New-York tribune., 1905-11-24
MUTUAL RESERVE UP.
Had Its Little "YelIo5U Dog Fand
The Assessment Plan.

The first days probing into minor insurance
companies developed the existence even here Of
a yellow dog" fund, which might, perhaps
from its smallness, be called a puppy ac-
count. 1t also revealed president prodting
from a commission policies written by his
company mounting high as $4,000, a year.
while the unfortunate policyholder was being
assessed because of a lack of funds with which
to meet obligations. Finally, it showed a per-
petuation of power through will which is re-
markabe even in face of the startling develop
ments of the present investigation.
The assessment phase of the Mutual Reserves
affairs occupied most of the day. George D.
Eldridge, vice president and actuary of the
Mutual Reserve, testified at length to the varl-
Gus changes and manoeuvrings which charac-
terfzed the conduct of the company before It's
reincorporation in 1901. Mr.. Eldridge testified
that the company originally incorporated
as the Mutual Reserve Fund Life Association.
Its policies for the first few years were, as ne
admitted ambiguous in their terms" He
traced the various forms of policy issued at the
outset and related a case before the House of
Lords when a pocyholder was upheld in
refusing to pay an assessment. He added that
since 1892 no such policies had been issued.
Taking up the subject of assessments, he
showed that in 1881 there was only one; that
the number had mounted to six in 1887 and
nine in 1888. These made only on death.
Despite these assessments the company ap
parently still failed to get enough to meet its
claims
In 1901 the company changed to level pre-
MUM plan, and Mr.. Eldridge produced a state
ment of the rates charged, ranging from S13
to $33 $1,000, with additional $40 year
for dues, Mr. Hughes illustrated the assess
ment plan by taking the case of a man insurfng
for $1,000 This plan would put lien Of $1,000
on the policy man of forty would not be able
to get rid of the lien until he was seventy-nine,
and meanwhile he would pay interest at per
cent on it. The policyhoIder, moreover, did not
have any chance to register his protest against
such procedure. The change to a metno,
forcing this assessment accomplished py
the votes of proxies cast by the president, f. A.
Burnham.
MR.. HARPER's WILL.
Mr.. Hughes then introduced In evidence the
will of E. B. Harper The following extract
shows it's remarkable character:
Mutual Reserve Fund Life Assocaton and it 'is is
my earnest desire that the association should CON
my fellow directors in The association. in the eyent
my friend FREDERICK A Burnham. who has been
Intimately associated with me during recent years
fully % understsnds sta my plans and purposes for its
And l therefore assign and transfer TO said Fred
erick A. Burnham all proxies which l hold from
constitute and appoint him M, as my substitute or
aad or mgSe If dG living ee Gf
queathed to said association one-third of the in
% Do RRareSy sach
10 this request With reference TO the election IT Of
association being complied wit With for the Period of
ham is then living and in good health and If said
e be r9e h9e snd w said 9R IN of S
moneys payable under said contract or agreement
ysdn % wod aad &
of five years
MT Hughes then asked
whereby he entitled to any commissions? A
gSn wha2 under 6 Presdehcy shs written
cents upon 5a thousand Of insurance each year
Q.-What amount had been paid him prior to his
Al think have statement ia siI here here Of the pay
that m a to he h drew ue p To you the
oyery well 4 if yog H s give these e please ie A.
iSs5 $1,000 1856 $500 1887 2ocO 1858 SEQ 500; 1889
o@Now Whst was done under s,h this provision
titled under his contract should be paid to the
suPtsG5 to the condition In aaHor sf
elected president of the company.
THE PUPPY" FUND.
Extracts were then read from the resolutions
passed by the directors of the Mutual Reserve
when BUrnham elected. and these recorded
that the money received under Harper's will
were devoted to the payments drawn from
contingent fund.- which he (Burnhsm) shall
deem desirable and proper to make, which do
not fall under the ordinary routine or depart
rnents of the business. but are nevertheless de-
sirable and necessary to be made In the ad-
vancement Of the interests and good Of the in
stftution, its business and its memberships"
In 1898 this resolution was rescinded and $500
a week added to Burnhams salary con
tingent fund This brought President Burn
hams salary up 10 $4,000 IN 1901. His own
salary $4,000 and $4,000 In this year
This amount has been continued and account
has ever been asked for this Contingent fund"
Mr.. Eldridge will be recalled to-day
TO ~ Ill w & Y NGH 4 w u