The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-09-13
DUMMY DEALS BY
NEW YORK LIFE
Continued from First Page.

Continued from First Page.
New York Life, was the first witness
before the legislative insurance investi-
cation committee today. He was exam
med on syndicate accounts. The Tor
onto, Hamilton and Buffalo deals were
the first taken up and the accounts
were gone into in detail.
GLOW could the. New York Life"
asked Mr.. Hughes, counsel to the com
mittee, "retire Toronto, Hamilton and
Buffalo bonds from the syndicate at SO,
syndicate at 91?''
"Because the market price, in the
opinion of G. M. Gibbs, the treasurer
at the time, was then 80. We credited
the profit, $44 1886, to profit and loss.'
Profit Credited, Not Made.
Mr.. Shipman said the company raised
the price from 81 to SO, but the profit
had never been realized and the COM
pany holds the bonds at the present
Life in this case did not return bonds,
as is customary, to the syndicate man
ayers, but took them itself and credited
on the books profit, which in fact had
not been made.
Next Mr.. Hughes turned to the joint
account of Goldman, Sachs & Co., and
the New York Life in 1899. The ac-
count was created in order to invest in
Chicago & Northwestern railroad bonds
with an agreement for equal division
Of profits Mr.. Shipman said it should
not be called a,syRdicate. f'E 5@t, Z .'>
How Shipnnan Explained.
elbow can you explain that on July
1S. 1898, you buy and sell $50 bonds on
the same day?' asked Mr. Hughes.
"The only way I can explain it, -
Mr.. Shipman replied, els that the New
York Life held these bonds and wished
to sell them. Therefore it named a fair
price and transferred them to a joint
ACCOUNT =,
CHOW, don It you see the purchase is
| York Life Insurance company9'
~ can't say, it was six years ago.
els it fair to say that t he New
York Life enters into an agreement
with others and provides the money fol
the purchase Of the bonds and then
gives the members Of the syndicate the
profits Of the saleF'. .....s.&
-,'tDoes it mean the New York Life
| w
| them to handle the syndicates?'
eyes, think it is sometimes ad:
visable in order to get the business.
G. B. & @. Deal Probed.
The Chicago, Burlington & Quincy
| deal was next investigated. w. 5: Fan
shave was the other member Of this
joint account. It, too, was purseEhaaasf
900 or 100000.
HThere seems a great many, of these
joint accounts,'' said MIR. Hughes; So Is
It safe to say they are all speculative
like the Chicago & North-Westerng'
"W. S. Fanshawe," Mr.: shipmar
said, is new member OF the harvey
Fisk & Co. He was formerly IN busl
ness on his own account.
Mr.. Shipman was asked to prepare
separate accounts giving all the details
dealing with joint accounts. He sale
another syndicate was formed to pur
chase the Chicago Burlington stock.
| Syndicate Deals Necessary.
1 Frederick Cromwell, treasurer Of thu
4 Mutual Life Insurance company, re
called, stated that it is impossible TO-
life insurance companies to seek invest
i merits nowadays without the aid of syn
dicates. Heretofore business could b
j conducted thru bond brokers, but toda,
it must be conducted thru a combina
ton Of big capitalists.
i The Mutual, ne said, is doing bust
ness of $100,000,000 a year, and mus
seek syndicates. This company, h
. said, has $45O,O0O,OO0 invested, O.
which some $150,0O0,000 is in bond
and mortgages
| Mr.. Cromwell expatiated upon tn,
| or no rrna Of +hr11 a eyn n !
cate. Gin fact,'' he said, eve coult
not with safety invest our money with
out a syndicate managed by banker
: We cannot do the banking. Further
we could not compete with the combi
nations of bankers. Then too, with on
/ syndicates we can get in on the groun'
r floor price.
Test on Statement.
i To test this, Mr.. Hughes took up a
: item in 1904, when the Mutual Life i
) d syndicate took up $4,O00,00O Of Re
| public Of Cuba bonds at 90 DIG. Thes
$ bonds were issued by the Republic 0
= Cuba at 80 or 1916 per cent cheape
/ than the syndicate price.
t At this point Mr.. Cromwell addresse
Q the committee and protested that Will
e he and his company had participated i
many syndicates, he handed a list of a
b to conceal.
! want it thoroly understood
f said, that in all these transaction
8 there never was condition NOR an Oh
d legation imposed upon any member G
f these .syndicates by which they woul
d be influenced. =
Il Mr.. Cromwell apologized for his ten
t piled: Y our frankness and candor
: con nnpndah1n >, - 353{8 500 ~
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