The free lance. (Fredericksburg, Va.) 1885-1926, 1905-09-16

Treasurer of Mutual Life UphOlds
Operations With Them.
REMARKABLE GROWTH OF ASSET

MIR. Cromwell Declares It Is Absolutely
Necessary to Buy Securities Of Syn
dicates, Owing to Heavy Receipts.
Admits Personal Profits.
New York, Sept IA vigorous de-
Tense Of syndicates and their oper-
ntions i'm connection with the insur-
anre business and a frank statement
Of personal profits gained through
their operations. made by Frederick
Cromwell treasurer Of the Mutual
Life Insurance company. was the fea-
fure OF the session OF the special
legislative committee appointed to
probe methods Of life insurance com
panies i'm this state The defense OF
the syndicates was made by Mr.. Crom-
well soon after he was called to the
stand. Before he was asked question
he begged leave TO say few words,
and upon being directed to proceed,
said
THE law Of combination, which ar
fects finance as everything else, has
made syndicatos necessary. When |
became treasurer Of the Mutual Life
Insurance company the total assets
OF our company were 800. 900 900. The
transactions in my department now
are over 100000 900 per year. When
our receipts were less 20 years ago
it was quite possible for us to buy
from bond dealers and pay the sue
ccssl,e profits. but now it is absolutely
impossible 10 buy advantageOusly
large blocks OF securities. except as
they are hoatcd by these combinations
Of capital. popularity called syndicates,
and we have gone into them 20 get our
investments. and get them In sufficient
size and al ground floor prices We
could not make our investments with
out syndicatcs. and We are partners In
every syndicate which we 90 into.
want 10 say further that unless we
went into these syndicates we would
+ IlI INNf hllli W llINfnA OAA AHtA'ARf -
cept by buying in small quantities and
paying the successive profits Of mid
dlemen.
81 ask you Mr. Hughes. and the
committee. 10 consider that we have
now over s450.00oOOO Of assets, and
while we have over 100000 O in
vested in bond and mortgage, we are
constantly under the necessity OF
finding additional investments for our
large accumulations Of funds. This is
the condition II is no theory"
The acknowledgment OF personal
profits was made in tabuated state
ment which was presented TO the COM
miitee after recess It showed that
Mr.. Cromwell had made n personal
profit Of S2G.37l from syndicate oper-
ations during the past five years. in
which he individually and the Mutual
Life Insurance company had partici-
patcd
Mr. Hughes. chief counsel TO the
committee. Immediately took up each
item of these syndicate transactions
in an effort 70 ascertain the manner In
which these profits were obtained.
An interesting point was brought
out when probing a transaction IN
PENNSYLVANIA railroad 81 conyertl-
bles in which Mr.. Cromwell made no
personal profit. the witness stated "of
course we are greatly interested in
the PENNSYLVANIA railroad. might say
we are the heaviest stockholders.
Answering Mr. Hughes, Mr. Crom-
well said the holdings OF the Mutual
Life in the Pennsylvania railroad was
1000 600 par Among these transac-
lions the connection Of trust COM
panies with the Mutual Life was
brought out, when it was stated that
the G1.000.O00 subscription to a Japa-
nese loan was shared by the United
States Mortgage and Trust company
and the Guarantee Trust company.
Just before closing the inquiry for
the day Mr.. Hughes said: I'VE had
some talk this morning in connection
with another insurance company, OF
Joint accounts. Have you any OF
these?"
mo. sir: we have not. and never
have had" replied Mr. Cromwell. We
have no partners in our investments,
that is, any investments We make are
made by the Mutual Life, and what Is
done is for the Mutual Life Is done
for the pOlicyholders.