The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1910-10-08
WARNING AGAINST
Ger TAIN STOCKS
Virginians Being Asked to Buy
Shares in Irresponsible
Concerns.

For the protection OF the people OF
Virginia. Insurance Commissioner Jo-
seph Button warns them against
flood of irresponsible insurance cor
porations whose agents are endeavor-
Ing to sell stock in this State. During
these concerns have been developed
by promotion methods in the Middle
Western. Southern and Pacific States.
This scheme. which Is described by
Superintendent Hotchkiss of the New
York Insurance Department. as new
sort OF get-rich-quick craze" is being
brought into Virginia. reports coming
to the Bureau OF Insurance indicating
! that stock selling is rather widespread
The New York Department, under
recent law. is permitted to examine
such concerns In the same manner as
applied TO insurance companies, and
examinations, the results OF which
will soon be available to the public.
While not very many concerns exist In
that State, the following companies
Concerns Looked Into,
United Insurance Company of Arl--
iona and It's subsidiary. the United
Ere Insurance COMPANY Of New York.
subsidsary. the pr66tectivee Fire roA 1ns sur
ance Company, both OF New York:
Manhattan Funding Company and sub
sidiary. Life and Casualty Company
VI new oIh, clIc ocCuTltlcSa
of New York and subsidiary, the First
Pennsylvania, Trinity Finance Com.
pany OF Maine. Hanover Finance Com
Company Of New York, Government
Surety and Casualty Company of New
York. Reliable Fire Insurance Com
pany of Indianapolis, Columbia Guar
antee Corporation,
Some facts have also been developed
as to the these two corporations-Con-
solidated Life Securities Company ana
subsidiary. the Consolidated Life In
be Illinois corporations. and the Ma
tional Assurance Company of Will
mington. Del.
In view OF the facts developed In
this investigation, the New York In.
surance Department has refused to adj
nit into that State any company pro-
noted by certain means which are de-
signed to enrich the professional pro-
moter and to the great injury OF the
investing public
Details of. Scheme.
The plans OF most OF the companies
investigated are essentially the same
and usually almost Identical with those
used In other States. A stock selling
company Is first organized, whose only
asset Is usually the cash representing
the stock.
Elaborate literature is issued. max
able profits. based often on false state.
ments OF actual gains by existing COM
panies Then comes the crowd Of So
Letting statesmen, who hawk their
wares from house to house upon rep
reservations sometimes based on the
literature and sometimes on their Inns
aginatlons, at an expense to the ulti-
mate stockholders Of from 20 to go per
cent, a process which is somewhat va
rled In one or two companies by use
Of the mails. which decreases the cost
Then a contract Is entered into where
tire control Of an insurance company
to be formed as csorollary will BE-
an agency corporation. which contracts
in several cases, says Superintenu emit
Hotchkiss. "seen to have been. made
without regard to tna ability OF the
promoters as insurance managers, and
In some instanceB are apparently en-
tered into that the same may be sold
for the benefit OF the promoters them
selves
II the plan ultimately succeeds after
paying an enormous cost for promo-
tioR the investor nndg himself but a
. 4 "a ! 4 4s Z