Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-02-27
Eurtr na an February II 1909

to have written the letter which the
company is advertising, then goes on to
| tell the insurance company itself that
AS this impairment is due to excess
sive dividends paid to stockholders. as
will be a subject of comment farther on
it certainly subjects the management
to criticism for its undue liberality to
stockholders, and the fact that such inn
pairrnent has since been wiped out does
not in any degree relieve the manage
ment from responsibility in the prem
ises The present financial status of
the company, however. indicates its
ability to mature the absolute guaran-
tsed benefits stipulated in its policy
contracts: nevertheless, it is not appar-
ent from the deductions disclosed thru
this examination that the policy hold
ers are likely to enjoy any very sub
stantial earnings over ard above such
guaranteed indemnity from the alleged
sources of revenue from which such
s,,rplus profits or benefits are to be
derived"
He then criticses at length the pusi-
ness methods of the company in allow
ing its agents to misrepresnt and over
estimate the returns to be derived from
the contracts sold. ar.t speaks of the
profits absorbed by the stockholders as
follows:
The disclosure made thru this en-
animation, that the sworn annual state
ments filed with the Minnesota lnsIr-
ance Department have shown as dis
bursement. under the head of Agency
and Managers Account, representing
salaries. allowances, ETC.. moneys actu-
ally paid to and received by the stock
holders on account of their stockholding
can not be too severely condemned, as ii
clearly involves a plain violation Of the
statutes prohibiting the uttering or fill
ing of a false statement. The only rea-
son for thus enormously entering such
a disbursement is that of keeping from
the policyholders and general public the
large profits enjoyed by the stocknold-
ers, which, however, can not be con-
sidered as valid excuse on the part Of
the officials who are responsible for the
offense The total amount which has
been paid to and received by the stock
holders, thus Incorrectly entered in the
sworn statement as disbursed OIL ac-
count of salaries and allowances for
agencies, exceeds 100000 during the
past four years, same being addition to
the disbursement of $4,000 entered as
stockholders surplus capitalized, and
the regular stockholders dividends de-
clared-certainly a handsome profit
r hx,n r-
iginal capital stock subscriptions OF
100000.
The letter closes with a lecture to the
managers pointing out their duty to be
more liberal with their policy holders in
dividing the profits. He observes that
while the surplus fund belonging to the
policy holders was increased in the year
1902 by $4,000 the surplus fund be-
longing to stockholders was increased
s33. 600 during the same time. 1T was
due" he SAYS. "as will be noted from the
examiners report. to these heavy pay
ments to stockholders that the COM
nany's cash capital stock was shown TO
have been impaired as of December 81,
1904 Holder of contract policies in
these gold bond companies will un-
doubtedly recover the amount of money
paid in to the companies and should not
let their policies lapse. but they have
been paying some ungodly profits for
the insurance carried. and by a. close
reading OF the fine print classes in their
contracts will probably find that the
amount absolutely guaranteed VIII
fall far short of the expectations Of the
policy holder when he purchased his
insurance.