New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-04-11
INSURANCE INVESTIGIIiON.
THE LEGISLATIVE COMMITTEE.
EXAMINATION OF SHEPARD HOMANS, JOSEPH !.
KNAPP. AND JOSEPH =. FACKLER.


EXAMINATION OF SHEPARD HOMANS, JOSEPH 7.
KNAPP. AND JOSEPH =. FACKLER.
ALBANY, n Y, April l0.-The Insurance
Comi,ce net this afternoon and heard the testimony
Of Sheppard nOmans, President Of the fro7Idcnt say
mcs Lie Insurance COMPANY. He testified: H+i been
an actuary II years III the Mutual Lie ana Tor trce
Yeas in other companies; first connected VIA ne
insurance in 1896; rroXies.dre obtained from pohcy-
noldes with view to STRENGTHENING the position Of the
officers AGENTS are frequently requested to obtain them
FOR this purpose they generally given to m officer
by name they have right 10 require proxies as con
sldcraiion for nSrng with the companies proxies are
usually kept 10 used when there is an occasion Tor
them but there has been only one or two sach oc-
cas!oas in the Mutual Life; in 1870 there were
two tickets and by OF proxies there was an inn
ucuse majority for the officers ticket saw the proxies
east; do not remember TO have heard the result DO
cared the opposition ticket was one madc mp ny policy
holders; think proxies are dangerous when lasting an
indefinite time; they may be used for other purposes
than the one originally designed by the policy
who gave It; where proxies held IN great numbers
IN the ease OF stock company, il would be very dan
eerous power; when the surplus Of "A stock company
equals the amount Of policies tbs poicynoders should
he allowed TO vote; believe that law prohibiting the
holding OF proxies would he very JUST there can hardly
be any way of preventing officers from using their !ni-
.pcc 10 Obtain proxies or votes; connection
with the Mutual ceased E ls7l acuarl ani altogether
in 1872; diralproy" OF the manner IN winch p"A" &'c
given III certain mutual companies; thlnk t'y sio" ne
Emit d e. the particular election for when thcy are
clveu the officers have undde amount OF power DY
means Of proxies il proxies should become lnyHid dItr
year would wcik very Justly secret combinations
10 sCt possession OF conpnie" shoad 30 -uI dslis',
but not Idorc 20 .han IN banking institutions mere was
Il IN the Mutual Life ltsclf where combination Of
policy holders secured proxies and carried an election
Mr. Winston WIS ten aoe to put in Alne hST irIslc
Mr. winston 1T tHa time only trustee; 40 one cX-
cept officers seem 10 have any chance to ina out me
by access 20 The cOmpanys bools which Is almost i'm
possible, by advertising. Policy -ho.fcrs witness
Ittfg ltpy, te Loo, Ia, ID
say mat the privilege granted would ne accorded very
freely. AE MeCulioch IN 1869, as poi.cy;holdor was
Importance resulted from H. He was III the interest OF
all opposition
AMALGAMATIoN METHODS.
There several mixed companies where poicy-hod-
cs have no right vote. He knows several instances
where majority of the stock has been purchased to con-
troll elections III rensuTed companies Such tie
in the widows aud Orphans MI McCurdy, Ncc-Presi-
dent of the Mutual Life, director in the Widows
and Orphans and secured the majority OF the stock.
rensued in the Mutual Protection These two com
panics beng consolidated became tue Reserve Mutual
which altcTwaTd was swallowed up IN the Guardian In
examining the accounts OF the company witness found
checb-,tu0 for $4,000 Tor agency expenses, when
Mr. BIsS-Did NOT the checrbook show that the check
drawn hreci months before the CONSULTATIONS a.
No Sir; few days afterwarl.
Witness was also director OF the Widows and Or.
phaus'; about One-hgf of ie directors Of the Widow
and Orphans also directors IN the Mutual Lc the
stock ct Tie Widows and orphans wac purchased al
par; witness opposed the TRANSFERS M NcCurdy drew
for Tensuriug attorney ana counsel tOr
the company; the contract was adopted unanimously,
witness having voted; opposed thc transaction be
cause The WidOWs and Orphans IL good shale,Whe
the 1tual Protection was really suspicious company
ma Al had Iepute Mr. Beers Uf the NcIl ok IAie said
after, ara that he would have gwen Sl0OOoO Tor the
Of the company; witness had 10 STOCK AZ he
lime transfer, although ne acted ~ director hal
sold stock, bat 1t probably was left in his name on
the books report of the Widows and Orphans o. the
year does his knowledge SLOW mat the company
was IN, olycnt, its somewhat impaired the
carefully selected and the impairment re-
suited the too heavy dividends de-
clared upon the calculation Oy the d-
tuarV a liability of some 100000 was overlooked
md thus resulted the wrong dividend The witness was
consulting actuary, but did not make the calculation
MR.. HOHANs AND THE MUTUAL LIFK.
To Mr.. Bliss-I DO not think am record as having
stated that the impairment due to increased NOR
tally. Tbs differences between the officers OF the Mutual
Life and myself were due TO the fact that Mr. Winston
had directed that dividends should not be
paid although the charter declares that they must be
paid The witness, actuary tried to persuade Mr..
winston that II was wrong but he could not he per-
suadcd, witness refused 10 sign the annual state
Iuen unless he could modify tie OATH That II true.
Mr. Winston objected and the assistant actuary signed
the statement Bylaws were afierward adopted AT Mr..
WnstOn's instance, giving the duty OF auditing money
accounts the bOOkkeeper instead OF the actuaTy.
Mr.. Moak-1hat gave him the auditing OF his own
counts
Witness-Yes, Sir
Witness had also pointed out detect in "A certain cal
culaon for the change Of the dividend system, which
had been made by certain professors OF West Point
defect which would have invOlS ed disaster 10 the
pany. A method OF dividend making was then
agreed upon but IL proved unsatisfactory, and Mr..
Winston became angry aud his connection with the
Mutual dissolved. -
10 Mr Blss-Do believe that Mr.. Winston intended