Waterbury evening Democrat., 1905-09-09
MONEY LENT CLERKS
New York Life Loaned Mil.
 lions to Hide Stock Sale.
SECURITIES MARKED SOLD ON BOOKS
Witnesses Testify Insurance Compa- ny Kept Large Shed String on a Trust Company In New York.
 RandoIph's Revelations.

Trust Company In New York. RandoIph's Revelations.
 NEW YORK, Sept. 9.-How two $60'
 clerks in the New York Life Insuranc
 office were able to borrow $3,000,00t
 and do it time and time again in or
 der to conceal the fact that the com
 pany was carrying securities which i
 had no business to carry and showed
 on its books as sold and how the New
 York Life kept large sized string or
 trust company which it appears tt
 have sold were sensational features
 which marked the close of the third days session of the legislative insur
 ance investigation yesterday.
 The sensational testimony was given | by D. B. Randolph, treasurer of the
 New York Life company, in the course of a grueling examination by Charles B. Hughes, chief counsel for the com
 mittee. Mir. Randolph was on the
 stand until late in the afternoon, and
 when the hearing closed Mir. Hughes had not finished lis examination. Sen
 ator Armstrong announced when ad- journment was taken that the next session of the committee will not be held until next Tuesday morning.
 Sensation followed sensation after MT. Randolph took the stand. MT. Hughes took up the question of the relations of the New York Life con- pany to the New York Security and Trust company, now the New York Trust company, with which the New York Life kept several millions of dol lars on deposit.
 Five or six years ago the New York Life had some difficulty with the Prus- sian government and was debarred from doing business in Prussia, but was readmitted on condition that it would agree not to invest in certain forms of securities, among which were the stocks of industrial and mining corporations.
 The New York Life owned a large block of stock in the New York Se- curity and Trust company, and this stock it decided to sell. In order to get rid of the stock the New York Life sold it to commission of trustees consisting of c. S. Fairchild and oth- CTS on certain conditions, one of which was that the trust should not expire till 1907. So that while the stock ap- peared as sold on the books of the New York Life company it was in real ity in the hands of trustees chosen by that company.
 By MT. Randolph's testimony it was then shown that the New York Life kept from S3,000,000 to $10,0O0,0O0 on deposit with the New York Security and Trust company and aided it in making loans. Then the New York Life got interest on the money from the trust company.
 Mir. Randolph was induced to tell about certain loans obtained by clerks in the New York Life office. The sub- stance of his testimony was that the New York Life under its agreement with the Prussian government had to get Hd of certain industrial and other stocks barred in it's agreement Among them were certain United States Steel securities, known as Carnegie bonds.
 When the sale of these securities be- came imperative the market was in no shape to absorb them, and it would mean big loss if they had been of- fered at the time. So in order to make it appear on the New York Life books that the securities had been sold they were transferred to the New York Se- curity and Trust company. The latter, however, on its books did not show any sale, but showed the money loaned to the New York Life company.
 That loan was made was admitted by MT. Randolph in a statement that two clerks in the New York Life office, one of them getting a salary of 5000 a | year, borrowed S3,000,000 on their per sonal notes from the trust company and secured by collateral consisting of railway bonds, which collateral was by the New York Life con- pany. The names of these clerks were and Marshall, Mir. Ran | dolph said. When asked how much sal | ary they got he said he believed Mar. shall's salary was 5000 a year.
 "An examination of your books, then" said Mir. Hughes, would have shown that you did not own the United | States Steel bondsy'
 Yes said Mir Randolph.
 But as a matter of fact" pursued | Mir Hughes relentlessly, you owned l the bonds, although they appeared on your books as soldT'
 A reluctant Yes was the reply to this question.