Newspaper cuttings, from the manuscript, MEGAdigital (MEGA² IV/19).1 Traducción al español
THE OVEREND AND GURNEY PROSECUTION.
Mr. EYKYN, in rising to call the attention of the House to the case of “Regina v. Gurney and others,” and to move that in the opinion of the House the prosecution of the defendants was of such national importance that the burden of it ought to be borne by the Government and the case conducted by the law officers of the Crown said that he considered the Stock Exchange were responsible in the first instance for having given a settling day to the company in the face of the clause in the prospectus guaranteeing all outstanding liabilities, because it was now perfectly plain that the company could not have substantiated such a guarantee, and if the Stock Exchange had done its duty the company could not have been started. They were the more to blame because in 1865 they tacitly sanctioned the issue of no less than 34,870,000l., which in the same or following year came into liquidation. Be that as it might, the ruin caused by this company was so vast that it assumed a national importance and the effect upon public morality if this case was not sifted to the bottom would be such as seriously to damage our national reputation for integrity. Dr. Thom alleged that he had already spent all the money which he was able to spend in this prosecution, and unless the matter was taken up by the Government, they would hear the hackneyed phase of there being one law for the rich and another for the poor. This case showed more than anything of late years the necessity of appointing a public prosecutor. If the persons charged should escape through the inability of the prosecutor to carry on the prosecution, the Lord Chief Justice having stated that the rules of the court would not allow of Dr. Thom appearing in person, it would be a disgrace and scandal to the whole country, because it would prove how easily wealthy defaulters could escape, even after their solemn committal to take their trial, and though nominally the Queen was the prosecutor. He justified his motion by the action of the Government in the case of the British Bank.
The SPEAKER informed the hon. gentleman that one amendment having been put and negatived on the question of going into supply, it was not competent to put another.
Mr. FOTHERGILL, who stated that he was himself a sufferer to the extent of 4,000l., considered that the prosecution was one which was instituted in a spirit of vindictiveness and revenge by angry speculators, who instead of making money had lost it. He was of opinion that there was nothing in the case which ought to induce the Government to step out of its way and prosecute the case at the public expense.
Dr. DALRYMPLE also protested against the Government taking up this case. He deprecated any discussion on the eve of this important trial, and said that although it might suit the press to write sensational articles on the case previous to trial, he did not expect the House of Commons to be made the arena for a sensational discussion, which he could only suppose was attempted to be introduced at the present moment for the purpose of prejudicing the case.
Mr. FAWCETT said that he only expressed the opinion of the independent members when he said that the motion had been defeated by the tactics of those who had resorted to the technical forms of the House to prevent any decision taking place. But clever as they thought themselves there was one mode remaining by which an expression of the opinion of the House could be obtained, and of that mode he would avail himself. The defendants were either guilty or innocent. If they were guilty let them be punished as they deserved; if innocent let their innocence be made clear; and with a view to give the House an opportunity of expressing, though in an indirect way, their opinion, he would move the adjournment of the House. (Cheers.)
Mr. MUNDELLA solemnly disclaimed the smallest vindictive feeling, but he should regard the breaking down of the prosecution for want of means as a public calamity, and he therefore felt bound to second the motion.
Mr. BRUCE indignantly denied that the Government had resorted to any tactical device to prevent the question from being raised; and the Speaker confirmed the right hon. gentleman. As regarded the prosecution itself, Mr. Bruce pointed out that there had been but one exception to the rule of non-interference on the part of the Government, namely, the case of the Royal British Bank in 1857, which had cost the country 20,000l. But had there been no instances of gross immorality since then? If the House thought that the Executive ought to interfere, it ought to have done it long ago. The Secretary of State who had directed the prosecution of the Royal British Bank directors had since expressed an opinion that that course ought not to have been taken; and the right hon. gentleman opposite had declined to assist in a proceeding against the Leeds Bank. In this case the Government had been called upon to undertake a prosecution when it had had no opportunity of investigating the case, and when the result of such an examination might have led it to the conclusion that there was no ground for proceeding. (Oh! oh!) He was expressing no opinion upon that point; but it was quite clear that the Government ought not to contribute to a prosecution on which it was not to have the direction. (Cheers.) Besides, the shareholders were wealthy enough to conduct the suit themselves if they were so minded, and the judge had now power to order the prosecutors their costs, if, after hearing it, he thought they were entitled to them. In a word, he saw no reason why this case should be treated as an exceptional one. (Hear, hear.)
Sir P. O’BRIEN thought that as the Government had been a consenting party to the passing of the Limited Liability Act, it was fair to ask it to assist an inquiry into the results of that measure.
Mr. GILPIN had relations who had been reduced to the verge of ruin by the failure of Overend, Gurney, and Co., but they would not add a feather’s weight to the load of humiliation, degradation, and suffering which had fallen upon the firm. (Oh.) The defendants were most anxious that the trial should proceed—(cheers)—but he protested against the power of the State being invoked at the last moment to carry on a suit began by a private person. (Hear, hear.)
Mr. S. HILL agreed with the Home Secretary that it had never been the practice of the Government to take up a case after the committal of the defendant. (Hear.)
The ATTORNEY-GENERAL had always supported the proposal for the appointment of a public prosecutor, but he agreed with his hon. and learned friend opposite that for the Government now to interfere would be a step wholly without precedent. The Government either prosecuted or it did not; but such a thing as for the Government to subsidise a prosecutor was never before heard of. The Government did not take up a case unless it felt almost a moral certainty that it would obtain a conviction. In his instance no depositions had been laid before it, so that the law officers knew absolutely nothing about the matter, and could form no idea as to the probability of success or failure. (Hear, hear).
Sir J. PAKINGTON did not think that either Mr. Hill or the Attorney-General had grappled with the real question. (Cheers.) For his own part, neither he nor any friend of his had suffered from the failure of Overend and Gurney; but he thought that if this prosecution would be created from one end of the country to the other. (Cheers.) It might be true that there was no precedent for the present proposal; but if there was not the House ought to make one; and he trusted that no such scandal would arise as would be created by the failure of this prosecution for want of funds. (Cheers.)
Mr. C. BUXTON said the subject was one peculiarly painful to him, but he was in a position to say that the directors of the company would deeply regret the breaking down of the prosecution, for they had, by the advice of their counsel, withheld their defence when they were before the Lord Mayor; and they believed that if the trial went on it would end in their triumphant acquittal. He would not characterise the conduct of those rich gentlemen who professed to think that they had been injured by misconduct on the part of the directors, but who had refrained from supporting Dr. Thom. Certainly the defendants would, above all men, regard the proceeding of the prosecution as a great boon. (Hear, hear.)
Mr. BARNETT agreed with the hon. gentleman who had just spoken, and thought that the Government had exercised a wise discretion in not interfering.
Mr. GLADSTONE said he was glad to hear from the hon. gentleman who had just sat down that there was a great likelihood that the prosecution would proceed, notwithstanding the decision of the Government. He thought the strong and positive assertion of the right hon. member for Droitwich was a little out of place when they considered that the proper time for undertaking this prosecution on the part of the Government was at the earliest stage of the proceeding, when the right hon. gentleman himself was in the Cabinet. No doubt the House had a right to interfere with the Government in the discharge of its executive functions; but it was an extreme right, and one which the House never dreamt of exercising only in the rarest cases. If an exception was to be made in this case, what were the grounds on which it was to be based. Was it on the moral enormity of the offence of the supposed delinquents? That could not be alleged in the present instance without the grossest inconsistency. Whatever might be said as to the magnitude of the ruin and the amount of the scandal, there could be no doubt that other cases of commercial immorality had been before them year by year without any call for a public prosecutor. Another important element was the certainty of the result. If they had a public prosecutor, he would not take up everybody’s case, but would carefully consider whether there was a probability of a conviction before he undertook it. But here they had no means of judging of the probability of a conviction. The motion of the hon. member for Windsor concluded by saying that the case should be undertaken by the law officers of the Crown. But the Solicitor-General had for months been retained for the defence. The third ground was a more plausible one, and that was that the shareholders had not the means to vindicate their own cause. But was that the case here? The fourth ground was the magnitude of the case. But the meaning of those words was, that although a portion of the shareholders might be persons of small means, others were persons of great wealth. No doubt it was a moral good that his hon. friend had in view. But (continued the right hon. gentleman) our object is to deter. And are we to say to a generation too greedy of money, when they adopt one of the most culpable means of obtaining money, that is to say placing their investments in concerns of which they know nothing at all, with a view of grasping large and easy gains—of gaining the fruits of industry without going through the toils by which those fruits are ordinarily obtained—are we to say “You have only to look to the best prospectuses, you may rush into speculation, the advertisement will stand you instead of intelligence and forethought—you shall have all these advantages, and if you fail you will fail with a tragic splendour, benevolent men will be excited to make motions in Parliament to assist you; and for your neglect of the rules of prudence, and for your hasty and incautious indulgence of the thirst for gain, you will receive the exceptional favour of the State, and the British taxpayer will bear the expense of carrying your case before a court of justice? (Loud cheers.)
Mr. R. N. FOWLER expressed his belief in the honesty of the accused, however much they might be mistaken, ant that the trial would vindicate their honour.
After a few words from Mr. Morrison and Mr. Clay in support of the motion, and Mr. Muntz against it, the House was cleared for a division; but none took place, and the motion was negatived.
THE ALBERT INSURANCE COMPANY.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—Mr. H. B. Sheridan, in his letter which was published in the Times of the 1st inst., states that in the year 1862 a valuation of the risks of the Albert Life Office was commenced by Professor de Morgan, and completed in 1864, and that the report of that investigation showed in the clearest manner that the result of the business was most satisfactory and profitable. I have never seen the Professor’s report, and am therefore unable to judge of the accuracy of that statement; but this I can assert, that it was not the opinion of the soundest actuaries of the day that the Albert was at that date in a satisfactory condition, but that on the contrary it was considered by them to be in a state of insolvency; and I have reason to know that the confidential advice which would have been given by them to any friend who was unfortunate enough to hold a policy in that company would be, to surrender it on any terms.
Mr. Sheridan wishes the public to draw the conclusion that the money which he received from the Albert was merely a commuted commission for the introduction of ordinary business. To this I demur, because a heavy commission had no doubt already been allowed by the transferred office to the original introducer of any policy, a commission which, to my knowledge, often amounts to one per cent. on the sum assured, or fifty per cent. on the first year’s premium, with, in either case, five per cent. per annum on the premium afterwards. In addition to this, it is certain that the commissions on many of the transferred policies had already been commuted by the payment of a lump sum to the original agent. The sum which Mr. Sheridan received was not paid by way of ordinary commission at all, but for his diplomatic skill in being able to transfer the business of a sinking concern to another of better reputation.
Now that public attention has been drawn to this question of compensation it would be well if shareholders as well as policy-holders insisted upon knowing the sums which have been allowed in all the various amalgamations which have taken place during the last fifteen years. It is true that many of such sums are irrecoverable, but there are many which are still being paid by way of annuity by offices which can ill afford it, and such sums are out of all proportion to the work which has been done for them, and in fact as a rule they are the reward of mismanagement. Looking at the question entirely as a matter of income, it has scarcely paid a manager to work his office successfully during the last few years, since he could make so much more money for himself by letting it drift into amalgamation.
Until life assurance companies are compelled to publish the date on which their valuations are made exposures like that of the Albert will periodically occur, as unscrupulous actuaries and well-paid managers can, by a mere alteration of the rate of interest on which their calculations are based, prove anything; and so long as a certain amount of new business can be obtained, the first break down is for many years averted. At the present time the ordinary topic of conversation in well-informed insurance circles is the number of months that more than one of the very large assurance companies will be able to survive.—I am, &c.,
JNO. L. OLIVER. 45, King William-street.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—I ventured to send you last week an extract from the form of policy in use by the above office, from which shareholders might calculate the extent of their liability, and policy-holders that of their security. I would not attempt to draw any practical conclusions, as I felt that the “disturbing elements” were far too numerous and potent to admit of even an approximation to the truth being arrived at. I do not place the smallest reliance on the calculations put forward, and I look upon the “reconstruction scheme” as about on a par with the famous Laputian one for extracting sunbeams from cucumbers. The disturbing elements I refer to are the incalculable but frightful cost of the winding-up machinery there seems so earnest a desire to set in motion, the vast field for ordinary and extraordinary litigation, arising out of the questions of liability of the shareholders to the annuitants and policy-holders, and of one set of shareholders to another, and their unascertained ability to meet the calls that will be made. I would now offer a practical suggestion, that may be worth the consideration of such of the policy-holders as are in position to avail themselves of it, and which, simple as it is, may not have presented itself to all of them. The class I refer to is not perhaps so large as might be wished, but still considerable—policy-holders, viz., of a comparatively recent date, and who are now in good health. To such I say—Cut the connexion, waste no time in attending meetings, no money in litigation, treat your payments as lost, abandon your claim, and at once effect a new insurance in some really good and solvent office; there are plenty to choose from, and there is not a solicitor in London of five years standing who cannot point them out. The loss to such will not be very serious; it is not represented—as might at first sight appear to be the case—by the premiums paid; for up to the time of stoppage consideration was received for them. Claims were paid as they arose, and the insurance paid for was actually enjoyed. The real present loss is limited to the surrender value of the policy, the future to the excess of premium paid for the new insurance, and that in the case of young lives will be very trifling indeed. It may, too, be fairly expected that offices would treat the insured under the peculiar circumstances with exceptional liberality.—I am, &c., G. R. Lincoln’s-inn-fields.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—Will you please permit us through the medium of your columns to express on behalf of our clients, who are shareholders, policy-holders, and creditors in this company, our entire concurrence in the resolution passed at the meeting at Manchester yesterday on the motion of Mr. Probis, and also to thank that gentleman and the other policy-holders who supported the resolution for the confirmation which it affords that we were right in advising our clients to apply for the dismissal of Mr. Kirby from the office of provisional liquidator? Our clients desire that their interests, which pecuniarily are of very considerable value, should be protected independently, except and until a sound and equitable arrangement of the affairs of this company can be preferred, which would be acceptable to all concerned; but no such arrangement has yet been brought forward. Upon the request of our clients we have instructed Mr. W. J. White, whose peculiar experience in the liquidations of insurance companies is a matter of notoriety (especially having regard to his very satisfactory liquidation of the Hercules Insurance Company), to prepare a proposal for such equitable arrangement, which will be submitted for the Vice-Chancellor’s consideration on the hearing of the petitions for the winding up of the company, when we believe there will be two or more schemes brought before his notice; and we confidently expect that the proposal for an arrangement which Mr. White will then submit will be such that will not only merit his Honour’s approval, but will recommend itself as a satisfactory basis for the solution of all the complications of the disastrous affairs of this company. It is only just to inform the public that the proposed schemes for reconstruction have not yet been fairly submitted for his Honour’s consideration.
The whole matter will be fully discussed before the Judge on the 17th inst., and while we shall carefully guard our clients’ interests, that they be not committed to any of the various channels open for litigation, we shall advise them not to discountenance, but, on the other hand, to support the best means that can be adopted to stay litigation and expenses, and dispose of the business of the company to some one or more of the present well-established insurance company or companies, which would secure a guarantee of the minimum loss to the shareholders and the maximum value to the assured therein.—We are, &c.,
MERRIMAN and Co. 28, Queen-street, City, E. C., Sept. 2.
THE Directors of the European Assurance Society are making a somewhat superfluous appeal to the Policy-holders and Shareholders. It is but of little use to tell them, in the largest of capital letters, not to be alarmed, unless some figures can be given which will show them that the alarm is needless. It is, indeed, not quite obvious what harm it can do if the policy-holders and shareholders are alarmed. In the present position of affairs the Society is not likely to do any new business, and no shareholder can throw up his shares nor can any policy-holder demand the surrender value of his policy, for the Directors have already said that “in the interest of the great body of “policy-holders” they decline to purchase any more of the Society’s policies. Nor is it much to the point that the Directors are still “in full assurance of its sound position.” Their complete belief in the Society’s position is no sufficient reason for the public to believe in it. They have sent out such assurances so long and so often that the public cannot now rely upon their judgment. The policy-holders and shareholders may do far more harm to their own interests by accepting these assurances than they can possibly do by continuing their alarm. Whether the petitions for winding up are “unwarrantable” or not, they equally come on for hearing this day week, and the policy-holders must be prepared to establish their position in the liquidation should a winding-up order be made. Even if the position of the Society is as sound as the Directors believe it to be, it has been so shaken by recent events that nothing but an independent investigation can satisfy the policy-holders, and they must organize themselves, if only to enforce such an investigation. Meanwhile soundness is a demonstrable thing. It can be set out in figures; it can be proved by facts. Let the Directors and their Manager give the figures and the facts. Their balance-sheets are before the world; but by mystifying the case they cast suspicion over it. Let us have at once a clear balance-sheet, showing the liabilities and their nature, setting forth the assets in detail, describing the exact quality of the securities, and making the sound financial position of the Company so clear that even the unlearned in figures may understand it, and the learned in figures may approve. The Directors must have had some such statements before them or they could not, as men of business, arrive at the full assurance they profess. It can hardly be with them merely the full assurance of faith; and we can assure them that even if it is they will never communicate it to the public merely by printing it in capitals. Let us have it in figures, for in such a case seeing, and only seeing, is believing.
THE ALBERT LIFE ASSURANCE COMPANY.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—As some misapprehension exists with reference to the extent of the shareholders’ liability in the above office, the enclosed extract from one of the policies may not be uninteresting to your readers.—I am, &c.,
G. R. Lincoln’s-inn-fields, August 20.
“Provided also that the funds or property of the said society, consisting of the sums and moneys of which the two funds, respectively called “The Proprietors’ Fund” and “The Assurance Fund,” may from time to time be composed, according to the directions contained in the deed of settlement of the said society, and of the stocks, funds, securities, and property, in which the same may from time to time be respectively invested, and of so much of the capital of the said society for the time being held in shares by proprietors and others, as shall not for the time being have been paid up, or according to the provisions in the said deed of settlement in that behalf contained, treated and considered as paid up, and for the time being remaining unapplied and undisposed of, and inapplicable to prior claims and demands in pursuance of the trusts, powers, and authorities contained in the said deed of settlement, shall alone be answerable for all claims and demands upon the said society in respect of this policy, and neither the directors signing this policy, nor any other proprietor or holder or holders of shares in the capital of the said society, shall, when any claim or demand shall be made in respect of this policy, be individually subject or liable to such claim or demand beyond so much of the shares then held by him, her, or them in the said capital, and not subject to prior claims and demands, as shall not for the time being have been paid up, or according to the provisions in the said deed of settlement in that behalf, contained, treated, and considered, as paid up, and no other person shall upon any account whatsoever, be in anywise subject or liable to any claims or demands in respect of this policy.”
TO THE EDITOR OF THE DAILY NEWS.
SIR,—I have read the various letters of your correspondents, and beg to inform them that measures are being taken by myself and a number of policy holders to procure an independent supervision of the companies’ affairs. If your correspondents will communicate with me I shall be happy to inform them how it is proposed to obtain this.—I am, &c.,
ALEX. WERNER. 41, St. Mary-axe, E. C., August 20.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—I have been this day instructed by the Secretary of the Investigation Committee to act on behalf of the committee, and I am desired to notice the letter of Messrs. Lewis, Munns, and Co., solicitors for the provisional liquidators, published in your paper of yesterday. My clients approve the suggestion made in your issue of Thursday, that at the outset an independent name should be associated with those of the provisional liquidators to represent the policy and shareholders until after mature consideration a course of action be determined on.
My clients make no suggestions; their maxim is audi alteram partem. But they require the most thorough explanations and the fullest investigation. They challenge the right of trustees to shield themselves from responsibility for the gigantic ruin impending over the heads of thousands, and they will discharge with unflinching resolution, and at the expenditure of adequate labour, the duty the policy and share holders have reposed upon them. The solicitors to the liquidators shadow forth a plan for the “reconstruction of the company,” which they state will be issued “in a few days.” Meantime a circular has been issued by the secretary of the company, convening a meeting of the shareholders for the 28th instant, to sanction the registration of the company under the Companies Act, 1862. It is manifest that, looking to the enormous interests involved, undue haste is to be avoided. The fullest inquired should be courted by those now invested with authority, and this is all that is required by those for whom I am acting, before being asked to consider or assent to any “plan of reconstruction.”—I am, &c.,
WALER WEBB, 27, Gresham-street, August 20.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—I see by a letter in your money article of to-day that a strict investigation of the affairs of this company is being made by Mr. S. L. Price, the well-known accountant. It would, I feel certain, be very instructive if Mr. Price would give us the amount of compensation paid to the respective managers of the following companies absorbed by the Albert Life Office—viz., the Falcon Insurance Company, the Kent, Mutual, the Anchor, the National Provincial, the Bank of London and National Provincial, the Medical Invalid and General, and, I believe, two or three others, the names of which I cannot at the moment call to mind. I feel sure if this can be done the policy holders and the public will learn how it is that amalgamations so often take place, and it will no doubt be a warning to avoid insuring in an office that has made its business by the combination of a lot of companies got up for the sole purpose of being transferred, in order that the managers (who have in nearly all cases been the promoters) may bag some 5,000l. to 10,000l. each, as compensation for the supposed loss of their appointments. I very much fear there are several offices built on the same rotten foundations, with large incomes, in quite as bad a position as this unfortunate Albert, and which would, on strict investigation, be found hopelessly insolvent.—I am, &c.,
W. H. August 20.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—I feel that you will excuse me troubling you, but I cannot help telling you a little about my affair with the Albert. In 1834 I think it was that my late husband and me were at Exeter Hall, and we saw strewd over the seats prospectus of the Times Life Assurance Office on Ludgate Hill, and in them it spoke of that office as being so suteable for the working classes as they took the money quarterly, and we had not seen any other that took the money quarterly, so we made great sacrifices, and has paid ever since my husband died, five years ago, and since that time I have struggled to pay the £3 6s. a year. I can assure you that it has distressed me fearfully as the quarter comes round, even the week before last I was obliged to borrow the money, as I have a sister that works hard to help me to keep my home, and would never marry, tho she might have done so while our mother lived, and now my mother has gone to her rest in her 89 year, my sister will still work to keep our home, but I do not wish to fill this letter up with my distress; only seeing your remarks in this day paper about folks saying they knew the Albert was going, and they could have told me so 3 years ago, one lodger said this to me on wednesday when I spoke about it after reading it in the Daily News, and another said how much better if you had put it in a bank, and another person said that gone that 45l. that you have half starved to pay, and a 4th has said the same, but Sir these people that have this world comforts cannot see that working people cannot do what they can, we do work very hard from 4 in the morning till late at night to keep our home, but I feel my sister and me cannot always work if we are spared, as even now we are getting old and I cannot see very well, but what I want to tell you Sir is they never ask the policy holder weather they will continue or not but send as usual every quarter the notice to pay my 16s. 6d. and once I could not get it till one day after and they made me go to the Dr. to see if I was still in health before they would take the 16s. 6d., that was last year and I would not have submitted to that only I had paid more than 40l. and of course I thought of my sister and felt that was the only way that I could do anything for her if I was taken from this world, now only think Sir how I feel now I fear I shall not be able to leave her A shilling, surely some protection ought to be given to those who are obliged to trust to others it does seem so cruel I feel for others as well as ourselves, hopeing you will excuse me takeing up your time to read this I am your Obedient Servant,
H. M. August 20
TO THE EDITOR OF THE DAILY NEWS.
SIR,—The scandal recently unveiled of the Albert Life Assurance Society must keenly affect and prejudice the business and credit of all existing offices, but there are some points to which your correspondents have not directed attention, of great interest to the unfortunate victims of such transfers or amalgamations with other offices, and I desire to prove how such amalgamations may set all prudence of selection at defiance. In my own case, I assured 1,000l. with the Family Endowment Society (absorbed by the Albert), being influenced by the high names attached to its direction and proprietary. Are such to prove no protection to those unwillingly transferred, and who groan over the grievous additional wrong that for 20 years the full rate of premium has been exacted without reduction, ending in a breach of contract now beyond repair? Surely some legal claim must attach to the original directors of the office who signed such policy.—I am, &c.,
A VICTIM.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—Every life insurer must thank you for the article in yesterday’s paper. It is to me surprising that so much notice should be taken of the Albert, and so little of the failure of the International, which, as the National Loan Fund, was established about 1836, as I have a receipt for 10l. 15s. for a life annuity, dated Nov., 1837. From all I can gather the Hercules took off all the liabilities of the International last May twelvemonth for 77,000l. (the two negotiators receiving 8,000l. and 10,000l. respectively, in hard cash, for their share of the business). The Hercules came to grief in February last; and instead of 77,000l. being the price for the liabilities, &c., of the International, no less than 329,685l. is the sum to be paid the Prudential for taking off all the International liabilities, as by circular inclosed from Mr. Maynard, the liquidator. I may add I wrote Mr. Bright some months since, giving him particulars of the International matters, and received from his secretary a very courteous reply. Life insurance has never had such a blow before.—I am, &c.,
W. J. CLARKE. Bath, August 19.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—Observing the notice of meeting called for the 26th inst., allow me to urge the policy-holders firmly to unite in requiring that the shareholders and directors be held responsible for the due return of the moneys paid in premiums to all such as may object to enter a reconstructed company. The shares are not “limited.”—I am, &c.,
ONE WHO HAS PAID PREMIUMS FOR MANY YEARS.
(From the Insurance Record.)
It is a most difficult thing to get at any reliable data as to the present state of affairs, but when a valuation of the assets and liabilities of the office was made by Professor De Morgan, in 1861, the result showed that after the valuation of the sums assured and the gross premiums, and a distribution of 50,000l. as bonus, the reserve for future profits and expenses was not equal to 10 per cent. of the value of the gross premiums. If on that occasion the whole of the loading had been reserved, as it ought to have been, it would have been impossible to have divided any bonus at all. At this period the sums assured were about 7¼ millions, and the assets were 747,939l. These assets consisted of the following items:—Government stock and East India Government paper, 113,226l.; mortgages, 143,159l. bonds, freehold property, and other investments, 253,969l.; loans on policies, agents’ balances, current interest, premiums due and since paid, and other assets, 121,449l.; life interests and reversions, 71,395l.; value of policies with other offices, 13,679l.; cash at banker’s (deposit and drawing account), 31,062l.; making, as above, 747,939l. At the end of December, 1863, the assets had been reduced to 714,846l., whilst the liabilities had slightly increased. From that time to the present the assets seem to have declined very rapidly, until they are now something like 400,000l., and of these it appears that only the sum of about 180,000l. is absolutely available to meet policy liabilities, which amount in round numbers to 8,000,000l. In addition to this large sum there are annuities of about 22,000l. a year, which, at eight years’ purchase, may be set down at 176,000l. To meet these large liabilities there is the 180,000l. already mentioned, and an annual income of about 350,000l. Assuming, then, the annual premium income to be 300,000l. the value of the liabilities under the policies, estimating them at the moderate rate of three years’ purchase, will amount to 900,000l. Setting the annuities and assets against each other, there remains a deficit of a sum but little short of a million sterling. It may be imagined, therefore, that the shareholders are not in a position of themselves to make up this deficiency. Many of them have, no doubt, been large sufferers through the failure of other unfortunate concerns within the last few years, and are already to a certain extent “skinned out.” If, then, the shareholders are unable to meet the demands upon them, the policyholders must suffer. To what extent they will be called upon to do so it is impossible to say until a fair valuation of the liabilities and assets has been made. The office may be able to pay them, say, 10s. in the pound for a few years, and then on a fresh valuation, according to some principle yet to be defined, this may be increased or decreased as the experience of the office may justify. Of course, any arrangement with the policyholders such as that indicated will require the sanction of the Court of Chancery before it can be carried out. That sanction may be withheld, but if it be given, the probability is that the young and healthy lives will retire from the office, as it will be more to their advantage to lose the few premiums they have already paid than to continue paying for years for what they will never get by a very large percentage. The old and diseased lives will probably keep their policies in force, and consequently the claims will be excessive during the whole period of the existence of the office. Until some scheme is propounded and laid before the policyholders, it would be premature to offer any advice on the subject. There are one or two committees being formed for the ostensible purpose of protecting their interests, and with reference to these we would only caution those interested against putting their fingers, as the French say, “between the hammer and the anvil.” A meeting of the shareholders and policyholders has been convened for Thursday next at the offices of the company.
THE CASE OF OVEREND, GURNEY, AND COMPANY.
Yesterday, at the Justice-room of the Mansion-house, Mr. Richard Bridgman Barrow, a magistrate for Derbyshire, described as of Sydnope-hall, Matlock, appeared before the Lord Mayor and Alderman Sir Robert Carden, on a summons which charged him with writing and publishing a certain false, malicious, and defamatory libel of and concerning Dr. Adam Thom and Mr. Oswald Howell, well knowing it to be false.
The charge arose out of the investigation recently made into the case of Overend, Gurney, and Co., in which, it will be remembered. Dr. Thom was the prosecutor, and Mr. Howell the accountant. The defendant, Mr. Barrow, was a shareholder in the company, and gave evidence against the directors in January last, before the Lord Mayor. An association was formed among the shareholders for the purpose of the protection, of which the respondent was appointed chairman, and the alleged libel was advertised in some of the daily papers at the end of last week. It bore the signature of the defendant, and was as follows:—“Overend, Gurney and Co. (Limited).—Notice is hereby given, that Oswald Howell, late partner in the firm of Messrs. Walker, Reddall, Nix, and Howell, of 39, King-street, Cheapside, London, and now a bankrupt, was (by a resolution passed at a properly constituted meeting of the committee of the Shareholders’ Association, for taking common law proceedings against the directors, Mr. Holm and Mr. O’Reilly assenting, and which resolution was subsequently duly confirmed) discharged from acting any longer for such committee, in consequence of his having withdrawn from the Bank of England, in conjunction with Adam Thom, several large sums of money belonging to and without the consent of such committee; that the said Oswald Howell had no authority, since his discharge, to issue circulars, or to do any other act by or on behalf of the said committee. (Signed) RICHARD B. BARROW, Chairman.”
Mr. Howell and Dr. Thom alleged that that statement was false, and that it had been maliciously made by the defendant to prejudice them on the trial of the directors.
Mr. Campbell was counsel for the prosecution; Mr. Serjeant Parry and Mr. Montagu Williams appeared for the defence.
Dr. Thom said he was very sorry that he should be called upon to proceed in this case against a gentleman with whom he had previously been on terms of personal friendship. The advertisement in question had been published to his prejudice and that of Mr. Howell in two daily papers, and the proceedings had been taken to vindicate their characters before the public. He contended that the publication was unprivileged and unjustifiable, but he assured the bench that he bore no hatred against the defendant, and that this proceeding was not taken vindictively. The advertisement, he urged, comprised a most elaborate libel, and he would show that it was utterly devoid of truth. He denied the allegation that Mr. Howell had been discharged from his position on the committee, that any meeting of the shareholders had been called for that purpose, and that the defendant held the office of chairman of the committee. He should prove these circumstances, and then apply that the defendant might be committed for trial.
Dr. Thom then entered the witness-box, and deposed that on the 11th of September he saw in a daily newspaper the advertisement in question, which was read to the court. The person there named as “Adam Thom” was himself. The allegations in it as affecting himself were untrue from beginning to end.
Cross-examined by Mr. Serjeant Parry—Mr. Barrow and witness were both shareholders in this company, and the defendant occupied the position of chairman of the committee of shareholders. The other members were witness and Messrs. Holm and O’Reilly. Its object was to obtain compensation from the directors of the company in common law proceedings. There had not been the slightest pretence for saying that he had put one penny into his own pocket out of the funds subscribed by the shareholders towards the cost of these proceedings. The first difference between him and Mr. Barrow was in February last. He had charged Mr. Barrow with “an attempt at shameless exaction.” The trustees were not allowed to draw cheques except by direction of the committee. In all, 2,350l. was subscribed. Witness had not paid a single farthing in money to that fund. Mr. Barrow held 200 shares, and paid 3s. to the fund on each share. No proceedings in common law had been taken. There was a payment of 200l. to Mr. Linklater, the solicitor, on account of some equity proceedings, 500l. to Messrs. Lewis and Lewis, solicitors for the prosecution in the criminal case, 200l. to Mr. Howell’s firm. Mr. Barrow objected to the payment of such sums, and expressed his dissent. He did not knew that 22l. was paid for depositions in the criminal case, and 58l. for stationery. Mr. Barrow also objected to that expenditure. The sum of 64l. was paid to Mr. Howell’s firm for rent of a room to the committee by a cheque singed by witness and Mr. Howell. Witness, Mr. O’Reilly, and Mr. Howell were trustees of the money, and two of them had to sign cheques. There was a suit in Chancery against a shareholder named Oakes, the result of which was that 1,800l. had to be paid to the liquidators. Witness and Mr. Howell, with others, were guarantees for that sum, and were pressed for its payment in July last. The sum required of witness and Mr. Howell was 900l., and a cheque was drawn for that amount out of the fund, signed by witness and Mr. Howell. He had no authority to do that by the committee, but it was agreed to at a meeting at which witness, Mr. Howell, and Mr. Reilly were present. Mr. O’Reilly declined to sign that cheque, as he wished it to be reserved for criminal proceedings. He would swear that Mr. O’Reilly did not call it a misappropriation of the money. The cheque was eventually signed on the 30th July, and Mr. Barrow did not know of it until August 20. The defendant, Mr. Howell, and Mr. O’Reilly then went to Ashurst, Morris, and Co., and witness as a committeeman alone remained. The sum was subsequently replaced on September 7, witness having been threatened with proceedings by Ashurst, Morris, and Co. That sum was replaced by Mr. Thos. Clark, a shareholder, but witness was no party to it, and was hostile to it. Witness subsequently declined to attend the meeting of the committee at Ashurst’s office.
Mr. Alfred Street, clerk to Mr. George Street, advertising agent, 30, Cornhill, produced the manuscripts of the advertisement in question, which he said were inserted in the Daily Telegraph, Daily News, Echo, on Saturday. The Times, Standard, and Star refused to insert it. He received the advertisement from Ashurst, Morris, and Co., and not from Mr. Barrow.
That was the case for the prosecution.
Mr. Serjeant Parry said the prosecutor had had an opportunity of explaining his transactions in the matter, and he was instructed by the defendant to say that not the slightest allegation was made against either Dr. Thom or Mr. Howell of personal fraud or misappropriation. He only wished to object to the payment of certain sums, and if the advertisement had led to any other belief, he could only express his regret.
Mr. Campbell, on the part of Mr. Howell and Dr. Thom, expressed himself satisfied with the statement made on the defendant’s behalf.
The defendant explained that he had not the slightest intention to impute any personal fraud or dishonour against either of the complainants.
The Lord Mayor then allowed the summonses to be withdrawn.
ANOTHER step in the fortunes or misfortunes of the Albert Assurance Company was taken yesterday, and both shareholders and policy-holders may consider themselves fortunate in having emerged from the confusion of the last few weeks into certainty. The Company is to be wound up, and the winding-up order will issue on two petitions, one of which represents the Company, and the other the Policy-holders. The policy-holders have allowed themselves to be somewhat divided, and their efforts to get complete control of the liquidation have been frustrated. Vice-Chancellor JAMES’s rebuke was by no means undeserved, and it may be hoped that the refusal of costs to persons who had illustrated the ancient proverb about the carcase and the eagles, will act to prevent further needless litigation. The liquidation will now probably proceed under two liquidators—one to be appointed by the petitioners who represent the policy-holders, the other by the Company. The shareholders meet on the 21st for this purpose, and they will probably still endeavour to devise some scheme for the resuscitation of the Company. Any such scheme must of course be entirely independent of the liquidation, and can only appeal to the policy-holders individually, by offering them something better than the mere dividend on their claims the liquidators may give them. But it is impossible to be sanguine of the success of any such proposal, and the unfortunate shareholders will probably have to make up their minds to pay off the rest of their liability and to bear their loss. It is the policy-holders who are most interested in quick and economical liquidation, and they have already reason to thank Vice-Chancellor JAMES for his determination to protect the property against litigation, “for which there was no pretence, but an attempt to get costs.”
The liquidation of the Company will be by no means a simple matter. On its very threshold there are two questions which the future liquidators will have to try, on the solution of which the success of the liquidation depends. As matters now stand the prospects of the policy-holders are by no means encouraging. The liabilities to the policy-holders and annuitants are set down in the provisional liquidators’ report as 1,297,932l., a sum which represents, of course, only the value of the policies, less the estimated value of such premiums as may be due on them. The assets, reckoning everything, are 430,021l. 2s. 10d., leaving a deficiency of 971,837l. 2s. 2d. Of these assets the sum due from the shareholders is only estimated at 150,000l. whereas their actual indebtedness amounts to 321,000l. But Mr. PRICE has stated that his experience as a liquidators does not justify him in reckoning on more than the sum he has named proving actually recoverable. It may be said that even on this statement the assets amount to about a third of the liabilities; but no creditor would be wise who estimates that he will actually receive even a fourth of his debt. Liquidation is always expensive and tedious, and several small dividends spread over a term of years is all that can be hoped for as matters now stand. But the question is, Are all available assets brought into Mr. PRICE’s reckoning? Is anybody else responsible? Is any of the squandered money recoverable? To the first question the Chairman of the Manchester Committee gave a very positive affirmative answer, and said that counsel’s opinion had been taken as to the liability of the shareholders in amalgamated companies, and the opinion was that they were liable. On the other hand, the liquidators and their solicitors, in their published statement, while they express a vague hope that some of the squandered money may be recovered, express a far less vague doubt whether the amalgamated shareholders are responsible at all. Indeed, the whole existence of this remote and scattered body of persons is involved in some degree of nebulosity. It has not yet been stated how many of the Albert shares and shareholders have become so by transference from other companies, or whether any have been so translated; but it is certain that, in any case, a very large number of persons must have held shares in those companies who are not Albert shareholders. Should these unfortunate persons be held responsible to their transferred policy-holders their contributions will considerably increase the assets, though those contributions will be the special property of transferred policy-holders, and will not go into the general fund. But though the question whether these unfortunate persons can be made responsible is one which affects many thousands of shareholders, not only in the Albert but in other of the great amalgamating companies, it is of far more public importance to solve the other question raised at the policy-holders’ meetings. The Albert has paid 283,011l. 0s. 4d. to amalgamators and others in so-called compensations and commissions, in what are called the cost of transfer. It paid an enormous commission to its late Manager—giving him an income, it is said, of many thousands a year. Were these payments legal? If not, can any portion of them be recovered, either from those who made them or from those who received them? This question interests the policy-holders, as bearing on their dividend; it interests the public, as bearing on the responsibility of the directors and officials of great companies in dealing with money which is, in a sense, public money. Incurring as they do a great public responsibility, and performing as they aim at doing a great public function, it will be well to know whether a public responsibility can be brought home to them or not. If it can all may be well; if not, some legislation must be undertaken which shall bring their legal responsibility more nearly to the level of that social and moral responsibility they so greatly overlook or so utterly deny.
THE ALBERT LIFE ASSURANCE COMPANY.
TO THE EDITORS OF THE DAILY NEWS.
SIR,—The “nostrum” of your correspondent, “Life Assurance,” as set forth by him in the Daily News of to-day, would only aggravate the company’s condition. He evidently considers 55,000l. an enormous reserve to put by for 8,000,000l. odd liabilities—it is not ¾ per cent., and even this has to be reduced by the payment for annuities. I have been for the last fortnight investigating actually a plan similar to what I presume “Life Assurance” to mean; but the result has proved the idea utterly impracticable. I took four different hypotheses as regards lapsed policies, the percentage of these to existing risks varying from 5 to 25, with a gradually increasing rate of claims by death, commencing at three per cent., and interest of money four per cent., the present assets of the Albert and the unpaid capital being placed to the credit of the new company. Under these not unfavourable suppositions there resulted an “Assurance Reserve Fund” of from 15 to 18 per cent. on the sums assured, at an interval ranging between eight and ten years—not sufficient for the then state of the office on the basis of Messrs. Jellicoe and Bailey’s valuation by from one-third to one-fourth. After that date matters only grew worse. The great difficulty in any project for resuscitating the Albert is that in order to start the company on a sound basis the young lives must submit to have their policies reduced to such an extent as renders it more advantageous for them to leave the company at once.—I am, &c.,
WILLIAM KING. English and Scottish Law Life Assurance Office, 12, Waterloo-place, London, Sept. 10.
TO THE EDITORS OF THE DAILY NEWS.
SIR,—I have read with much interest the letters published in your columns in re the Albert Life Office, and am astonished to find that no one, as yet, has moved for a list of the shareholders. We are under the impression here that they are worth more than 1,000,000l. Will some one in a position to inform us let us have some information on this point? I was originally in the Western, and the policy having been assigned, I am informed that the holders, in default of the “Albert” satisfying their claims, can proceed against the “Western” shareholders, probably many others are in a like position, and I should be happy to join trying this question.—I am, &c.,
X. Liverpool, Sept. 9.
TO THE EDITORS OF THE DAILY NEWS.
SIR,—Your correspondent “Life Assurance” seems to me to have come nearer to the mark in the suggestions that he makes for the bringing out of the policy-holders of the above unfortunate concern with the least loss than any who have undertaken so delicate a task. His suggestion appears to me to be excellent as a groundwork, but no more; and I venture to submit the following short outline of a scheme which, if fully carried out, would, I think, be the most satisfactory which has yet appeared. I used scarcely say that for the successful working of any scheme of reconstruction it is absolutely essential that the co-operation of all (that is to say, of practically all) the policy-holders should be obtained, for if the younger and more healthy lives are content to pocket their losses, and rush off to other thoroughly established and reputedly solvent offices, nothing can be done with the rest; for it needs but little discernment to foresee, that if a new society were to be formed to take over only the worst of any company’s business, it would soon find itself in much the same position as the Albert at the present time.
A new society to be formed on the mutual principle, to take over the policies of the Albert, the assured paying the increased premium which would have been required had they joined the Albert at their present age. This renders policy-holders free from liability to rejection on a fresh medical examination.
Two eminent actuaries to be employed to make a valuation of the loss sustained by policy-holders having to pay increased premiums for the same assurance; and the sum so ascertained (and fixed by the Court of Chancery, if need be) to be regarded as the claim which the policy-holders have upon the Albert, and the various offices which have become incorporated therewith.
A deed to be executed by which the policy-holders vest in their directors for the time being, as trustees, the amount of their claim as so ascertained, with full power to realise everything, as far as law will permit, until the said claim shall have been completely liquidated.
The amounts so realised to be regularly invested, but kept quite distinct in the books of the society, and to be apportioned periodically in the form of a reversionary bonus upon all the policies which may be entitled to participate (that is, upon all taken from the Albert, and not any new ones which have been issued), due regard being had to the age of the original policies. In this way those who had suffered most, i.e., the oldest policy-holders, would receive the largest return.—I am, &c.,
W. W.
TO THE EDITORS OF THE DAILY NEWS.
SIR,—In reference to the lamentable disclosures of the conduct of the business of the Albert Life Assurance Office, some of your correspondents have suggested the policy of appointing a Government inspector, in order to test the accuracy of the statements issued by life or other assurance offices. The suggestion is worthy of consideration; but I would ask what advantage would be derived from Government inspection if the mode of auditing public accounts generally adopted by auditors, of merely attesting the totals or aggregate, be persisted in, instead of systematically going into the details, and comparing every voucher with the books of the company? I know some will say that the above mode is simply impracticable, on account of the length of time it would involve, and the multiplicity of vouchers which would have to be waded through. An auditorship, unless practically carried out, is merely a nominal office. I venture to assert that if the accounts of the Albert Life Office had been properly audited the present unhappy results could not have occurred, for the true state of the affairs of the company would have been apparent six or seven years ago; and if the same strict principle be applied in all the existing assurance offices, every unsound office would be weeded out, and we should feel that we have an impregnable barrier against unscrupulous persons making out fictitious balance-sheets, and thereby imposing upon the confiding shareholder.—I am, &c.,
ALBERT. St. John’s-road, Isleworth, Sept. 9.
TO THE EDITORS OF THE DAILY NEWS.
SIR,—I have no desire to be drawn into a newspaper controversy on points of detail involved in any scheme for disposing of the business of the Albert Assurance Company, whether that scheme be a reconstruction on a similar basis to its present constitution, or a mutual basis, with or without a special Act of Parliament.
The one point about which I was most concerned when I addressed you on Monday last was the obvious desirability and importance of keeping the Albert business together, with the view of making the best of it for all parties. And there is nothing in the argument of “W. J. Thompson” necessarily opposed to this object. Let it be assumed that in this matter of the Albert, as in all others, it is every man’s duty to do the best he can for himself, it may still follow, as I hold it does, that the Albert policy-holders as a whole will do best for themselves, individually and collectively, by acting together. They may not, perhaps, by taking this course, do best for individual agents of other offices. But that is not their case.
The twenty-year old example adduced by Mr. Thompson in support of his particular project must in fairness be regarded as exceptional, and certainly quite insufficient as date on which to rest a general case, as few persons assure at the age of 20. Youth, however, I might almost say extreme assurance youth, is indispensable to this view. The “bonus” element of Mr. Thompson’s case is also exceptional, and at best of doubtful quality. Personally I am opposed to the “bonus” system as usually pursued and to Mr. Thompson’s example we can attach just so much importance, and no more, as may properly be given to a suppositious case. The Albert itself has paid “bonus” of one kind or another. The word “bonus” is, in too many cases, a mere bait on the assurance book. It is one of those things which it is very well, or not very well, as the case may be, for life assurance agents to play with. But if a man would make his estimate soberly and act with safety, it will be always most prudent to regard that little word “bonus” in a purely piscatory sense. I repeat, sir, the great matter for the Albert policy-holders, as individuals and as a body, is to fix upon some authoritative well-chosen scheme for dealing with the whole business, in order that the best interests of the whole body may be conserved, by saving what remains of the assets from being divided amongst antagonistic lawyers and rival liquidators; and, at all events, from that most of all to be dreaded eventuality—liquidation pure and simple.—I am, &c.,
JAS. BUCKLE. London, Sept. 9.
TO THE EDITORS OF THE DAILY NEWS.
SIR,—With reference to the remarks of a gentleman at a meeting of the Albert Assurance Company, published in the Daily News of this day, would you be so kind as to permit me to say, that I am not, as supposed by many, the Dr. Beattie alluded to as being a director or that Company?—I am, &c.,
ALEX. BEATTIE, M. D., 45, Porchester-terrace, Hyde-park, Sept. 10.
THE “SYSTEM” FOR PLUNDERING THE PEOPLE.
TO THE EDITOR OF REYNOLDS’S NEWSPAPER.
SIR,—It is to be hoped that the scandal originated by the near failure of the Overend and Gurney’s prosecution will be productive of good effects. The laws, as regard both great and petty criminals, as administered in this country, are a disgrace to any civilized community. And no wonder such is the case, as those laws were formed and framed by persons desirous of shielding their own order from the penalties incurred by the commission of grave offences, and anxious to retain in their hands the power of dealing rigorously with those in a condition of life beneath them. All such wicked and abominable laws as those which place the life of a pheasant in the same balance as that of a human being are the produce of one-sided legislation. Men have taken advantage of their high position to tyrannize over their fellow-creatures.
There is not a more tyrannical body of men on the face of the globe than the English aristocracy, and hence, knowing as we do that for centuries they have held the reins of government in their hands, there is nothing surprising in the circumstance that every day is fruitful of occurrences showing how vile and infamous are many of our boasted laws, and proving what a hollow mockery it is to cry up English justice as the purest on the face of the globe.
Take the case of Overend and Gurney as a specimen of the ricketty, cumbersome, antiquated machinery whereby our judicial system is worked. Dr. Thom, the prosecutor, alleges that he was plundered of a large sum of money by the fraudulent misrepresentations of the defendants. He goes to considerable expense in proving a prima facie case before the Lord Mayor, who commits the accused for trial, and binds the prosecutor over to prosecute in the sum of 5,000l. No sooner is this done than the defendants, being affluent persons, and blessed with rich connexions, go before Lord Chief Justice Cockburn and ask him to remove the case from the Old Bailey to the Court of Queen’s Bench. His lordship consented, and at the time he did so I remarked, in all probability, that was the first step towards the accused getting off scot free, and intimated that the burlesque would have been more complete had his lordship delivered his decision through a horse collar. This alteration immediately saddled poor Dr. Thom with thousands of pounds of additional expense, and the attorney for the prosecution declared that 5,000l. was the amount required for carrying it out.
Here, then, the luckless prosecutor was placed between two stools. If he did not proceed, the Lord Mayor mulcted him of 5,000l.; and if he did, the same sum must be found to go on with. There was not the slightest chance, be it remembered, of his recovering one farthing even of his original loss, and none of getting back a farthing of his legal expenses. In this dilemma Dr. Thom asked to conduct his own case. The Lord Chief Justice would not listen to such a proposal, and peremptorily told him he must appear by counsel.
Now, this may be law, but it certainly is not justice; for it is simply tantamount to declaring that no person without a heavy purse shall prosecute persons who he suspects, and has excellent grounds for believing, have swindled him of his money. Indeed, the practice of his court, as expounded by Lord Chief Justice Cockburn, is nothing better than carrying into effect the advice given by Lord Melbourne to a rich friend, who was engaged in an almost hopeless suit with a poor adversary. The “amiable” nobleman recommended his friend to continue the action at all risks, and so ruin the poorer man with expenses. Lord Melbourne, as one of the privileged classes, knew how admirably the laws his own order had framed were adapted for banging the door of justice in the face of the poor suitor; and Justice Cockburn must have known that when he removed the Overend and Gurney matter from the court where such cases are usually tried to the Queen’s Bench, and when he subsequently refused letting Dr. Thom conduct it himself, that he was opening loop-holes whereby the defendants might escape the punishment of whatever misdeeds they have committed.
If barristers are recognised institutions attached to the law courts, barristers ought to be hirelings like other servants of the public, and paid accordingly; and the stupid fiction of being voluntary mouthpieces of those who remunerate them by honorariums exploded. Hitherto most persons had believed, before Justice Cockburn told them to the contrary, that the tribunals of England were open for all classes of suitors to obtain relief. But, according to his lordship, you cannot ever be heard unless you are prepared to pay lawyers, and fee counsel whatever they may demand.
What we require in our administration of justice is levelling down to a machine whereby quick and economical equity can be obtained. We do not want enormously salaried judges stuck upon the bench for the sole purpose of throwing obstacles in the way of the poor man getting justice, or of putting exorbitant fees into the pockets of attorneys and barristers. The judges are by no means the very independent immaculate beings Englishmen are taught to believe. Most of them wink at legal iniquities that are in fact monstrous scandals.
Thus, for instance, frequently, when very complicated, troublesome cases are brought on, they endeavour to get rid of them by what is called a reference, or, in other words, leaving them to barristers named by the court to determine. All the time these references continue the barristers pocket their fees, and the longer the case lasts the more they get. The other day an unfortunate suitor who had thus been referred, wrote to the Times, complaining that although his case was a very simple one, it had lasted two years; that the referee seldom sat to hear evidence, only came at long intervals for two or three hours, the greater portion of which time was occupied in luncheon.
Now the judges know perfectly well all these scandals, but they never attempt to stop them. They belong to the system whereby they themselves have risen to the bench, and they do not care to disturb it. They are part and parcel of the system which crushes the poor beneath the iron heel of the rich. Judges are not, perhaps, accessible to pecuniary bribes, but they often strain the formalities of the law to screen those with whom they are accustomed to associate, whose preserves they have shot over, and whose purses have perhaps been open to them in early and less prosperous times.
THE ALBERT LIFE ASSURANCE COMPANY.
TO THE EDITORS OF THE DAILY NEWS.
SIR,—I have made it my business to watch carefully the various wire-pullers in the matter of the Albert Assurance Company, and have attended the meetings of London policy-holders at the Whittington Club and the Guildhall Coffee-house with the view of forming an impartial opinion of the plans (?) submitted for dealing with the unfortunate position of the company, and of the character and position of the company, and of the character and position of the various parities submitting them. I have also read carefully every morning, and sometimes again in the evening, the various letters and reports which have appeared in your columns during the past fortnight, and the conclusion I have come to is that, unless rather more practical wisdom is manifested by the whole body of policy-holders at the approaching meeting on the 9th inst. than has hitherto been displayed by the majority of those who have as yet moved in this most distressing business, the result will be that the policy-holders will allow the whole business and affairs of the Albert to pass into the hands of a set of agitating self-seekers, whose sole object appears to be to get the winding up of the company under their own control. Accomplishing this object those disinterested gentlemen will care little about the welfare of either policy-holders or shareholders, and still less about the credit of the whole business of assurance. Let any impartial man look well to the names and connections of the various parties whose names have appeared to the several advertisements, and some of the correspondence in the daily papers, and I have little doubt his conclusion will be similar to the one here indicated. It is palpable the leading policy-holders have not as yet appeared upon the scene. But they will neglect an obvious duty, which in after years they will probably regret, if they do not come forward in support of some authoritative plan of a nature to save the whole business of their office from becoming a prey to a set of self-seeking attorneys and hungry liquidators.
Surely, sir, in an assurant constituency 16,000 strong a dozen policy-holders of position and independence can be found who have intelligence enough to see that the best interest of the policy-holders lies in some plan—if such can be discovered—which will keep the business together. If to this end they are not satisfied with the plan submitted by Messrs. Jellicoe and Bailey, or that of Dr. Farr, or of “W. G.,” whose letters appeared in your paper of Friday last, let them select a competent arbiter, and go before the whole body of policy-holders with his scheme. If the policy-holders do not adopt some such course as this, they will, by their wild and insane opposition to the Albert management, simply allow their interests, and the whole business of the company, whose agency network alone ought to be worth at least 50,000l., to be dissipated into thin air by that potent compound legal dissolvent—lawyers’ bills and liquidators’ charges.—I am, &c.,
JAS. BUCKLE. London, Sept. 6.
TO THE EDITORS OF THE DAILY NEWS.
SIR,—In this age of enlightenment on the one hand and systematic fraud on the other, what will things get to in the course of a few years? We have heard of late a great deal about reform in the political world, and a great deal has been accomplished; I think that the next great reform should be to prevent the public being victimized and plundered by men who are represented to the world as men of means and high standing, such as the public have had brought before their notice of late; and the failure of the Albert Life Assurance Company is a fitting opportunity for some plan being devised to prevent, in the future, the recurrence of such downright roguery. Allow me, sir, to submit, through the columns of your valuable paper a plan which, if adopted, would, I think, afford perfect protection to shareholders and policy-holders in all joint-stock companies. In the first place, I propose that at the next session of Parliament a clause should be added to the present Limited Liability Act making it compulsory that the accounts of all companies ranking under this Act be audited every year by inspectors appointed by Government, who would be in fact Government accountants, and who should be paid for their labour by a percentage of the profits of the company whose books are examined; and when a case arises where fraud has been detected, then, on the sworn evidence of the inspectors, the Government should step in and prosecute in the case; and in the event of the directors being found solely to blame they should forfeit all they possess in the first place, and be punished according to the part they took in the transaction. In the case of “unlimited liability” and assurance companies, that the accounts be audited by Government inspectors, when requested to do so by at least one-third of the share or policy holders; the expense of auditing to be paid out of the profits, or bonuses of the company or society. I think if such a plan were adopted that all share and policy holders would be glad to avail themselves of honest and impartial inspectors to protect them from being made the dupes of designing men. In the case of new companies being formed, that they should lay a statement of their affairs and prospects before Government, who would have them strictly scrutinised by the said inspectors before the company was allowed to transact any business; this would effectually prevent bubble schemes and wholesale swindling. The insertion of this will oblige, sir, yours, &c.,
A POLICY-HOLDER. Newcastle-on-Tyne, Sept. 4.
TO THE EDITORS OF THE DAILY NEWS.
SIR,—The policy-holders in the Albert are very much indebted to you for the earnest manner in which you continue to support their cause. The advice given today (Saturday) in your excellent leading article much have the approval of all the policy-holders who are not blind to their own interests. It is gratifying to observe the unanimity of opinion expressed at the different meetings of policy-holders in regard to the removal of Mr. Kirby from the liquidation. This is right; those under whose management the vessel has become a wreck, ought not to be trusted with the remnant of cargo, and its disposal. This leads to the mention of a matter of great importance, to which you refer, the selection of a person suitable to be appointed in the place of Mr. Kirby to act more especially for the policy-holders “and to assert their true position in the liquidation.” It is important to all concerned, shareholders as well as policy-holders, that the liquidation should be effected in an economical and judicious manner. A large sun from the assets of the Albert has already been spent in calling and holding public meetings, it is therefore urgent that the policy-holders should come to an early decision to ask the Vice-Chancellor to appoint some well qualified person to act in their interests.—I am, &c.,
A POLICY-HOLDER. Sept. 4.
TO THE EDITORS OF THE DAILY NEWS.
SIR,—While second to none in my deprecation of the reckless conduct that has led the Albert Assurance Company into such a deplorable condition, I am anxious that just views should prevail on the subject of life assurance generally, and therefore regret that Mr. W. Gibbs’ letter which appeared in your issue of Saturday has not been answered in that of to-day. Mr. Gibbs asks, “Why should not the full amount of premium paid be recouped for the surrender?” and then goes on to argue as if an assurance company ought to be dealt with in precisely the same manner as a bank or building society. The answer is very simple, and yet is one frequently overlooked by policy-holders, who seem to think that because the office has not been called upon to pay a claim in their case, the premiums ought to be returned in full. A little thought will at once show the impossibility of this, for not only have the expenses of the business to be paid, but claims have to be met (for in spite of Mr. Gibbs’ doubt on the subject, every life office can testify to the fact that a certain number of assurers do die in the first year), and of course many premiums are required to pay one claim. Every carefully conducted office will, in cases of surrender, return a just proportion of the amount paid, but it is unreasonable to expect the office to bear the risk of paying a large amount (compared to the premium) year after year, and yet get nothing for it. I would not thus trespass upon your valuable space, but feel desirous that on this subject no wrong impression should remain on the public mind.—I am, &c.,
FAIR PLAY. Sept. 6.
TO THE EDITORS OF THE DAILY NEWS.
SIR,—It seems to me that the policy-holders, shareholders, and the public generally, are at fault in the view they take of this unfortunate wretchedly-managed company. If there are assets at present for the debts—including, of course, claims which are due—how can you say the company is bankrupt? It is true that there are not sufficient assets until an assurer dies, for it is only then they are liable. I may be wrong—I am no lawyer—but I would ask, “If all they now owe was called for, and that there was money to pay it, can they be made bankrupt?”—I am, &c.,
U. R. M.
TO THE EDITORS OF THE DAILY NEWS.
SIR,—Among the many letters which I have read I have seen none embodying a distinct plan for relieving the policy-holders. Allow me to suggest one. It is this. Let the policy-holders propose to an office of repute that they take over their policies at the rates of such office, allowing, say 10 per cent., on the premiums, and let the policy-holders offer to release the Albert on payment to them of one year’s premium. The policy-holder would be freed from anxiety its proprietary—for of course the arrangement would only apply to average lives. I will assume such an arrangement to be carried out with the Economic, in respect of a policy effected at 30 by a life now aged 45: premium at 30 22l. 2s. 6d. for 1,000l. add 10 per cent. (2l. 4s. 3d.), value of 22l. paid by Albert, 1l. 15s. 3d., total, 26l. 2s., equal at 45 to 730l. The bonus to be paid by the new office would be only 5 per cent. on the premiums, for it would save any commission to agents. These figures are of course open to variation, but they will elucidate the principle.—I am, &c.,
ONE INTERESTED. London, Sept. 6.
ALBERT LIFE ASSURANCE COMPANY.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—It appears, by the statement of the provisional liquidators, as published in your report of Saturday’s meeting, that the directors, in the seven years ending 1861, when they had made a profit, according to that statement, of 60,000l., divided 41,702l. among those interested; whereas during the last seven years they have divided, in “dividends and bonus”, no less than 90,000l., and that in the face of the very heavy “losses” which had in that time accrued. Now, it seems evident that this could only be done in one of two ways; either the board left the whole affair to Mr. Kirby, the “managing director,” who has managed matters to some purpose, or they understood the position of affairs, and, with Mr. Kirby, conspired deliberately to defraud the policy-holders. I leave the “annuitants” out of the question here, because I don’t know how many are in receipt of an annuity as “compensation” for the loss of their situations in offices which have joined the Albert, the legality of which compensation I think may well be doubted. It is quite clear, however, that the share-holders have pocketed dividends which were never earned, but it is possible that the balance sheets were so drawn as not to show it. I am a policy-holder, and of course never got such a document.
Then, as to the “amalgamations,” and the sums paid to individuals, officials or not, who have managed these affairs. I take it that the several directors, secretaries, &c., were dealing with—buying and selling—property not their own, with money not their own, and that in every case where they have appropriated any portion of the money to their own uses, without the express sanction of the shareholders, they have deliberately, in the eye of the law, robbed the shareholders and policy-holders in any company should be bought and sold in droves, as Mr. Sheridan’s letter proves to be the case, without being consulted in the matter?—unless, indeed, a packed meeting, convened for the purpose, can be considered as representing the parties most interested. I hope a good many of the victims in this catastrophe are Mr. Sheridan’s constituents. If it were one, I should know how to act, and as to the testimonial—why, in this case let “virtue be its own reward.” Mr. Sheridan’s letter in your issue of today will require examination.
With regard to the deed of settlement and Mr. Kirby’s “commission,” I do not think that the deed was drawn with a fraudulent intent, but simply that Mr. Kirby was taking what he thought to be the surest way to feather his own nest. The effect, however, is a fraud on the shareholders and the policy-holders, for it is contrary to all idea of justice that an individual, well paid in other ways, should realise such enormous sums, while the concern from which he obtains it is absolutely insolvent. I hear, too, that the directors received 4,000l. a year for their services. Surely the Court of Chancery would compel the restitution of these sums of “compensation” and “commission.”
On the question of reconstructions, it appears to me that the policy-holders would do well to unite and form themselves into a Mutual Assurance Society, having no connection with the old company, and without shareholders as such, for I cannot see why we, their creditors, should be called upon to pay them 5l. per cent. on money which they have lost in the old company. The directors’ proposal seems to me to be more in favour of the shareholders than the policy-holders, who have found the bulk of the money. The policy-holders could doubtless frame a constitution by the light of this disaster which would prevent such deplorable consequences in the future.
Thanking you heartily for the manner in which you have taken up this unfortunate matter, I am, &c.,
A HOLDER OF TWO POLICIES, (Bank of London and Western). 12, Cambridge-terrace, Sept. 1.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—It is marvellous to note how some people will charge for work done when they are virtually in a position to make their own assessment. In the City, if I make an exceptional and unusually large transaction through a broker, I can invariably arrange that the commission charged shall be on a considerably reduced scale as compared with the ordinary rates. Mr. Sheridan, however, attempts to justify himself in charging for a month’s—or, say, for day to day work, less than a month’s negotiations, a fee which equally able men are glad to earn in a life time. A commission of 15,000l., or any sum approaching to it, ought to be entered in the books of amalgamated insurance companies as “black mail;” and I venture to assert that such charges would never have been allowed in this case if they had been stated in plain figures—the naked truth—to the shareholders, notwithstanding Mr. Sheridan’s insinuation that the Albert proprietors sanctioned the proceedings.—I am, &c.,
N. City, Sept. 1.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—I have seen an announcement in the Manchester Guardian, taken from the Insurance Record, that “in 1861 a resolution by the above company was passed to limit the number of shares to be held by each future shareholder to 100.” Can you or any of your numerous readers state whether that resolution is in force now or not; and if it is, how can a person hold 300 shares that have all been purchased by him since 1866, and from one broker?—I am, &c.,
A CONSTANT READER OF THE “DAILY NEWS.” August 31.
THE ALBERT ASSURANCE COMPANY.
A very numerous meeting of policy-holders was held in Liverpool yesterday, for the purpose of considering the proposal made for the arrangement of the affairs of the company. After some delay, Mr. I. Penny (Messrs. Horsfall and Penny) undertook to preside. Mr. Price’s report to the policy-holders and shareholders having been taken as read, Mr. Lewis (solicitor), read the order of the Vice-Chancellor, under which meetings like the present were held. The Chairman then alluded to the proceedings at Manchester yesterday, and read the resolutions there adopted. The resolutions denouncing the mismanagement of the company were warmly cheered. The Chairman said that though no doubt a very strong feeling prevailed with regard to the management of company, at this stage it was necessary to consider what was best to be done to protect their interests, and probably the appointment of a committee would be the best course to adopt in the meantime. Mr. Hull, solicitor, who opposed the plan of arrangement laid down in Mr. Price’s report, read a series of resolutions which he had prepared. The first of these, moved by the Rev. Canon Gray, and seconded by Mr. Bigley, was as follows:—“That, in the opinion of this meeting, the scheme of reconstruction of the company proposed by the provisional liquidators is crude and inequitable, and that it is not practicable for this meeting to frame any modification of it.” A long discussion took place, during which great interruption was experienced from a policy holder, who kept vigorously denouncing the affair as “a d——swindle,” &c., &c. Mr. Price wished it to be understood that the proposal made by the liquidators had not the definiteness of a plan, and merely enunciated a principle. After an interview that morning with the Manchester Committee, Mr. Price said there was a good and reasonable probability of some good substantial company taking up the concern. The discussion which followed was of a very excited character, and while one set of speakers fiercely demanded a winding up in Chancery, others were equally eager for proposals to be made to some other company to take over the business, while others advocated a voluntary winding up. After one or two amendments had been put and withdrawn, the resolution was put and carried with one or two dissentients. Mr. Hull then read his second resolution as follows:—“That a committee be appointed to co-operate with the several committees appointed by policy-holders in other towns, with power to adopt such measures as may appear best for the interests of the policy-holders.” The Chairman suggested that the question of the responsibility of the proprietors of stocks in the amalgamated companies should form one point for consideration by such committee. In reply to Mr. Edward Banner, Mr. Price stated that no opinion had been taken by the provisional liquidators as to the liability of shareholders in the amalgamated companies. He was not aware that any opinion on this subject had been taken by the board of directors. Mr. Cunningham next moved, and Mr. Collard seconded the resolution read by Mr. Hull. Mr. Provis (Manchester) wished to address the meeting, but the interruption was so great that he could not be heard. Loud cries were raised of “Go to Manchester,” “You had your meeting yesterday,” &c. All that could be understood of Mr. Provis’s remarks was a vigorous denunciation of Mr. Kirby, who retorted at intervals from the other end of the room.—Mr. Morgan (solicitor) spoke at length upon the importance of either forming a united assurance company amongst themselves or making overtures to take over the business to some influential offices. The resolution moved by Mr. Cunningham was put and carried unanimously. Mr. Ledward proposed, and Mr. Dodd seconded—“That in case it becomes necessary to wind up the company, compulsorily or otherwise, the committee are instructed to request the Vice-Chancellor to appoint as liquidators persons who will fairly represent the interest of the policy-holders. Upon this resolution Mr. Price explained that he considered himself bound to help both policy-holders and shareholders without being a partisan of either. After this explanation Mr. Ledward withdrew the resolution. Mr. Price further explained, in answer to loud calls of “Who gets the money?” that the money was paid day by day into the Bank of England in the name of the chief clerk of the Vice-Chancellor James, and the Provisional Liquidators, and that no cheque could be paid without the chief clerk’s and their signature. He further stated there was perfect safety with regard to the payment of premiums, for those premiums were vested in the names of the provisional liquidators and the chief clerk; that a separate account was kept of them; and that if before the 1st January next, the holder decided to discontinue his policy, he could have the premiums repaid. Mr. Lewis stated that the difficulties which would be experienced in the way of another company taking the business over were that one-third of the business of the Albert Company was Indian business, and that the amalgamation with the Medical and Invalid Office had contributed a large amount of life risks which an ordinary insurance company of first-rate character would not touch. In conclusion, he dwelt upon the importance of making some arrangements upon the basis of the really sound and good business which the society possessed for a settlement of the affairs, instead of protracting those arrangements until there was really little or nothing to work upon. A committee was then appointed, and the proceedings closed.
THE ALBERT LIFE ASSURANCE COMPANY.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—Allow me through the medium of your journal to address a few words to my brother sufferers by the collapse of the Albert Assurance Company. The fiat has gone forth; the company is to be wound up. But the end is not yet; though what the end must be, unless we combine and save ourselves, is a matter of the greatest certainty; i.e., total loss to all concerned, except the present creditors, and to many utter ruin. Shall we, then, submit to such a calamity when a small sum from each would save us all? It appears there are 20,500 policy-holders, annuitants, and shareholders. From 5l. to 50l., or an average of 35l. from each, would produce 717,500l., with which to form a new company for the purpose of taking over the liabilities and assets of the company now ordered to be wound up. If this be done there will then be an paid-up capital of nearly 1,000,000l., irrespective of the support which the public might, and no doubt would, render by subscribing to an undertaking offering so profitable and safe an investment as a new company so formed would do. Time is of the utmost importance in such a crisis. Let us all then, or at least every one of us who can possibly afford to subscribe even the small sum of 5l., unite heart and hand without a day’s delay, and form a new company under the Companies Act of 1862, by which every one can determine before hand the extent of his liability. To the shareholders particularly it is of the most vital importance that they should adopt either this or some better method of relieving themselves from the trouble now threatening them. If they do not, and the present company be wound up without the formation of a new company, they will be called upon to pay to the utmost extent of their means; and I need scarcely remind them that what they will have to pay will be totally lost; while, on the other hand, what they may subscribe to form a new company will not only save them from a present grievous loss, but will also become a profitable investment. There may be other methods by which something may be saved from the wreck, but as far as I can see this is the only plan by which everything and everybody concerned may be saved. It was stated by Mr. Price, one of the provisional liquidators, at a meeting held at Birmingham on the 3rd instant, that overtures had been made by a very eminent office for taking the risks of this company; but the amount required for so doing was 800,000l. beyond the assets of this company. Now, as the shareholders are not liable for more than 324,000l. in respect of the uncalled capital, and as on Mr. Price’s own estimate not more than 150,000l. of that sum is likely to be realised, it is obvious that a transfer of the risks to another company could only be effected at an enormous sacrifice to both share and policy holders and annuitants; in other words, the shareholders would lose entirely every shilling which could be squeezed out of them, and the policy-holders and annuitants would have to submit to a frightful reduction of the amounts insured by their policies and annuities.
Assuming a new company to be formed as I have proposed, it would start under the most auspicious circumstances, viz., with a very large business to begin with, and a proprietary of upwards of 20,000 persons, the interest of every one of whom it would be to, and who, of course, would influence their friends and acquaintance to insure with it. In addition to this, there is a large number of agents of the present company who would act as agents for the new company; and the united influence of proprietary and agents would produce thousands of new policies annually. A new company, so formed, must of necessity be a flourishing one. The annual income from premiums, and interest on capital invested, would pay all claims as they arose and a good dividend to the proprietors, and leave a handsome surplus for a reserve fund. Brother sufferers, will you then submit to enormous loss to all, and inevitable ruin to many, when there is such an easy way of escape open to you? Be up and doing, and save yourselves!—I am, &c.,
E. C., a Share and Policy Holder. Sept. 18.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—In 1854, under the influence of the local agent, I took out a policy on my life for the very humble sum of 200l., at an annual premium of 4l. 10s. 4d., in the Times Life and Guarantee Assurance Company, 32, Ludgate-hill, and in 1857 the business of that office was transferred to the Albert; and having paid in sixteen annual premiums, amounting in the whole to 72l. 5s., the machine comes to a “dead lock.” I have never been asked to part with it, and still hold the Times policy. The capital of the Times was 50,000l., in 5,000 shares o 10l. each, upon which 3l. per share had been paid, making the paid-up capital at the time I took out my small policy 15,000l.; which at that time I thought a sufficient guarantee. On the transfer of the business, the Times shareholders were recouped their payments at the rate of 20s. in the pound, or, in other words, paid back their 15,000l. out of the Albert funds, as I presume; and the manager, who had in fact founded the office, was awarded an annuity for life of 650l. per annum, which he afterwards surrendered, as I have been informed, for a ready cash payment of 8,500l.; out of the funds of the Albert also. My policy has the usual clause, “That no director signing it, and no shareholder, shall be liable in respect thereof beyond the unpaid part of any his shares in the capital stock of the company;” and I am aware it was laid down by the late Lord Eldon that the policy-holders were as much bound by this condition of insurance as the company was by the policy. It appears to my mind that the shareholders of the Times are therefore liable for the full amount of the subscribed capital of 50,000l. towards the liquidation of the claims under the policies signed by their directors, equally with the shareholders of the Albert; and the same principle will apply to the rest of the twenty-two offices the Albert absorbed. They should be all “tarred with the same brush”—and the public will not agree that justice has been done unless they are.—I am, &c.,
JAMES ALEXANDER. The Square, Dunstable, Beds, Sept. 17.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—If ever a Vice-Chancellor was “great” in his day and avocation, it was most certainly yesterday, when Sir William James decided that the shareholders of the Albert were not to be considered as a huge carcase to be preyed upon! And why should they be? The shareholders are equally the victims of the gross mismanagement of the company as the policy-holders are; the great difference between them being, that the one has to pay, the other to receive. The Albert paid away to the officials of twenty-two life offices the sum of 283,011l. 0s. 4d., as mis-called compensation. The really first and most sensible course to be pursued is to see how much of this money can be legally recovered for the benefit both of share and policy holders. In this case, the “black flag” should be hoisted without commiseration, and no quarter shown. The recipients thereof have materially assisted in robbing the helpless widow and her fatherless children of the only last resource they had in this world to help them in their hour of need, and mercy to such men would be direct cruelty to the whole human race. That being done, than let us try the question, How far are the shareholders of the 22 companies who transferred their business to the Albert, liable for the amounts insured under their several policies, and signed by their respective directors? I believe the managers of the Albert never called in any of the policies that had been issued by these twenty-two companies, and that the originals are still in the hands of those who have nevertheless continued their payments thereon to that office. At all events, I still hold the original policy I had from the Western Life office in 1845, and which was transferred to the Albert in 1865, and the Western had a wealthy and highly-respectable proprietary, considerably more so than that of several of the others. That the policy-holders in the Albert have a right to protect themselves cannot be disputed; but do not let us apply it in the same sense that R. B. Sheridan did when he made Rolla say, in his great tragic play of Pizarro, “Such protection as vultures give to lambs, covering and devouring them.” In common justice, the Albert shareholders exclusively should not be called upon to bear the whole amalgamated liability of 23 offices, when, in all human probability, they had no voice whatever in either of the transfers. The legal liability of the whole of the parties above-mentioned should be tried in Equity, before these innocent lambs are slaughtered, and offered up as a sacrifice to appease the indignation of the victimised policy-holders.—I am, &c.,
HENRY BARRETT. 19, Wellington-street, Woolwich, Sept. 18.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—Notwithstanding the large amount of space the Albert Life Assurance Company has recently occupied in your journal, I very much question whether anything has yet appeared similar to the statement which, with your permission, I am about to make public. The break-up of the above-named company forcibly illustrates the truth of the old proverb, “Honesty is the best policy.” I will, therefore, without further introduction, briefly and truthfully state how the Albert and Medical Assurance Company behaved towards me, and leave you and your readers to judge whether it was likely that any assurance company could stand and prosper which acted in the manner about to be described. In the year 1860 I applied to the Albert and Medical for a life policy of 200l. (I am a poor man) on my own life. I have previously applied to two other offices and had been rejected on account of something being the matter with my heart, the result of rheumatic fever in 1857, and that was why I applied to the Albert and Medical. I was examined by two of their medical officers, and a few days afterwards I received a letter from the company stating that they proposed that I should take out a five years, policy, which they offered to grant me for twelve guineas a-year; I was then 31 years of age. This offer was made, they said, with the view to my interest, as if at the expiration of the five years I should be in no worse health than I then was—and they said the probability was that I should be better—they would be happy to reconsider my case with the view to granting me a life policy at a lower rate of premium. I replied stating that I should prefer a life policy, and asked them to favour me with their terms for such. Their answer was that they should require twenty guineas a-year, and again urged the five years, policy. Well, sir, I was timid, thought I should probably soon drop down dead, and was anxious to do the best I could for my wife and children; I therefore accepted the offer of the five year’s policy, and, by dint of considerable pinching and screwing I managed to pay the twelve guineas a year for the five years. Shortly before the five years had expired, but after I had paid my six guineas for the last half-year’s premium, I wrote to the company, quoting their letters of five years previously in reference to the promised life policy at a lower rate of premium. Now, in my simplicity I expected that, as my case was a special one—it was treated specially in the first instance—I should not be dealt with in the same way as an ordinary applicant for a policy, the company having pocketed sixty guineas of my money. But no; they simply sent me one of the usual forms of application, which I had to fill up, and go before the medical officers in the ordinary way; and a few posts afterwards I received a short note informing me that my application was refused. At the present moment I quite forget whether I wrote again or not complaining of this treatment; but I think I did, and received no reply. I informed the company that their prophecy regarding my health had turned out correct; that for the past five years I had had uninterested good health, not having been laid by a single day. In conclusion, I may mention as a proof of the truth of this last statement that I afterwards wrote to the Provident Clerks’ Mutual Life Association, stating all that this letter contains, and although I was, of course, more than five years older than when I went into the Albert and Medical, the Provident granted me a life policy for 200l. for a premium of 8l. 13s. 8d. a year, payable half-yearly. If you can find space in your valuable journal for this letter, it may possibly prove to be of some benefit to simple, though honest, people.—I am, &c., R.
THE ALBERT LIFE ASSURANCE SOCIETY.—
On the 18th ultimo the committee representing the policy-holders in the Albert Life Assurance Society in Calcutta met the members of the local board of direction by request. The object of the committee was to ascertain to what extent the position of the policy-holders had been prejudiced by the proceedings of the board. The position taken up by the board, on the other hand, was, that they had done everything in their power, as far as their position allowed them, to protect the interest of the Indian assurers, and to maintain intact in India a fund sufficiently strong to meet all the probable liabilities of the Indian branch. The meeting extended over two hours and a half. The directors instructed the manager, Mr. C. H. Ogbourne, to read certain extracts from their proceedings, and from their correspondence with the head office. From this it appeared that from 1861, inclusive, a sum of 220,000l. had been withdrawn from India by the home board, and that a further sum of 50,000l. had been paid in England on what might be termed the company’s Indian account, thus bringing the total derived from the Indian branch up to 270,000l. Against these enormous withdrawals the Calcutta board had protested repeatedly and in the very strongest terms. Indeed, on the 16th of February last they wrote a letter reviewing the whole question, and declaring that unless the understanding come to in October, 1866, was adhered to, and the Indian fund kept at 100,000l., invested in Government securities, they would resign, and published their reasons for taking so important a step, and one so certain to prejudice the company in the eyes of the public. They next went over their relations with Mr. Neale, and fully explained how it was that they consented to his withdrawing a sum of 40,000l. from the Indian surplus funds. Mr. Neale came out, it appears, armed with full powers, and if he had not been allowed to withdraw the 40,000l., and he was only allowed to do so under stringent terms and conditions, he might have withdrawn all the funds. The directors throughout acted under the opinion of the Advocate-General. The Indian branch has now invested in Government securities more than 7½ lakhs of rupees, and in addition it holds at the different agencies, securities, not immediately convertible, to the extent of some two or three lakhs, so that the assets of the Indian branch exceed, if anything, 100,000l. The directors finally read a resolution in which they strongly condemned the conduct of Mr. Neale, and expressed their indignation at the course he had pursued, and concluded by declaring their intention of immediately publishing and circulating to every policy-holder a pamphlet embodying the explanations made to the committee, and containing the extracts which had been read. This course met with the hearty approval of the committee, who then proceeded to pass the following resolutions:—Resolved, “That after the explanations afforded by the Calcutta board, and their statement that they consider themselves no longer directors of the Indian business, the Inquiry Committee request that the gentlemen forming the late Calcutta board will be good enough to continue their services, in conjunction with Mr. Ogbourne, in the interests of the policy-holders, until relieved by some one properly authorised by the Court of Chancery.” The second resolution recommended the policy-holders to continue the payment of their premiums, on condition that, if no arrangement was made for the transfer of the business, the amounts should be repaid.
THE EUROPEAN ASSURANCE SOCIETY.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—An advertisement in your columns to-day records another crash, and I fear a greater one than that which has of late occupied so large a share of public attention. As one of the unfortunate policy-holders in this European Society may I ask you to let me tell in your columns the story of my connexion with it, as it is probably that of many hundreds more? It is by no action of my own that I find myself an European policy-holder. In 1854 I insured my life for 500l. in the English Widows Fund, a society which was recommended to me by the published assurance that its capital was 200,000l., and by the facts that some of its directions were personally known to me, and that Dr. Lankester was its medical officer. There were also some especial recommendations, among them a provision that in case of inability to pay the premium the policy should not lapse, but the amount should remain as a debt upon it. In January, 1860, I received a circular, signed “J. Pope Cox, secretary,” telling me that a bonus of 22l. 17s. 4d. had been added to my policy, congratulating me on the result, expressing a cordial hope “that you may derive corresponding advantages in future from your connection with the Society.” I was also told in an italicised sentence “This addition is irrespective of the ordinary bonus,” which was said to be due in October, 1860; and an intimation was given that still another bonus might be expected in October, 1863. But October, 1860, found me transferred. When my Michaelmas premium became due I found that I had to pay it to the British Nation Company; and as no alternative was offered me, I did so. I took an early opportunity of testing whether the change had altered my rights under my policy, by demanding that one premium should be allowed to stand as a debt upon it. After some little altercation this was agreed to, and I afterwards went on paying my premiums to the British Nation. In 1863 I got a very congratulatory circular from this company, recognising the amount of my policy as 522l. 17s. 4d., and telling me that “the Reversionary Sum added to the above Policy, and payable at death with the above-named amount assured, is 24l. 12s.” This circular concludes by telling me that “the business is rapidly increasing, and it is hoped that at each succeeding valuation this very satisfactory bonus will be materially augmented.” But such is the mutability of all human things—and especially of Assurance Offices—that no further valuation ever took place. For in 1865 I found myself transferred again; and again without any power to help myself. The usual renewal notice came, and told me to pay the premium to the “European Assurance Society;” and I did so. Two years after this transfer I received another of these congratulatory circulars, informing me that the Reversionary Sum added to the Policy was 7l. 14s.; and again adding, “The business is still rapidly increasing, and it is hoped that at each succeeding valuation the bonus will be materially augmented.” But as the previous prophecy of material augmentation had not been realised I felt doubtful, not only of this promise, but of the whole amalgamated concern. The prospectus attached to the bonus declaration, however, removed my doubts. I saw that the Society was empowered by “special Act of Parliament;” that it had (this was in 1867) an annual revenue of upwards of 345,000l.; that its capital, subscribed by nearly 2,000 shareholders, exceeded 800,000l.; that Government, the leading banks, railways, &c., accepted its guarantees; and more than all, that “the Royal Naval, Military, and East India Life Department is under the especial patronage of Her Most Gracious Majesty the Queen.” How could I longer doubt? All these great authorities gave the institution their sanction, and I, perhaps, rather than doubt its safety, ought to congratulate myself that my little policy had not only grown 50l. in value, but had been promoted step by step from Fleet-street, E. C., to Regent-street, W., and, more aristocratic still, to Waterloo-place, S. W., and that I was now in a Society one Department of which enjoyed the Special Patronage of the Queen, another Department of which was “the only Society authorised by the Imperial Parliament to guarantee the fidelity of persons holding Government appointments,” and the whole of which was under the powers of a special Act of Parliament. Thus matters went on with me till the fall of the Albert raised suspicious rumours about the European, and I got alarmed for my little investment of fifteen years’ premiums. So I wrote to the manager to ask for the surrender value of my policy, and told him I imagined that value to be the sum assured, with the bonuses—making together 555l. 3s. 4d., less the estimated value of the premiums due from me. The reply was, a paper of questions to answer, and a request for a fee of 5s. I answered the questions and paid the fee, and was informed in about a week that my policy was worth 36l. 19s. 6d.; that the sum owing on it was 6l. 1s. 3d.; leaving 30l. 18s. 3d. as the price the society could pay for its relinquishment. This was dated 8th September. On Saturday last I wrote accepting this offer, and last night I got a reply saying that “in the present state of the Insurance World the directors decline to purchase any more of their policies.” I at once resolved that to-day I would put an advertisement in the Daily News, asking other policy-holders to co-operate with me in forcing an investigation of the affairs of the company. But on taking up the paper at breakfast this morning I see that I am too late, for prominent among the advertisements is a notice of an application to the Court of Chancery yesterday to wind up the concern.
One word on this application. It is made by two of the directors of the company, and must, in the interest of the policy-holders, be resisted. We must have, as the Albert has, a compulsory winding up, and must be represented in it, as the Albert policy-holders are. But for this purpose we must at once organise, and I shall be glad to help in the arrangement of a preliminary meeting to set the matter moving.—I am, &c.,
P. W. CLAYDEN 13, Tavistock-square, W. C., Sept. 22.
TO THE EDITOR OF THE DAILY NEWS.
SIR,—You have opened your columns to the disappointed policy-holders of the Albert, pray do not close them to the miserable victims of the European. Look at my case. In 1855 I insured in the Diadem. In 1857 the Diadem merged in the Anglo-Australian. In 1858 the Angle-Australian was incorporated with the British Provident. In 1859 the British Provident became absorbed in the British Nation, and in 1865 the British Nation yielded to the same fate as its predecessors and was incorporated in the European. Now, in 1869, the European is swallowed up in vacancy. Surely I have one consolation, for as not one of these amalgamations or transfers has taken place, so far as I know, with my consent, I have a remedy against five sets of shareholders, and five boards of directors. I am ready to help any fellow-victims in enforcing that remedy.—I am, &c.,
A LOST DIADEM. Sept. 22.
Text according to MEGAdigital (Berlin-Brandenburgische Akademie der Wissenschaften), MEGA² IV/19, licence CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0/); the editorial apparatus of the MEGA is not reproduced. ↩