The Royal Fraternal Guardians are
housed at 31S Pine street, and has been
doing business since December /, 1871
| W. II. Pettis bears the designation OF
! Supreme Royal Guardian and A. L.
| Schafer that of Supreme Royal Secre-
II was only on October 18th last that
the United Workmen's Alliance became
a body corporate; but it already as
sesses between 200 and 300 members,
and longs for more. Z. c. Barclay pre-
sides over it's destinies as Supreme
! Master and H. S. Baldwin acts as Su-
preme Secretary. It's office IS at 5Io
California street.
/ The FraternaI Argonaut has Grand
! Admiral r. H Taylor at its head and
! Grand Secretary II. c. Oswont to keep
| its log.
The complaints against each of these
six companies is Of the same character.
It sets forth that the defendant is car
rving on the business of mutual lnsur-
ance on the assessment plan; that 1t is
not a secret or fraternal society, but
lcor1Oration: that the $1,000 deposit
! from 200 or more persons who have ap-
piled to become members, as required
| bv law. has not been approved by the IN
! siJrance Commissioner or placed with
fhe State Treasurer nor has it any Ii
| cense to conduct business, nor mas IL
complied with the law.
Speaking Of the actions brought
! Wednesday, Commissioner Higgins
says:
''The law providing for the supervis-
| ion of assessment associations espec-
iallv exempts from its provisions secret
or fraternal organizations that are en-
gagged in the insurance business, as well
| as all societies that cOnfine the member
shin to members of any secret society.
II have no doubt that in the passage
OF this law such well known secret or
ders as the Masons, odd Fellows,
/ knights of Pythias, etc, were contem-
mated. There is no good reason for eX-
emption even in such cases, but the
greatest harm arising from It is that II
lCpeued the door to unlimited fraud.
| 1T provides the opportunity for fake
concerns to swindle the people, and
! California has been especially bur
dened with such schemes, owing to the
great ease with which the 'ny-by-
NIGHTS can be organized. The atten-
ton Of the lawmakers was called to
these matters at the last session, but
nothing was done.
1.-THE societies against whom these
suits are brought issue policies without
requiring the applicants to be a member
of such order to be initiated regularly
in one In this they clearly violate the
law which says they must secure mem
bership on the lodge system exclusively
or conffne the membership to members
Of such societies exclusively.
| Generally. the agent gives the appli-
cant an obligation and goes through
some sort of n rigmarole of sign and
grip but in many instances even this
fancied evasion Of the law was omitted
land the policy issued without any init
nation that an initiation was neces-
sarv. I have been at work for a long
time obtaining evidence and believe that
there is no escape for the parties engi-
tneering the same.
Generally speaking. the modus Oper-
andi of one of the promoters is to obtain
the services of some reputable physi-
clan. who is made the Medical Director
with visions of large fees before him.
He is granted the privilege of naming a
friend or two on the Board of Directors.
and thus some good men are innocently
drawn into it. Afterward by the use Of
these names, unsuspecting citizens are
corraled.
None of these companies have any
deposit or security for payment Of
Eclafms. and the moment the company is
Of sufficient age that claims begin to &C
cumulate. the Office door is closed or
the sign of another company is painted
on it. and the grand high worshiper is
merged into the most awful potentate
or other bigh-sounding title"
Commissioner Higgins intimates that
criminal proceedings will also be com
menced against the managers of these
companies.
FLAG RAISING