Idaho County free press. [volume] (Grangeville, Idaho Territory) 1886-current, 1912-10-24

to be organized by themselves, and
which was later by due incorporation
under the laws of the state and of
which organization the same John M.
thames was made the first president
and the same Robert Lansdon was made
the first vice president; that John M.
Halnes, as member of this promotion
company, entered into contract with
John M. Haines, as trustee of the in
surance company not yet born, where
by John M. Haines and the other as.
soeiates of the promotion company were
to receive $125,OO0 for the sale of the
stock of the new $250,000 insurance
company to be born later, and that, or
ganizing this insurance company them
selves, they made themselves directors,
elected John M. Haines president and
Robert Lansdon as vice president and
that they thereupon approved and rat
flied the agreement they had made with
themselves to pay themselves $125,O00
for organizing and selling to the people
of Idaho the stock of the corporation
+. 7. Houghton, actuary and examin
er in the insurance department of the
state of Washington, reporting upon
this phase of the transaction in his
first or preliminary report, says:
Houghtons Report
From information at hand and a
careful inspection of the various tran
sactions had at, before and subsequent
to the filing of the articles of incor-
poration, it would appear that the or
ganlzation of this company was pro-
NOTED, incorporated and launched upon
the public, not as needful institution,
organized with good business Judgment
and for the benefit of those who pur-
chased its stock or secured insurance
in the company, but was organized
by bunch of professional promoters
for the sole purpose of securing the ex-
ira large commission for the subscrip-
ton and sale of the stock.
The proposition was handled in
about the following manner. The pro-
motors were attracted to the field of
operations by the fact that there ap.
peared to be lot of easy money lying
around and held by the people who had
secured it through the natural indus
tries and development of the state and
which, through the wonderful stories
of profits to be obtained, and the high
pressure methods of the statesmen.
could be secured for stock in the in
surance company. Prior to the incor-
poration of the company the profess
sional promoters got together and or
ganized themselves into what was
known as Galloway & Company, organ
lied for the purpose of engaging in the
business of selling stock in life insur-
ance companies. Galloway & Company
then selected one of its members to
act as trustee for the Idaho State Life
Insurance company, limited, corpor-
alton thereafter to be organized and
entered into an agreement with said
trustee for the subscription and sale
of the entire block of said insurance
company at commission aggregating
$l25,OOO. The said promoters then
got together and filed articles of in.
for the insurance company.
High Finance Agreement.
"In carrying out the transaction it
would appear that the promoters or
ganized as the insurance company en-.
tered into an agreement with them
selves as Galloway & Company for
the entire sale of stock and |
receiving the commission thereon of |
$125,OO0, and whatever more they were
able to secure in the manipulation of |
the stock sales when the advance in
price of the different series was made.
The amounts obtained through stock
were undoubtedly large
but cannot be fixed because Of the in
definite records pertaining to the sub.
scription and transfer of the original
stOck.o