Los Angeles herald., 1905-12-16
COCHRAN SCORES
INSURANCE MEN
DELIVERS STRONG SPEECH IN
THE HOUSE
Refers sareastieaIly to Methods Of Re-
form Which Put in Charge Men
Who Know Nothing Of
the Business
BY Associatcd Press.

by Associated Press.
WASHINGTON. Dec. t5--Tho house
today devoted four and three quarters
hours to lively debate on the possibili-
ties of controlling insurance companies
Two set speeches were the features
one, by Mr. Sherley of Kentucky, bore
on the doctrines of states rights and
the other, by Mr.. Cochran Of New
York, related to the exactions of the
officers who manage the big life insur-
anCe companies of his state. Mr..
Cochran proposed that congress,
through It's taxing power, should con-
fine all Insurance companies to the
state in which they are organized.
Mr. Mann of Illinois outlined q pro-
posed means of control he will later
present in the form of a bill, leaving
it to the insurance companies volunta-
rly to submit to federal examination
and approval. Mr.. Williams, the min
ority leaders, concluded the debate,
holding that control was possible but
not through the taxing power.
Digressions were INDUCED in, first
to send message to the senate return
ing its bill regarding canal bonds as
an usurpation of the constitutional
rights Of the house 10 originate revenue
legislation, and again to discuss hazinE
at Annapolis. No conclusion was
reached on the subject of the Insurance
feature of the presidents message
which is the matter now under con-
sideration and the debate will proceed
tomorrow.
Mr.. Cochran of New York main
tanned that the power of taxation was
a legitimate weapon for the control of
privileges of commerce. The reason
the senate was steadily increasing In
power. he said, was because it con
stantly exercised every vestige of Its
power. Emphasizing the relations of
the two houses, he asserted that pow
ers unused would decay, and that the
house now possessed all the power
necessary to establish its prcdominance.
Mr.. Cochran said:
within my memory the three large
companies have accumulated a billion
and a quarter of dollars, and il will
not be a generation before this sum
will be five or six billions. The utter
viciousness of this condition is that
these funds are under the control of
men who have no personal interest in
them. This money is a trust fund,
and yet the persons who are the bene-
flciaries of the trust cannot have a
word to say regarding them. This sys-
TEN must be wholly uprooted to effect
a cure"
Mr.. Cockran's remedy was to conflne
the insurance companies to the state in
which they were organized, the same
as savings banks are confined.
believe me-" he declared, there is
not the need of paying a salary of
$1o0,OO0 year by any insurance COM
pany to protect it's policy holders, but
it is necessary to get a man to swindle
them"
Arraigns Insurance Magnates
1t was an awful spectacle. he said,
to see these men mount the witness
stand and boldly confess their misuse
of the peoples funds. There is now the
spectacle in New York. he said. of the
district attorney working day aud
night to prosecute those guilty of vio-
lating the purity of the ballot box.
which was commendable. But at the
same time the insurance officials did
not go to jail, but back to their offices
after their confessions. He said it was
n deplorable confession to mako, but
he would assert that it would be alb
solutely impossible to put the possessor
of S1,000,000 in Jail in this country.
AS a proof that no special skill is nee
essary in insurance for insurance pur-
poses Mr.. Cochran said
1--WE have but to look at the methods
by which these three companies have
undertaken to reorganze themselves
What is the first thing they have done;
do they go out and look for insurance
experts? No, by no means. The first
thing they did was to send them all
away"
The Equitable company was organ
ICED on somewhat peculiar basis. A
very rich gentleman whom We all have
the right, I suppose, TO call philan-
thropist-for he himself has said 1t, and
it is greatly to his crodit-0aughter
purchased the control of this company,
giving $2,500,000 for stuff that can pay
him but $3500 a year. That is to say,
through his philanthropy he has given
an earning power of $125,000 for $3500.
He is too good business man to have
done that as u matter of course. There
is no explanation for 1t except philan-
thropy 0aughter.
What Has He Done?
"Now. in order to appease the popu-
lar mind on the philanthropic enter
prise what has he done? Has he gone
to the insurance world to find this
talent that is worth $150.000 a year or
SIS, 900 year? BY no means. He has
gone outside and appointed Il kind of
financial vigilance committee. and not
one of the Vigilantes has ever had any
thing to do with an insurance COM
pany except that possibly one of them
may have borrowed money from 1t. Al
very eminent statesman. one of the
most illustrious of our time, has been
called from the classic shades OF
Princeton, where he has been spending
the decline of an illustrious life in COM
posing philosophical contributions to
the thought of the country, and placed
In the chair of an insurance company
with which, so far as / know, he has
never had the slightest acquaintance