The Penn's Grove record., 1905-06-30
EQUITABLE is CONDEMNED
State Superintendent Of Insurance
! Hendricks Makes Report.
CENSURES ITS MANAGEMENT

DDS Now Prevsiling-Matter Placed by
Him For Action in Hands of the Attor-
ney General-Alexander and Hyde Ar.
raigned-Prohts Should Be Paid Back
New York City.-Francis Hendricks,
State Superintendent of Insurance, in
his preliminary report to Governor
Higgins on the Equitable Life Assur-
ance Society, arraigns the conditions
prevailing and refers the entire case
to the Attorney General Of the State
for such action as he may deem neces-
sary.
That some definite action in the So
ciety's affairs should be taken by the
State is clearly the conclusion of Mr..
Hendricks. "No superficial measures
says he, Twill correct the existing evils
in this society. A cannot be
cured by treating the symptoms"
In many respects MI. Hendricks re-
port is a more severe arraignment of
the society than that made by the
Frick committee. Practically every
abuse that the Frick committee found
existent Mr.. Hendricks finds, and, fur
thermore, the Insurance Department
has delved into the question of real
estate leases and repairs, and shows
that a shocking condition Of favorit-
ism and petty graft has existed in this
department for years.
Thomas f. Ryan's purchase Of the
society by acquiring the majority
CfnaY hAldinnc Of To n1nS III HU10 and
the other devices Of the new owner of
the company, to assure it's partial
naturalization by the selection Of di-
rectors by the distinguished voting
trustees, former President Cleveland,
Judge Morgan J. O'Brien and George
Westinghouse, is family praised by Mr..
Hendricks.
II do not question:" says the Super
lntendent Of Insurance toward the close
of his report and after briefly advert
ing to the purchase of the company by
new interests and the plans for partial
mutualizing the company-"1 do not
question but what this is the honest
intention Of those who have acquired
the control Of the society"-to so man.
age it that certain reforms will inure
to the benefit of the policy holders. II
do not think, however, that they will
go far toward restoring the confidence
of the present policy holders or aid in
procuring new business for the So
ciety."
Mr.. Ryan's expenditure of $2,500,0 900
for Mr.. Hyde's $4,000 worth Of stock
is not likely to prove a very profitable
investment if Mr.. Hendricks views
are carried out. Without specifically
mentioning Mr.. Ryan's recent acquisi-
ton of the company's control, Mr..
Hendricks has this to say Of stock
ownership:
"In my opinion the only thing which
will restore confidence and benefit the
company will be the elimination of
the stock control, and, what I deem of
Equal Importance, the elimination of
Wall Street control. y = Complete
naturalization, with the elimination of
the stock to be paid for at a price
only commensurate with its dividends,
Is, in my opinion, the only sure meas
ure of relief"
President Roosevelt, in a remark
able letter issued in defense of Paul
Morton's business career, expresses
confidence that he will be able to bring
order out of chaos in the affairs of
the Equitable Society, and, further
more, declares that in his Judgment
thorough insurance reforms can only
be made effective through federal SUI
pervision of these companies. In this
conclusion the President is Joined by
John A. Mccall, president Of the New
York Life Insurance Company: Sen
ator John T. Dryden, of New Jersey,
president Of the Prudential Life In
surance Company, Of Newark, and
other leading life underwriters
throughout the country.
Mr.. Hendricks finds:
That all who took part in the deals
Of the Games H. Hyde and associates
syndicate should be compelled to pay
back the sums received by them.
That the leases between the society
and it's subsidiary companies care all
o~ne-sided, unfair and unjust to the
society,""
That James H. Hyde's authority con-
tinued to increase, and he proceeded to
and more, as if they were his own, un-
til he was checked by the demand for
naturalization and his retirement.
That James w. Alexander was cog
infant Of and approved the various
subsidiary undertakings criticised, and
by reason thereof has failed to meet
the obligations imposed upon him as
chief officer of the society, and it is an
open question whether he is not dis.
qualified under section sc of the in.
urance law from hereafter holding
any Office in a life insurance company
as we'll as all the others officers and di
rectors who participated in these I'M
lawful transactions.
That the report, with a copy of the
evidence taken on this investigation
will be transmitted to the Attorney
General for such action thereon as he
may deem proper.