Creditors After the General Manager's Life Insurance Policy The failure of the Union Trading Corporation, Inc., has been followed by amazing developments—- developments which would not be possible in any other country but China, Here was a company, whic!:, with an alleged capital of less than a million dollars, failed with liabilities amounting, it Is " believed to some $8,400,000. It had been trading on an enormous scale, and with simest incredible losses, mainly ea. loans obtained from Chinese banks, and Chinese compradores of various foreign banks. It is no secret, of course, that the failure of the Company for this large amount was: due, to a very large extent, 20 fraud, Even Chinese banks, reckless though they often are in their financial dealings, do not make loans: aggregating millions of dollars without some form of security, and when the failure of the company had to be admitted it was found that the cargo upon which many, of these advances had been ma.e was missing. The shortage ig now the subject of un investigation by the American District Attroney, and: until this investigation has' been concluded it is obviously undesirable to go into any details. Similar re-tic once, however, need not be obst ed in connection with certain other developments during the past fey weeks, comments the "Peking and Tientsin Time In most countries a failure of this magnitude would involve the immediate intervention of the Judicial authorities. An official Jiquidator would be appointed, who would act on behalf of the entire body of creditors, And any officer employe of the bankrupt con cern suspected of fraud, would be arrested, and duly brought to trial before a competent Court. The; State would not only be concerned to bring any person guilty of fraud to justice; it would feel obligated to the best of its ability to protect he interests of the victims, and to see that they all received impartial Aistribution of any, sets, Typical Procedure On the failure of the Union Trading Corporation, the Manag Mr. Wang was duly arrested the Chinese authorities. Mr. Honan Chi, General Manager, and the leading spirit in the concern, disappeared, but gave himself up a few days Tater, and was also confined in the civil prison to await trial, A Cent mittee of Creditors, consisting chiefly of Chinese Bankers, appears to have been informally establishes), Dut the general body of creditors found that to take legal action to establish their rights would involve an outlay of $96,000 in Court fees! One, but by no means the largest of the creditors, was the Chun.
Yuen Industrial Bank. Certain militarists, it is understood, are interested ili this bank, and to this, rightly or wrongly, is attributed the sudden removal of Mr, Honan Chi from the civil to the military prison in Tientsin about three weeks aKo, The reason given by a Chinese noys agency for this notion is that "Cri guilty of disturbing the econom foundation of the money markets at the present critical moment when Tientsin is under martial Iw." And from the same source we learn th "Mr. Chi, unless his relatives and friends can discover means to make: up his heavy loss may finally be sentenced to death by the court, as Tupan Chu Vu-pu is very' particular about this case, which he ran as not genuine commercial Deliberate Murder Contemplated Honan Chi has, we believe, ae opted "full responsibility for. the failure of the Union Trading Cor poration, and admitted certain fraudulent transactions. But it is obvious that if he has committed fraud he is a common criminal, who should be dealt with in the usual manner upon a.eriminal charge, by a recognized tribunal. During' his detention in the military prison he has been kept in heavy chains, art every effort has been made to la duce him to disclose the whereaboxt of what remains of the missing money.. He has stoutly and consistently denied that he has any substantial amount in his possession, though threatened with, if not actually subjected to, torture, and hourly fear of death. Now comes the most amazing part of the story. His persecutors discovered that he had insured his life with two or more insurance companies for at least Tls. 125,000. And as he persists in stating that he cannot p dace any money to satisfy his mili tary creditors, it is suggested that hho should be shot in order to obtain the insurance mone; appear to be satisfied worth little or rething alive, but to believe that he will be worth Ths, 125,000 dead. And there is every reason to. suppose-that what is really deliberate murder is contemplated in the hope of obtaining' the sums for which he is insured. the Scheme for those who) losses. that policies have been taken out with foreign companies, If the latter were liable on his poli. cies, they would certainly not make Payment toorie creditor, to the exclusion ofthe rest. And the amount available, when divided up, would be too insignificant to make his execution worth. while, But there is another aspect of the eas to be considered. "In both the British and American Courts it has been held that "even in the absence of such an exception," a life insurance company is not liable "for the death of the insured in consequence of the known violation of any law oF at the hands of justice." Ax an Insurance text book puts it, "if death ensue from any of these causes, the insurer is not liable, since it is eontrary to the policy of the law, in such case, to. allow the insurance money to be recovered." It may, of course be argued that the shooting fof Honan Chi by the military auth-being murder and nota indiciad execution, the above pri: ciple would not apply. In that case, however, if the insurance companies resisted payment the military' authorities would have to prove that he had been murdered, and had not mot his death "in consequence of the known violation of any law or at] the hands of justice." Even the effrontery of the Chinese mil tarist, we fancy, would hardly go to the length of pleading a murlier for which they were responsible ast reason for paying out on a life insurance policy.
Text read from the printed page and cleaned; old type leaves the occasional error.