New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-12-22

not reach such a company. Ultimately, he
thought. a number of small assessment
panies would have to go out under this law.
MISLEADING CIRCULARS.
Mr.. Hughes then took up circulars of various
companies of a misleading character, but Mr.
Hendricks declared that the department had not
required the companies to submit copies of them
to him. He admitted such supervision right,
however. None of these circulars had resulted
in a reference to the Attorney General ne as
serted.
No attempt had been made to close up assess
ment companies under his regime. and Mr.. Hen
bricks regarded himself as helpless" in this re-
spect. In the case Of the Mutual Reserve he
could not recall whether 1t had been authorized
to take over the Northwestern. He equally
at a loss to explain the extraordinary payment
by the company OF 100000 to the late Frederic
Storm a cigar manufacturer and friend Of
President Burnham
Mr.. Hughes tried to find out why the Provi-
dent Savings had not been investigated since
Mr. Hendricks became superintendent, but the
witness had no explanation. The practice of
this company in marking up its real estate had
never been detected until the committee showed
it up" he declared, adding that one in his
office was particularly charged with this duty.
and examination had been made this
point To the case Of the $4,000 gift in the
Life Association Of America, Mr.. Hendricks de-
clared he had called attention through the At
torney General. This seemed to be the sole case
of this sort, the only of the various tricks
of these smaller companies that had ever come
to his attention The misleading circulars Of
this company had never been brought before
him.
The Metropolitan Life. which has supplied the
committee with so much interesting material,
had not been examined since 1900. Asked how
many companies the department could examine
yearly. Mr.. Hendricks replied that in his term
Of office twenty-six life insurance companies had
been probed, as well as various other companies.
MORE EXAMINERS NEEDED.
Mr.. Hughes inquired what increase in staff
would be necessary to double the number Of ex-
aminations. Mr.. Hendricks thought ten more
examiners would be needed, merely for financial
subjects Mr.. Hendricks thought by sending
out a blank the companies themselves could be
depended on to supply facts concerning salaries
and expenses
AT this point MI Hughes depressed TO point
out that last year the Mutual Life made more
money thar 1t reported, through various syndi-
Gates and other deals, and used this to cover
losses This had never been called to Mr.. Hen
dricks's attention Then Mr.. Hughes cited the
stock transactions of Equitable officials buying
themselves and selling to the company. This had
never come to Mr.. Hendricks's attention No
orders had ever existed under which his Subordi-
mates looked for this sort of thing.
Mr.. Hughes asked Mr.. Hendricks If he cared
to comment on the omission from his original
Equitable report of any reference to the Depew
Improvement Company, but Mr.. Hendricks had
nothing TO volunteer. To him, he explained, II
ancient history" He recounted the facts.
the discovery that the stock not sufficient
security for the loan, the various appratsals and
the order in 1902 to call the loan Asked to COM
nent the similar omission of the Union Pa
ciflc blind pool" transaction Mr.. Hendricks de-
clared he had never seen the syndicate agree
rnent. He seemed doubtful at first to whether
he actually from
Finding by reference that he had, he explained
that his action was probably due to the fact
there had been loss in the affair-again the
desideratum Of solvency. The omission. be de-
clared, positively Was on his own judg ment with
the deal as a bona hde purchase by the Equi-
table. for which the Equitable had put UP the
money and received the dividends and he
thought Mr. schiff must have been mistaken"
in testifying to the contrary.
NEEDS OF DEPARTMENT
The Equitable syndicate operations had not
been probed, Mr. Hendricks testified save in
few cases Asked about the system Of guar
anteeing trust companies In advances to agents,
Mr. Hendricks testified that the practice had
been generally known and had been acted upon
by the department in it's last report. Regard
ing rebating Mr.. Hendricks could think of
remedy but the department had conducted no
examination this subject
I'VE would be very glad. Mr.. Hendricks, II
you would suggest to the company what from
your experience. is needed in order to make the
work Of the department more efficient in the way
Of power amplihcation Of existing Statutes
said Mr.. Hughes.
why. my view of 1t is, Mr.. Hughes" he re-
piled. that the department ought not to be
given power to go any further than to examine
companies as to their solvency-that they are
able to pay-their financial condition believe
it would be a very grave mistake If the depart
ment was authorized to go in and undertake to
manage the companies. l think they must be
left in the public interest TO the officers of the
companies, and hold them responsible. In my
11v7fl ftn dnTa -rvr1aT
power it would be a great error; better go to
paternaltsm and manage the company wholly;
make a State insurance company; have the
State assume the responsibility Tor IT. think IL
would be a dangerous thing to give the Super
intendent of Insurance the power to say how
much salary there should be or how much COM
mission they should pay or what securities they
should buy. I do not think there ought to be
divided responsibility. think 1t ought to be left
with the officers Of the company. and hold them
responsible for it. That is my view of it, 1 may
be wrong.
WOULD NOT REGULATE SALARIES.
Publicity, Mr. Hendricks conceded. was de-
sirabIe, and in this line he thought that some
things should be done by the department He
yentured to suggest that the books Of the COM
uanies should be kept in such fashion to be
ineligible. a condition not now fulfilled by all
But on the broader ground of supervision OF in
vestrnents Mr. Hendricks had his doubts. while
on the question of salary he was convinced
nothing in the way of regulation could be done
He suggested 900 a year might not be too
r7uch FOR one man. while another might prove
expensive at 81 year. He conceded, however.
that the salaries might safely and wisely be
made public BY doubling the number Of ex-
aminers in the department and increasing the
appropriation by $4,000, he thought more fire.
ouent examinations could be made possible
This would still keep the expenses OF the depart
uent within the total OF the fees paid by In
surance companies. The possibility Of twist
ing" he suggested, was the only objection to
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