The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1913-07-25
Sounded Warming That General
Founders Co. Stock Wasn't
Safe Investment
EXECUTIVE HAD CHANCE
TO PULL OUT THEN
Didn't Take Advice and Now
Does Heap of Explaining TO
Square" Himself

against the purchase Ol hthSiai rum
ders stock, printed in The Times al
most two years ago, and effectively
severed all his connections with that
Inflated concern. he would not now be
engaged in trying TO explain away
whatever may be his share III the re-
sponsibility for the loss OF thousands
of dollars oy Michigan investors.
The governor and Howard Wade
president OF the collapsed insurance
company, lately have been exchang-
ing mutual compliments in verbal
passage at arms, each placing the
blame for his interest in the concern
upon others whose mistaken example
and avice he followed Now, II his
excellency and Mr. Wade had taken
the trouble to read the issue Of The
Times OF August is, 1911, and had
acted upon the Advice 10 investors
given there under the caption, Gen
eral Founders is not attractive" they
at least would have avoided being
caught in the crash when the bubble
Of high finance burst.
This unfavorable report on the
Michigan Life Insurance Co. and the
General Founders Co, both promo
tons OF Frederic Apps. whom the gov
ernor now says he would like 10 jail,
was made when the General Founders
concern was at the height OF what
prosperity it may be said TO have en-
ioyed Governor Ferris himself, made
an address In Put-in-Bay. O., Septem-
Der l, 1911, in the interests OF the
Michigan Life Insurance Co. and re-
ceived compensation from that com
pany for it.
The warning issued by The Times
| financial man a fortnight before the
governors address reads in part as
| follows:
The General Founders Co is
not exactly a subsidiary of the
Michigan State Life, though 1t is
closely connected with 1t.
This company General Foun-
dersl has the general agency con
tract TO write business for the
company On. S. l.. Coz where
ever il has license TO do bust
ness with the exception OF Mich
igan. This was about the only
! asset the company had to offer
when ii sold stock TO the public.
This stock was sold in a way
| which left a bad taste in the
| mouths of those who bought II.
| Although the par value is $40 IL
| was put out TO the public at from
| $40 to $50 share and most OF
| the premium went To the agents
| who sold the stock The exorbi.
| tant commission naturally had the
result or impairing the value OF
! the stock and there is no mar
! ket for II at anywhere near the
| prices that were asked at the
time of floatation.
The stock has paid dividends
OF 10 per cent year which has
given large enough return TO
| those who paid the agents so we'll
for selling them the stock, 10
keen them from bowling very
loudly.
| do not consider this stock
safe or wise investment for the or
binary invesotr because I am in
clined TO think that this advan-
| tageous contract. which is the
! chief asset OF the General Foun-
ders Co.. will not last forever.
The agency company is great
help In the first years of an In
surance business, but when tho
| insurance company gets on its
own feet IL is generally consider
ed pretty costly method OF get
ting business.
In recent months since the General
! Founders Co failed and it's founder
| disappeared. Gov Ferris has been at
! tempting 70 get list OF it's stock
| holders and a copy OF an audit OF It's
accounts. from President Wade. but
the latter hasn't the audit. since IL
| still is a matter Of litigation In which
| the auditing company Is suing for 1915
| for making the investigation. The
suit will be heard in Detroit before
| Justice OF the Peace Command. Fri.
day. AS 10 the list Of stockholders
Mr.. Wade AYERS that II contains the
| names of ministers and bankers and
should not be made public.
The governor declares that he will
use the influence OF his position 10
make an expose of the company's AT.
fairs. but denies he ever asked any
one 10 buy It's stock. although a let
ter written by him April 8. 1909. which
has been made public. is addressed
( TO whom II may concern" asserts
that-he had made a searching inves-
tigation Of the affairs OF the company,
and within the limits of his own OBJ
servation and Investigation recon-
mends the stock 10 his friends as an
| investment
u is expected that application for
the appointment OF a receiver for the
! totterlng insurance agency will he
asked in few days
President Wade. who is endeavor.
! ing 10 straighten up its affairs. ad
mits that about 100000 had been
1 raid into its treasury for which there
are assets 70 show OF only about $50
/ 900 lie. however denied that Grim
nal action would be brought against
rs fnrmnI m md