The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-09-22
Spirit of the Press.
More Life Insurance Revelations.

New York Herald
Every day brings it's own "sensa-
ton in the probing of the life in
surance companies.
IhoSe who had heard or read the
statements of Vice-President Perkins,
of the New York Life, are surprised
by the testimony given yesterday by
Mr.. John A. Mccain to the effect that
he, as president of the company, is
in control of it's affairs.
Mr.. Mccall frankly assumes per-
sonal responsibility for the companys
contributions to the Republican Ma
tional Committee in the last three
Presidential elections, declaring that
the purpose was not partisan, but for
the maintenance of the gold standard
as necessary to the prosperity of the
company.
Asked whether such contributions
were not matters for consideration by
the full Board of the company, Mr..
Mccall replied that if he were not
given discretion in such circumStan-
ces he was not worthy to be preSl-
dent of the company. The same
sense of individual authority and re-
sponsibility marked his replies to
questions touching the very large
sums intrusted to Andrew Hamilton,
"in charge of taxation and legisla-
ton" throughout the United States
when the company's interests are
effected, and for which he makes no
accounting whatever, save verbal
statements and receipts rendered 10
the president in person
Interest in the days developments
in the New York Life was no greater
that manifested in the news that the
new management of the Equitable
would sue the Mercantile Trust Com
pany for the restitution of a million
dollars and President MOrton's state
ment explaining the basis or the
claim This furnishes new 1llustfa-
ton of the uses of the subsidiary
corporations" The Western Nallollal
Bank-two-fifths of which was own
ed by the Equtable-made loans on
worthless collateral. When the BANK
examiner condemned this it was shift
ted over to the Mercantile Trust COM
nany-also an Equitable auxiliary
which made good 20 the bank ana
then the parent Equltapie De
gan sending good money aItei oau
IN attempting to develop some OF IN
properties represented by the col
lateral and in taking over the Dur
den from the trust company
The excuse given for the life lnsur,
anca companies backing banks ana
trust companies is that they could de.
rive larger profits from the class OF
investments that may be Legally Hdue
bv these The manner or inns loss VI
q million by the Equitable suggests
the real purpose OF malntaliililS
the "auxiliaries." 1t was eHpiallleu
that the purpose of putting life lnsur-
ance money into Joint accounts ana
underwriting syndicates was to get IN
vestment securities at low prices. mat
theory has been exploded by the tesu-
mony. which shows that in most ~
stances the securities ulluel W ill.SH
are not taken at all or brought lhe
higher price at which they We're OH
ed to the public. officials and thelr
friends interested in the "auXillar1es
nrofit by the operations OF these.
hacked. as they are with the cfeulI
and cash of the insurance companies,
inst as the officials and friends prom
bv their interest in the syndlcateS III
which the money of the pollcy holders
is ventured. ,,
If is unfortunate that the disclos-
u.as If the companies investigated
here arouse suspicious as to the man
agement of all life insurance copofa1
lions This lament was Volceu
Yesterday by the Natlonal AsSo-
citation of Life Underwriters in session
at Hartford which passed resolutions
demanding the removal of all otlcldIS
who have violated their trust, the
publicity as will correct all abuses.
The path along which reform, must
he initiated is now clearly revealed.
Abolition of all auxiliary corporations
and return to the sole proper business
of insuring lives is one step TO De Ia
ken. Creation of an efficient super
vising authority is another More I'M
portant, in a sense than either Oh
these is the enforcement of publclty'
A railway corporation, in when the
nublic has not a 1.-THE of the interest
il has zone of the big life insurance
companies, is compelled to publish
detailed reports, including income ac-
counts and balance sheet whereas me
life insurance company supplies yearly
a few figures which are buried in the
report of the State Insurance Depart
ment. which the policyholders never
see.
Meanwhile the word restitution
will strike pleasantly on the ears OF
pOlicyhOlderS.