New-York tribune., 1905-06-22

and to the other executive officers for raising
this issue. says Superintendent Hendricks.
President Alexander shared in the syndicate
transactions. says the report. He executed leases
which cost the Equitable thousands of dollars
Because of his connection with the syndlcates'
Superintendent Hendricks deems it IAN open
question whether he is not disqualified under
Section 36 of the Insurance law. from hereafter
holding any office in life insurance company
Gage E. Tarben. accused of extravaganza re-
batting and practically a conspiracy against MI
Hyde has denied these charges and has shown
that expenses were not heavier than IN other
companies says the report. No evidence mas
been brought out to sustain the accusations
Legislati tive establishment of standard for
the invest tnents OF life insurance companies
should follow this investigation, says the Super
intenGent The investment of their funds IN
subsidiary companies and the carrying OF large
balances in these subsidiary companies are most
harmful to the best interests of the policyhOid-
ers he says.
The report goes back to the time of Henry b.
f4yde. creator of the Equitable. In a remarka-
BILE analysis of the elder Hyde. superintendent
Hendricks pictures the growth OF the sociely
and the beginning of the system OK encouraging
subsidiary companies. to which re ATTRIBUTES
the complete decentralization of the company
now crown vast. unwieIdly and corrupt. When
HYDE conceived the idea of erecting office bcild-
fncs il, the various large cities. They would Se
/ exca1lent advertisements. he thought, says Su-
perintendent Hendricks
Then these Office buildings represented much
valuable space for banking companies and safe
deposit vaults. Such business would have
mncb 1roat SO Mr. Hyde organized, in 1876. the
original subsidiary company of the Equitable
the Mercantile Safe Deposit Company Others
followed rapidly. Superintendent Hendricks
shows how the directors and their friends
bought stock in these companies. to which
were granted leases marvellous in terms. carry
fpe, unusual privileges. These leases are ap-
I pended to the report.
I From tho formation of the safe deposit COM
nao:es 20 the organization of banking COM
uanies was only short step. This Henry B.
HYDE took and his policy has been continued.
the report shows even up to the reorganization
of the Equita bic Trust Company. In which con-
Germ most of the directors and their personal
( friends made large profits. The Equitable. after
The reorganization bought stock costing S5.2S1.-
50D at $500 share whose book value at pres
/ ent is 1888 SO 1-3 share. Stockholders bought
this stock at $3.50 share. and it's value rose to
/ S3S3 33 f-3 says the report Meantime. the
Eouitable has kept on deposit an average OF
! SfOpGOO0 year. at > per cent interest
| In the merger which resulted in the absorp-
! lion OF the Western National Bank by the Bank
Of Commerce the Equitable got only $40 for
its stock in the Western National according to
the report instead of selling its controlling in
terest at 500 II got promises and prospects.
| according to the testimony Of Valentine p sny-
der Investigation OF three subsidiary COM
| panies-the Lawyers Title Insurance Company.
| the Lawyers Mortgage Company and the
| Franklin National Bank-was not undertaken
because of lack of time.
The syndicate transactions are set forth In full
in the report. with other stock transactions,
criticised sharply by Superintendent Hendricks
Jacob H. Schf. of Kuhn. Loeb & c.. Is men
toned conspicuousy in these comments.
The attorneys fees are set forth IN a table.
| showing the large sums spent in this way. Alex
ander Green anu Alexander & Colby received