Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1905-08-26
GROSS FRAUDS
ARE ALLEGED
Interesting Developments Lik
ly to Follow the Petition
for a Receiver.
MAY BE EFFORT TO INDlcTI
Northwestern National Life and Saw.
inss Company Of Minneapolis May
be Sued in Iowa courts-Bis salar-
les Paid the Officials in Minneapolis
The News in General.
Special to .Times-RepuDlican.

Special to Times Republican.
Des Moines, Aug. ATTORNEYS
A. Dyer, representing r. r. Nesbitt III
other policyholders of the old Neg
western Life and Savings Company
Des Moines, today made applicatf
in the district court here for the al
pointment of receiver for the Mort
western Life and Savings and asH
that the receiver be instructed to cid
up the affairs of the company.
The application is based on the al
cation that the Northwestern Life
surance Company OF Minneapoll
which bought out the Northwestern
Life and Savings had no legal authorit3
to buy the Des Moines company; tha
the Des Moines company had no lei
right to sell to the Minneapolis CD
pany; that the officers Of the MOI
western Life Insurance company
Minneapolis are now engaged IL
scheme Of spoiliation Of the funds
Des Moines company and Of the ssl
reserve in the hands Of the state audi "a
tor of Iowa: and that the company is
now not only insolvent, but that It is
in the hands Of officers who are com
Quoting the company with a view to-
getting all the plunder from it that is
possible.
Dishonest Management.
With the application for a receiver
there is fled as evidence OF the dis
honest management of the Minneapolis
company, recent report Of 8.
Wolfe, Of New York, to Ins1rance
Commissioners O'Brien Of Minnesota In
which it is shown that while the audi
torinm and office building erected
Minneapolis by the company has
book value of $4,000, it in reality
not worth more than 100000; that
ficers Of the company, "A. T. Tim
and Miss Bechtel, bought the lots
which the building stands at Elevent
and Niccolet in Minneapolis, for $62s
500 and sold them to the company fo1
100000; and further it is alleged THAI
the present officers having the actual
management of the company are In
league with the old officers and are
conducting the management with tle9i
same spoiliation scheme.
The sale Of the Northwestern Life
and Savings Company of this city TO
the Northwestern Life Insurance Com
pany of Minneapolis took place Aug.
%, 1908. The Northwestern Life and
Savings Company was a gold bond
tontine company 1t issued two class
es of policies with premiums Of $25
and $50 year respectively. The polt-
cies were for ten years and in reality
at the end Of the ten years on the $50
policy the company was contracted to-
paw the holder only 5000, but the
agents Of the company made the pros
poets appear very much larger than
that.
At the time of the sale there, were
10000 policy holders in the Iowa scom-
pany and according to the policy and
the laws Of Iowa the company guaran-
teed to run its business on 8 per cert
basis. For every 81 paid by the policy
holders the law required that 81 cents
be deposited in securities with the au-
ditor Of state, as guarantee to the
policy holders.
The Iowa company was incorporated Z
for 100000 and was close corpora
ton. The Minnesota company paid the
stockholders for their stock $3.50
In the application for a receiver today
Attorney Dyer alleged that the Minne-
sofa company had no funds with which
legally to buy the Iowa company and
that the only method for paying for the 4
Iowa Company was thru the spoiliation
of the legal reserve Of the Iowa COM
pany or that they used the assets OF
the company bought out to pay the
stockholders with
Iowa Securities.
The securities in the hands
of the auditor Of the state
OF Iowa now amount to $2,150,00O and
ceiver to take charge of these securi-
ties, leaving them, however, on deposit
with the state auditor.
1t is alleged in the petition that no
one is entitled to the legal reserve So
curities nor to the surplus except the
of the Northwestern Life
and Savings, and that as the policies
have no cash surrender value all lapses
BECOME the property of the persistent
policyholders also.
1t was alleged in the application for
a receiver that the agents OF the
Life Insurance Company
had rewritten 2,100 Of the policies Of
the Northwestern Life and Savings
That ther were on deposit with the
auditor of Iowa on these 2,1o0 policies
securities to the amount Of $260.0OO
and that in rewriting the policies the
agents of the Minneapolis company
had given credit for but $4,000. The
difference or $4,000 1t is alleged the
officers withdrew frim the auditor mere
and used either to pay the stock hold
ers for their stock or placed In tneif
pockets. The attempt was made to
show that when one OF the policies In
the Iowa company was rewritten 1t In
fact became lapsed policy and that
the payments therefore became the
Of the persistent policy hold-
ers. and that the officers OF the Min.
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