The daily morning journal and courier., 1905-09-14
SYNDCATES ARE
 4 NECESSARY EVIL
so SAYSTREASURER CROMWELL, OF THE MUTUAL LIFE IN-
 SURANCE COMPANY.

-~-sS ~AO" San tne vast Assets or the
 Societies be PrOftabIy Invested s-
 Very Frank Statement of Existing
 Conditions Made by the Oficial-
 'syndicates Take Cash in Bulk, and
 the Successive Profits of MiddIemen
 Brokers Are ObIiterated.
 New York, Sept. 1S.-A vigorous de- fense of, syndieates and their opera tions, in connection with the insurance business, and frank statement of per- soal profits gained through their oper- ations, made by Frederick Cromwell, treasurer of the Mutual Life Insurance company, was the featureof to-day's session of the special legislative com of life insurance companies in this state. A defense of the syndicate was made by MT. Cromwell. He said:
 "The law of combination which af- fleets finance, as everything else, has made syndicates necessary. When be- came treasurer of the Mutual Life h. surance company, the total assets of our company were s10O,000,000. The transactions in my department now are over $100,000,000 per year. When our receipts were 1ess-twenty years ago. it was quite possible for us to buy from bond dealers and pay the successive profits that might come with brokers, but now it is absolutely impossible to buy advantageously large blocks of ss- curities, except as they are foated by these combinations of capital, popular ly called syndicates, and we have to go into them to get our investments and get them in sufficient size, and at ground floor prices We could not make our investments without syndi- eates, and we are partners in every syndicate which we go into. I want to say further that unless we go into these syndicates we would not be able to in vest our funds. except by buying in small quantities and paying the suc- cessive profits of middlemen.
 T ask you, MT. Hughes, and the com mittee to consider that we have now over $45, 100000 of assets, and while we have over $1000O0,O0O invested in bond and mortgage, we are constantly under the necessity of finding additional in vestments for our large accumulations of funds. That is the condition, It is no theory. It is a condition which we meet and the exhibits are here which show how we have to employ it. Our investments are such that when MT. Tappan, suppose about the most wide- ly known and honored bank president of his day in New York, died, he left it as condition that his trustees should have one privilege, and that was to invest the same in securities as those of the mutual life insurance companies. That is the way we invested our money, but we could not make the transitions of $100, 100000 year in the securities bought by this company without using syndicates.
 Tt goes without saying that 1t is better for us to ue our own compa- mics rather than give to institutions with which we have no connection, the handling of our large investments. For this reason we put men into the direct crate of these subsidiary companies to look after the interests of the Mutual. They are not there for the profit on the interest of the paltry 100 shares they have to hold, but to protect the Mutual. It is natural we should wish to put in as directors of these compa- nies the same men as are on the board of the Mutual. t.
 T have 100 shares in these companies as a director, but I have never made any secret of it.
 ''The result of our connection with these companies is that in fourteen years we have made through them a profit of $16,00O,000 for the policyhold- CTS. If we did not have these institu- tions we should have to turn the Mu- tuaI into a banking institution as we'll as a life insurance company. This we could not do.
 'aThis being the state of the case, it, is natural we should help these sub sidiary institutions to make money and should throw opportunities in the, way The men we put in them are not there for their own profit. They never get 8 dollar out of the Mutual unfairly, and every cent they make through these trust companies and banks for the Mutual is for the policyholders and for the po1icyholders alone.'
 
 FORAGTNG DEER.