The Montgomery advertiser., 1905-05-16
HYDE WAR COSTLY
LIFE INSURANCE BUSINESS ALMOST
 PARALYZED BY IT.

EAAALxLED BN He
 Public Connidence Shaken-Domestic Difficulties of the Equitable Society Brighten Policy
 holders.
 William B. Curtiss New York Special
 to Chicago Record Herald.
 The domestic difficulties of the Equi- table Life Assurance Society still oc- cupy great deal of public attention and the officials of that organization still continue to wash their dirty linen In the newspapers, to their own dis credit and to the serious damage or the interests they represent. The dis closures have acted like a stroke or paralysis in the management of other companies. as well as that of the Equitable; and, for the time being, the life insurance business is practi- cally arrested. Very few new policies | are being written. and many policy | holders are refusing to pay their pre- niums One of the general agents or | the Equitable told me last night at | the Waldorf-Astoria that if 1t were not for answering question of frightened people and stimulating the faith of their policy holders. half the insurance agents in the country might go a-fsh- | ing and stay all summer An officer of the Mutual told me that their busi- ness had fallen off more than seventy per cent; that they were doing prac- tically nothing; and one of the vice. presidents of the New York Life, who | Is a conspicuous figure in financial | circles. remarked this morning that the business of the life insurance had received a blow from which 1t could not recover for several years. He be- lieves that the best way to restore public confidence would be to get under federal supervision as soon as possible, | as proposed in bill introduced in Con- gress last winter by Senator Dryden. of New Jersey, who, by the way. Is presi- dent of one of the large life companies. Notwithstanding this paralytic condi- tion, there is confidence on all sides that the Equitable affairs will be pull ed out of the mire and strengthened all right. It is generally believed that the recommendation of the committee now making an investigation will be adopted by the board of directors. no matter what they are. The partisans of both Hyde and Alexander will have to accept them, because the committee is composed of five men who have the confidence of the public and of their associate directors. They are Henry C. Prick of Pittsburg. formerly of the Carnegie Steel Company, who is re- garded as one of the ablest business men in the country; Cornelius N. Bliss, who Is recognized as the first gentle man of New York and an ideal citi- zen; E. H. Hartman, the banker and | railway magnate: Brayton Ives, presi- | dent of a trust company and for years | one of the most prominent bankers in this city; and Melville E. Ingalls,, of | Cincinnati, recently president of the | Big Four Railroad It would be diff | hcult to select a stronger committed,
 or one that would command public confidence to a greater degree.
 These gentlemen are going through the affairs of the company in a careful and methodical manner, and when they | discover the facts will make a report with recommendations for the guidance i of the board of directors, which will | then decide what action shall be taken | to ''mutualize'' the company and give l the policy-holders the control of Its
 finances and management. The situa- | tion is, however, a very difficult and
 delicate one to handle. AS promi- nent banker expressed 1t this morning:
 When an irresistible force meets an | immoyable body no one can tell what | will happen" and that Is the situa- l ton In the Equitable case. The irre-
 sistible force Is public opinion. The
 immovable body is James Hazen Hyde.
 who owns a majority of the stock, and | can, LnereIOTS, uO dHyLHluS hO pACoOOS | in the affairs of the cof&pany. So long
 as he stands on his legal rights nobody can disturb him. But the Prick com-
 mittee has got to do something to
 restore public confidence which Is not possible so long as MT. Hyde retains
 his power
 The Equitable company Is entirely
 solid. The policy-holders are all right.
 The assets have not been impaired and l have mt daOrepiatad in value. But
 the disclosures show that the manage
 ment has taken great risks and but for
 favorable financial conditions they might have ruined the company.
 Fortunately, however. they have not
 even injured 1t. It will also be neces-
 sary for number of the board or
 directors to retire, because it has been
 discovered, or the public has been com
 pelled to take notice of fact that
 everybody knew before-that big pri-
 vate bankers national bank presidents,
 railway men, managers of trust com
 panies and other large borrowers and
 stock and bond dealers have been on
 the boards of the Equitable and other companies for financial reasons. They
 have used that and other companies to
 promote speculations and sustain en-
 terprises, generally of a high character,
 perhaps, but involving enormous risk
 which should not have been permitted
 with insurance reserves or any other
 trust funds. They are all in 1t.
 It Is a popular impression that the
 money which these great companies
 have received as premiums and which
 they are holding in trust for the benefit
 of their policy holders and the widows
 and orphans for whose benefits those
 policies have been issued, are invested
 in imperisRable property--in gilt
 edeged mortgages and real estate and
 not in stocks and bonds which are sub
 ject to speculative infieuences. An
 examination of their assets shows. how
 ever, that each of the three great com
 panies has been furnishing money to
 the four great railway syndlcates rep
 resented by members of their boards of
 directors as follows:
 Equitable Mutual. N. '. Life.
 cassatt .i27,122,5OO $s2.0l4.oo0 s25'S2d'SOO 'OO