The Providence news. (Providence [R.I.]) 1891-1906, 1905-09-12
THE NEWS. PROVIDENCE. r. 4. TUESDAY, SEPTEMBER 10. 1905.
N. Y. LIFE CO..
USED A
DUMMY

New York, Sept. 12.-Inquiry into the
methods pursued by life insurance COM
panies was resumed today by the special
legislative committee appointed for that
purpose at the special session OF the
legislature last spring.
Today's session was the fourth held
by the committee and the inquiry was re-
sumed where It was broker off by adj
journment on Saturday, when h. ID. Ran
dolph, treasurer OF the New York Life
Insurance company. explained the trans
actions by which the New York company
disposed ~ assets objected 10 by the Prus-
sian government.
The removal OF the preferred stock Of
the Chicago. milwaukee, and ST. Paul rail-
road from the assets Of the company TO
satisfy the Prussian government, which
was under consideration at the last ses-
sion OF the conference, was again
taken up.
Mr.. Randolph testified Friday that
when the insurance company had 10 re-
move the stock vom its assets 1t was
turned over to the New York Trust COM
pany as collateral for a loan for which
notes were given by George b. Marshall.
a colored messenger employed by the life
insurance company at $500. The trust
company was owned by officials OF the
insurance company.
Counsel for the investigating commit
tee endeavored today 10 ascertain who
authorized the transaction.
Mr.. Randolph was asked 10 point out
in the minutes OF the finance commit
tee Of the New York Life Insurance com
pany the record Of the sale OF the stock.
The committee had no record OF any
dummy notes given by Marshal or an
other messenger employed by the com
pany. MIR. Randolph declared:
1T is n recognized custom In financial
concerts 10 ave dummy bonds. | am
sorry the name Of George Marshall has
been brought into ridicule. ON this trans
action we carried it along for the COM
pany and made an additional s20o,0OO for
the p~olicyholders.'
Mr.. Randolph said there was no record
on the books OF the finance committee OF
the insurance company OF the loans made
10 Marshall and another employo named
Madison. He said also that he did not
make any delivery OF the certificate OF
stock.
Mr.. Randolph stated that the sale of the
Chicago and Northwestern stock was re-
corded in the books OF the company and
that the received 81, 10000 which
was deposited with the New York Secu-
rity and Trust company. There was no en-
try In the insurance company's books to
show hat the trust company was under
obligation 10 return any part OF that
money.
Regarding both the Chicago and North
western stock and the Chicago, Milwau-
kee and ST. Paul matters, Mr.. Hughes
asked:
You kept control of the stock after 1t
went of your books so as to make any
profit you could7'
Yes"
Taking up the non-ledger assets. Mr..
Randolph said they did not appear on
the ledger. but a record was kept in a
ard index. a card for such an index,
showing the record and sale of POO shares
OF Erie for $2l0.0 600, was introduced in evil
dence.-
Cornelius c. White. deputy auditor OF
the New York Life. was then called.
He said the $4,000 received for the Erie
stock was credited TO the Financial or
Hanover ban office OF the insurance
company.
Mr.. Randolph again on the stand said
hat 5000 shares OF Union Pacific railroad
preferred stock. which was received as
bonus for underwriting. never appeared
as n ledger asset. as II cost nothing.
The Union Pacific stock. Mr.. Randolph
said. was sold at different times from
1902 10 1904.
The question OF syndicate operations
was then taken up.
Mr.. Hughes drew Mr.. RandoIph's atten-
tion 10 the fact that stocks received by
the New York Life for underwriting were
recorded in the card index as non-ledger
assets. while bonds received for under
writing appeared as an asset on the
ledger.
Mr.. Randolph did not now why this
was done. lie presented Mr.. Hughes with
a pamphlet entitled Participation I'm
syndicates by the New York Life In
surance company for ten years past"
The net profit TO the New York life In
surance ompany by its syndicate rams
actions in ten years was stated in this
pamphlet to have been 1889. 695.
This was offered in evidence by Mr..
Hughes and was alleged TO show the
New York Life in the time had made
no syndicate transactions which had re-
suited I'm a loss. These syndicate opera
lions were being probed when a recess
for luncheon was taken.