New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-10-14

rotchkiss Objects to Insurance
Organizers Methods.
CONTROL WITHOUT COST
Report Says Mortimer Would
finance Company by Sale CT
Minority Interest.

- c~- rs-WfTlian Il Hotchkiss,
As-..,5e,+ n Insurance. IN a report
- here to-day makes public the result
- Ais s--vestfration OF the Affairs OF the
--.,bs+-a- Funding Company, a New York
--,-e-fon. organized last March. ap-
-.-o--1v for the purpose Of accunlulatlns
-ascsa-t funds with which TO launch the
re and Casualty Company Of New York.
- Manhattan Funding Company, like
.l,a United Insurance Company OF Arizona
= o-be- insurance promoting corpora
rs was examined by the department n
.--,,-sance with the new amendment 70
- Insurance laws which went into effect
80 Tulv. and permits the department 20
.--.-7,ne and report upon insurance Pro
Gu companies as they have done on
assurance corporations.
Norton /. Mortimer. an insurance man
r. was one OF the organizer. or the
.,a--npolitan Underwriting Company and
= columbia Life Assurance Society.
--t-, = financed. Is a director and organ
.-e- II this new Manhattan Funding Com
,sn- and ITS protege. the Life and Casualty
r-7-,rarv. and II appears from the depart
,-.,s -eport that the entire stock OF the
.--oSiu- company so far issued was issued
r. NJ Mortimer
rrsri--,r. Baldwin & Co.. Of No q Will
ian street had been retained as promoters
n re funding company, however. and Il
-ras 70 be their duty 70 obtain buyers for
rr,ch Of Tire stock as was 10 be turned over
70 Investors
euerey Powers fer Holding Company.
re Manhattan Funding Company, the
hslatnE company for the majority Of the
life and Casualty Company's stock, has
attained a contract from the latter cor
,o-ari01. which gives II sole general agency
novve-s and the control Of the Underwrit-
.rC business OF the proposed insurance
corpany for twenty years IN this state
In the prepared literature, apparently de-
g-r7e5 f0r the purpose Of furthsrinE stock
sales Of the funding company at some later
rae -h= great value Of a general agency
business is ezemplifed hy q reference 10 the
firm If ~ Il. Raymond & Co. which held
that position for the Mutual Life Insur-
snoe COMPANY prior 10 the Hughes in
vests-s-on Of life insurance affairs in 1903
.eTre PROMOTERS Of the Manhattan Fund
snz COMPANY" says the departments re-
nor i.e--ea~ 10 have vested in themselves.
without any money payment therefor, a
lna5o-itv Of the total capital stock II $780,
De- with -he intention, as stated by the
sxarliners 10 finance the insurance com
NAM with the proceeds Obtained from the
sale u the minority stock of the Manhat-
'raa Funding Company as 70 which the
examiners comment. this plan VIII enable
ne officers and directors. who paid moth
snr for their stock. 70 control both COM
pane
The examiners found that some Of the
directors If the Life and Casualty Com
pauv were entirely unaware Of the honor
thrust upon them. and that others, though
knowing -har their names were being used,
were unaccualnted with any Of the plans
or prospective work Of the concern.
n the literature prepared for the pre-
.imi1a-y stock selling campaign. which
was held up 70 await the departments &C
ton under The new law. the examiners
found that the promoters had sketched out
n great detail the probable future status 4
q both The funding company and the insUr- 4
z1ce company as Of Januarv :, 1918
By this statement i appeared that by
thar date the stock Of the funding com
-pa-v would have an established book value
Of sos & share. and TIE Life and Casually
COMPANY. besides paying 20 per cent divi-
Serds annually. would have q book value-On
SIS stock II S5+2 a share
Literature Best of Its Kind"
The promoters OF the Manhattan Fund
sng Compan-" says e report. present 20
possible investors. quite appropriately.
copyrighted pamphlet entitled The Modern q
Cold Nine This interesting exhibit lures
the reader with arguments and examples
that .cha-a ctertze IL as one Of the best Of
ats kind"
-. Among the experiences Of investors given
Is one Of a certain William RobOthan, who, /
on an investment Of $4,000 IN 1875. realized /
r. 1902 a fortune % S2.200,00o-
The Insurance Departments report ends 1
with -Ee following:
Printed copies OF the report IF this ex- (
animation are now available and VIII be
furnished hv the department upon appu- 4
cation Printed copies Of the literature /
should be applied for AZ the of5ce OF the I
Maintain Funding Company, No. .
William street, New York"
Morton l. Mortimer said yesterday that 4
tEs action Of the Superintendent Of 1nSu-- /
ance was entirely unczlled for. iussmuch /.
- neither company had started 70 do bust I.
uess- He referred all inquirers 70 Welkup 4
Baldwln d Co.
AZ -re Office Of that firm a member /
exhibited copies O. q letter sent 70 the .
Insurance Department. asking whether the .
proposed plans Of the funding and insur- 4
snCe companies were IN accordance with .
the insurance laws. as amended al the last .
session OF the legislature. and the reply 4
sent 70 them by Superintendent H0tchki-s Z
n which he said their question could not .
De answered Gntl after an examination Of .
the cornpany's affairs. He added that the .
department would certainly not approve Of /
any scheme which contemplated the sale Of /
Insurance stock based entirely upon rosy
view O. The future.
Walzup. Baldwin & Co. said they had no .
knowledge of M Lor1imers connection
Win the ole Columbia Assurance Society
CT with the Metropolitan Underwriting
COMPANY. irs financial hacker. and they did 1
nor know that several Of the directors Of
rhe Manhattan Funding Company and the
Life and Casualty Company were also di-
Eectors Ia the Columbia and Metropolitan
companies.