The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-09-15
could lend great deal Of money at per
cent. but not safely.

MORTGAGE BUSINESS SECOND HAND.
Mr.. Hughes went into the Mutual's rela-
lions with the United States Mortgage ant
Trust Company. The United States com
papy lends Its money on mortgages, puts
up the mortgages as collateral for de-
bentures, and these are taken by the Mutua
Life The Mutual gets per cent. on Ii
money invested in these debentures; the
Mortgage and Trust company gets ~ or
It's mortgage loans. The Mutual thus
loses u per cent, providing 1t could have
taken the mortgages itself
Mr.. Cromwell commended that the Mutual
couldn't get the mortgage business frs
hand; that the insurance company tried to
do 80 at first, but that It was practically
forced to form connections with other
companies.
MI. Hughes wanted to know what pre-
cautions the Mutual Life took to satisfy
the debentures. The witness said that the
United States Mortgage and Trust Com
pany else guaranteed the debentures. but
counsel for the committee pointed out that
the Mutual Life itself owns half the capital
stock Of the Mortgage and Trust, company,
guaranteed, the bonds which it held
Mr.. Cromwell said that there were mem
bers OF the Mutual's board of trustees on
the governing board Of the United States
representative from the Mutual's treasury
department Mr.. Cromwell said that he
personally was satisfied that the, property
behind the mortgages was good after it
had been passed on by the Mutuals repre-
Mr.. Hughes asked the witness to have a
statement prepared showing the Mutuals
transactions in the United States Mort
gage and Trust Companys debentures.
ARBUcKLE BRos.' DEALS.
flames n Jarvie said that he was di-
rector In the National Bank OF Commerce.,
the Guaranty Trust Company, the Mutual
Alliance Trust Company and the Morton
Trust Company. In each Of which the Mutual
Life IL a large stakeholder. Mr.. Jarvie
said that in his opinion 1t was necessary
pate in syndicates because in the first place
IL was profitable and in the second place
they couldn't acquire large lines of securi-
ties under any other circimstances.
He said that personally he had never
the Mutual had been niterested or from
which the Mutual had purchased bonds.
Arbuckle Bros, the firm of which he is a
member, had however, been interested in
syndicatss with the Mutual Life. Mr..
transactions Of his firm. He was perfectly
willing, he said, to make the statement
that hi, personal judgment had never been
affected by the fact that the Mutual had
entered q syndicate. and he thought that
Mr.. Hughes replied that Mr.. Jarvie's
declaration was important, but that it was
necessary to- get at the facts as regards
the transactions of his firm Mr.. Hughes
were interested in the Pennsylvania con-
vertible " syndicate, Mr.. Jarvie appealed
to the chairman of the investigating COM
niittee and asked whether it was necessary
for him to answer that question; Assembly
NnrvnV Ia rrTh .t<HI fho nl4s.
place OF Senator Armstrong, said that the
witness would have to answer.
Mr. Jarvie replied that Arbuckle Bros.
had participated in that syndicate to the
extent of 100000, and also in one Of the
Imperial Japanese bond syndicates in which
the Mutual was interested.
Mr.. Hughes told the witness he might
20, but as he was leaving the stand James
NJ. Beck, the Mutual's counsel, arose and
said, addressing Mr.. Jarvie:
If by reason OF your connection with
the Mutual Life Insurance Company you
were not permitted to invest your private
funds and the funds OF the firm OF which
you are member as you pleased, would
you remain a trustee Of the Mutual Life
Insurance Company" .'.>
Mr.. Jarvie answered that he woul not.
WHERE WOULD TRUSTEES COME FROM?
sThen," continued Mr. Beck, do YOU
think the Mutual Life Insurance Com
pany could get a board of trustees COM
posed Of men Of experience and affairs to
continue members OF such board OF trus-
their private means as they peased?"
Il think not" was Mr.. Jarvie's reply.
Mr.. Hughes quickly recalled the witness
10 the stand. and asked rather sharply:
proper for you or your firm to make money
out Of the purchase Of bonds by the Mutual
Life Insurance Company"
we never had made money out of that"
replied Mr.. Jarvie.
g. Vow do m make money out Of it when
you have profit in the syndicate? A. As
:wsrsS that auesstho ',o II this This way told
SSd tna or SrG n went to
that the Mutual Life Insurance COMPANY S1
going In had no influence in their. judgment
want to know whether one OF the conditions |
Of your being trustee of the Mutual life |
mones out Of aa L2 ass
Company by the purchase Of securities?
Mr.. Beck interrupted with:
Such was not my question
Il knew that it wasn't but 1t is mine"
Tetorted Mr.. Hughes.
CAN'T Oct BONDS FIRST HAND.
Mr.. Henderson gave it as his opinion
that 1t was practically impossible for the
Mutual Life to get bonds directly from the
vendors, from, for instance, a railroad.
A banking house, when 1t takes a series of
bonds, wants the entire issue, and it Is more
satisfactory to the house TO have the Mutual
participate in the syndicate underwriting
the bonds. Mr.. Hughes wanted to know
whether 1t wasn't o fact that the Mutual
went into synoicates sometimes because
It didn't want to prejudice its relations
with banking institutions, and Mr. Hender-
son replied that he didn't think 30.
Mr.. Henderson said that his firm par
dcipated In the Pennsylvania Railroad
shares syndicate to a small extent and
also in two Of the Imperial Japanese bonds
eyndicates, in each of which the Mutual
Life was interested.
George +. Baker testified that he was a
director In the Guaranty Trust COMPANY,
the United States Mortgage and Trust
Company the Morton Trust Company and
the National Bank OF Commerce. He
said that the Mutual Life maintained a
considerable cash balance in the First
National Bank, Of which he is president.
Mr. Baker Is member Of the Mutual's
finance committee. as are also Mr. Hender-
son and Mr.. Jarve.
THE DEATH CLAIMS" ACCOUNT
The Mutuafs account In the First Ma
tiopal. he said, amounted on an averag &c
TO about 100000. 1t is the company's