The news & observer., 1905-10-26
Trustees to Investigate
the Mutual Life.
so MUCH FOR LIGHT
This Pouring Out in a Flood From
the Dynamo of the Iavestiga-
ting Committee Forces the
Company to Take Action
in the Matter
(By the Associated Press.) }


New York, Oct. 25.-More startling
than the testimony before the Legisa-
tive committee investigating the meth
DDS of insurance companies today was
the announcement by President Rich
ard A. McCurdy, of the Mutual Life
Insurance Company, that committee
of the board of trustees of his COM
pany, had been appointed to investi-
gate the company and its methods.
The members of the committee are:
William II. Truesdaie Effingham B.
Morris and John w. Auchincloss, all
prominent in the financial and business
world This action was taken at a
meeting of the board today and was
the result of the insurance investiga-
tion. The matter was brought before
the board by President McCurdy and
the company will begin it's work at
once.
Still another interesting development
in insurance matters was the statement
issued today by President Morton, of
the Equitable Life, showing that the
receipts of the company for the nine
months of this year exceeded the eX-
penditures by 16,723,197, an increase
of over 100000 compared with the
same period last year. Receipts from
premiums of policies for the third
quarter this year were over $1,00O,0O0
less than in 1904.
After an entire day given over to
the examination OF Emory McClin-
took, actuary of the Mutual Life In
surance Company, and to reading col
umn after column of figures the legis-
lative committee adjourned until No
vember 8. the day after the municipal
election. This extended adjournment
Of
the committee who are candidates for
reelection to the assembly to meet
their constituencies and conduct their
campaigns.
Testimony of McClintock.
The testimony of Mr.. McClintock
was of a technical nature. A number
of his explanations brought the fact
that his ideas were in many respects
at variance with the established meth
DDS of insurance companies, and that
of his own company in particular. This
was especially apparent when the sub
ject of deferred dividend policies was
being inquired into. He said the word
deferred was ambiguous and mis-
leading, as it implied that dividends
were accommodating or were paid at
the end of each year. The company,
he said. reserved the right when it
wrote a policy to say what amount
should be apportioned at the end OF
each dividend period.
Mr.. McClintock also said he was
strongly i'm favor of limiting the
amount of business a company should
write. He said an attempt had been
made to come to an agreement with
the New York Life and the Equitable
Life to limit the amount of business
done by each company to one billion
dollars. This was finally increased to
$1,5OO. 100000, but James III. Hyde, of
the Equitable declined to enter the
agreement and then George w. Per-
kins, of the New York Life, object
ed Mr.. Hyde'S reason was his am
bition to make the Equitable the
largest insurance company in the
world. Mr.. McClintock thought that
a law limiting the amount of buiness
would be good thing AMI felt sure
the Mutual Life would lend its sup
port to such legislation.
These views are contrary to those
expressed by President McCurdy, of
the Mutual, when he WAS CO the stand.
Mr.. McCurdy did not think that any
company'S business should be limited,
even at the point when that business
failed to be profitable to the company
Mr.. McClintock also thought that
law compelling the declaration of
dividends at stated periods would be
unwise.
AS to the method of computing the
dividends that should be paid on q
policy. he<aid the apportionment was
made upon his Judgment 1t was not
matter of accurate calculation, but
was based on the experience of Drevi-
Gus years. The interest earned by the
company or the increase in the mark
ct valuation of the securities held by
the company, MIR. McClintock said,
were not taken into copci,lara +;o.. =,
apportioning these dividends He
said--hat in 1903 when the dividends
were reduced, the market value of the
company's securities had decreased.
In 1904. however. the securities rose
in value some eight millions of dol
lars, lost by the decrease the year be-
fore. were regained and a million in
addition. The dividends were NOT in
creased for 1904. however, yet thew
were not cut. He was still on the
stand at adjournment.