Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1910-01-02
PUTS UP
THE RATES ON
OFFICIAL BONDS
Alleged that Exorbitant Rates
Charged by So-caIled Sure
ty Trust viii Result in Full
Pledged Scandal,
Especial Correspondence to Morning Journal

Especial Correspondence to Morning Journal
Chicago, Dec. 81. 49, Exorbitant
charges by the surety trust for Of
| fetal bonds, regarding which a report
| recently was made from Chicago TO
the United States treasury department,
| promises a new revelation by the
| Merriam commission which is digging
into the conduct of departments at the
city hall. Since it became a practice
two or three years ago to pay out OF
| municipal funds the premiums Tor
| surety bonds-something not done
elsewhere-it is believed the taNpay-
| ers have been mulcted out of many
thousands OF dollars.
The close compact existing among
surety companies of the east, one OF
which has had as Il director CITY
Comptroller Wilson, has enable them
to advance surety bond rates untll
| Chicago, pays from four TO five times
| as much for bonds as employees OF
| Uncle Sam. Attempts to double ana
| triple the cost Of surety bonds OF rcd
| eral employees proved 4 failure, al
| though an advance was scored All
| along the line. This effort was frus-
trated BY the efforts OF the men back
ed by the assistance of Sub-Tresurer
Boldenweck. MIR. Boldenweck' in a
report to the treasury department. IN
Washington, went into the details 81
the claims Of the companies and the
complaints of the men. Upon the
strength Of this report a railing was
made by the department TO the effect
that the bonds of accredited surety
companies would be accepted, provid-
ed the premium rates were not in ex-
cess Of 35 per cent more than had
beer charged for several years prior
to that time.
This close agreement upon premi-
UNI rates serves to explain the bitter
ness of the opposition during the year
to new surety concerns, notably the
! consolidated Casualty company. or
ganized By Robert B. Armstrong, for
mer assistant secretary of the United
States treasury, in Chicago. The east
ern combine has carried on guerilla
warfare upon these concerns, but the
New Year will find the west much
less dependent upon the east for sure
tv bonds and insurance than a year
ago. The Kansas State Bankers as
ISOLATION has adopted the bonds of
the Armstrong company, owing to its
independence in the matter Of rates.
1t has been found that the premi-
ums paid upon bonds of Chicago Off
cials have been from 81 to IS per
$1,000. 1t is admitted by several city
officials that premiums on surety
bonds Tor municipal employees and Of
ficers have been increased from so TO
100 per cent in the last year or two,
and that the city pays the bill. For
merly each city officer or employe was
REQUIRED to furnish his own bond ana
pay the premium.
There are about twenty surety com =
panies doing a general business in the
country, whose bonds are accepted by
the government. Nearly all of these
companies are members OF the com
bine which is 10Y as the Surety AS
ISOLATION Of America The principal
members Of the association are;
American Bonding company, Bank
ers' surety company, Empire state
Surety company. Federal Union Sure
ty company, Fidelity and Deposit
company, Illinois Surety company.
: Title Guaranty and Surety company,
National Surety company, United
Al Ctl tAS 1OiiiB any 1iiiA'A RNo'NE 4 No.
: ity and Guaranty company.
According to the testimony brought
out at congressional hearings in Wash
ington the 900 per cent advance in
rates discovered was the result of a
3 meeting of representatives of the COM
panies in the association. Bone Off
lis who appeared before the COM
mittee insisted that the advance was
not made by agreement but admitted
that it was the result of AN inter
/, change of experience, The bond Of
ficials complained that they had not
been making money and that unless
their rates were increased the exist
ence Of the companies was In peril.
< In contrast to this statement Con
? gresham Tawney submitted a state
ment of profit made by the various
2 companies, showing that all were do
ing well.
~ .r4a.a -. - 49,