The Birmingham age-herald., 1905-09-15
Insurance Companies Must Buy
 Securities Through Them
METROPOLITAN MAN TALKS
rN O Cromwell of the Mutual Life Sa, S as Has Always Been Unable to So Railroad Bonds o'o
 Direct.

New York, September 14.--When the l special legislative committee probing life insurance methods adjourned today, Chief | Counsel Hughes had finished for the pres
 ent the examination into the Mutual Life
 Insurance company and the Metropolitan
 Life Insurance company was started on,
 when Silas B. Butcher, a director and
 member of the finance committee, was 1 called to the stand.
 MT. Butcher was question concern
 ing the securities held by the Metropolitan
 and as to the syndicate operations of his company. He was asked the sdlaries of the
 company's officers but couli not re
 member them. He will prasert the list of
 officers salaries to the committee to-
 morrow. MT. Butcher was still on the
 stand when the committee adjourned.
 Earlier in the day Treasurer Cronp- we'll had taken the stand to continue his explanations of the Mutual Life sypdi-
 cate operations. Tn explaining the rela- tions of the Mutual with trust companies. MT. Cromwell stated the interesting fact
 that on the purchase of s1,120.00 shares of
 the Title Guarantee and Trust company
 the Mutual had received m dividends s1,-
 220,000, making these shares cost nothing
 and realize a profit. fir. Cromwell stated these shares were now selling at over
 $500. On the question of dealing through syndicates in preference to EiSng rail-
 road bonds direct, Mr. Cromwell said he
 had actually tried 10 buy bo.'ls directly from a railroad company. lie went to his friend, Stuyvesal. Fish, president of the Illinois Central
 Bankers Control the Situation. "Mr. Fish told me-" he said, that he could not afford to sell bonds to the
 Mutual"
 Then the truth Is that the railroads
 must stand in with the bankers in order to sell their securities, and Hle insurance companies must stand in with the hanb- CTS in order to buy at low prices:' MT. Hughes asked.
 "Exactly.p ''The bankers coatrol the situation Y ''No doubt about that Tn his testimony after the recess, ex- plaining matter of purchase or Bank
 of California stock, MT. Cromwell said
 the issue price of stock was now thirty.
 MT. Cromwell hoped to get the shares at
 this figure but in the end the sharehold-
 CTS to whom under the California law the
 rights to the new issue belonged, held 40,
 and the Mutual obtained its 5000 shares
 at an average price of 3sO 3-10o. The deal
 was entirely by individuals and there was no syndicate The transaction was left
 entirely to William Babcock with absolute
 confidence that he was dealing fairly
 with the Mutual.
 MT. Hughes asked how the increases or
 decreases of bank balances were con trolled.
 Helped Out the Trust Company. .I control them" said MT. Cromwell. He recalled that in one instance ne
 added $10o0,o0O to the deposits in tho Guarantee and Trust company because inc trust company needed the money for A special purpose. He could not remem- her what was the special contingency, but he promised to look up the records and disclose 1t. This case he said, was in no wise unusual. MT. Hughes asked If anybody else had word to say about increasing de- l posit.
 .sNo I do it," was the answer. q take the responsibility" | Mir. Cromwell said the company's busi- ness could not be conducted effectively unless some one had the power to regu- late the deposits. But finally he added | the finance committee must approve his | actions, for all the bank balances were | scrutinized by the committee every week. l HIS own power bl ic6uiatiDitf
 was temporary and anything ne might oo | could be revoked within week. | MT Cromwell was asked whether he in- | creased or decreased his holdings In the 1 debentures of the United States Mort
 gage and Trust company to assist the | trust company. He reped Not entirely so; 1t Is partly to neip our whole western clientele to know that | through one of our companies they can and mOrtRage SeCuI- | ities."
 ..The advertising printing, stationery | and hostage accounts of the Mutual IS | Ri. .334 S34: of the New York Life it is
 $s51, ,2s5; for the Equitable, $772645. Can you explain these very large amountsT .I know nothing about 1t. Current e1 | penses of the Mutual are under a special committed"
 .'Is the same true of the legal expenses
 to the sum of $364,254?" 'I have nothing to do with 1t. It would | be under the law department. Do you as subsidiary companies make advances to agents?"
 'sNo sir"
 How are advances made to agents by the Mutual?"
 "It Is done through the general agents of the departments. but understand the amounts are not large" Docs the Guaranty Trust company or | the United States Mortgage and Trust | company make loans on mortgages?" Not to my knowledge would not like | to swear to it.'
 "You have an account with the Amer
 ican Exchange bankT'
 "We have had 1t for nearly a genera
 tion."
 You do not receive any interestT' sNone whatever; its president is one l os our trustees, he tells us frankly if we want interest we must go elsewhere,
 but we have not thought 1t necessary to close our account"
 Metropolitan Directors Called. 1 It was at this point that MT. Butcher was called. While his testimony developed nothing of a startling or sensational na- ture several statements made by the wit
 ness were of passing interest. One Of these was that the company had no treasurer, | the cashier acting in that capacity. | The list of stock and securities held by
 the Metropolitan on January l. 1905 was l marked for Identification; also the lists l of purchases and sales of securities and l syndicate participations in the last ten years were produced and put in as evi- l dence.
 l or s7s-ooaooo of the sAauriuss held hv