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

to-day that whom he came into the com
many. in 1909. he found Van Laiiins
hams methods distasteful and ehiih-
mated him In order to have the COM
pany on a solid financial basis "iieh ~
came to do an actual insurance ousii''7'
contracts had been made with the rep
resentatiYe of one of the pest hho"
financial institutions in this city LOT
loan of 100000 to put the company
on its feet for start The eXtraVa-
Eance in selling stock had been eiiml-
mated with Van Laningham, ana the
company was now relying entirely on the
100000 loan to start an insurance
business. After the insurance business
was started there would be pracucaliy
no expense in selling stock. and the stock
sales would pay back the loan.
Company issues a Statement
The company yesterday issued the ioi-
lowing statement:
The attention of the officers of this com
pany has been called to a circular letter al
dressed by the Superintendent OF lnsui dlCS :
OF the State of New York to editors anu
containing what is presumably a resume Oh
that officers report. based on an eNalillild-
ton OF the company's books.
This examination was concluded NOR
than a month ago and a tentative repoi
drawn up, a copy of which was sem ~
this company. On hearing the sEperul-
tendent ordered the report amended III Sef
eral particulars and stated that a copy OF
the amended report would be sent TO the
company when completed. We nave re-
ceired no copy and, except as indicated py
the circular letter. do not know Whal /,
now contains. In view of this fact, we ieel
that tho interests involved require a reply
in several particulars.
In the first place. much OF the report Is
devoted TO .. l.. y an Laningham. torTneri!
connected with the United, and his hisloTy
a. a promoter * dwelt upon at leng n
Van LaninSham severed his connection
with the company nearly year ago ana
this TACT was known to the superintendent
Of Insurance. The $1,000 compromise with
Van Ianingham adversely commented or
was for money actually advanced the com,
p3ny ny him. and was legally and IN COCO
faith due him. This transaction was fuzzy
explained TO the insurance examiner, VINO
did not question its bona tides.
Tho stock salcSmep feature Is another
subject Of attack. The plan of organization
adopted by the United was to sell its stock
10 those who were TO he its local repre-
senfsfivcS, thus building up at one ano
tho same time large agency force pre-
pared Immediately 10 furnish the company
large volume of business as soon as II.
organization il COMPLETED. " hen that was
accomplished. and approximately nine hun
dred agencies We're established in forty-twC
states. stock statesmen were practically dis
ppnSn6 with and the officers turned Inell
attention to interesting large capita lists
work that Is nov progressing satisfactorily
In addition to this agency force, more mar
TWO hundred bankers in the several states
arc interested Is stockholders Of this com
psny and sffording 20 II their local inuu
enca.
The statement Of assets and liabilities
contained in the circular Is both unfair and
misleading In treating of expenditures
the examiner has entirely omitted refer
erca 70 the most valuable asset which any
sr,-r -esva~H many
acquired BY 2 large part Of the eXpendl
tUres-that Is, the agency organization, "
this instance nearly nine hundred, every
one under signed contracts to represent
not only the fire branch but also the sew
eral other branches of insurance which 4
Is proposed 10 conduct 4 conservative IS
innate of the cost Of securing these agen
cies. based on thirty years of underwriting
experience would nc a. least Sn,ee Thi!
expense has been charged to organization
cost. while il should he charged To under
ritinE expense. Deducting the abov'
item the organization expense Is lsrgel!
reduced. no credit is given in the repor
for the wide publicity given the nitsd
plans. which are generally known through
ont the United States. and for the scCruinE
benefit therefrOm. The expense OF puplict5
has entered largely INFO tho general eN
penditures and a proper credit should b
accorded.
After an exhaustive examination of the
counanv extending over two weeks, thF
SUPERINTENDENT of Insurance Is unable tC
point 10 the issuance If single Shar" q
Hsfered. bonus or promotion stock, or II
one dollar Of graft or misapplcauoh ol
funds.
In this circular ho states that tho present
mana cement IS actuated by an ende3Vo1
to start an insurance company. and h'
knows from the examination made that nc
promotion profit is 10 enSue therefrom oil
rectly or indirectly for the management
He should i'm all fairness have added, a!
the examination mas shown. that these of
ticers have given all their time and thel
best efforts 20 protect and promote the IN
N--Tl col ErTE -
small as 10 mean q financial loss 10 them
selves.
We arc convinced tilat the amount OF tn
necessary 60 pttal viii be interested and this
company be made a valuable factor in th'
insurance world. Failure will not be du'
In lack Of honesty and diligence on on