Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1916-11-20

a1nasa frsm rage Ono
IS Els out Of seven experts employed to
saiue them, was insolvent
70 understand the nature Of the trans
s6Ei0ns By which the officers Of the Pension
Mutual procured the temporary ownership
81 theee bonds from the New York bond
h3nss Of II. L. Doherty & Co Gin MFR. Bells
ietfer Il is spelled Dougherty). there is
heel to dieress n little from the letter Mr.
Beil wrote to Mr. Johnson.
Theae bonds amounted to almost 81 000,-
600 and were obtained by the syndicate
method that ls, q number OF investors were
ael4ed TO Join syndicate to take up cef-
tain amount Of stock (more than $SOO,OoO
eorfh) OF the Pension Mutual Life In
enrance Company. They were given to
understand that they would never be called
on ID buy the stock. All they had to DO
was to say how much OF the stock they
would subscribe for, give their notes for
the amount with the written understanding
that these notes would never be negotiated,
mat the stock for which they Subscribed
would be sold by the holding company
fConsolidated Investment Company, FINANCE
BuildIng) at a profit and that profit turned
over TO the subscribers with their notes
BONDS RETURNED
rbntead Of selling the Pension Mutual
sforl, the officers Of the company took
the notes to Doherty Co. and exchanged
them for the bonds. When Doherty q co
tried to turn the notes into cash they uh-
covered the private agreement that the note
makers were not liable, and they demanded
q return Of the bonds and brought suit In
tho courts Of Pittsburgh. The bonds were
fcturued to Doherty & Co, but meanwhile
they had served their purpose as LYNDON
ID. Wood had sworn to the Insurance De.
partment that they were the property OF
the company.
The condition Of the company was set
eut in detail by Charles johnson to Mr
Bell, whom he advised to proceed AT once
10 take the step which Commissioners O'Neil
took early in November and which comes TO
q head on November 27.
Mr.. Bell has been and is now a legal
adviser of the Pension Mutual Life In
nurance Company and Mr.. O'Neh reterred
very recently to $4,000 check he received
for work In connection with the Union
Casualty Company, which In In the same
boat with the Pension Mutual, and which is
dominated by the same man. Lyndon d.
Wood M
Before becoming Attorney General Mr..
Bell was nlAo counsel in general way for
ths Pension Mutual Life Insurance Com
pany He has said emphatically that he
was not connected with II in any capacity
while he held the State. office.
MR.. BELLS LETTER
The letter from Mr.. Bell to Mr.. johnson
was written December "a. 1914. Mr., BelrB
answer IL under date of Harrisburg, Pa,
December 20, 1914. II Is more illuminating
than any paraphase could be and Is as FOL
lows:
office OF the Attorney General. Harris
burg December 20, 1914.
Hon Charles Johnson, Insurance Com
missioner. Harrisburg.
Dear Slr-Under date OF March IL,
1914, you addressed n letter to the At
torney Generals Department. advising
that the Pension Mutual Life Insurance
Company, of Pittsburgh Pa, had been
issuing policies and otherwise transact
ing the business Of life insurance with
out authority from the Insurance Dc
partment and that an examination OF
it's books and accounts by your depart
ment showed that it's condition at that
time was such that it's further transac-
ton of business would be hazardous to
It's poicyhoders. to it's creditors ana TO
the public. In this communication you
requested that this department apply to
the Court of Common Pleas or Dauphln
County. under the act Of June l. 1911
p L. 600 for an order upon said in
surance company to show cause why
you, as Insurance Commissioners OF the
Commonwealth, should not take possess
sion of its property and lIquidate its
businssg-s
coMPANYs ARGUMENT
Your said communication of March
II, 1914. was based upon report OF the
examiners of your department, show
Ing deficit In the assets of said com
pany as of February 81, 1914, of about
sB7i 900 In accordance with the usual
practice of the Attorney Generals de-
partment an opportunity was anorded
the said insurance company to show
any reason II might have why proceed
ings should not be instituted against II
in said Court OF Common Pleas of Dau-
phin County. In accordance with the
provisions of the said act As result
OF several hearings had at the Attor-
ney Generals department. at which
your department was represented,
letter was addressed by the first deputy
to Messrs. Stone & Stone. counsel
for the said, The Pension Mutual Life
Insurance Company, OF Pittsburgh,
Under date OF April l5, 1914. In this
letter the attention of counsel for said
Insurance company was called to the
fact that a difference OF opinion existed
between your department and the off,
GERS and counsel OF said insurance COM
pany with reference to the proper con-
struction OF the article of agreement
entered into under date of July 20.
1911. between the State Insurance and
Trust Company and the Pension Life
Society. and the article of agreement
dated July 29. 1911. and re-executed
January 10, 1912, between the said
State Insurance and Trust Company.
renamed The Pension Mutual Life In
surauce Company, and the said Pension
Life Society-the subject matter OF both
agreements being the taking over of the
assets of the said Pension Life Society
by the said The Pension Mutual Life In
surance Company, under certain terms,
conditions and stipulations. And 1t was
further stated in said communication
that the Attorney Generals department
did not desire or intend at that time,
70 commit itself to any particular con-
struction of said agreements but that
It seemed clear in any view OF the mat
ter that The Pension Mutual Life In
surancs Company took over under said
agreements, the assets of the said PEN
sion Life Society OF the value OF about
$4,000, and agreed. at least. TO hold
said assets and accretlops thereof in
trust for the benehciaries OF the said
Pension Life Society. 1t was further
stated In said communication that
among the alleged assets of The PEN
sion Mutual Life Insurance Company
was an item of ss17 ,113.s2, consisting
Of capital stock notes and agree
mantss .