St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1892-02-03
its finance committee, and two ques-

Cs
tons are raised:
First-As 7" 'vh"ther or not finn, n
member o. hich was 4 member or u
company ) bouru oI trustees and of its
finance committee, could act as its
brokers without having the opinions OF
such trustee as to the value of seoul
ties affected by the probable commits
sion which the firm would receive on
such transactions.
Second-Whether or not the company
had the right to purchase securities
through such firm OF brokers.
The first question may be briefly dis
posed OF without discussion by Il SIM
pie statement of the results. In the
years covered by Mr. Whites connec-
ton with the New York Life Insurance
company about $50, 000 600 of securities
have been purchased by the company's
finance committee, and considera-
BILE proportion of this through the firm
of which Mr.. White is member,
Messrs. Looms L. White & Co.; and Oh
the 30th of June last the superintendent.
after valuing these securities at a time
of depression, found them worth to the
company something more than g, 100000
above the cost value at which they are
carried on the cOmpany'S books. Such
result is the best answer TO all ques
tiOnS as to the wisdom of the finance
committees action; and, in so far as Mr..
Whites action Influenced ii. it is
an evidence of the value 10 the
company OF this connection. The sec
Ond question is one on which opinions
of counsel differ. have reviewed now
with YOU the graver criticisms of the SUI
perintendent's report. / shall stop here.
L realize that there are other criticisms
which l have not referred to, and l do
not deem it necessary to do so. | have
tried to present to you fairly the facts
concerning those of most Importance,
and l believe l have shown you that,
while there have been errors in the
management of this company, there has
been no betrayal of their trust. A full
criticism of errors, with an equally full
statement of management deserving
COMMUNICATION. would have been only
fair to you and perfectly satisfactory to
me. however severe these criticisms
might have been. But the super
intendent Of insurance, who is i'll
vited TO examine the condition of this
company, while properly criticising
whatever he deemed criticiSable, omitted
to state the other side of the case, and
in addition. unfortunately, so states his
criticisms as to make it probable that
you may have misunderstood and over
rated their Importance. | desire to reit-
crate my disclaimer of infallibility and
repeat the message Sent from Europe
last summer-that in business of our
magnitude mistakes are inevitable, and
we compare favOrably with others; but
my integrity of purpose cannot be
shaken. General net results are the
touchstones in every business. We
need not go far TO iud confirmation OF
this. Errors have been made perhaps
in the management of every company
6nino hut
OF common notOriety. may refer to
them without seeming to attack the
companies themselves. In addition |
will say, to the best of my knowledge
and belief, these are natural experiences
incident to the fact that no one is infal-
lible. The Connecticut Mutual lost out
right SAC. GOO through the defalcation of
its financial correspondent at Indian
apolls in 1888. The Mutual Benefit Life
Insurance company, Of Newark. n. j.,
company eminently conservative in all
things, lost about the same amount in
Elizabeth, n. j.. bonds. 1t is a we'll
known fact that the Equitable Life As
surance society marked off in 1889 and
1890 almost 81, 100000 in real estate and
that it carries nearly $2,000.000 i'll its
published statement of assets and sur
plus as ''cOmmuted commissions"
agency balance, etc., which is practi-
cally another form OF expressing what
the superintendent calls debt in the
case of l.. G. VanuXem & Co.
In the report of the department eX-
animation of the Mutual Life Insurance
company, made in 1880, it was stated
that $3.50, FOL had been charged off to
profit and loss on account of its office
buildings. After naming these causes
land others might be referred toy we
have simply recited a list of average
errors which, in proportion to the inter-
ests at stake, represents less loss than
the experience of any business of which
l have knowledge, and with which the
management of the New York Life In
surance company invites comparison.
[ referred in one of the opening para
graphs of this letter to the new and
larger responsibilities which have been
met to the best Of our ability within ten
years. Amongst these has been the
growth OF certain evil practices i'll the
conduct of the business of life inSur-
ance.
Several suggestions for their remedy
have been offered, but for their COM
plete reform it does not seem to me
that any adequate remedy has yet been
named The worst practices, and the
most demoraliZing and in every way the
most reprehensible, are the giving of re-
bates to insurers, aud the more or less
constant attempts of companies to en-
tice into their own service the agents of
competitors. This is a natural result of
fierce competition, and in my Judgment
should be speedily eliminated, and it
seems to ME that the one and all-suf-
ficient remedy would be (and desire
to go on record as indorsing that plam
to limit by statute the amount of insur-
ance that company shall place upon
IFS hOOlZS That 6nOIlnt having hQnp
reached, the incentive of that company
for obtaining new business is entirely
taken away. and it is practically
eliminated from the contest. This
might dlsappoint ambitious managers
myself included), but from the point of
view of a citizen it would be altogether
beneficial. Such law would tend to
give the younger and smaller companies
better opportunity to grow, and would
greatly strengthen and extend the ben.
eficent work of life insurance by at
once curtaiing errors in the conduct OF
the business and widening the field of
its operations. i
In conclusion, let me say, when my
official relations with the New York lii
Surance company begun twenty-nine |
years ago its assets after eighteen |
years of existence were less than two |
millions of dollars, and its surplus less |
than two hundred thousand dollars. |
Its history since and its officially de- |
termined assets June so last of $780, !
100000, its Sl5,000,000 in surplus and its |
annual income of over thirty million |
dollars l submit to your impartial |
Judgment as the achievements of my |
associates and myself during the adj |
ministration of our trust. I remain |
yours faithfully,
w r. REERS President