The Washington herald., 1913-05-21
aimed TO help
DISTRICT CODE
CONTINUED FROM PAGE ONE.

in real estate TO be used as the prin-
cipal or home Office of said company IN
the District OF Columbia; and said real
estate shall be owned free and clear of
membranes
Sec. Z. That 1t shall be the duty Of
every insurance company in the District
Of Columbia to include in its annual
report complete statement OF Its ex-
penses, including the rate of commits
sions paid In securing business, salaries
paid to each OF its officers. directors. or
agents, and such other matters as will
enable the said Superintendent OF Insur-
ance to ascertain whether said company
Is being managed carefully. prudently,
economically, and safely; and II shall be
the duty of said Superintendent of In
surance to examine into said matters
and to ascertain whether said company
is being safely. prudently, and properly
managed, and II he finds that the same
is not so managed he shall order such
changes. reductions, or notifications of
expenses or salaries as in his judgement
are necessary and proper.
Explaining his bill. Representative
Prouty said:
Bill Aimed Against Promoters.
Almost every State in the union has
passed. or has under consideration the
passage of laws limiting the operations
of the professional promoter. The Dis
trict of Columbia has no such law, and
1t Is becoming a mecca for those en-
gagged in that kind of operations. The
very fact that such operators are To-
Gated in the District of Columbia under
the very eyes OF Congress gives them an
advantage in securing the confidence Of
the public.
MI l.
ton, at least as to insurance companies
II requires that they shall submit to
the Superintendent of Insurance their
plan of organization and the literature
that they intend to issue and circulate
in securing subscriptions
MY bill is also intended to secure
honest and open management II is IN
ten0ed to stop the somewhat prevalent
practices OF paying dividends from capi-
tai and subscribed surplus and thus fool
the investor. 1t is also INTENDED to pre-
vent the officers and directors OF a com
pany from forming inside corpora atoms
or organizations and making contracts
with themselves to absorb the profits of
the business Stock companies should
be run for the benefit of the stockholders
and not for the benefit of the officers.
1T is also intended to give the Super
intendenI of Insurance the power to
the company is being managed prudently
or not or whether its resources are being
absorbed in large and unreasonable
salaries.s Stockholders scattered all over
the United States have no chance to
become efficiently represented in the local
management of company, and 1t is the
province OF Congress to protect as best
IL can such investors.
Every insurance man is aware Of the
fact that capital and surplus OF fnsur-
ance companies ought TO be held in
liquid form. so that they can become
promptly available for payment Of
losses-the real thing for which the in
surance company is organized.
THE bill also requires the insurance
department to keep a record of all trans
actions with the companies, and the
orders and regulations made by the
Superintendent of Insurance. 1t also re-
quires the keeping OLA book showing
the amount OF money received from the
companies for any and all purposes. and
requires this record to be open for the
inspection OF the pubic"
The bill was referred to the House
District Committee.