New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-06-03
FEATURES OF REPORT.
Chances and Economics Strongly
Recommended.

The Frick report. The Tribune learned last
night, included the following charges and recon-
mendations:
The removal of President Alexander, First
Vfce-President Hyde and Second president
Tarbell Is advised in no uncertain terms Fur
Their a. complete reorganization of the various
departments is demanded on the general ground
OF extravaganza There is also the general criti-
cism that the salaries of most Of the officers are
too high.
Innumerable mistakes of judgment are charged
against Mr. Hyde, but, in the opinion of the
committee such mistakes not in any way
| criminal. The report says that salary of $780,
600 year is too great, and that the first vice.
president should be prohibited from drawing
any salary from the Mercantile Trust Com
| pany and the Equitable Trust Company. Mr.
| Hyde is charged with unusual extravaganza in
the salaries of his personal clerks. The famous
| dinner to Ambassador Cambon is ticketed as an
| unwarranted charge against the society. The
| dinner at Sherry's is not mentioned. There is a
further censure of inflated bills for travelling
| expenses.
| President Alexander says the report must be
| held equally responsible with Mr.. Hyde for all
| of the latter's mistakes and errors The blame
| should be equal because he had full knowledge
of what was being done. yet failed to report 1t
to the directors. He IS charged with a neglect
! full and careless administration.
There is general charge against Mr.. TarbeI
that he was most extravagant in the manage
| ment of his office. The report declares that the
| increases in salaries made by Mr. Hyde and
concurred in by Mr.. Alexander since 1900 were
utterly unjusti1able and out of proportion to the
| increase In business.
| The reorganization of the executive commit
tee of the Equitable Life Assurance Society
1 t6adS
| board Of directors yesterday. had been recon-
| mended in the report of the Frick committee
| Among its other findings the report contains
| the charge that the minutes of the proceedings
| OF the executive committee have not been kept
| in the manner provided by the bylaws and
| that In the conduct of it's business there has
| been marked absence Of the formality which
is proper If not essential in dealing with trust
| of such great magnitude" 1t is further found
| that the directors responsible for con-
| structing the executive and finance committees
| Of the same persons. except one: thus destroy
| ing the check upon and supervision over the ex-
| ecutive committee which the bylaws provided
| shall be exercised by the finance committee
| Upon the points of dummy directors and
| "one-man control so-called the Frick report
| says. In substance, that the title of the great
| majority of the members of the board to their
oftces as directors is open to question under
| the societys laws, as the shares held by them
| were transferred to them in order that they
| might qualify directors. This practice of
| qualifying directors is almost old as is the
| society ITSELF the report continues; and for
years there has not been a time when there
| have been enough male stockholders owning
| rectors required by the charter. At present
| there are not more than half enough The re-
lation OF the board of directors to the exercise
of the Societys powers" is found to have been
| practically nominal since the establishment of
| the society,"
There are several paragraphs devoted to the
| use of the funds of the society. The report con-
| dennis the practice of using the society's money
| to organize and support trusts and safe deposit
| companies, banks, railroads any other outside
| interest.
| Details given of the enormous cash deposits
| kept in various institutions, and such deposits
are disapproved of, especially the So, 100000 de-
| post In the Equitable Trust Company, the So
OOOOoo deposit in the Mercantile Trust Com
pany, the S3,OO00OO deposit in the National
| Bank of Commerce, and the S2,50O,0O0 deposit
| in the Commercial Trust Company, of Philadel-
| PIMA The report says this money should be put
where it would earn greater interest for the
Equitable Society. and its immediate withdrawal
| is suggested.
| suit in larger surplus is condemned and a
change to annual payments is advised. The
deferred dividend" system is declared to be 40
| wasteful and. in the opinion Of the committee,
the society would be better off without IT,
Another section Of the report, without men,
| tioning names takes up the selling of securities
| to the society by members of the finance COM
n1ttee This action is frowned upon severely.
IN nine of the transactions conducted by the
| syhdlcate known as James H. Hyde and Asso-
clates, the Frick report finds, the Equitable
| purchased some or all of the securities involved
| Inc tothi profit In these nine transactions in
| two OF which the Equitable was participant in
| the syndicate, was $204504. of which s167,741
| was received by eight men who were directors
| in the society six of the eight being members
| OF the executive and finance committees "In
the case OF one purchase of the syndicate securi-
| ties; the report says, the society guaran-
| teed to be given the benefit of any decline in
| price during the life of the syndicate. In fur
| therance or this guarantee the society received
rebate or 100000, and subsequently, sold the
| securities at profit of s71.S82. The syndicates
| proht on the transaction s11,931. In one
| ease IN which the syndicate profit was s30211
| the society now holds the security purchased.
| which at present quotations shows a loss of
about $4,000. In all other cases the society has
either made profit. or could make profit by
selling the securities at the present market. If
| the socletys directors who figured In the syndi-
| cate had acted solely for the society the So
| ciety's profit would have been s167.741 greater
| than It was