Evening star., 1939-09-13
Insurance Firm
Virginia Made
Loans 10 Officers
Monopoly Session
Probes Concern With
$4,000 Policies Here
BY JAMES E. CHINN.

The Shenandoah Life Insurance
Co. of Roanoke, Va, which has
written $1l3,576,909 in group insur-
ance on the lives of $4,000 Federal
employees in Washington, made COL
lateral loans chiefly to it's officers
and directors and various other con-
Germs in which they were interested,
until stopped by the Virginia law
in 1884, John P. Saul, jr., executive
vice president and general counsel,
today told the Insurance Subcom-
rlittee of the Federal Monopoly
Committee.
In several instances, Mr. Saul
disclosed, loans were made to the
late r. H. Angel, former president
of the company, in the name of di-
rectors to conceal the fact he was
borrowing the money.
Altogether, the witness testified,
the company made 95 loans to it's
officers and directors, totaling in
excess of $714,000. He pointed out
the greatest amount of these loans
outstanding reached $399,516 in 1888.
Since then, however, he said the
company had materially reduced
the amount, which on December 81,
1888, totaled $43,348.
Borrowers Named.
Mr. Saul read into the record the
names of number of the officers
and directors and the firms in which
they had an interest, as well as
relatives of officials who had bor-
rowed from the company. He dis
closed he himself had borrowed on
several occasions, but had repaid
the loans in full.
Mr.. Saul told the subcommittee
Mr.. Angel, who was president of
the company until his death in 1882,
had an interest in a number of other
concerns including a lumber and
mill plant. He also was president
of two banks in Roanoke Former
Gov. E. Lee Trinkle of Virginia
succeeded him as president of the
insurance company.
In hquidating the loans, Mr.. Saul
emphasized that no direct loans
had been charged off, but $3.50 in
indirect loans had been charged off
to profit and loss.
The witness said Government en-
ployes who have taken out group in
surance in the company are men,
bers of Is voluntary associations in
various Federal departments. The
membership is paid, he declared, in
monthly dues.
Income of S2,700,OOO.
Organized as a stock company,
Mr.. Saul testified it took steps in
1884 to mutualize. He said the
company writes only ordinary and
group insurance, and has from
Sis, 100000 to Sl20,000. 900 in group
insurance in force. The company
last year. he said, had a premium
income of $2,700,000.
1t was developed through ques-
tioning of Mr.. Saul that prior to
enactment of the Virginia law pro-
hibiting the company from making
loans to it's officers, it had twice
been criticized for the practice. The
Virginia Insurance Department in
1882, it was said, declared the prac-
tice to be open to criticism" and
suggested that the loans be re-
stricted because they were not in
the best interest of the company.
Digging deeper, the subcommittee
learned that when the firm was
undergoing a reorganization several
years later, five officers borrowed
$4,000 from the company for the
Shenandoah Holding Corp, of which
they held control, in order to make
a payment on the purchase of stock
in the insurance company.
Mr.. Saul said the Managing Com
mittee. which passed on the loans,
never discussed the propriety of the
action. since the loans were made in
legal manner and on collateral,
often more than two or three times
the value of the loan.