Los Angeles herald., 1905-12-13
Prudential Investigated

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United states Senator John f. Dry
den of New Jersey, president OF the
Prudential Life Insurance Company Of
America, was on the witness stand all
the remainder of the day.
lie testified that his company paid
s26.00O to the Republican national cant
paign fund in 1896, 1900 and 1904. 1t
also paid $4,000 TO Andrew Hamilton,
formerly the New York Life Insurance
companys legislative agent at AL
bany.
Earlier In his testimony Mr. Dryden
said that dividends of 10 per cent are
paid on the stock Of the Prudential
company He said his son. Forrest f..
Dryden, had been connected with the
Prudential for twenty-five years. He
began work as q boy and worked up
through the various grades until at
present he is the first vice president
Witness said he had q nephew in the
employ of the company at salary Of
$40 week. One OF Senator Dryden's
relations is a director of the company.
Witness was asked about a move TO
sell the stock to the Fidelity Trust
company He said he became appre-
hensive of the distribution of stock, as
the old holders were dying off and the
stock was going into their estates. He
suggested giving policyholders n fran
chise. but was told he would need the
consent Of all the stockholders. so he
abandoned it. The plan OF selling a
majority of the stock to the Fidelity
was adopted.
Sale to the Fidelity
The Fidelity was to issue new stock
to make the purchase. A majority Of
the directors agreed to sell and wit
ness had arranged for the Prudential
to buy for the Fidelity. He advertised
the plan as widely as he could. 1t was
advised to sell Prudential stock to the
Fidelity at $500 a share below the mar
ket price and some stockholders re-
fused to do so.
1--WE had to carry out the contract
and sell more than we wanted to- the
witness said. ITO keep the Prudential
out of the hands of designing men who
had no sentimental interests in it, we
determined against any further increase
in it's capital stock"
The Fidelity got a majority of the
stock, but parted with it and does not
now hold a majority. Mr.. Dryden said
the price paid by the Fidelity Trust
company was $6,000,000 for a majority of
the Prudential stock. A little more
than one-third of the directors of the
Fidelity were then and are now Of
ficers or directors of the Prudential
surance and the trust company. The
Prudential holds $4S0O00 of the stock
of the Fidelity company.
Witness said the Fidelity got the
$6,OOO,OO0 to buy Prudential stock from
its own (Fidelity's) assets. The Equit-
able Life Assurance society. he said
bought lot of the stock of the Fidel-
ity Trust company, witness thought, in
1902. The deposits of the Prudential
company with the Fidelity Trust COM
pany of Newark during 1903, witness
said, ranged from S5,JO0,0O0 to $4,000, 900.
In 1904 they ranged down from S., ,621 900
to $1,467,OO0 In 1904 they averaged
about s1,500.000. Witness said the Pru-
Dental plans to leave about 81, 500 900
on deposit with the Fidelity Trust COM
pany. The interest paid on the balance
is 6 per cent. The balances were re-
duced from S5,0O0,OO0 to cut down the
obligations of a single company to the
Prudential. At the same time it's de-
posits in the Equitable Trust company
We're increased. Witness said he owned
S275OO worth OF Equitable Trust CON-
pany stock. Some former officers of