Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-03-04

| penSeS, ana the funds betonglnS eNciu-
sively to policy holders should be like
wise safeguarded to the fullest extent
possible. The original cost or expense
OF placing the business upon the COM
pany's books is shown to have been
very heavy, but regardless of this fact
the original subscribers to the capital
stock of the company h.ve, within the
first six years of it's existence, received
in the way of dividends over 100 per
cent of their original subscriptions.
This rather severe acraignment OF
the company is in the letter of the Mill
nesota insurance commissioner to the
officers of the company transmitting the
report proper which was made by S. IA.
Wolfe, OF New York, recognized as an
actuary of ability. Mr.. Wolfe elabo-
rates somewhat on this same subject.
After stating that the income and dis
bursement account Of the company as
compiled by him Is self-explanatory,
except as to one very important item,
he adds:
II refer to that disbursement en-
titled Salaries and allowances for agen-
cies, including managers. agents and
clerks No question can exist in the
mind of any insurance officer or super
vising official as to the exact meaning
of this item and it's limitation. BY no
stretch of the imagination can divi-
dends to stockholders be construed as
properly coming within it's scope. 1
nevertheless find that during the year
1901 the sum of $54,249.72 was paid TO
stockholders and charged upon the
books of this corporation as agency al
lowances.' 1 find that during the year
1899 similar payments amounting to
$11, 774.4S were made to stockholders
and charged to the same account, and
that the same practice was in vogue
during 1900 to the extent of $23,S77.22.
In other words, the sum of $S9,4O1.42
has been paid to stockholders during
the three years mentioned above. in
addition to the regular dividends de-
clared by the company, notwithstand-
ing the fact that the sworn reports
signed by the officers of this company
have led insurance officials and the
public to believe that these disburse-
ments were for agency purposes.
Upon being questioned with refer
ence to this Misrepresentation, the sec
retary frankly admitted that the sole
purpose of making these incorrect en-
tries was to keep from the policy-h hold
ers true knowledge of the amounts
paid to the stockholders. In my opin-
ion Misrepresentation of this kind can
not meet with too serious condemna-
tion. may call your attention to the
fact In connection with this, that the
$4,000 paid in on account of capital
stock during the year 1901 emanated
from this source, and the $4,000 which
you will find among the disbursements
stated as stockholders surplus capital
ized.'"
Mr.. Wolfe devotes also much space
to discussion Of the methods by
which business has been secured, Show
ing that many of the policy holders
of this company are under the impress
sion that double the face of the policy
contracts is promised to them as q pay
ment To De made at the end of the en-
dowment period, and this false impress
sion has undoubtedly had its inception
in literature emanating from the home
Office But he further states that the
officers have promised not to do this
any more. He suggests. however, that
the promise be made to include the
agents who are soliciting.
This report of Mr.. Wolfe, following
closely on the one he made with rela-
ton to the National Life and Trust, has
stirred insurance circles here as never
before, and copies of the report. which
will never find its way into any Des
AIoines newspaper, are greatly in de-
,onn6 .s-