The Washington times., 1915-07-20
humors Of Criminal Proceedings
Follow. Meeting to Hear
Report Of Insurance Com.
missioner Nesbit.

somewhat scrambled during the regime
Of four presidents in less than nine
months, have been under investigation
by Insurance Commissioner Nesbit and
yesterdays meeting was called that the
stockholders or the subscribers to stock
might learn Just what the commissioner
thought of the company and the meth
DDS under which 1t had attempted to do
business.
Mr.. Nesbit's report already rendered
copy, it is understood. furnished to the
office Of the District Attorney, detai.sd
4 plan Of high financing which. consid:
cred up-to-date In VEL Wall street .ttnn enc
encountered in the handling Of coinpan-,
les organized in the Capital
Commissioners Report. +.
In substance the insurance commis-
sioner's report was as follows:
'This company filed its articles Of in.
corporation November Z. 1914. They pro.
vided for $25.OOO capital stock. par value
Of each share. 80: to be increased from
more than N.oOO. 900.
"4Also that There shall be not less
than Ave nor moro than fifteen trustees
number Of trustees who shall manage
f,rst. srs sSnss'h years. IS ave. " mo '0' - s'
The company In November. ~.
price of $40 per share For each share SO
capital stock: IS was to become part
OF the permanent surplus Of the com:
pany, and s. per share was to be paid
for organization expenses Of every
kind and description:
Th stock ;v ,s, and sns
open s cte to ts other Criticism. than tie tie use
Of one-fourth Of the entire subscrip-
tion for promotion expenses. and the
practice Of taking all this In cash out
Of the e. rst f psymsn ccsat.S sysn whom this
Under this the company, operated
from early N November. 1914, unit!
practically May /. 1915 and secured ue. ,S;a
= ber Of shares Of stock subscribed for
Between November Z, 1914. and April
changes in the personnel Of the, board
Of offiCr 8. but no attempt to do any
other business than sell stock seems to
have been made.
was held. 0t ts n minutes e. Of 9f''; which cover
twenty-six pages. An examination OF
these pages show resolutions, contracts.
and agreements which are little less
THE original contract for selling
stock, with c. w. Walker, was cancel
ed and a new contract made with r. W.
Power, in which the company agrees to
sell him or his nominees or assigns all
the unsold stock Of the company. not
exceeding A.ooo.0Oo par value. at $l2
per share.
The company to receive and accept
individual signed subscriptions to said
shares Of tho capital stock in such num-
bers and to such amounts as may be
rendered to It by said party, his nomi-
nees. or assigns, from time to time &C.
fo1 hNyo nf moi 81
1T was further agreed. that should
any condition or contingency arise
whereby the directors Of the company
should deem it advisable. or desirable
to abrogate the same. there shall be
paid to the said party Of the second
part. his nominees or assigns. the sum
Of $4,000 liauidated damages
,"Ii This seems & to be very one Cne.sided; as
mination Of the contract. so far as the
party taking the option is concerned.
This Is. in my judgment not a contract
Of sale which it pretends to be. but is
~ soAlity an option
This contract was assigned to The
National Capital Life Agency. incorpo-
rated. This agency has chosen a name
Insurance Company as to readily lead
the uniformed person solicited to as
sumo their close relationship II not
their IDENTITY The The assncy sSs h9weyer
ware. with total authorized capital
stock of 5000 and 81 900 set out as the
amount of capital stock with which it
will commence business"
1T next resolved to create a board Of
governors . limited to two hundred
members. In the United States, and ap-
Insurance. Company of Washington. D.
resent the stock holders and govern and
hers hs sRs Rs'S be Of set nf Aside ans hey:
in trust for account. of the board OF
governors a fund made up OF and equal
to 10 per cent of all first year cash
per cent OF all second and subsequent
years premiums on the entire business
OF the company Attached to this
specimen contract were forty cou-
1917: the fortieth maturing January
!. 1855. guaranteeing to the holder his
share of said fund on the 1st of January
of each year. The manifest illegality of
appointing me to represent the stock
holders and control the stockholders
company is apparent. There seems to
be no provision that the persons SO
named and holding these coupons shall
profits thus provided for. The applica-
ton for membership to the board of
governors Is set out In the minutes In
connection with the subscription agree
ment. l am informed not many of these
applications for membership have been
made and accepted by the company.
There Is bank deposit agreement
set out which provides, among
other things. Second: That the lnsur-
ance Company. subject to the approval
of the Board OF Directors. agrees, that
10 per cent Of the full legal reserve on
all business produced by the county in
which its depositary bank Is located,
shall be invested by the bank In county
bonds, mortgages. and other securities
that meet the requirement OF the insur-
ance laws OF the District and the an
proval of the insurance commissioner
Said Investments to net the insurance
company per cent and the company
agrees to pay the bank all interest
which may accrue over and above the
sum OF per cent net on said invest
ments as its compensation for selecting