The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-04-19


power to conduct any investigation and
was now doing so. though Senator White
urged that the revelations concerning the
Harrison Hyde management Of the Edu-
table called for prompt and active mea-
sures on the part OF the State authorities
senator Grady based his argument
against the bill upon the fact that Section
js had been enacted as the result Of an
opinion Of the COur5 OF Appeals write
by Rufus w. Peckham, who Il nov United
States Supreme Court Justice. Judge
Peckham declared that II would be ruinous
to the interests of life insurance com
pany if every poliCyholder had a right Of
acton at any time.
senator Malby declared that IL the doors
were opened for wholesale actions on the
part OF poEcyholders the result would
Ice disastrous and the insurance companies
in tins state would crumOle away within
the next three OF five years. NO com
pany could stand the strain, he said, and
ii this bill should pass It's operation would
tend to weaken confidence IN the LIE IN,
suranCe companies and the effect would
he something ike run on a bank started
through some Idle rumOr.
IN my EumUic judgment, said Senator
White the confessions, admissions ana
revelations in regard to the management
r, 80 INDUSTRIOUS 30 opposed to everyhonest
theory of management, that there IA urgent
need of some Ell ective method Of bringing
about honest conduct Of these great lnsutL-
ii JAs or at least one Of them. On the other
hand have been impressed with the leellng
that the remedy which Senator Bracket
proposes would lead to dangers no less
dangerous than that which he seeks to
correct haze entire faith in the courage
aid in the ability Of the Auorney-Genera,
ale- i- III S','"'irtcr lent % lrsurarcc.
Senator Lewis made a strong argument
in favor Of the Legislature going TO the
~ n nj
rnent He said: Il have no sympathy
with anv attempt to bLlckmal any one ,
least Of all the great insurance companies
Of the State. | do not, however regard
tie attempt 70 reGeal TINS section ellher
as an attempt 70 blackmail OF as an at
tack upon such corporations. When a
mernl eT Of Copartnership tecomes dis-
satisfied with the management OF the al
fairs Of his firm he has the right TO go into
the courts of the State and sue for an m
junction to prevent waste and for the
appointment Of receiver and an account
ing Of the partnerships affairs. Why
should not one Of the Partners IN NE
insurance COMPANY have similar rlght;
The enormous salaries formerly we're
not p, id 10 officers. The sons and brothers
end nephews and unces Of the chief eXecu-
tive officers were not formerly in the en-
ploy of such corporations Formerly there
was no charge Of expenditures Of large
sums Of money belonging to policyholders
IOT the giving OF fancy DAllSs I. mn INttllNlg
IL has never been charged that moneys
belonging to poicyholders were used by
the officers Of any company In the payment
Of the expenses Of entertaining distinguished
foreign representatives,. Never until re-
Gently has it been known that officers OF
insurance companies we're organized and
banded together for the purpose OF selling
to the companies Of which they we're di-
rectors stocks and securities Of which they
were themselves the owners.
a lima. In, ina
world. Companies ought to welcome any
and all Investigations rather than seem 20
prevent them. The passage OF the bill
introduced by Senator Bracket will, I
think. tend 20 restore confidence in the in
surance situation OF the state.
SENATOR BRACKETS ARGUMENT.
Senator Brackets remarks in favor Of
dischargi the committee embraced
strong arraignment Of the Harriman-Hyde
management Of the Equitable, and he de-
clared that the contest which had been in
auEurated bet ween the officers Of the Equit-
able to secure control Of its $3.50 90 600 Of
assets eventually would end in a re- &c TO see
who could keep out Of States prison. In
part he said:
1T will lie seen by the language Of the
section which seek to repeal that It at
tempts to throw around insurance COM
panies a protect ion not given by our laws
to any other person or corporation, In that
IL deprves any person deeming himself
possessed Of a cause Of action Against such
a corporation Of the right to go into court
70 pttempt 10 vindiCate that right.
These Insurance companies have long
been in the habit Of issuing policies Of insur-
ance, by which the one issuing promises
to ray a certain sum Of money named,
and In addition another sum, dependent
upon the amount Of profits Of the company
during a certain period They issue state
ments showing tire probable profits in a
given ca sc. and when the time has elapsed
and the due period arrived they o1er in
settlement a very much less sum in pay
ment The Insured, astounded and in
dignant, asks the reason for the shrinkage
and is given none, Recognizing his or
binary right In such case to 60 into court
and demand an accounting 70 ascertain
what the profits we're, Of which he Is en-
titled TO Part, he Is met, at the outset with
the proposition that under this Section SO
he cannot ask an accounting, but can only
make his appeal that the Attorney General
shall proceed for him.
II a sutton comes into court and his claim
is unfounded he will be turned out Of court
without relief and he sui jet TO the costs
and thus suffer the penalty Of his wrong
claim But he has the right TO try. Any
III ing less than this rs denying him the equa
protection Of the laws-anything less than
this breeds suspicion and contempt for
our whole system and the notion, danger
Gus TO our safety, that we have with us
classes that have privileges before the
law.
The public to-day is stunned by the par
tiR revo lation Of the story Of one Of these
co mpanies-onc claiming thus to be a wand
Of the State. Four hundred millions OF dol
lars Of assr d, $50 600, 900 of surplus over
any possible liahility-this company not
mana ged 10 make money? This company
a wart Of the Stath2
Enormous sala rios without service 90
ca IN them Commissions taken from the
company in express efiance OF the statute
that forbiis them and that stamps such
taking ar me- riting forever the disgr0oe Of
Ci,qualiication 20 hold Office In such a
company TIE most eTtravagant Of social
functions seer thy paid for from the funds
Of this company claiming 10 protect the
widow and the orphan. The company
managed by men who have no cent Of
money invested in it-all these are petty
matters oompa red with the real thing"
that will he banned hereafter, and in the ir
insiguifoanoe we can hardly take time 10
n count.
The 90 Iossal sums that have been gathered,
~ r-istensly used 10 finance and pro gress
the schemes Of the officers whose duty II
is { . conserve them, railroad sche mes, in
uustnal schemes, whiskey trust schemes
schC mes which { the fall the loss IL upon
the Company, IL they succeed, the gain TO
the oiIiue r.. These are the chaTges-these
the things vociferously denied a fort
night since, and now confessed in all thcir
essential features, and OF which, under
tine 6ar Of mi bHCity 10 rtial rpgtitutiOn 10