The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1907-04-06
.ATTACkMADEON
American NE: h GUILD. ] j /.
Maryland and Virginia
AGtuaries Investigate
,E|[l( and Submit Report
LENGTHY PAPER
HAS BEEN FILED.
Reference Made to "1ndefcnsible
Practices in Amalga,nationo
and Improper Use Of
Funds in Purchase
of Savings Bank
Stock

In reports based upon an examination
recently made by actuarlcs OF the Viz
glnia and Maryland insurance depart
1ncnts. the American Guild, whose
home Office Is In this cSts,, ~ sharply
irrlticized for the meth ,ds by which 1t
tis alleged to conduct i,s bust rs.
fi The main points with S...::..s1ssi the cx-
Itpnining actuaries deal are what they
thall "lndefensible practices In amaga-.
nation" and Improper use OF funds
lin the purchase OF savings bank
sg
1t was Mt the instance OF Insurance
Commissioners Grouse. OF the State OF
Maryland. that the examination was
made. Ile sent his actuary, Mr.. Il. G.
Wolfe, here some time ago to go over
the books, and he invited Commissioners
Button to join In the work. Colonel
Button designated his actuary, Mr..
Charles G. Taylor. Jr.. TO assist Mr..
Wolfe, and the two went over the az
fairs Of the concern with great care.
Tho report has been drawn, and du-
plicatess have been placed in tho hands
OF the two commissioners.
Colonel Button referred his, as Is
usual, to the State Corporation Com
4 mission. and would not discuss It's con-
tents when seen last night.
g3 The Maryland commissioner, how
ever has made public the report, and It
Is quite an interesting paper.
Or. s. Galeski, the supreme governor
of the guild, was out OF the city last
night, and could not therefore be seen.
i Supreme Secretary Carl w. Kimptoni
preferred not to make any statement
pending the return of DIR. GaIeski, who
Is expected to-day.
What Report Says.
Tho American Guild Is a fratcrnal
s organization. and in addition to its
FORMER business 1t recently took over
the order of modern PurItans, which Is
Il A. sonsHhat y! nilar organlzat ion with
d lnrge memDeTship scattered through
the State
The guild does business in the State
OF Maryland. and for this reason. Com
missioner Grouse had right to look
into It's affairs.
In tho opening OF their, report, the
examiners thus describe the guild:
."rhe beneficiary association was orr
ganizcd in January. 1890 under the
name OF the Progressive Endowment
Guild OF America. In 1897. the name
was changed to tho American Guild. 1t
Is fratcrna1 In its organization ana
Iins amalgamatcd with, or reinsured,
several associations"
VI The examiners go into much detail
in discussing the guilds connection
with the Provident Savings Bank and
the Southern Interstate Bank OF Rich
mond. They submitted to the supreme
governor the following inquiry In re-
gard to certain payments:
I'VE note a payment OF $3.50 month";
ly to one W.. Gray Watson. who Is
cashier OF the Southern Interstate
Bank. The payment is recorded as be-
Ing on nccount Of organization. Will
you kindly advise in what capacity Mr..
Watson serves tho American Guild.
and the amount OF time devoted by
him to the business OF the guild"
The answer was MS follows:
Mr.. Watson Is not In the employ
ment OF the American Guild and does
not receive these payments individuals
", but solaly on behalf Of the South-
crn Interstate Bank, which last
March became the successor Of the
Providcnt Savings Bank, an institu-
tion practically owned (S7 per cent?
by the American Guild. At the organl-i
cation OF the latter bank in 1899 the
guild paid for Its stock In numerous
small notes which were collected by
the bank at considerable expense, and
consequently did not net the bank the
face value of the stock which It Is.
sued to tho guild"
Branch Of Guild.
Tho report In dealing further with
the bank transactions Of the guild,
says:
cit Is seen that the assets of the
guild In tho shape of tho secured notes
referred to We're used for the purpose
Of organizing and starting tho Provl-
dent Savings Bank, in which the guild
owned 81 per cent OF tho stock, and
t,l,
was president. These notes bore In
terest at the rate of 9 per cent per
annum and the dividends paid by the
bank have only amounted to 3 per
cent. per annum.
"Tho remaining II per cent. of stock
of tho Provident Savings Bank was
owned by officers or executive commit
4 tee,nen OF the guild, and tho board OF
directors of the bank consisted. ac-
cording to tho statement Of the su-
promo governor, OF officers or execu-
two committeeman of the guild, It is
34 therefore seen that the Provident Say
ings Bank was practically a branch
of tho American Guild and 1t was
80 considered by the officers OF the
guild.
Called Improper.
iS "It is the opinion of your examiners
that it Is not within the province of a
fraternnl beneficiary association to en-
gage In any other branch of business,
and that the use of the funds, of the
guild for launching the Providont Saw
VI tngs Bank was Improper, and. as shown
by the comparison of tho rate Of dlvi-
dend with the rate OF interest on the
Investments turned over 10 tho bank In
\ payment forathe stock, unprofitable for
tlA' guild, without considering the
additional payments which tho guild
has been called upon to make to the
4 Proyidont Savings Bank. II. Is ilnpos-
slble to make q further analysis OF
the relations betWeen the bank anu
the guild without m examination Of
tho Proyident Savings Bank. which has
since been merged With the Southern
Interstate Bank. but wel believe this
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