Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1905-09-13
In One Business Deal Of
the New York Life.
100000 in Bonds Sold and
Bought Back the Next Day.
So That Holdings Of These Bonds Would
Show Less in the Report.

in bonds one day and buying them bach
| the next but one, a holiday interven
ing. in order to keep within state
ments made in the New York Life In
| surance Cos. report to the superin
| tende1ce Of insurance, was the sensa
tional disclosure made. today, at the
session of the legislative insurance in.
vestigation committee. The fact was
drawn from Edmund D. Randolph
treasurer of the New York Life In
surance Co., late in the day, after At
torney Charles E. Hughes, of counsel
to the committee, had labored for over
| ali hour to get a direct answer from
| Mr.. Randolph to a direct question.
| The inquiry had dregged through a
mass of figures during almost the en-
tire day. but it was not until near the
hour for ending the session that the
sensational feature was brought out.
| Earlier in the day, Mr.. Randolph had
| handed Mr.. Hughes a schedule of syn
| dictate underwritiEgs and transactions
of the New York Life for the last 10
years. This was to show, and foot
| note to the schedule stated that the
| company had participated in no syn
| dictate transaction that had been closed
out with loss. Among these 'syndi-
cate transactions was the underwriting
of the navigation syndicate, or Inter-
national Mercantile Co.
Mr.. Hughes drew from the witness
| that there was an aggregate of $4,000
600 the New York Life paid ]. P. Nor
gan Il Co. on this "joint account"
Mr.. Hughes then took up sales item
| dated, Dec 81, 1903 of 100000 of Inter-
national Mercantile Marine stock. Mr..
| Randolph replying to Mr.. Hughes.
said this sale was made to ]. p. Nor
| gan & Co. Mr.. Hughes continued his
| inquiry into the matter, and asked:
''On Jan. q 1904. there is an entry of
a purchase of $500, 900. From whom did
you buy?
~. p. Morgan & Co"
"Why did you sell to J. p. Morgan.
| then buy from J. p. Morgan & Co. on
the next business day."
Because they desired to reduce it,"
Yes. but why then, did you buy it
| back the next business day."
Here Mr.. Randolph began to eX-
plain, and wandered several times
| from the subject. He was lead back by
| the lawyer. who seemingly was unable
| to get a reply. Finally. he asked:
GAS a matter of fact there was re-
port to the superintendent of insur-
ance, Dec. 81, 1902
Eyes"
''Then the sole purpose of the trans
action was that you might be able to
tell the superintendent of insurance
you held only s3.29O.0 900 on Internation-
| al Mercantile Marine shares?"
The witness hesitated and tried to
evade a direct answer, but Mr. Hughes
| repeated the question until finally Mr..
Randolph said:
Eyes"
There was momentary hush fol-
lowed by a murmur of suppressed ex-
element.
Following up the navigation syndi-
cate transactions, Mr.. Hughes refer
red to an item on the schedule of syn
dictate transactions under date of Dec.
80. 1904. by which 100000 of bonds
were sold to J. S. Morgan & Co. of
London. for 100000. Mr.. Randolph
admitted that this was an outright
sale. and the loss of $4,000 was charg-
ed off to the profit and loss account.
The usefulness of the New York
Security e Trust Co. to the New York
Life came out when it was testified
that while the insurance company was
not taking collateral loans. it made a
practice of lending its money to the
Trust Co., which made the collateral
loans.
Mr.. Hughes took up the accounts OF
the money deposited with the New
York Security & Trust Co, i'm 1902.
which was called account No. 4. 1t
ran from s6.750.G00 in May and June.
up to S12.531 900 in September. and
ended at well over $10,000,000 in De-
cember.
Witness was then led through the
change of the name of the trust COM
pany and admitted the three accounts
with the old company were closed and
four opened with the new one. When
the money was withdrawn from the
New York Security e. Trust Co, it was
deposited with the First National Bank.
This admission was elected from the
witness after much pressure.
In reply as to interest paid by the
various banks where the insurance
company had deposits, Mr.. Randolph
said all Of the banks paid per cent.
except the bank of Montreal. which
paid az per cent.
Assemblyman Rogers, who was in
the chair, said to the witness before |
adjourning the sitting:
'Some of the committee are not sat
isf1ed with your refusing to give the
names of those who participated in
the joint profit deals
TN answer to that. 1 would say,
answered Mr.. Randolph, that 1t is an |
entirely confidential matter; there, was
no intimation on the part Of anybody |
of bad faith; we had expectations
which were not realized. and I don't |
think II necessary to expose people |
who did not actually participate in the
transaction"
Here. Mr.. Rogers read from a paper
Continued on Page Four.)