The Montgomery advertiser., 1905-06-22
HENDRICKS
 REPORT OUT Investigation Made Into
 the Equitable. SOME SHARP CRITICISMS Superficial Measures Not
 Sufficient Now. Superintendent of Insurance Lambasts Previous Management and the New Trust Arrangement
 by Ryan.

Albany. N. r.. June a1.--The report of superintendent Hendricks of the state Insurance Department to Cover TOT Higgins, upon his investigation of the Equitable Life Assurance Society. was made public here and in New York tonight.
 It Is described in the title as pre- liminary report and sharply criticises the management of the Society, as we'll as the new trust arrangement for voting the stock agreed upon by Thom- as F. Ryan and the three trustees des- ignated by him.
 In conclusion Superintendent Hend- ricks says:
 NO superficial measures will correct the existing evils in this society. A cancer cannot be cured by treating the symptoms. Complete naturalization with the elimination of the stock to be paid for at a price only commensur- ate with it's dividends Is, in my opinion, the only sure measure of relief.
 This report with a copy of the evi- dence taken in this investigation will be transmitted to the Attorney General sfor such action thereon as he may deem proper.
 J. W. Alexander, President. and James H. Hyde. First vice-President, respectively, whose resignations were accepted yesterday by Chairman Nor ton, are severely arraigned In the re- port Gage E. Tarbell. Second Vice President. is exonerated. Mir. Hendricks finding that no substantial evidence ap- pears in support of the charges against him. Mir. Hendricks says it is an open question whether President Alexander and the other officers and directors who participated with him in the transac- tions of James H. Hyde and associ- of the insurance laws from hereafter holding any ofIiee in a life insurance company. The report charhcterixes these transactions as unlawful MT. Tarbeiis name Is not in the list of par ticipants in these transactions. The poiicyholders. however. the report sets forth, are under great obiigations Co Mir. Alexander and the other executive osficers for demanding the mutualizn- tion of the society and the retirement of Mir. Hyde from its control
 A Surprising Feature. A surprising feature of the present. ment is that Mr. Hendricks goes back to the organization of the Mercantile Safe Deposit Company in 1876 by Henry B. Hyde, founder of the Society. and declares that the company, which leases  Equitable Society. does not pay suf- ficlentIy and profits enormously at the expense of-the parent company. paying % per cent dividends. The safe de- posit lease has ninety-six years to run.
 Of Henry B. Hyde and the organiza- ton of the safe deposit and other sub sIdiary companies, Mir. Hendricks says:
 Under his direction and manage ment, the Society grew in public con- fldence and before his death 1t became one of the largest and most extensive insurance companies in the world But he did not neglect his own interests or those of his immediate associates and dependents in the Society,"
 The organization of the Equitable Safe Deposit Company by Henry B. Hyde and it's lease of space In the Equitable building, Boston. is criticized and the lease declared to be unprofit- able to the parent society. This lease Mir. Hendricks speaks of as jug handled" and he notes that the real estate pays the Society only 1.5s per cent on the building, while the Security Safe Deposit Company. which succeeded to the rights of the Equitable Safe De- posit Company pays IS per cent.
 Under the heading, The Missouri Safe Deposit Company" the report says:
 "The late H. B. Hyde. who. by this time, had become h firm believer and an expert In the safe deposity business, concluded he could improve on the Bos- ton lease hy $4,0O0 year in favor of himself and his friends and to the loss of the Society"
 Kept Lion,a Share.
 The stock of the Missouri Safe De- posit Company of St. Louis consisted of 2,000 sares, par value $10o each. Of these, 1.745 were in the name of Louis r.. frIr af this point: we have sent for Mir. Fitz- gerald to tell us who the real owner of this stock was, but he has not ap- peared. It may be assumed that most of it was owned by Henry B. Hyde him. self, for while he favored his intimate friends on the inside at the expense Of the Society, he kept the Hons share himself"
 In 1902 when 1t was desired to sell the St. Louis building the purchaser objected to his release and the safe deposit stock was bought by the Equl- table Life at $250 share, James /H Hyde, the owner of 1.410 shares, re- ceiving $352.0O0 in cash for his shares.
 Of James W. Alexander's share in these leases, MT. Hendricks makes the following statement:
 James W. Alexander says he sign cd these leases under the direction of Henry B Hyde. I believe that to be a fact and 1t is the most charitable construction which can be placed up- on his acts"
 The Commercial Trust Company of Philadelphia Is next taken up. Tn 1893 the New York State Insurance De- partment refused to admit as an asset the Society's advances. to agents. The Commercial Trust Go. of Philadelphia was then made the assignee of large advances to agents and the trust com pany then credited the Society with these advances as cash deposits. On December IF. 1904. the Equitable Life Society assigned to. the Commercial Trust Go. agents balances to the amount of S4.27S.24s On the same day another assignment of agents bal ances was made to the Equitable Trust CO of New York In the sum of S1,539,- 535. These sums were then entered on the books of both trust companies as loans to the Equitable Life and inter est was charged at the rate of 5 per cent. It is only fair. the report says, to say that the Equitable Life Ia a shareholder in both these trust com T,zTlies and shares in their profits; but. it is pointed out. James H Hyde also ts a stoekho1der it them and has "a q "a