Daily press. [volume] (Newport News, Va.) 1896-current, 1905-09-14
SAYS THY ARE Ne, EsSARY
Declares That His Company Would be
Unable to Secure investments at
Bottom Prices in Any Other Way.
Officers of Company Also Profit Per.
sonally by the Deals.
By AssOrlatrd Prrss. J

NEW YORK. Sept. ia vigorous
defense of syndcatcs and their opera.
| liens in connection with the insurance
business and Il frank statement of per.
snnai profits gained through their one
| raiiunS made by Frederick Cromwell
treasurer of the Mutual Life Insurance
Company, WAS he feature OF tolay'S
session of the special legislative com.
lnltttc appointed to pr:,c methods Of
me Insurance. companies in this State
he defense Of the syndicate WAS made
ly Mr. Cromwell soon after he WAS
called to the stand in the morning
before he was asked Il question he
begged leave to say few words and.
| upon being directed To proceed, said:
Syndicates Necessary.
The law of combination which If
iccls finance as everything else has
made syndicatcs necessary When Il
became treasurer of the Mutual Life
Insurance Company. the total assets
oi our company were 100000, 900
| The transactions in my department
now are over $l00,0000Oo per year.
| When our receipts were lcsS-t went Y
years aSU-tt WAS quite possible for us
10 buy from hOnd dealers AMI pay the
| successive profits. but now il is abSo-
lut"ly impossible 10 buy advantageous
| ~ large blocks of securities except lis
they arc iloatc,i by combinations Of
capital. popularity called syndicatcs.
ana we have To so into them to sci our
investments ANA set them in sufficient
SIC and ut ground floor prices.
Profits Of the Middlemcn.
we could not make our Investment
without syndicatcS and We are part
ncrs in every syndicate which we 80
Into. want to say further that unless
we went into these syn,icatcs we
would not be able to invest our funds
except by bl.ying i'll small quantities
and paying the successive profits of
middlcmen
| II ask you, Mr.. Hughes, and the com
mittGe. to consider that VIC have now
over $t50.V00,00 of assets, while we
have over Sl00,0O0,0O0 invested in
bonds and mortgages. we arc constant
~ under the necessity of finding addi
tional Investments for our accumula
lions Of funds. We could not make
transactions of Sl00000,000 year in
the securities bought by this company
without using syndlcatcs"
| Acknowledges Personal Profits.
| The acknowledgment Of personal
4 al
mcnt which was presented 10 the com
mittcc after recess. It. showed that
Mr.. Cromwell had made a personal
profit of $2G.37l from syndicate opera
tionS during the past five years, in
which he individually and the Mutual
Life Insurance Company had pnrtici-
| patcd.
Mr.. hughes, chief COUNSEL to the
committee, Immediately took UP each
Item OF these syndicate transactions
III an effort tn ascertain the manner
III which these profits were obtained.
An interesting point WAS brought out
when probing a transaction in pcnnsyl-
vania Railroad = ~ convertiblcs IN
/ which Mr. Cromwell made no personal
profit. the witness stated "of course.
we are greatly interested in the Penn
Sylvanla Railroad. ] might say we are
the heaviest stockholders"
In on Jap Bond Issue.
Answering Mr.. Hughes, Mr.. Crom.
well said the holdings of the Mutual
Life III the pennsylvania Railroad was
S5,000,0n0 par. Among these transnc-
tons the connection of trust compa.
MES with The Mutual Life WAS brought
out when IL was stated that The 900
Ooo pounds sterling subscription 10 Il
Japanese loan was shared by the
United States Mortgage and Trust
| Company and The Guarantee Trust
Company. In explaining this relation
Mr.. Cromwell said:
We gave the opportunities to the
trust companies in which we had
large interests for good reasons AZ;
explained this morning we as an in.
smrancc company need very large hank.
ing facilities for very large interests.
Men to Look After interests.
| 1T goes without saying IL is better
Tor us to use our own companies raIh-
or than give To institutions with which
we have no connection, the handling of
our large investments. For this rca
son we put men into the directorate of
these subsidiary companies to look af-
ter the interests cf the Mutual
Mr.. Cromwell the Mutual
subscribed 100000 8 D the Cuban
syndicate. Spcycr a. Co had relied
upon the support of the Mutual The
Mutual Withdrew no bonds from this
first syndicate. All the bonds were
sold to second syndicate for 81. and
the sellers, including the insurance