The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-06-22


the EQUITABLE society. These transac-
lions we're explained in detail in the Frick
committee report. In summing up the
transactions the Superintendent says:
BY simple addition it appears that the
gentlemen and corporations associated In
these transactions. made the following
profits:
James II H. H Ayissandyt. ss5s e
\cinsm "a Jcintyye ,.,........... 1920 80
Valentine r snyder ,...,,,....,,....,.,, ~. q
Alvin w krech. 80 az
T fSe toui,n6ie Trus, co ..,,,.',,.,, O.isi 10
The Wesjern National bank ............, 3.O2i oJ
The Commercial Trys co o' rh''aoepAa ~" az, M os
Mercantile Trus, Co ..,...............'''' S'i~'a
Total Observation-Disclosures, sis8U -
"The corporations mentioned were taken
in and given small participation because
they were affiliated with the Equitable
society. and the other associates were
Interested in their dividends. All of these
gentlemen who divided these profits were
directors Of the society and six OF them
! members Of the executive and finance
committees. As syndicators they took
these several alotments OF securities and
| as directors OF the society they caused
! 1t to purchase Of Kuhn, Loeb Co. sub
| stantially the came amounts which were
| allotted to them.
TO illustrate: On June II. 1902, Kuhn:
Loeb 4 Co. allotted to James H Hyde and
| Asso ates a participation of 81 100000 in
the Metropolitan Street Railway per
| cent. bond syndicate at "a. and one week
thereafter the Equitable society bought
the "a me amount at about ~. This partlci-
patton was allotted TO these men lecause
II was known they could dispose Of them
and when they accepted the participation
they knew where they could sell them
Why should the officers Of the society
make this per cent proht;
ALL SHOULD MAKE RESTITUTION.
-Mr. Hyde and associates raise the point
that the society did not lose by he purchase
Of these bonds. but that is no excuse for
them. II the market went down the so
ciety would have lost and if it went up
the society should get the profit. They
we're trustees. Their first obligation was
to the trls, estate which they represented.
They should not be permitted to make
money for themselves at the loss or even
at the risk of he society. The profits which
they and each OF them realized belong to
the society. All these men should he com
| PEELED to pay back to the society these sew
eral amounts with interest. And the
affiliated companies should also pay to the
society the several amounts received by
| them less any portions thereof which the
| society has received in the form of div
| idends.
This question was put to Mr.. Alexander
on the witness stand We're you in the
syndicate?' And he answered: Mr..
Hyde managed these matters on his own
voluntary part and put me down for II
share. When the matter came complete
| turned what | made over to the cashier.
Whether there is any legal question about
| it or not, it seemed to me ii questionable
| thing for an officer to participate in syn
dlcate that was making, money by selling
| bonds concurrently to the company He
| further explains that he did not know Mt
the time that the Equitable society was
! buying any portion OF the bonds or secun-
tiet in which James H. Hyde and Associates
were allotted participation. and he claims
he was conscious OF no wrong or viola
! Mr. Hyde insists that Mr.. Alexander was
aware OF the transactions which were being
made and knew from what source the
| profits came.
Mr.. Mcintyre, who was very candid
and exact Witness stated all the facts fully
part OF his profit, but makes the argument
| that since he was not at that time a mem
! Der Of the executive or finance commit
tees he ia entirely blameless, and that his
part in the transaction was entirely honor
! able and legitimate. His comprehension
as to the duties OF director toward his
tr,,st estate Is not surprising for he was
reared in the society since the age Of a.
and under the immediate tutelage Of the
late Henry b. Hyde
BOUGHT Hl0H, SOLD LOW.
Under the heading "Other Stock 7 rams c
tons Mr.. Hendricks says that the schedule
! prepared and verified by the financial secre
tary Of the society OF purchases and sales OF
the stock of the Mercantile Trust Company
and of the Equitable Trust Company dis
close some peculiar and unusual bushes,
transactions" During the years 1903 anc
1904. he says, 1t appears from this schedule
that the Equitable society was frequen
purchaser Of the stock Of the Equit table
Trust Company at from $40 TO $3.50 a share
and in the same period OF time 1T was dis
posing OF these securities to various in
dividuals at about $500 share.
The Equitable Life was purchaser o
the stock Of the Mercantile Trust Compan,
at $500 a share as early as 1900, and in TIL
purchaser Of that stock at about $1,000
share. In the record OF sales in 1900 OIL
Jan. 4 is a sale Of 100 shares to George j
Gould at $500 share, and upon the same da,
80 shares to Mr. Frick at $3.50 share. an
on Dec, 20, 1901. 100 sl.ares to NJ, l.. Schif
at $500 share and on Jan. 3. i9O2-fourtee
days later-lOO shares to f. H. Hartman a
$500 share. These purchases and sales
It appears from the record were nearly al
approved by the finance committee of tn
society.
I KUHN, LOEB 4 co.'s PROFIT
Supt. Hendricks calls attention to an
, other transaction, this one with Kuhn, Loe
! 4 Co, OF this transaction the report says
! There is one transaction covering the sal
| of securities (which l call attention to. o.
} November 49, 1904, the Equitable societ
resold to Kuhn, Loeb & Co, 81 1923 ,3Os, pa
} value of the first issue of Japanese bonds a
> elT fiat With the interest which ha
: accrued on them at that ii ne it was pract
! cally 81 net. These bonds were purchase
, from Kuhn Loeb 4 Co. May % and June ~
1904, at 93H and interest loss in the sal
to the Equitable society of pa per cent
amounting in the aggregate to $2s,0S?, Il
II they had been held they could have bee
! sold at very much higher figure.
when the inquiry was made of Mr. Schi
as to the reason for this sale of bonds, h
} stated that possibly the society was pre-
pairing to purchase the second issue of JAY
anese bonds, which find was correct, for O
: Dec. 5, 1904. the Equitable society purchase
81 900 900 par value Of the second issue
Japanese bonds, and the total profit realize
by James H. Hyde and Associates in tn
transaction was sea, si5.ls, not very az
. vantageous transaction for the Eauitab
: society. but a very profitable one tn u
James Fl. Hyde and Associates syndicate.
rHE cnovTu M THE SALARY LIST