The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-09-29
If All Men Are Honest.

If All Men Are Honest.
"Checks are not necessary if all men
81 have always believed every man
said Mr.. Schiff. HThis has always
been my theory and practice thru life"
In reply to a question by Mr.. Hughes
as to whether he did not think there
ought to besmore supervision Of insur-
ance companies, Mr.. Schiff said:
"There is no doubt Of it, but no law
can secure it. Do you expect every
director to have accountants at his dis
posal to examine the accounts of every
bank, insurance or trust company
Equitable society was audited only by
two of it's executive offcers-Mr. Nc
Intyre and Mr.. Jordan-and that Mr..
Hyde appointed them. And he added:
81 think he made a mistake because
he actually kept board OF directors
absolutely at the mercy Of one man,
schiff for Strict Watch.
Mr.. Schiff said he would like to see
an insurance company looked after as
strictly as his own banking firm and
its executive officers and held to as
strict accountability as his own cashiers
During his. connection with the soc1e-
ty, Mr.. Schif said, he never heard any
thing of the numerous trustee accounts.
and it was never brought to his atten'
carried under an account in which they
did not belong. -. ~-.-. 1913 -.
Mr.. Hughes asked him about cam
paign contributions by the Equitable
society. Mr.. Schiff said in reply that
Cornelius N. Bliss had told him that Mr..
Hyde had contributed to the last CAM
5paign, but he did not know whether it
was the society's money.
Witness knew absolutely nothing as
to how the money Of the society was
used by the executive officers unless
they chose to inform the finance COM
mittee. Mr.. Schiff said it had been
suggested that the society's accounts
be audited by outside accountants, but
rying Goals to Newcastle to have "mere
pignnies'' of accountants, as outsiders
were looked upon, audit the accounts
kept by such experts as the Equitable
employed. + g.
Schiff's Deals for Schif.
Taking up the transactions Of Kuhn,
Loeb & Co., with the Equitable, witness
testified that the names of the firms
from whom contemplated purchases
were under advisement were never men.
toned in the ccl nmittee room. When
Kuhn, Loeb & Cd. had any proposition
to make to the Equitable, Mr.. Schif
usually presented it to George H
executive committee and then it was
passed upon by General Louis Fitzger
aid. Witness said it was some times
three weeks before he could obtain re
ply to the officers of his firm. These
transactions continued until Genera
Fitzgerald retired and then George H
Squire passed upon the offers of bonds
How syndicates Are Formed.
Of the transactions of the Equitabl.
syndicates of which Kuhn, Loeb & Co
were the managers, witness said the ar
rangements were made in writing, tn
terms, the amount, and conditions beins
fully described. Mr.. Hughes went int,
a line Of questioning that brought from
the witness a description Of how tn
syndicates are formed, managed ant
closed. - ,:s
Gates, do you9' asked Mr.. Hughes.
emo, indeed, - witness replied.
"It'sa pretty good thing to be lie
Mr.. schiff smiled and nodded, an,
Mr.. Hughes continued: IT mean, the,
are good things to be let in,' wherea
Mr.. Schiff smilingly nodded.
Way to Catch Investors.
The list Of the syndicate transaction
Of the Equitable was taken up~and tn
manner Of allotment of bonds wa
probed. The allotments to Genera
| Louis Fitzgerald were made to hin
rather than to the Equitable, Mr.. Schit
| said, because he was financial facto
! in circle of men whom he desired t
take into the syndicates. AS direc
to Mr.. Schiff that the profits from thi
would not 90 to the Equitable HI
trusted to General Fitzgerald's fail
/ ness.
| All the syndicate transactions givin,
! the participations, allotments and prof
/ it's to- the participants were read b,
Mr.. Hughes. This took almost an hour
/ The allotment of number of Georg
4 III. Squire, tout of the account o
/ Kuhn, Loeb & Co. !" witness said, wer
| made to Mr.. Squire out Of the firm
own share, as a special favor. OF tn
allotments to ~. Il. Hyde and Assc
time he did not think Mr.. Hyde pal
ticipated individually. At the write
request of the society their interest
were allotted to James Fl. Hyde an
1 associates. This request was write
4 by and signed by James III. Hyde a
i vice president of the Equitable Lif,
i Prior to this latter, Mr.. Hyde had ne1
er been allotted any syndicate partic
i patton. Mr.. Schif said he did nc
think it was right for Mr.. Hyde to pal
| ticipate personally under these arrange
\