The daily morning journal and courier., 1905-06-22
Inside Facts Concerning Equitable Life Laid Bare by N. Y. Insurance
 Commissioner.
SERIOUS EXISTING EVILS
NO sURERFICIAL MEASURES
 WILL CORRECT THEM.

Declares the Cancer From Which the
 Society is Suffering Cannot be Cured
 by Treating the symptoms-Com
 Naturalization the Only Measure of
 ReIief-standard of Investment For insurance Companies Recommended--
 Elimination of Stock Control and Es-
 peciaIIy of Wall Street Control Nec-
 essary-auestionabIe Dealings of the
 Late Henry B. Hyde-Parent Society
 Robbed by Subsidiary Companies 1 Albany. June 21.-The report of Su- Iperintendent Francis Hendricks of the state insurance department to Cover nor Higgins upon his investigation of 1 the Equitable Life Assurance society was made public here to-day and iii New York tonight. It is described in l the title as a preliminary report and | it is decidedly critical of the manage- ment of the society, as we'll as of the new trust arrangement for voting the stock agreed upon by Thomas F. Ryan and the three trustees designated by Ihim. In the conclusion of his report he says:
 No superficial measures will correct the existing evils in this society A cancer cannot be cured by treating the symptoms. Complete Naturalization with the elimination of the stock, to be paid for at a price only commensurate with it's dividends, is in my opinion the Ionly sure measure of relief.
 This report with copy of the evil idence taken on this investigation will
 be transmitted to the attorney general for such action thereon as he nlasss4 Ideem proper
 l Of the subject of proposed legislation,
 he says:
 think it important that the next Legislature should take into considera- Etion the question. of the investment of fthe funds of life insurance companies land establish a standard investment.
 As to just how far or to what extent
 they should be restricted in their ir1-
 vestnents I am not prepared to offer
 an opinion at this time. There can be Inc question, however, of the wisdom lof prohibiting the investment of life insurance companies In N subsidiary Imoneyed and business corpoi tions con- trolled by life companies, which occa- Lsion the carrying of large balances for I the benefit of those companies and for I the stockholders who are largely asso- iciated in the management of the socie- Ity. The suggestion that these large Ibalances were carried for the purpose lof enabling the society to avail itself Iof the opportunity to purchase securi- ties at a low price Is not sustained from 1.-the fact that large balances were car Tried during the years 1903 and 1904. I when securities could have been pur- Ichased at a much lower level or the lmoney loaned at much higher rates Ithan were being paid by the affiliated I companies
 l Turing then to the new control under (which the society has passed MT. I Hendricks, while not questioning the honesty of purpose of the trust proposi- I tion, expresses the opinion that the oniy thing that will restre confidence and lbenefit to the company would be the Ecifn,iration of the stock control ssard IWhat deem of equal importance, the Ieli1nination of Wall street control. | learlv came tn the opinion and so ex- pressed myself to the legislature in the departments annual report this year, lthat all the surplus accretions of this Isociety beyond the per cent. dividends |, holders. The charter provides that the lbusiness of the society should be con- tducted on the mutual plan, and pro- lvides that each policyholder shall be Ifcredited with an equitable share of the isurplus. x And am not confirmed in lmy opinion by an examination of the Istatements that were made early in the lexistence of this society to the insur- lance department verified under oath by the president of the society. that 1t was a purely mutual company and that all its surplus should be divided in an I Reputable manner among the policy Iholders. and still further by an exam Iination of the affidavits made os behalf iof the society to the commissioner of Itaxes and assessments of the city Of New York, containing the statement sl that no surplus earnings belong to the ! lstockholders. and that all the accounts Ilations of the society are held for the benefit of the assured and are free from taxation
 Il James W. Alexander, president, and James H. Hyde, first vice president,
 whose resignations were accepted yes-
 terday by Chairman Morton, are se-
 verely arraigned in the report. Gage
 D. TarbelI second vice president, is
 exonerated, MT. Hendricks finding that I no substantial evidence appears in sup
 port of the charges against him. MT.
 Hendricks says it is an open question
 ,whether President Alexander and the
 other officers and directors who par- lticipated with him in the transactions
 6Continued on Eighth yoage.a