The sun., 1905-09-11
KEW YORK LIFE EXPLAINS
THAT IT MADE MONEY ny CIV
ING IN TO PRUSSIA.
Got Rid Of It's Securities At Proiit for
tho stockholders OF % S0O.l2l-The
Deal In New York Security and Trust
stock Was Carefully eafeEuarded.


tho Stockholders OF % 800 .l2l-The
Deal in Now York Security and Trust
stock Was Carefully safeEuarded.
The New York Life Insurance Company
made a statement TO the Armstrong in
surance committee before the committee
tegan holding its hearings in regard to the
transactions which enabled the company
10 conceal in it's annual schedule Of assets
it's ownership Of class Of securities OBJ
jected to by the Prusian Government
II was this statement which Charles Z.
Hughes, counsel Tor the investigating
committee, used es the besis Of his ex-
sminati5n II Edmund d. Randolph, the
New York Iifes treasurer, who explained
the transactions in considerable detail
tef,re the committee on Friday. Preei-
cent John A. McCall's statement to the
committee, however. throws additional
light on the TIRE nssctions.
President Mccall says that In 1909. after
an investigation by the Prussian Insurance
Ture au. made simultaneously with an ex-
animation OF the New York Life's affairs
ty the Insurance Department OF New York
State, the company was readmitted TO
transact business in the Kingdom Of Prussia.
Among the various requirements imposed
by Prussia there was one in particular
which had been favorably considered by
the officers and trustees Of the New York
Life regardless Of the application which
had been made for readmittance to Prussia.
This requirement provided that the New
Tork Life upon readmission should cease
TO make Investments In loans or upon stocks
twithstanding the permission granted
10 make such investments and loans by
the laws Of our State
A new bylaw adopted by the company's
board OF trustees, after defining the Sc
curities in which the company's moneys
shall be invested. states that this company
shall not make "sny loan on or investments
in what are commonly known as industrial
enter prises. nor shall this company. not
withstanding the permission to invest In
or oan on stocks contained IN the insurance
laws of the State of New York, hereafter
increase its holdings In such securities, but
instead it shall annually reduce both the
amount OF stocks owned and the amount OF
stocks held as collateral security ito be
evidenced by tho annual statements here
after made by this company until, IN the
company's annual statement to be rendered
IN 1902, no item Of stocks owned or OF stocks
held as collateral shall be included among
It's assets
The statement says that in the reports
ty the Insurance De apartment Of this State
and the Prussian Bureau In 1904 the New
York Life is credited with the following
stocks at their cost value:
Chicago and Northwestern preferred,
q. $50. OOo New York Security and Trust
Company, s843, $50; Chicago. Milwaukee and
st. Paul preferred. $3.50, 800: Valley Railroad.
s502 800; Atchson, Topeka and Santa Fe.
1907 500: Fort Wayne and Jackson. sles.65
Central National Bank. $4,000: Pennsyl-
vania Railroad. Slil.7os: Chicago. Milwaukee
and st. Paul common. ssS,Ss7: Southern
Eswsy yBani o5 Me4ehants ns;
HaStS Railroad, iii ,sss; Bank Of America,
Estate Exchange Membership. $500.
Tho total was A.S32,0S4.
The statement says:
Between the date Of said official reports
and Dec. 81, 1901, at which latter time We
had agreed, pursuant to the bylaw, that no
stocks should be included In our assets we
disposed Of substantially all the sharehold-
inRe above mentioned with profit to our
policyholders over cost value OF s., 2sS, 9Ss;0s.
York Security and Trust Company an addi-
tional profit OF 1l54. 1882, being the excess
realised on the Chicago, Milwaukee and St.
Paul preferred stock and the Chicago and
Northwestern preferred stock over their
This excess profit was received pursuant
to an agreement whereby those shares OF
stock were delivered to the New York
Security and Trust Company and an addi-
tional amount OF securities sufficient to
secure the trust company against loss were
LII. 30 A-n nntH Hnr yrif h ha 1rto
of EMPLOYEES Of our treasury department,
Messrs. Mattison and Marshall and credit
was given to this company Dec. 81, 1901,
for the then market value Of the North
western and the St Paul, 2s5 and 100 re-
and tbos those sfes yaues
paid to the New York Life:
I his additional profit Of Sl54, 1852
added to the profit previously mentioned
Of s6 6,zss.asS. % makes grand total profit
Of H,so0.l2i.'
OF the sale Of the New York Security and
Trust Company stock by the New York
Life. On Jan. I, 1901, the company owned
$40 shares Of this stock which stood on
the books Of the company at $500 500 On
Jan. 8 Ave shares we're sold to George W.
:Throush the year, says the state
ment, sthe company was considering the
best way to get the highest price that it
could for this stock. After full considera-
ton. it decided that the best arrangement
il could make was one by which it would
obtain $500 share in cas- for the stock
and an agreement to give 1t half Of any
increase in the value Of the stock over $500
q share during the next five years. We
consulted counsel as to the safest and most
effective way In which this arrangement
could be carried out.
Inc result WIS tnt,t subscribers to the
stock sgreed to pay in cash to the COM
pany $500 a share; the stock VI g to be trans
ferred to Messrs McCs II. Fl irchild and
Perkins as trustees; the trustees were to
issue certificates # interest therein to the
subscribers, to collect the dividends on
the stock and to distribute them to the
subscribers; the trustees were to serve
without compensation OF eny kind; at the
expiration Il five years the sto ok WIS
TO be valued by Il committee; at
the v, lu' ton fixed by the committee
the trustees we're to have the first
right to buy the stock and to hold it
free frc m the trust; in Gee the trustees
did not exercise thu right, then, in case the
stock was v, lued at less tha IN $500 a sh' re,
Il wss to be delivered to the subscribers
pro rata In C. SO it W W lued at more than
&SOO a SHIRE It W: to be delivered to the
subscribers who were bound to pay to
the trustees, I r the New York Life Com
prny, en- fm,unt ecu to one-fa'f the
difference between $500 share and the
W IN tio n vi ced nv N II by the committee.
The statement adds:
sRv the nroyisions OF these n apreements