The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-09-15
Questioning of Cromwell
Finished Yesterday.
POINTS OF INTEREST
Among Them the Purchase of 1,12O,-
900 Shares Of Title Guaranty Com
pany Which Really Cost The Mu-
tuaI Nothing, and On Which 1t
Realized a Profit.
(By the Associated Press.)

New York, Sept. 14-When the
special executive committee probing.
the life insurance companies methods
adjourned today Chief Counsel Hughes
had finished for the time the exami
nation into the Mutual Life Insurance
Company, and the Metropolitan Life
Insurance Company was started nn
when Silas H. butcher. a director and
member of the finance committee.
was called to the stand.
Mr.. butcher was questioned regard
| ing the securities held by the Metro
politan and as to the syndicate OPP
erations of his company.
He was asked the salaries of the
companys officers. but he could not
| remember them. He will present the
list of officers salaries to the COM
mittee tomorrow. Mr.. butcher was
still on the stand when the committee
| adjourned
Earlier in the day Treasurer Crom-
we'll had taken the stand to continue
his explanations Of the Mutual Life's
syndicate operation. In explaining
the relations of the Mutua. with trust
companies. Mr.. Cromwell stated the
! interesting fact that on the purchase
of 100000 shares of the Title Guar
antee and Trust Company, the Mutual
had received in dividends $1.220.00e.
making these shares cost nothing and
| realizing profit. Mr.. Cromwell
stated the shares were now selling at
! over coo.
On the advantage OF dealing
/ through syndicates i'm reference To
buying railroad bonds direct. Mr..
Cromwell said he had actually tried
TO buy bonds directly from rNA'road
! company He went to his friend,
! GtnyXracopt oh - ~,
nois Central railroad.
Mr.. Fish told me he could not af-
ford to sell bonds to the Mutual" he
said
The Bankers Are 1t.
Then the truth is that the rail-
roads must stand in with the bankers
in order TO sell their securities and the
! insurance companies must stand In
| with the bankers in order to buy at
| low prices" Mr.. Hughes asked.
Exactly"
'The bankers control the sltua-
t:on?"
mo doubt of that"
In his testimony after the recess, in
| explaining the matter OF a purchase
of the Bank of California stock. Mr..
Cromwell said the issue Price of the
stock was $50.
Cromwell hoped to get the shares
CT tiiiSo ilS Ql e. Dul III TIE emu the snare
holders, to whom under the California
law the rights to the new issue belong
ed held out and the Mutual obtained
It's 5000 shares at an average price OF
$50 $40. The sale was entirely by
individuals and there was no syndi-
cate. The transaction was left entire
ly to William Babcock with absolute
confidence that he had been dealing
fairly with the Mutual.
Mr.. Hughes asked how the increases
or decreases of bank balances were
controlled.
Il control Them" said Mr. Crom-
well.
He recalled that in one instance that
he added $1,000.000 to the deposits
in the Guarantee Trust Company, be-
cause the trust company needed the
money for a special purpose He
could not remember what was the
special contingency, but he promis-
ed to look up the records and disclose
it.
"The advertising, printing station
cry and postage accounts OF the Mu-
tual is $1,134,S33.76; of the New York
Life it is $851,28468; for the Equit-
able, $772, 2,645.50. Can YOU explain
these very large amounts ?"
II know nothing about It, Current
expenses of the Mutual are under a
special committee"
"Is this true, that the legal expenses
amount to the sum of $364.254?"
81 have nothing to do with it. 1t
would be under the law department"
Mr.. butcher Called
1t was at this point that Mr. Dutch
er was called. While his testimony
developed nothing of a startling or
sensational nature, several statements
made by the witness were of passing
interest.
One of these was that of the COM
pany having no treasurer, the cashier
acting in that capacity.
OF $4,000, 900 Of the securities held
by the Metropolitan about $65.OOO.-
600 We're purchased from Vermille &e
Company and w. A. Reid az Company.
The reason Mr.. butcher thought that
SO great an amount of Ausiness was
done with these firms, was because
they have done business satisfactorily
and the company deemed it advisable
to continue with them. Mr.. butcher
said the president usually did the
purchasing of the securities for the
Metropolitan.
1t appeared from the questioning
that the president of the Metropolitan
had discretion in which banks and
trust companies deposits should be
kept.