New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-09-09


bough. bonds under such agreement that 1t
could not be willing to hold for their intrinsic
value.
DO you regard 1t serious matter, asked Mr.
Hughes. for the New-York Life to tie itself up
no that it cannot dispose OF the large blocks or
stock"
Not in the least was the reply,
Statements of the cash balances Of the New
York Life in the banks OF the United States
and Canada from September. 1900 to August 81,
1905, were introduced as evidence.
NETWORK LIES CASH BALANCE.
The cash balances of the New-York Life at
the end of January were upward OF sloVUWpo'
February. upward of 100000: March, up
ward OF S1000o,Oo0; April, upward OF sl3.oh-
COO; May upward of S120O0OOo; June, upward
of S13oOoOO0; July upward of S14WoVo and
August, nearly 100000.
Now. with so large a sum at It's comihahu'
why could not the New-York Life at any tirne
command as good a price in the open market
withou; binding itself not TO sell its bonds Tor
q year." asked Mr.. Hughes.
Il wish to emphasize the fact" said Mr..
Clahin, that the New-York Life could, with
absolute safety tie up threefourths Of its assets
for Ave. six, eight or ten years. There is aoso-
1utely harm in tying money up. The
finance committee could save themselves much
trouble If they invested all their money in The
United States or municipal bonds, and then
there could be no objection unless some policy
holder came and asked them why they were not
getting higher rate. We cannot put our talent
In a napkin. You will admit that it is an ad-
vantage to people from whom you are purchas-
ing bends that you should not sell within GER
tain time
ARGUMENT OVER SYNDICATES
For some time Mr.. Hughes and Mr.. Clafiin
argued to the beneficial results of these
eyndicates to the New-York Life. Mr.. Clafiin
based his defense of the holding agreements on
the benefit to the vendors Of the knowledge that
the company would not be In the market i'm
inediately to dispose Of its holdings. and so
compete with the first issue of the bonds. Con-
eequenely the company received the bonds at
lower rate. and was assured the market would
be protected for it. too. No possible harm
could come to the New-York Life from the
delay in selling the bonds again. To establish
the advantage Of these holding agreements to
the Network Life. Mr. Claflin referred to the
result OF the syndicate transactions of the COM
pany.
g. Do you participate in these syndicate trans
q Have you participated in the last five years.
a. may have done So
Mr. Clafin said he had not done within the
last year.
g Have you been at any time i'm member 1 &
"A. have been in several syndicates but not IN
my that have sold bonds to the New-York Life.
little later Mr. Clahin said: 81 personally
have never made a cent out Of the New-York
Life except the working fees The participa-
ton of the New-York Life in the International
Mercantile Marine Company to the extent OF
So 200 900 was brought up. In this company Mr.
oI1y int ste5 ia
Of 100000.
BONUS TO PROMOTERS.
Witness said there to be a bonus to syn
dicate promoters of $2,5OO,OOO preferred stock
and S25OOoOOO common stock. He declared
that in all such transactions the New-York Life
and members of the finance committee were
members OF the same syndicate; they were
merely co-adventurers in an investment. ana
in such cases the New-York Life never bought
any of the bonds as placed on the market
He urged his participation in the International
Mercantile Marine Company had nothing 10 90
with his Official position in the New-York Life
and was not in any way assisted by that.
1.-The International Mercantile Marine Com
pany only earned interest on Its ponas Tor one
year?' asked Mr.. Hughes.
Yes"
The witness said that this the only syn
dictate transaction in which both he and the
New-York Life participated He said the New
York Life had Carnegie steel bonds. but had
none of the bonds issued in lieu of the original.
Mr. Claim said the New-York Life was in
terested to the extent Of S2,500000 in Chicago,
Burlington and Quincy purchase syndicate, and
still had S1250O 900 Of the bonds. 1t purchased
these bonds from the New-York Securities and
Trust Company and other holders
us there any reason why you should go into
syndicates for s., 100000 only, when you con-
template taking as much as S12,5O0,oo0 soon
afterward?'
THE amount that the New York Lie can
ret is often limited, and increases the demand
The bonds may turn out to be better than we
exnected and so we may decide to increase our
halAanSa."
eYND1CATES EXPLAINED.
Mr. Langdon testified that his interest In the
International Mercantile Marine Company is
$4,000 Mr.. Randolph. recalled said the New
York Life makes few collateral loans. At pres
ent such loans amounted to less than 81. 900 600,
he said.
Hes the New-York Life any stock that does
not appear In its published list of assets?"
asked.
zone thousand shares of Southern Railway
preferred. We have had them for some years.
MT. Randolph explained that these We're re-
earded as "non-ledser assets; that they had
been acquired without cost. There had been no
loss over them, as they had been acquired with
bonds. which had since risen greatly in value.
The New-York Life has "non-ledger" assets Of
the par value Of 100000 In 1897 the company
went into syndicate for 100000 Union Pacific
purchase money bonds 1t took 100000 worth
and paid sss7.722. The commission the
also j,-a1 eva