The Goodland republic. [volume] (Goodland, Kan.) 1891-1907, 1905-09-29
LIFE INSURANCE SCANDAL

insurance company is attracting the
attention OF the entire country The
press, irrespective Of politics, COM
ment upon the facts brought out in
the investigation and emphatically
condemn the methods employed by
these companies The following edi-
tOrfais are copied
The Chicago RecOrd-Herald, re-
publican, under the head, '.Deceiv-
ing the Government" says:
In al the revelations concerning
the Equitable Life Assurance society
il Is doubtful whether there was any
thing more shameful than the action
Of the New York Life insurance COM
pany in deliberately classifying its
own books in order to deceive the
PFussian government The company
owned certain securities, including
the steel bonds and railway stocks,
which the Prussian government re-
garded as unsafe investments for an
insurance company. Unless these Sc
curfties were disposed Of, the New
York Life would be barred out Of
Prussian territory According to the
admission Of Edmond D. Randolph,
the treasurer Of the company, the
books Of the company were made to
show that these securities had been
sold. Actually, however, the securi-
ties were merely put up as collateral
for a loan to the New York Trust
company but by a bond clerk and a
messenger, the latter Of whom was on
q salary Of $500 a year. The amount
involved was above 100000. To
make the matter worse the trust COM
pany was itself under the control,
and ultimately the property Of the
New York Life company, but in order
10 81 hc
been transferred to trustees Here was
dOuble-eyed deception. If the New
York Life insurance company deceiY-
ed the Prussian government in this
manner, to what extent has IL deceived
our own state governments and their
inspectors? The impression is abroad
that if it has not found il necessary
TO falsify its books for home uses, it
is only because it, like other cOmpan-
les, has been on such friendly terms
with the New York insurance depart
ment that such methods were unneces-
sary. Manifestly the officials of a
company that have thus betrayed
their trust are utterly unfit to con-
tinue in the management Of policy
holders money. The fact that the
slime Of syndicate operations seems to
cover them does not make their pO-
sitiOns any better"
In a recent number Of the Chicago
Tribune, a republican paper. an edi-
tOriaI entitled Life Insurance Scan
dals," appeared, which editorial was
as follows
When Mr.. Thomas ". Lawson, in
his magazine articles, incidentally re-
fered to scandals which were said to
exist in many life insurance cOmpan-
les people were disposed to discount
his statements No one at that time
was prepared TO believe that the life
insurance companies, which were
supposed to be in the hands OF high
minded honorable men. could be
guilty Of the practices alleged by Mr..
Lawson II is now apparent that he
did not tell half the truth The man
ayers Of these companies themselves
admit being engaged in operations
worse than those he charged against
them People viii not know how to
reconcile the behavior Of J. Peirpont
Morgan, for instance, with his stand
ing in the community as a gentleman
and man OF honor Surely il can not
be held appropriate that he should
take from the New York Life insur-
ance company its principal vice-presi-
dent, occupying the position OF chair
man Of its finance committee, and
make him a partner in the banking
house Of J. P. Morgan & Co. If Mr..
Perkins had retired from the posi-
ton Of vice-president Of the insurance
company when he became a member
OF the banking firm he would not
have been open to criticism, but it
was impossible for him to discharge
faithfully the duties Of trustee and
pOmOter at the same time The law
does not hold such relations as eQuit-
able. There have been many in
stances in the courts Of trustees who
have taken advantage Of their posi-
tiOns being compelled to turn over to
their principals the profits OF their
transactions No man can serve two
masters, for either he vii hate the
one and love the other, or else he will
hold to the one and despise the other.
Mr. Perkins can not properly dis
charge his duties as vice-president OF
the Insurance company and at the
same time as a member of the Nor
gan firm. J. P Morgan & Co. is not
an ordinary banking firm. 1t is q
promoting firm, a flOater Of bonds
and stocks, and its relations to cor
pOrations like the New York Life in
Surance company could not. under the
circumstances, be entirely free from
faint
When we come TO such transac-
tons as those by which the New York
LIE lllS4LdllEE company put OUT
hands large amounts OF industrial Sc
cUrities to deceive the German gov
eminent we are peTilOusly near the
region cot plain fraud How can any
one engaged in the life insurance bus
mess reconcile transactions Of that kind
with his conscience and sense OF duty
as a trustee The DRIFT OF legisla-
ton in all the states is plainly opposed
to the use Of public money for pri-
vate purposes So far as Legislators
are able to effect it treasurers are for
biden to take interest on public money
or to speculate with it. under the
severest penalties, which often involve
penitentiary sentences We fail to
see in what particular the abuse OF
a position as a private trustee differs
from abuse Of q position as public
trustee, except that the penalties are
lighter in one case than in the other.
Manifestly there is need for the
Oyerhauling OF the entire life insur-
aHce system and for its divorce from
trust companies and inside corpora
lions, through which some managers
apparently are seeking to enrich them
selves. II there are any profits from
such transactions the policy holders
should be the benefEciaries. The
temptation to accept dubious securi-
ties offered by a member Of a bank
ing firm 70 himself as chairman OF a
finance committee must be well nigh