Wausau pilot. [volume] (Wausau, Wis.) 1896-1940, 1910-04-26
old Line Life ms Co Promoter,

O10 134c LI1S lis 10 fTOMOLGTS
Severely Criticised by Insurance
Commissioner. - Secret Stock
Selling Agreements Termed a
Fraud W the Subscribe rs -
Matter Likely 70 be Taken INFO
Court
When the much heralded million
dollar Old Line Life Insurance Com
pany of Milwaukee, applied for a
license, it became the duty of the
Insurance Commissioner 70 first ex-
anime into its affairs and while ander
the opinion of the Attorney General
he could not refuse to grant the
license, the conditions surrounding
the sale of the stock and organization
OF the company were such that the
Commissioner has printed his report
showing the results of the examination
and his findings and directed that
copy be moiled TO each stakeholder.
This report shows that the pro-
moters sold S552, 1886 of the capital
stock at cost of 1888, 2O9. SO in com
missions and expenses of which sum
s54, 247.69 was paid TO r. +. Fry who
was elected president of The company.
''lt thus appears says the Commits
sioner that the right is claimed to
charge an average commission of 43.7
per cent. of the par value of the stock
actually subscribed and to pay COM
mission OF AZ per cent. on the par
value OF the stock actually paid for.v
The Commissioner in this report is
doing a good service. Wausau. like
all of the other cities and towns of
the state, has been overrun by stock
selling agents and the mails have
been flooded by alluringly worded
literature of the great profits to be
derived from investing in the capital
stock of life, fire or casualty com
panies. The fact that here in Wau-
sau successful life insurance COM
pany was rganized-but without any
promotion schemes or stock.selling
devices has in the minds of the pro,
moters of companies made the people
of this community especially suscept-
IDLE and easy victims and the revela-
lions of this examination will come
as surprise but will prove of benefit.
The report shows that 90, 1924 shares
of par value Of ten dollars were sold.
for the selling of which S2l1, 265. 80
was paid as commissions to agents
and S54, 247.69 to r. F. Fry who SUM-
eryised the promotion and selling of
stock and that further claim for S39.-
059.S8 as commission is made on stock
subscription. AS to this the Com
missioner says: Sin other words it is
clear that under the plan of the
organizers, the subscribers, without
their knowledge, if such plan bound
them at all, were paying Mr.. Fry and
his sub-agents twenty five per cent. of
the amount paid them, or from 374
per cent. to so per cent. of the par
value of the stock, for the privilege
OF paying their money into corpora
tion yet to come into legal existence,
without any benefit to be derived
from such payment and without any
obligation upon the organizers, after
the corporation should be organized. -
recognizing that these disclosures
will affect the organizers and that it
may result in disappointment to the
stockholders, the Commissioner in
sistS that sit is better to face the
truth squarely now'' and has ordered
the directors of the Old Line Life In
surance company to rescind all action
approving the promotion expenditures
until after each stakeholder has been
furnished with copy of the report of
examination in which he furnishes
the details of the secret agreement as
to the sale of the stock which he
declares fraud upon the subscribers.
and recommends that pending the
adjustment and final determination
OF the rights of the corporation to
moneys collected, r. +. Fry should
not be president or director. In his
letter to the company transmitting
the report of the examination, Com
missioner Beedle says:
"The board of directors may,
and on demand therefor should,
prosecute such legal action as NAV
be necessary for the determination
of the rights of the company to
the money withheld by the organ
izers and to collect any sum due
the company"
The stockholders must now take
the matter up and protect their in
terests, meanwhile the prospects of
the Old Line Life has received a
severe blow from this exposure.