Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-03-04
MORE DISCLOSURES
Minnesota Commissioner Scores
Gold Bond Company For
Excessive Salaries
BOOK ENTRIES WERE WRONG
BOOK ENTRIES WERE WRONG
Life and Savings Com
pany censured for Paying Most of
It's Profits to enthusiastically
100000 in Extra Dividends Entered
as Agents, Allowances"
pecial to Times-Republican-

/
Special to Times-Republican-
| Des Moines, March 4.-The series of
somewhat sensational disclosures in
connection with Des Moines companies
organized and doing business under the
INSURANCE laws of the state appears
not to have been completed as yet;
for only this week has there been re-
ceived in the city the report of S. n.
| Wolfe, the New York actuary, on an
other Of these companies, made to the
state of Minnesota In order to meet a
Idemand from policyholders for reliable
ness pursued by these companies. Wolfe
came here from New York last Sep
Itember and made examination of two
companies against which complaints
had been made. One Of his reports
was made public some weeks ago. that
relating to the National Life and Trust,
! in which he severely condemned the
company for having procured business
on representations which, as he re-
ports, Its own books show to be false
and misleading, and he further found
| that the plain provisions of the law
In regard to some important matters
had not been complied with. On this
report Commissioner Dearth. OF Min
nesota. was forced to give notice to the
company that "the further prosecution
OF business in Minnesota by your COM
| pany must be along lines that will not
be misleading to the policyholders."
and Savings, the parent organization
of this kind was made to the Minnesota
commissioner but not published by re-
quest of the officials of the company
until later examination was made.
This has been completed the copies IN
full OF the report Of Actuary Wolfe
and Commissioner Dearth have been
received here. In view of the fact
that these companies have some 10000
ssYntNss holders or holders of the ten
year gold bonds, and this is the first
official report on a thorough eXamina-
tion not only of the ledger accounts
of the companies but also of the meth
DDS of doing business and of getting
business and the results of operations
to date. there has been great de-
mand for publicity to the reports.
The delay in issuing the Northwest
lern report is explained by the COM
missioner because the first investiga-
ton of Actuary Wolfe was brought
down only to December 81, 1901, but the
company asked to have it brought down
one year later. The commissioner in
his letter to the company makes note
Of the fact that the surplus of the
company disclosed in the report indf-
Gates an impairment of the company's
capital stock as of date Dec. 81, 1901,
| in an amount exceeding $4,000. AS
this impairment is due to excessive div
idends paid to stockholders" continues
the commissioner in his letter to the
company officers, lit certainly subjects
the management to criticism for Its
undue liberality to stockholders, and
the fact that such impairment has since
been wiped out. does not in any de-
gree, relieve the management from
responsibility in the premises. In
further explanation of the manner in
which the capital stock of the COM
pany became impaired at the close of
1901 by payments to stockholders, and
the failure of the state insurance de-
partment OF Iowa to discover this i'm
pairment which would have been suff1-
cient ground for receivership, the
Minnesota commissioner goes on:
THE disclosure made thru this ex-
animation that the sworn annual state
nents filed with the Minnesota insur-
ance department have shown as a dis
bursement. under the head of agency
and managers account representing
balances, allowances. ETC.. moneys act
TALLY paid to and received by the stock
holders on account of their stockhold-
ings, can not be too severely con-
demned, as it clearly involves a plain
violation of the statutes prohibiting the
uttering or filing of a false statement
The only reason for thus enormously
entering such a disburs a,nent is that OF
keeping from the policy holders and the
general public the large profits en-
joyed by the stockholders. which, how
ever, can not be considered valid ex-
cuse on the part of the officials who are
responsible for the offerse The total
amount which has been paid to and
received by the stockholders. thus in
correctly entered III lltc SMOIi
ments as disbursed on account of sala-
1ies and allowances for agencies. eX-
ceeds $1O4,O00 during the past four
years, the same being in addition to the
disbursement of $4,000 entered as
stockholders surplus capitalized and
the regular stockholders dividends de-
clared-cettainly handsome profit
within period of four years ON the
original capital stock subscriptions of
100000.
II am bound to submit that In the
face of this somewhat remarkable
showing the management would be
fully justified In diverting consldera-
BILE portion of it's present expense ele-
ment or stockholders surplus to the
surplus account of policy holders. 1t
was due, as noted from the examiners
report, to these heavy payments to
stockholders, that the company's cash
capital stock was shown to have been
impaired as of Dec. 81, 1901. 1t is GER
ltainly at all times incumbent upon the
officers of any company to be fully adj
vised as to the exact amount that may
be available in the expense fund from
which to pay dividends TO stockholders,
after meeting the general managers, ev-