The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-06-22
WOULD END
STOCK CONTROL
Hendricks Exposes Equitable
Graft in Trust and Safe
Deposit Companies.
BLAME LAID ON n. 3. HYDE.
Suits Expected to Compel Faith
lass Directors to 0isgorge.


state superintendent Report Assaiis
James II. Hyde for Extravaganza and
says He spent Societys Funds A. He
Pleased and Used Them to Force His
way into other Dlrectorates-Iigh
o., Alexander ana FIX onerates Tarbell
Tells o. Companies in Equitable Build.
,nSs which Paid Less Rent Than the
Repairs Cote oniplete Naturalization
and the Purchase Of the Stock At Its
Dividend Value Arc tho Remedies.
State Superintendent OF Insurance Francis
Fend ricks's preliminary report on the
EQUITABLE Life Assurance Society scandal
was made public last night. 1t goes into
the charges that have been made against
The society's officers and directors most
thoroughly, and eclares that complete
naturalization and elimination OF stock con-
troll are the remedies.
The report finds that most OF the officers
Of the society have violated their obliga-
tons and perpetuated many wrongs. and
that it is an open question whether Presi-
dent James W. Alexander. James Hazen
HYDE and all the other officers and direct ors
OF the society who participated In unlawful
transactions are not disqualified under
Section 80 of the insurance law from here
after holding any Office In a life insurance
company The section provides that any
officer or director who profits through the
sale of securities to an insurance company
with which he is connected shall forfeit
his office
Mr. Hendricks finds that most Of the di-
rectors have paid little attention to their
duties and obligations as trustees and that
the mildest thing that can be said Of them
is that they have been indifferent. He
denounces the james H Hyde and As
rociates" underwriting transactions and
demands that not only the directors and
officers who made profits out OF these trans
notions, but also the Fquiteb BILE Life's sub
sdiary companies that were concerned in
the sale Of the securities to he society shall
make restitntion.
He blanes Henri Il. HYDE, father OF
James Il, Hyde, for itiaiguratin:- he sys-
tenn Of rsing tie syciaty'> money for the
self1sh ends Of the officers crttic2es him for
the way that he used the society in his
safe deposit company ventures, ard shows
that the society has lost thousands Of dol
lars by the inadequate rent which it has
been receiving for floor space for these
companies. Mr.. Hendricks attacks also
the relations Of the Equitable Life with
Its subsidiary trust companies, especially
as regards the advances made to agents
and the supposed deposits in the trust
companies
Mr.. Hendricks recommends that the next
Legislature take into consideration the
question of the investment OF the funds
OF ,ife insurance companies and establish
a standard Of investment. He says that
there can be no question OF the wisdom of
prohibiting the investment OF the funds
Of life insurance ompanies in subsidiary
moneyrd and business corporations
Mr. Hendricks has referred the report TO
Acknowledgement Mayer. Mr.. MAYER "a id
asst night that it was within his province to
bring suit against the Equitable directors
who have pocketed profits which belong
to the society to disgorge them. and it
vas minated pretty strongly that such
suits would be brought.
The Report.
Mr.. Hendricks begins his report. which
ia addressed to Gov. Higgins and dated
June co. with tho statement that the Equi-
table Life Assurance Society was examined
by the Insurance Department in the year
1901 and found entirely solvent, Its annual
report for the year 1904 sh ows, he says, that
twas financially sound, had large surplus
and was in prosperous condition
1T was therefore,, says the Supern-
kApl
to the public generally when internal dis
sension arose In this institution
He reviews the co .roversy within the
society and the circumstances which led
tho Insurance. Department to begin its
society by the late Henry B. Hyde father OF
James H. Hyde, the report says
Early in the history Of the society he Sc
stantly held and transmitted by deed Of
trust to his son. By reason Of his stock
control and his commanding ability he
absolutely dominated the society in all
firections. He was possessed Of untiring
energy and zeal. He worked early and late
land inspired others with much OF his own
Yenthusiasm and enterprise. He watched
over its affairs in all directions and even
NooSsSou itlbutduCc Oh tOe stIeetS
henry .. HYDE's 'sELFIsH PURPOSE
Under his direction and management the
society grew in public confidence and be-
aore his death became one Of the largest
and most extensive insurance companies in
Tho world. But he did not neglect his own
interests or those Of his immediate associates
and dependents in the society. As busi-
ness increased and money began to flow
into the treasury and the real or apparent
surplus began to grow he conceived the
IDEA OF strlcting or buying office build
ings in the larger cities In this country and
also In Europe. They were claimed to be a
useful advertising medium in impressing
the pofcyholders and general public with
the large SURPLUS substantial property and,
wise conservatism Of this institution. But
they incidentally served another and more
selhsh purpose
ARHcAHTIL8 SAFE pKposrT GRAFT.
Mr.. Hendricks then takes up one by one