Business: Exit Missouri Life

For years the biggest life insurance company west of the Mississippi was Missouri State Life. Recently it became the biggest insolvent life insurance company west of the Mississippi. Last week it ceased even to be Missouri State Life.

Writers of insurance in 40 States, with 250,000 policy holders and nearly $1,000,000,000 of insurance in force, Missouri Life has been in hot water for some months. Rogers Clark Caldwell, Tennessee’s meteoric financier, bought a 29% interest in it during the gay 1920’s, sold his interest to Inter-Southern Insurance Co. When the Caldwell bubble burst, the Missouri State stock passed to Kentucky Home Life, last year was bought back by Herbert Hoover’s friend Julius Howland Barnes, chairman of Insuran-shares Corp. Then it transpired that Missouri Life itself had guaranteed a loan of $800,000 to make the purchase possible.

Depression did even more than these sad adventures to produce the state of affairs which Missouri’s insurance commission lately uncovered: Whereas Missouri State Life had liabilities of $146,000,000, its assets were $27,000,000 below that figure. Last week a Missouri judge handed Missouri State Life over to David Milton, J. D. Rockefeller Jr.’s son-in-law master of Equity Corp., for a flat $2,000,000.

Terms of the sale were that a new company, General American Life, formed by Equity Corp. will take over Missouri State Life’s business. A lien will be placed against the cash surrender value of Missouri State’s outstanding policies so that policy holders cannot cash in on their policies at will. But all death benefits are to be paid in full.

Thus will the company try to stage a comeback under new management, and if it succeeds there will follow two comebacks, not one. For the head of General American Life installed by Mr. Milton is no less a personage than Walter William Head. Until four years ago Mr. Head was president of Omaha National Bank, one of Nebraska’s leading citizens, honored as national president of the Boy Scouts, as president of A. B. A., as director of New York Life Insurance Co. To him then came an opportunity for advancement. He was offered the presidency of the State Bank (Chicago’s leading Scandinavian bank) previously headed by the late Ralph Van Vechten. Only a short time had Mr. Head been installed when, at the height of 1929’s boom, State

Bank merged with Foreman National (Chicago’s leading Jewish bank). Promptly came Depression, Foreman-State was burdened down not by the sins of Mr Head but by the sins of pre-Depression banking. When Foreman-State was taken over by Melvin Traylor’s First National in the summer of 1931, Walter Head was set back on his heels, out of a job. He became president of Morris Plan Corp., the Manhattan organization with Morns Plan banks in over 100 cities making small “character loans” to working men. Now as president of General American Life, he gives up banking for its cousin insurance, returns beyond the Mississippi to rebuild success upon the plains.