Evening star. [volume] (Washington, D.C.) 1854-1972, 1897-10-02
REPORT OF ACCOUNTANT
Condition Of the Affairs Of National Life
Maturity Insurance Company.
Litigation Over the D,sporal NJ the
Funds-The Investment De-
posit Certfacates

In the case OF the National I.ife-Maturtty
Insurance Company. for which a receiver
was appointed several months ago on the
petition of Mr.. Frank Hume one OF it's
directors, who charged that IL was I'm an
insolvent condition. the expert accountant
appointed by the court to examine the
books of the company and report as to the
financial condition of the concern has SUBJ
mitted his report to the court. and Il viii
afford interesting reading to the hundreds
of stockholders and certificate holders
Mr.. Hume, In petit!oning for the appoint
ment OF a receiver for the company. set
forth that since 1859 the company had been
engaged I'm doing a life insurance business.
and since $3.50 investment deposit GER
tifcate business. the affairs of the COM
pany being managed by a hoard of direct
ors. its capital being $2D.oo. Mr.. Hume
charged that. by reason of adverse legisla-
ton hard times, etc. the directors and
officers could not make a statement that
would show a favorable financial condi-
ton, such as TO enable Ii to continue in
business; that there were Sloi.oo0 pending
unpaid death losses against the company;
that the company was indebted TO persons
holding investment deposit certificates for
more than s23o.000; that the company had
$106.o0o I'm assets. and that the board of
directors had earnestly endeavored to pro-
tect TIE interests of policy and certificate
holders.
The company admitted the allegations Of
Mr.. Hume's bill of complaint and Judge
Cox appointed Mr.. Job Barnard as the re-
ceiver of the company. Naturally. the add
mitted insolvency of the company was
matter of great surprise to the great ma
jority of the certificate and stock holders.
and on behalf of +. l.. Reinhold and others
of Marietta, Pa. Attorneys Birney and
Woodland filed a petition. praying that the
books of the company be carefully exam
ined by an expert accountant, and that the
F.,.x IT,. 81 hax. de- .F hn ~nr
should be applied to the payment Of per-
sons holding investment deposit certificates.
as that branch OF the business had proved
to be profitable, and also because by the
terms of the investment certificates IL was
provided that such fund should be used
for the benefit of certificate holders only.
These petitioners charged that the COM
pany in a statement published June ~
1885, claimed to have assets belonging 10
the certificate investment depositors alone
of over $5s0.Vo0. the greater part OF which
was represented to be loaned on real es-
tate security he also charged mat within
six months prior to The time OF the Hing
of his suit the company's agents and ON
GERS represented to him that the company
was perfectly sound financially.
The accountant appointed by the yourt,
Mr. James Bayne in his report. very
voluminous document, states that from
September 1, 1855. the date OF the FIRST sub
scriptions to the loan fund until March ..
1887, inclusive. there was received. uncer
thai p0rtlQn. OIL SccllOn Tue
which reads. The loan fund shall be made
up of the balance of the net monthly pay
ments after the first quarter. over and
above 8 cents per share monthly, etc. the
aggregate sum of S1.G. ..S-ya"
He claims that the certificate investment
branch of the business earned as profits
more than sos. 900; from moneys Deposited
by certificate holders over si10.0p WAS
loaned to the life insurance branch of the
business, and was used in paying death
losses.
Contrasting the company's condition, as
shown by its published statement OF
June 30, 1895, with the actuai condition. as
shown by the company's books on that
date, the accountant says the books show
that the company had only sl19,Vo in
mortgage assets, whereas its printed state
ment, as above. asserted IL had S505nrp.
He claims, too. that the books of the ,om-
pany show the company. in making loans
and then treated them as double assets. the
accountant saying: AS the reasoning
whereby notes representing twice The
amount loaned upon them. can be rightly
claimed as an asset for their full amount
is very far from cfear TO my mind, ] shall
content myself with merely stating the
facts"
The accountants report. IL Is expected,
will assist the court in determining Vfheth-
er the fund on hand shall be paid to the
holders of investment deposit certificates
as commended for by the attorneys for the
certificate holders, or whether ii shall be
applied in liquidation of death losses.