The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-04-04
AN IMMENSE SURPLUS \ DANGER.

Mr.. Lawson's "Frenzied Finance
has not startled the public so much al
the plain facts brought to light by
reason of the disagreement in the in.
ner circle of the management of the
Equitable Life Assurance Society. THAI
is one of the greatest life insurance
companies in the world. 1t has over
100000 policy holders and it's surplu,
exceeds an hundred million dollars
An immense surplus has been regard
surance company These disclosures
show that it is danger and a temp.
tation. In point of fact, beyond the
amount necessary to protect it's pol
icies, every extra dollar of surplus i;
extorted from policy holders unneces-
sarily. Instead of piling it up, the
cost of premiums ought to be de-
creased.
The charges against the Equitable
management are very grave. The
most of by the New York papers, to-
wit. the payment out of the money OF
policy holders by James H. Hyde, one
Of the officers, of the expenses of an
elaborate dinner given to the French
Ambassador, a ball that cost $780,
600, and carrying his personal servants
on the pay roll of the Equitable
These are such scandalous misappro-
priation of funds as to call down pub
lie condemnation. But that petty pc
culation-( for it is nothing else)-is
q small thing compared to the graver
charges.
Among the charges are these: that
the stocks in the Equitable Trust Com
pany, owned personally by directors of
the Equitable Society, sold to the
Society for $500 per share when they
were worth only $50, by which the
officials were benefited 100000 or
more; that Jacob H. Schieff and
others. directors, made big money SELL
ing securities and stock to the Equit-
able; that directors got rich by depos-
iting the money of the Equitable in
banks they owned; that individual di-
rectors used the funds of the Equit-
able Society to secure control of great
corporations, which they recognized,
and then sold to the Equitable Society
bonds and other securities of the re-
organization, out of the proceeds of
which they paid the initial loans and
had for their personal profit the un-
DERIVING stock and bonds; that many
of the directors were dummies, and
their object in being directors was to
use to their own advantage the $780,
600, 900 Of Equitable assets"
These are the very things Lawson
has charged against 1.-The System
panies are involved in a sense because
their directorates are interlocked with
that of the Equitable. The truth
seems to be that the directories of
these companies, having in their con-
troll sums beyond the dreams of ava
rice have sought to- dominate the bus
mess of the world, not hesitating to
get rich themselves the while.
The best message Mr.. Cleveland
ever wrote to Congress was ON the evils
of large surplus. He proved that it
tended to extravaganza and corrup-
ton and urged that it was the duty
of a government not to collect taxes
out of the people in order to pile up 4
large surplus in the treasury. 1t is
equally wrong for insurance companies
- Z, 70
plus beyond a sufficient amount to pro-
tect the outstanding policies. A Bill
lion Dollar Congress and much scandal
was the result of a surplus in the Fed
eral Treasury. Hundred thousand
dollar balls, at the expense of policy
holders, and examples of frenZied fl
nance have resulted from an immense
surplus in this great life insurance
company. If the gigantic SURPRISES of
the big companies continue to grow,
and the directors act together to own
banks and trust companies and mines
and railroads, q power will be lodged
in them greater than the old National
Sank that Andrew Jackson had to de-
stroy because it was menace to the
government.
OF course the Equitable Is well able
TO meet all it's obligations and pay all
its policies. For many years it has
been piling up this modern useless Py-
lamid until it has become top-heavy
The directors could give 100000
fancy ball every month for several
years and still leave enough money
to pay all policy holders. All of which
shows that the people are paying too
much for life insurance and piling up
in the great centres millions of money
which ought to be left in the pockets
of the insured There will be an in
vestigation there will be some changes
in the management, and policy hold
ers will be told that they are controll-
ing the company, and for time things
will run better. But just SO long as
the life insurance rate is high enough
to pile up an immense and unnecessary
surplus, just so long will the tempta-
tor. to speculate and town things" the
bane of The System, be So great that
few directors will resist it. The rem