Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1905-10-02
INSURANCE SCANDAL
LAWSON OPENS The EYES OF
The PEOPLE.
What Were Supposed to be High
minded Officials Prove to be Re-
Creanf to Their Trust. Private
Gain put Before Public Good or
Personal PrObity.

OdiIi Put DStoIS FuUuN OOOu VI
Personal PrObity.
In recent number of the Chicago Tri.
bune, a republican paper, an editorial
entitled Life Insurance Scandals"
appeared, which editorial was ae follows
"When Mr.. Thomas w. Lawson, in
his magazine articles, incidentally re-
ferred to scandal. which were said to
exist in many life insurance companies
people We're disposed to discount his
Statement. No one at that time was
prepared 10 believe that the life insur-
ance companies, wbicl were supposed to
be in the hands Of high minded, honor
able men, could be guilty cf the practices
alleged by Mr.. Lawson. 1t is now ap.
parent that he did not tell half the truth.
The managers of these companies them.
selves admit being engaged in operations
worse than those he charged against
them People will not know how to re.
c)nci'e the behavior of J. Pierpont Nor
gan, for instance, with his standing in
the omnunity as "A gentleman and man
OF honor. Surely it can not be held as
appropriate that he should take from the
New York Lite lnusrance company its
principal vice president, occupying the
position oil chairman of it's finance com
mite, and make him a partner in the
banking house of j. p. Morgan & Co. If
Mr.. Perhins 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 diScharg, faithfully the duties
of truscee and promoter at the same time.
The law do-s not hold such relations as
equlta Die. rh4re nave been many in
stances in the courts Of trustees who have
taken advantage of heir positions beng
compelled to turn over to their principals
the profits OF their transactions. No
man can 4'rve two masters, for either he
will hate the one aud love the other, or
else h. VII hold 10 the oIe and despise
the other' Mr.. Perkins can not prop
erly olsen irge his duties as vice presi
dent Oi the Insurance company and at
the same time as a member OF the Nor.
gan firm. j. =. Morgan & Co. is not an
ordinary banking firm. 1t is promoting
firm, tlJAter OF bonds and stocks, and
its rea .ons 10 corpora ions like the New
York Lie Insurance company could not,
under die clrcumstances be entirely free
from tallt.
"Wh.A We come to such transactions
as those oy which the New York Life
Insutance company put out of its hands
large nJunts Or industrial securities to
deceive The German government we are
periou:iv near the region OF plain fraud.
How Can any one engage in the life in
surauce Business reconcile transactions
Of that kind with his conscience and
sense OF duty as a trustee? The drift OF
Legislation in all the states is plainly OPP
posed to the use OF public money for
private purposes. So far as legislators
are able to effect it, treasurers are for
bidden to take interest on public money
or to speculate with it, under the sever
est penalties, which often involve pen-
tentiary sentences. We fail to see in
what particular the abuse of position
as private trustee differs from abuse OF
position as public trustee, except that
the penalties are lighter in one case than
in the other.
"Manifessly there is need for the over
hauling OF tle entire life insurance sys.
tenn and lor its diverse from trust com.
panies and inside corporations, through
which some managers apparently are
seeking to enrich themselves. II there
are any profits from such transac-
tons the policy holders should be the
beneficiales. The tempta ion to accept
dubious securities offered by a member
of a banki'.g firm to himself as chairman
OF tinance committee must be we'll nigh
irresistible. Such transactions can only
be called by one name-'graft,' even
when pIacticed by honorable men
ctaiuih5 hISh III tito CUu uuulty anu
famous tor acts Of charity and public
spirit. The word graft in its secondary
sense has not yet been fully adopted into
the language, but people know well
enogh what it means. The Century die
tionary defines grating as follows The
act OF inserting a shoot or scion taken
from one tree into the stem or some
other part of another etc. This is pre-
cisely what was done with Mr.. Perkins
when he was taken from the life insur-
ance company and inserted in the bank.
ing house; and he produced fruits as
banker that did not properly belong to
the stem upon which he was grated"