The Daily Missoulian. [volume] (Missoula, Mont.) 1904-1961, 1910-01-02
PUBLIC IS N|U[CTED
BY TRUST
ExoRHiTANT RATES For SURE.
TY BONDS PAID OUT OF OF
FiciAl GOLFERS.

Chicago. Jan. 1.-Exorbitant charges
bv the surety trust for official
bonds. regarding which report
recently was made from Chicago To
the United states treasury department.
promises new revelation by the Mer-
Ram commission which is digging into
the conduct Of department at the city
hall. Since ii became a practice two
ar three years ago to pay out OF
municipal funds the premium for
surety hands--something not done else
mlera-ft Is believed the taxpayers
have been mulcted out Of many thou
sands II dollars.
The close compact existing among
surety companies of the east. one of
which has had as a director city
Comptroller Wilson. has enabled them
Ia advance surety bond rates until
Chicago pays from four to five times
Us much for bonds ms employees of
Uncle Sam. Attempts To double and
triple the cost of surety bonds of fed
eraI employees proved failure although
an advance was scored all along the
line This effort was frustrated by
the efforts of the men backed by the
assistance Of Sub-Tr.asurer Bolden
week. Mr. Boldeweck. in report to
the treasury department In Washing
ton, went into the details of the claims
If the companies and the complaints of
the men. Upon the strength of this
report II railing was made by the de-
partment 10 the effect that the bonds
Of accredited surety companies would
be accepted provided the premium
rates were not in excess of 81 per cent
more than had been charged for sew
eral years prior to that time.
This close agreement upon premium
rates serves to explain the bitterness
or the opposition during the year To
new surety concerns. notably the Con-
snldated Casualty company. organized
by Robert n. Armstrong. former as
sistant secretary of the United States
treasury. i'm Chicago. The eastern
combine has carried on guerilla war
fare upon these concerns. but the new
year will find the west much less de-
pendent upon the east for surety bonds
and Insurance than year ago. The
Kansas State Bankers association has
adopted the bonds of the Armstrong
company owing to its independence in
the matter of rates.
1t has been found that the premiums
paid upon bonds Of Chicago officials
haze been from 81 TO 81 per 81, 900. 1t
Is admitted by several city officials
that premiums on surety bonds for
municipal employees and officers have
been Increased from 30 to 100 per cent
in the last year or two, and that the
city pays the bill. Formerly each city
officer or employe was required to
furnish his own bond and pay the
premium.
There are about 20 surety companies
doing II general business i'm the coun-
try, whose bonds are accepted by the
government. Nearly all of these COM
nanies are members of the combine
which Is known as the Surety associa-
ton of America. The principal men,
hers of the association are:
American Bonding company. Bank
ers Surety company. Empire State
Surety company. Federal Union Surety
company. Fidelity and Deposit com
iiany. Illinois Surety company, Title
Guaranty and Surety company. Ma
iional Surety company. United Surety
company. United States Fidelity and
Guaranty company.
According 10 the testimony brought
ont mt congressional hearings In Wash
iHatan. the 800 per cent advance in
rates discovered WAS the result Of Il
meeting Of representatives of the COM
ranies in the association. Bond Of
fiaials who appeared before the com
mittse insisted that the advance was
not made by agreement. but admitted
,hi.t IL VAS the result OF IAN inter
change Of experience" The bond Of
ficiais complained that they had not
been making money and that unless
their rates We're Increased the ex-
istence of the companies was i'm peril
In contrast to this statement Con
gresham Tawney submitted state
ment Of profit made by the various
companies. showing that all were do
ing we'll