The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-06-08
HUGE EQUITABLE
SCANDAL PROBED
Ten-Million Dollar Affair Uncov-
cred, Linking Insurance and
Trust Companies.
New York Sun Special Service.

New York Sun Special Service.
New York, June 8.-The most colossal
scandal uncovered in the affairs OF the
Equitable Life Assurance society is
now being carefully investigated by
State Superintendent OF Insurance.
Hendricks. The sum involved is much
nearer $10,000,000 than $l,O00,O00.. Mr..
Kilburn, superintendent of the state
banking department.
The scandal has ramifcations leading
from the Equitable Life intot the Equit-
able Trust company. Superintendent
Hendricks was unable to follow this
it led into the Equitable Trust COM
pany, over which his department has no
supervision. He therefore called on SUI
perintendent ,Kilburn last Tuesday and
the latter came to this city.
Since making this discovery Superin
tendent Hendricks has questioned at
great length President James W. Alex
and Alvin w. Krech, president of the
Equitable Trust company. What he
learned from these three men is being
| kept close secret.
Criminal Proceedings.
The scandal, it is said, is Of nature
which would make criminal proceed
|
table. Extraordinary efforts are being
made to hush the matter up. Mr..
Hendricks was staggered when he made
the discovery involving such huge
sum of money, and it is said that he de-
clared to a friend that the iniquities
within the management Of the Equit-
most beyond belief. .,.~[
Alvin W. Krech, president of the
Equitable Trust company and director
Of the Equitable Life Assurance society,
made this statement today.
"There is absolutely no truth in the
statement as to a scandal. No mention
of an improperly Involving $l0000,0O0
was made at the meeting Of the direct
nothing of $10,O0O,OOO scandal or any
other scandal in which the Equitable
Trust company Of New York has the
| slightest Connection s..
August Belmont, Senator Depew and
David H. Moffatt, three of the five mem
bers Of the committee appointed to
name a chairman of the board of di-
rectors, were in conference in President
Alexander s office today, but the COM
mittee adjourned until tomorrow with
out definite action except the final dis
mlssal of Judge Gray's name from con.
sideration in connection with the chair.
manship. 1t is understood that the
name of Paul Morton, secretary Of the
navy, was suggested, but that Mr.. Nor.
ton had not been conferred with in re-
gard to the matter.
49, What the Directors Did.
The meeting of the. Equitable direc
tors, which adjourned late yesterday
was IN many respects more remarkable
than any Of the meetings that have
; take place recently. Summarized, the
, developments were:
James Hazen Hyde and James w AL
exander We're frankly told by several O.
? the directors that it was their duty tt
resign their offices at once for the gooG
or the company; that as longg as they re-
/ manned active factors in the management
+ OF the society the Equitable could neve
4 regain the confidence Of the public no
! be successful figure in the world O
: life insurance. Both. MIR. Hyde and Mr.. Al
t exander refused to resign, majority o
= the board sustaining them in that course
An offensive and defensive alliance wa
seemingly formed by President Alexan
der and Vice President HYDE with Sec
ond Vice President G. E. Tarbell in a
y independents position, he refusing to be
party to the alliance
The designations of Robert T. Lincolr
Joseph T.. Lowe and Marvin Hughit
n We're announced to the directors to tax
n effect immediately This brings the tots
I OF the designations since last Friday
u thirteen. Other designations expec
ted before the end of the week,
k The finance committee and the execu
o tive committee were wiped out. Tt
It functions of both of these committee
C are in future to be centered in a ne
executive committee.
" Salaries and Sinecures.
'e 1t was decided to cut down the sala,
le les of all Of the executive officers of tn
d society and to reduce it's general e,
lie penses. A large number of employed
TT will probably be discharged to Offset tt
a falling off il. new business.
10 Hereafter, investments in securities
n real estate made by the executive con
re mittee not to become operative III
1t til ratified by the board of directorsA
That the cash deposits carried in banl
a and trust companies shall be reduced
working balances and the residue il
re vested in securities that will bring
e. return for the policy-holders e.,
n That no advance to agents or 9th
e. agencies expenditures shall be ma,
ce without the approval of the execute
committee. -s, ~
r A new nominating committee consis
3 ing of Chauncey M Depew, David ]
Moffatt, Louis Fitzgerald, August BIZ
mont and James B. Forgan, was appoin
II ed to select a chairman of the board al
II report its nomination at a meeting of tt
- directors to be held Friday. If, the nom
al mating committee is unable by that tir
tn to find = man who: viii taEe the Ma
ed the directors themselves will fill the c