Los Angeles herald., 1905-09-13
LOOKS BAD FOR
NEW YORK LIFE
TREASURER MAKES SINGULAR
CONFESSION
FICTITIOUS SALE ADMITTED
Edmund D. Randolph Acknowledges
Selling and Immediately Buying
Back 100000 In Bonds to
Bolster Up Statement
FICTITIOUS SALE ADMITTED
BY Associated Press.

NEW YORK, Sept. 12.-Selling $780,
600 in bonds one day and buying them
back the next but one, holiday hav-
ing interviewed. in order to bolster up
statements made in the New York
Life Insurance companys report to the
superintendent of insurance, was the
sensational disclosure made today at
the session of the legislative insurance
investigating committee.
The fact was drawn from Edmund
D. Randolph, treasurer of the New
York Life Insurance company, late In
the day after Attorney Charles
Hughes, counsel to the committee, had
labored for more than an hour to get
a direct answer from Mr.. Randolph TO
direct question.
The inquiry dragged through mass
of figures during almost the entire day,
but it was not until near the hour for
ending the session that the sensa-
tional feature was brought out.
Earlier in the day Mr.. Randolph had
handed Mr.. Hughes a schedule of syn
dcate underwritings and transactions
of the New York Life for the last ten
years. This statement was to show, as
a foot note to the schedule stated, that
the company had participated in no
syndicate transactions that had been
closed out with a loss. Among these
syndicate transactions was the under
writing of the navigation syndicate or
International Mercantile Marine.
Mr.. Hughes drew from the witness
the admission that an aggregate of
$4,000,0O0 had been paid by the New
York Life to ]. P. Morgan & Co. on
this "joint account" Mr.. Hughes then
took up a sale item dated December
81, 1909 of 100000 of International
Mercantile Marine stock. Mr.. Ran
dolph said this sale was made to J. P.
Morgan & Co., and that a purchase Of
$SOO,00O was made on January 2, 1904,
from j. P. Morgan & Co.
Direct Answer Insisted On
After failing for some time to get a
direct answer Mr.. Hughes finally asked
Mr.. Randolph: "As matter of fact
there was a report 10 the superintend-
ent of insurance on December 81, 1902"
YES"
Then, the sole purpose Of the trans
action was that you might be able TO
tell the superintendent of insurance
you had only $3,20O,OOO of International
Mercantile marine shares?"
Witness hesitated and tried to evade
a direct answer but Mr. Hughes re-
peated the question until finally Mr..
Randolph said: YES"
Following the navigation syndicate
transaction, Mr.. Hughes referred to an
item on the schedule of syndicate tran
sactions under the date of December
30, 1904 by which 100000 of bonds were
sold to j. P. Morgan & Co. of London
for $72000O. Mr.. Randolph admitted
that this was an outright sale, and the
loss of $50, 900 was charged off to the
profit and loss account. Mr.. Hughes
left the point and took up the connec-
ton of an association known as NY
lie" with the New York Life insurance.
He got from the witness the admission
that on April IL, 1904, a sale of $50,000
stock to "Nylic'' was made.
How Collateral Loans Were Made
The usefulness of the New York Sc
curity and Trust company to the New
York Life came out when it was testi-
fed that while the insurance company
was not taking collateral loans 1t made
a practice of lending it's money to the
trust company, which made the coll
lateral loans.
Mr.. Hughes took up the accounts of
the money deposited with the New York
Security and Trust company in 1902,
which was called account No. 4. 1t
ran from $6,750,00O in May and June
up to $12,531 900 in September and end
ed we'll over 100000 in December.
Now" said Mr.. Hughes, why did
you reduce the amount deposited with
the New York Security and Trust COM
pany in July, 1904, to $1,500,000 and keep
it at that even figure to the end of the
year? Your balance at the beginning
of 1904 was $S00O,0 ,000."
MI. pLOlCoocu dllCO,
the impossibility of remembering every
transaction and interrupted gain and
again. Mr.. Hughes repeated the ques-
tion and Mr.. Randolph finally said:
1T was q question at this time
whether our, relations would continue
with the company. The consolidation
az the New York Security and Trust
company was taking place at this time"
This closed the inquiry, but Assem-
blyman Rogers, who was in the chair,
said to the witness before adjourning
the sitting: Some of the committee
are not satisfied with your refusing to
give the names of those who particle
pated in the joint profit deals"
"In answer l would say answered
Mr.. Randolph, that it is an entirely
confidential matter; there was no In
timation on tn. part of anybody Of bad
faith"