by Casey Cep
Part of the reason that information didn’t exist was theological. Devout Christians were not meant to concern themselves with the details of their deaths. Like the timing of the Second Coming, as Christ proclaimed in the Gospel of Matthew: “Of that day and hour knoweth no man, no, not the angels of heaven.” God, who kept watch even over the sparrow, would provide, and to doubt those provisions by making one’s own end-of-life preparations was thought to reveal a lack of faith. Thus was the life insurance industry caught between a math problem and God.
To make matters worse, the overall reputation of the insurance industry had been tarnished by the sale of speculative policies, a practice barely distinguishable from betting. You could buy speculative policies with payouts contingent on everything from whether a given couple got divorced to when a particular person lost his virginity—or, in one infamous case, if a well-known cross-dressing French diplomat was biologically a man or a woman. Such policies could be purchased in secret, and the purchaser did not need to have any connection to the “insured.” These seedy practices, along with the obvious incentive to murder someone whose life you had insurance on, had led France, Germany, and Spain to ban life insurance outright. England, meanwhile, created the insurable interest standard, which mandated that an insurance policy could be sold only to the person being insured or someone who had an “interest” in his life—that is, an interest in his remaining alive. But not even those advances cleaned up the industry. They only encouraged a new kind of speculation, in which elderly, indigent, or ill policyholders auctioned their insurance policies to investors who bid based on how long they thought the seller would live.
Of these various obstacles to establishing a life insurance industry—spiritual, mathematical, reputational—the mathematical one was solved first. Everyone knew that death, while uncertain, was also inevitable, yet before the seventeenth century no one had even tried tracking it, let alone measuring life spans in particular populations or for specific professions. The closest thing to an actuarial table at the time was a Bill of Mortality, a grim British innovation that listed plague victims in various parishes around the country. In 1629, a quarter century after he commissioned a new translation of the Bible, King James I instructed his clergy to start issuing those bills for all deaths, not just the ones caused by plague. Later, around the time of the Great Fire, John Graunt, a London haberdasher who dabbled in demography, organized those bills, arranging twenty years’ worth of death into eighty-one causes and making it possible to see when people were most likely to die and what was most likely to kill them.
Armed with population information for the first time, insurance companies began to get a handle on probability calculations, and soon enough a natural disaster helped ease their difficulties with religion. On the feast of All Saints in 1755, just before ten in the morning, one of the deadliest earthquakes ever recorded struck the city of Lisbon. When the shaking finally stopped—fully six minutes later, some records say—tens of thousands of people had died as homes and churches collapsed, and fissures up to sixteen feet wide gaped open in the earth. Not long after, the waters along the coast of Portugal drew back in a sharp gasp, exposing the bottom of the harbor. Throngs of amazed onlookers had flocked to see old shipwrecks newly revealed on the seabed when, nearly an hour later, the ocean exhaled and a tsunami washed over the city, killing thousands more. The scale of the tragedy was so vast that existing theodicies seemed inadequate, and all of Europe struggled to answer the existential questions raised by the Lisbon catastrophe.
In the course of that struggle, theologians found themselves competing with Enlightenment philosophers, who seized on the earthquake to offer a rival account of the workings of the natural world. If earthquakes were not divine punishments but geological inevitabilities, then perhaps insuring oneself against death was not contrary to God’s plan but a responsible and pious way to provide for one’s family. By the end of the eighteenth century, that idea had gained legitimacy throughout Europe. Once it took hold, religious groups, initially opposed to the entire notion of life insurance, became some of its strongest advocates, in some cases even starting denominational funds to sell policies to their members.
That practice eventually spread to the United States, where even today millions of Americans buy their life insurance through religiously affiliated companies like Catholic Financial Life and Thrivent Financial for Lutherans. But such developments were a long time coming. Unlike Europe, which had decades’ worth of mortality tables by the eighteenth century, colonial America had little reliable information on life expectancy, making it difficult for insurers to set prices and underwrite policies. When companies did try to offer life insurance, there were often too many beneficiaries attempting to make claims at once and rarely enough money to cover them.
In addition, although most states required insurable interest, the American life insurance industry remained exceptionally vulnerable to fraud. Some policyholders lied from the start, fibbing about their age or forging their medical history. Others lied as they went along, violating the terms of their policies by traveling to restricted places (the malarial South, for instance) or by restricted means (by railroad, without the appropriate rider). Still others lied at the end, faking their own deaths or disguising their suicides as accidents. But calling out such lies was tricky. Contesting any claim was expensive, and litigation rarely resulted in denial of coverage, since jury members were far more likely to want to see their own policies honored than care about the profit margins of insurance companies. Moreover, whenever a company preserved its profits by denying a fraudulent claim—say, a father who had failed to disclose an illness, or a husband who had purchased arsenic a few days before he died—it risked damaging its reputation in the eyes of a skeptical public, who worried that their own heirs might be cheated, too.
As companies attempted to grow, they exposed themselves to even more fraud through their own lapses in judgment. Some of their agents approved policies too freely in an effort to earn larger commissions, while some managers invested assets too dangerously in an effort to earn larger returns. Spreading into new territories meant recruiting new agents, not all of whom were scrupulous, and the more geographically diverse a company became, the less it knew about the background, life, and likely death of its would-be customers, making arbitrage of any kind difficult. The expansion of the postal service in the second half of the nineteenth century enabled mail-based sales but also mail-based fraud, on both ends: nonexistent companies could market nonexistent policies by mail, while unscrupulous clients could send away for policies they might never have qualified for in person.
Individual states tried to protect consumers by setting deposit requirements for companies and restricting their investments. But those same protections slowed sales, because they required more due diligence at every stage of the process, and decreased investment returns, because they left firms with less freedom to take the kinds of risks that could make their stocks rise. Unable to sell as many policies, companies had to pool risks across a smaller population, which left them struggling to remain profitable. Eventually, however, an industry shift from stock companies, which were owned by investors, to mutual companies, which were owned by policyholders themselves, allowed insurance companies to free themselves from the capital game; instead of attracting investors, they needed only to recruit customers. That became possible due to the carnage of the Civil War, which did for the United States what earthquakes and fires had done for Europe: spread a sense of both dread and obligation around the country, creating a massive demand for life insurance. The total value of policies increased from $160 million in 1862 to an incredible $1.3 billion in 1870. Within fifty years there were almost as many life insurance policies as there were Americans.
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That growth in size prompted a growth in fraud. By the time the Reverend Willie Maxwell began buying life insurance, the industry was wild the wa
y the West had been: large, lawless, and lucrative for undertakers. Term policies were advertised in newspapers and magazines, flight policies were available for a few quarters from vending machines in airports, and local agents went door-to-door selling policies for premiums that could be paid on installments with pennies and dimes. With such low costs and so many ways to purchase life insurance without proper scrutiny, scams proliferated. Medical examinations were rarely undertaken at the start, and autopsies were not required at the end. All this left the industry open to every possible chicanery, from fudging the details of someone’s health to forging their signature on a policy to faking a death—or, worse, committing murder. Although Double Indemnity (1944), The Postman Always Rings Twice (1946), and The Killers (1946) were not documentaries, they did reflect crimes that were common enough at the time: agents turned accomplice in the killing of policyholders, beneficiaries turned murderers, and insurance investigators turned detectives solving homicides alongside the authorities.
Newspapers around the country were filled with such stories. Insurance fraud was so widespread that another Willie Maxwell, born the same year as the Reverend but living in Florida, made headlines after a man he confessed to killing was found alive a few weeks later. It turned out that three people were working a grift whereby a skeleton was left along the coast so that this other Maxwell could confess to murder; then the “dead” man’s cousin could collect on insurance policies, after which the ostensible victim could quietly be resurrected. Similarly, a funeral director right in Alexander City was convicted of first-degree murder in 1957, after an elderly man on whom he held insurance was found burned to death. Fred Hutchinson, who owned House of Hutchinson, one of the black funeral homes in town, became a suspect in the case when he hurriedly buried James Hunt’s body the same day it was recovered. Later, one of the funeral home employees confessed to getting Hunt drunk before setting fire to his house, in exchange for some of the seven thousand dollars that Hutchinson stood to gain from the policies he had taken out on Hunt three weeks earlier.
As that suggests, it was stunningly easy to take out insurance on other people without their knowledge, and somewhere along the line the Reverend Willie Maxwell started making a habit of it. By 1970, he had policies on, among others, his wife, his mother, his brothers, his aunts, his nieces, his nephews, and the infant daughter he had only just legitimated. Although the names on the policies differed, the address was always the same, as was the beneficiary: the Reverend Willie Maxwell. One of the local insurance agents in Alex City was a regular visitor to Maxwell’s house, but the Reverend also ordered policies by mail, completing the forms that arrived tucked into the pages of magazines and newspapers, then sending them away to Kansas, California, Florida, Nebraska, Pennsylvania, and cities all around Alabama, with checks made out for the initial payment—typically less than a dollar. The policies ranged in size from a few hundred dollars to tens of thousands and were held by, among others, Imperial Casualty & Indemnity Company, Bankers Life and Casualty Company, Old American Insurance Company, Fidelity Interstate Life Insurance Company, Allstate Life Insurance Company, Pennsylvania Life Insurance, Beneficial Standard, Booker T. Washington, Minnesota Mutual Life, United of Omaha, and Independent Life and Accident Insurance Company.
Many of these companies had policies on the Reverend’s wife, and when he began contacting them after she died, he was met with more than the usual bureaucratic resistance. Mary Lou Maxwell’s death had been declared a homicide, and insurance companies, like law enforcement, treat spouses as suspects—especially a husband who takes out sizable policies on his wife a few weeks before her murder. But if Maxwell was in a difficult position, the insurance companies soon found themselves in a worse one: not long after the Reverend was arrested for his wife’s murder, the charges were dismissed for lack of evidence.
As was so often the case, Maxwell had perfect timing. He had been arrested on Monday, August 10, and five days later a grand jury returned an indictment of first-degree murder. As it happened, though, the district attorney who brought the charges had been battling alcoholism for years, was about to be charged for illegal spending of state funds, and had already been defeated in his reelection campaign earlier that year. All in all, it might have been the best time in history to come before the Fifth Judicial Circuit in Alabama, because DA Thomas F. Young had no incentive to do more than a perfunctory job. To make matters worse, the Maxwell case was particularly easy to dismiss, in both senses, because the judicial system at the time was not especially interested in domestic violence or black-on-black crime.
Some of the lawmen, though, remained interested, especially Herman Chapman, the Alabama Bureau of Investigation agent whose doggedness had earned him the nickname “Bear Tracker.” Chapman, the son of a one-armed police chief from Clay County, already had twenty years of experience in law enforcement, first as a military policeman during World War II and then as a trooper with the Alabama Highway Patrol, and he didn’t like to leave a case unsolved. While the court dithered, Chapman and another ABI agent, Byron Prescott, who would go on to lead the state’s Department of Public Safety, kept investigating, gathering more material from the scene and more testimony from those who knew the Reverend. Based on the additional evidence they supplied, the crime lab at Auburn filed another report at the beginning of October.
When Charles Aaron took over as district attorney in January 1971, he tried right away to bring new charges against Maxwell, but the grand jury of Tallapoosa County failed to return an indictment. Although that was welcome news for Maxwell and Tom Radney, they had better things to do than celebrate. They knew that it was only a matter of time before State of Alabama v. Willie J. Maxwell would be back on the docket, and in the meantime they had a lot of death benefits to collect.
While the authorities continued to build their case, the Reverend and Radney set about filing civil suits against those companies that were refusing payment, hoping to force a reckoning before another grand jury could hear evidence against Maxwell. Grieving widowers, they both knew, made for better plaintiffs than indicted murderers. Radney filed complaints against Fidelity, Beneficial Standard, and Independent Life and Accident. The lawyer for Independent demurred in May, insisting that Mary Lou Maxwell’s death had not been accidental and that therefore the accidental death provision of her insurance policy was not applicable. The lawyer for Fidelity filed a motion of continuance in July, claiming that the new district attorney had intimated to him that a grand jury would be impaneled during the first week of August to try once again to indict the Reverend for murder. In front of a circuit court judge, the Fidelity lawyer argued that the policy would soon be invalidated because its beneficiary was about to be convicted of murder. Unconvinced, the judge denied Fidelity’s motion, and a jury then sided with the Reverend, awarding him the full accidental death benefit.
Fidelity might have lost in July, but its lawyer was proven partly right three weeks later: on August 6, 1971, almost a year to the day after his wife was found dead on the side of Highway 22, a grand jury indicted the Reverend Willie Maxwell on charges of first-degree murder. Tom Radney handled the arraignment and plea hearing, and one other matter as well: he agreed to represent one of Maxwell’s “lady friends” who was also being charged in conjunction with the murder, a woman by the name of Ophelia Burns. She was alleged to have helped ambush the Reverend’s wife at the church, or at least to have helped him move his or his wife’s car that night. In the end, though both were indicted, only the Reverend Maxwell faced a jury, and his trial began just over a week later, in the sweltering heat of August in Alabama. Twelve jurors were selected from the hundred or so residents who had received summonses. The state subpoenaed twenty-two witnesses, and the defense subpoenaed seventeen. But the trial did not last a day.
If the prosecution had ever stood a chance, it vanished entirely when the Reverend’s neighbor Dorcas Anderson took the stand. In her earlier testimony, Anderson had swor
n to two things. The first was that on the night of the murder Mary Lou Maxwell had received a telephone call from the Reverend saying that he had been in an accident and had left home to pick him up. The second was that the Reverend had returned home alone very late that night without any damage to his car. But as Captain Chapman later lamented, Anderson “told an altogether different story in court.”
Under oath at the trial, Dorcas Anderson claimed not to recall any of her out-of-court statements. Instead of testifying that she’d seen a frightened wife rush out of her home after a frantic telephone call from her husband, or describing the Reverend’s absence that night and the pristine condition of his car when he finally returned, Anderson provided an alibi for her neighbor. To the bafflement and fury of those law enforcement agents who had taken her original testimony, Anderson now swore that the Reverend couldn’t have been the one who met his wife on that dark highway because he had not been anywhere near the scene of her brutal murder. Armed with her revised—or, as the police said, perjured—testimony, and absent any physical evidence against him, Maxwell listened as one of his neighbors read aloud the jury’s verdict of not guilty, and once again District Attorney Aaron watched as the Reverend walked away a free man.
