The Irish standard., 1905-09-16
Speculate With
Insurance FUNDS
O. @I.S-h-,S IN T USING CON-
A---. ~-A-1A AN &c --aAa FOR
IND lS.oI.T.
TREASURER CT new
YORK LIFE IN STAND

Tells How Bond Deals Are Operated
Bankers Get Half for hano4lng
syncicates - Personal Profits tor
Treasurer OF Mutual Life.
New York. Sept. l4.-Speculation
running into the millions, with tue
New York Life lnsula..ce company TAX
ing ali the risk and members Oh pr
waite s!ndicaleS on the III. side get
Ting all the profits, was revealed
Wednesday before the joiAt legislative
committee investigating the lite insu.-
ance companies. An official of the
New York Lite company admitted Its
funds were used for the purchase of
Gonds and the syndicates pocketed the
profits in re-sales.
Frederick H. S.ipman, assistant
treasurer for the last three years OF
the New York Life Insurance company,
was the witness who made these reve-
iations. He was examined on syndl-
cate accounts. The Toronto, Hamil-
and the accounts were gone into in
detail.
How could the New York Life"
asked Mr.. Hughes, counsel to the COM
mittee. retire Toronto Hamilton &
Buffalo bonds from the syndicate at
80, when it had bought them while in
the syndicate at 91?"
Because the market price in the
OPINION Of G. M. Gibbs, the treasurer
al tins time, was then 80. We credited
the profit. $44,9S6. to profit and 10 $
Nj. Shipman. in reply to further
questions, said the company raised the
price from 81 to 80, but that the proiit
HAD never been realized. and the csm
pany holds the bonds at the present
time.
Credited Profit Not Earned.
''The New York Life, in this case"
| asked Mr. Hughes, did not return
bonds, as is customary, to the syndi-
cate managers, but it took them itself
and credited on the books a profit
which, in fact, had not been made, did
it not?"
Yes"
Next Mr.. Hughes turned to joint
count of Goldman, Sacks & Co., and
the New York Life in 1899.
The account was created in order to
| Invest in Chicago & Northwestern
railroad bonds. with an agreement for
equal division of profits Mr.. Ship
man said it should net be called a
syndicate.
How can you ex! lain that on July
is, 1899, you buy and sell 75u bonds on
the same day, according to your state
nlent?" asked Mr.. Hughes.
Transferred to Joint Account.
1.-THE only way can explain it," MT
Shipman replied, us that the New
York Life held these bonds, and wished
to sell them. Therefore. it named d
fair price and transferred them to q
joint account"
"Ncw, don't you see the purchase
is not for the syndicate, but for the
New York Life Insurance company? '
Il can't say; it is six years ago."
"Is it fair to say that the New York
Life enters into an agreement with
others and provides the money for the
purchase of the bonds and then gives
the members of the syndicate the
profits of the sale?"
| Eyes"
Pays Half Profits to Bankers.
"Does it mean that the New Yorl,
Life pays one-half profits to banker
to get them to handle the syndicate?'
Eyes, think it is sometimes alvl..
able iE order to get the business.
The Chicago. Burlington & Quincy
deal was next investigated w. S
Fanshawe was the other member oil
this joint account. It, too, was q
purchase of bonds for resale, amount
ing to 100000 to 100000.
"There seems a great many oil
these Joint accounts" said Mr.. Hughes
els it safe to say they are all specula
tive. like the Chicago & Northwest
ern?"
eyes"
w. S. Fanshawe, Mr.. Shipman said
is a new member of Harvey. Fisk 6
Co. He was formerly in business OF
his own account.
Another to Buy 60" Stock.
Mr.. Shipman was asked to prepar;
separate accounts, giving all the de
tails dealing with joint accounts HI
said another syndicate was formed tt
purchase the stock of the Chicago, Bur
lington & Quincy railroad.
Mr.. Shipman gave way to Edmund
Randolph, treasurer of the New Yorl
Life Insurance company, who wal
asked to produce the minutes of thu
! finance committee as to the authorize
ton of any purchase of bonds for re
sale on joint account.
4 Cromwell's Profits.
At the afternoons session of tn,
committee Frederick Cromwell. treas
urer of the Mutual Life Insurance
company, testified that he had made
personal profit of s26.371 during thu
past five years from syndicate opera
tons in which he personally and tn
Mutual Life Insurance company ha,
participated.
Farmland Murdered.
Wilmington Del Sent 14-JOhn W