The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1919-06-26
Breyfogle Says That's Reason
Hopkins Opposed Merger.
He Issues Statement About Fra
ternal Organizations Plans.
SAYS HIS FEE WAS MINIMUM
X. g. L. of S. Would Reinsure
F. A. e. Members.
Attorney General Wants To Be
Governor, BreyfOgle Asserts.

| Political rear ana SuDeIndlOTldi
ambitions combined to inspire R. ].
Hopkins, attorney general, to disap-
| prove the Knights and Ladies of Sc
curity and Fraternal Aid Union mer-
ger or reinsurance. That was the
charge today of John w. Breyfogle,
| who asserted that Hopkinss course in
| the fraternial insurance society trou-
BILE has been swayed by political cow
ardice rather than good faith and
! business Judgment. He denied en-
| pha tically that the merger plan was
in any manner IRREGULAR or that the
| trust funds were to be used.
| Breyfogle stated that his mission
was the closing of the reinsurance
project He was to deliver to the
| knights and Ladies $123,000, 900
worth of new insurance. For this
business the Topeka society was to
pay the minimum rate of 81 for each
$1,000 of insurance. The total ex-
| pense of $350,o00 stood, he declared,
as against a common expense of So
| 100000 for securing the same bust
ness.
His Price Minimum.
The $227,0oO above Breyfogle's COM
mission was to be used to pay fol.
cancellation of salary contracts of
persons who were to be left jobless by
the consolidation. The entire expense
| was to be paid from the expense
funds of the society. More than the
entire expense of the merger would
have been saved to the society mem
bers in less than a year thru reduc-
| lions in overhead and operating eX-
penses.
The Breyfogle statement also as
serts that every proposal by the attor-
ney general was promptly met. He
! said his own contract was above sus-
picion and that the price he was to
receive for his service is known by
insurance men to be the minimum
for such work. Carey J. Wilson, for
mer state insurance superintendent, is
| declared by Breyfogle to have APP
proved the contract of the two socie-
! ties. Many bankers and business men
familiar with the benefits to the So
| ciety members and to Topeka urged
Hopkins not to block the project.
Hopkins is asserted to have admitted
| on at least one occasion that he said
he feared political consequences if he
approved a contract for such a sum.
He then declined to stipulate sum
which would meet his approval.
BreyfogIe's Statement.
Breyfogle's statement follows:
''In a recent communication to the press
Attorney General Hopkins states that he
has refused to- permit a merger between
the Knights and Ladies of Security 'of
Topeka and the FraternaI Aid Union of
Lawrence because of the excessive broker
age being paid Mr. Hopkins also states
by innunendo and otherwise. that certain
financial interests and others not entitled
cutting
"The truth of the matter is this: First
this is not a merger, but clearly rein
surance of the business of the Fraternal
Aid Union by the Knights and Ladies
of Security. My contract with the Knights
and Ladies' provides for the payment to me
of a brokerage of one dollar per thousand
OF any business which they might acquire
n nG mi he
necessary to secure the surrender of the
salary contracts of those officers and en-
ployes that would retire in the acquisition
OF the business 1t is well known fact
that officers of a fraternal society have
salary contracts which they not only can
not be compelled to relinquish. but they
could not be expected to relinquish unless
they were compensated.
"As to the brokerage fee of one dollar
per thousand, any insurance man knows
that that is the lowest brokerage paid by
any insurance company for the securing
livering 1923. OOo, 900 of insurance which
would have cost them nearly $40 900 tc
i acquire In the ordinary way.
mfr, Hopkins was advised by me as tc
tmy brokerage contract of one dollar pei
: thousand md that the remaining sum Of
S227.00o was the amount necessary tc
secure the. REIMBURSEMENT of the salary
contract of those officers and employees
who would retire. After a full and thort
investigation he admitted that he had
found that it cost an average of SIS pei
thousand for for frsteTnal orders to put bust
as the business being delivered BY
me to the knights and Ladies' of Security
amount by comparison seemed very cheap
indeed.
Not Paid Out of Trust Fund.
"Mr. Hopkins has stated as one of hi
objections that this money was being paiC
| out of trust funds. This is absolutel,
untrue The statute provides that not ever
trust funds Of fraternai societies. Tha
fund can only be used to pay death bene
fits. Under the statutes and bylaws tn,
members provide an expense fund for tn
spectre purpose of acquiring business n
the board of directors may direct: 1t Il
l out of this expense fund that the $35O.OOO
or less than So per thousand of business
: ACQUIRED. is to be paid.
when asked what in his iudgmen
= would be a reasonable amount to nav TO
+ this business he replied that he did no
: know. that that was matter for the direc
tors to decide lnasmuch as the director
had already decided, his answer in thi
INSTANCE was about as intelligent and bust
: other matters pertaininp TO his cop sru
Many. of the most prominent banker
and business men in the state. as well a
men high in political life. whose reputation
e and standing is such that they need n
t defense from the press or aLy one else
. the fact that they are policy holders in on
. of these societies being fully conversan
with the terms of this contract and til
Mr.. Hopkins to approve this Reinsurance
for the best interests of the membership
r 1hey are at loss 10 understand his atti
I tude except as he has stated at numerou
n | times that inasmuch as he expects to b
= a candidate for governor, and as a rul
; | there is some more or less dissatisfaction
; with consolidation of fraternal societie:
d that he was afraid it might hurt him DO
t litically.
o Would Save Total Cost.
: mfr. Hopkins has been advised by til
e officers and representatives OF the tw
# societies that the entire sum of S350.O0
! would be saved to the membership In over
! | head expenses during the first twelv
{ months Furthermore Mr. Hopkins know
e that under the statutes before this reinsul
e ance can become fact. II must be SUI
/, mitted to the vote of the supreme lodge c
d both societies and receive their approval
e NO one conversnt with the facts an
Il ever raised any objection to. or CRITICS.
! of IL with the exception of Mr.. Hopkin
o The only real reason that he has assigne
r up to this time is his fear that it Nigh
e hurt him politically in. his candidacy "a
:, | governor of tslfs state and the further rae