Omaha daily bee., 1905-09-09
AFFAIRS OF NEW YORK LIFE
New York Investigation Brings Out Some
Peculiaritiss Of Insurance Finance.
MESSENGERS SIGN NOTES FOR LARGE SUNS
Method by which Undesirable Assets
Are Removed from COmpany's
Books lawson May
Testify.

NEW YORK, Sept. s.-Today's session OF
the legislative life insurance investigating
committee was devoted exclusively to the
affairs OF the New York Life Insurance
company and a searching examination was
made Of its officers. Beginning with the
salaries paid to the officers, the line OF
inquiry extended through all the details
Of the companys participation in various
underwriting syndicates for railroad
curities; the New York Life company's
connection with trusts, and finally, near
the close OF the day developed the fact
that It is not an unsual thing for clerks
OF messengers in the employ of the com
pany with salaries as low as $500 a year
TO sign notes for millions OF dollars to be
used by the company in relieving its books
of undesirable securities
Lawson May Testify.
An interesting feature was the statement
that Thomas w. Lawson OF Boston might
be called as a witness. The committees
chairman, state Senator Armstrong, said
that II the information Mr.. Lawson is
supposed to hold could not be secured from
other persons, the Boston financier would
be asked to testify Not being a resident
of the state, Mr.. Lawson cannot be COM
pelled to give testimony.
Oficers of the New York Life company
testified today that on one occasion IL be.
came necessary for the company to sell
certain securities in order to satisfy the
Prussian government. Two clerks signed
notes aggreguting 81 $4,000, and on the
books the securities appeared as sold to
these parties. although they really had been
turned over to the New York Trust com
pany as security for the loan made on the
notes of the two insurance company en-
ployes.
Salaries of Employees.
The salaries paid to the officers OF the
New York Life Insurance company were
the subject of the open Inquiries when the
insurance investigation was resumed today.
Edmund Randolph treasurer of the New
York Life. testified that the salary Of Presi-
| dent John A. Mccall of that company had
been increased from $4,000 in 1892 to $4,000
in 1893, $4,000 in 1896 and 100000 since 1901.
The salary OF George w. Perkins, vice
president of that company, Mr.. Randolph
testified, was increased from 10000 in 1893
to $4,000 In 1897, $4,000 in 1900, $4,000 in
| 1901, and then reduced to $4,000 in 1902.
The reduction in salary was due to Mr..
Perkins going into partnership with ]. P.
Morgan.
| Mr.. Randolph's statement Of the salaries
| crease.
John Clafiln. a director and member Of
the finance committee OF the New York
| Life Insurance company, was the next
witness. Mr. Clafn described the COM
pany's method of making investments
through the finance committee. The list of
investments, as a rule, was prepared, he
said, not by individuals but by great
number of financial institutions. practically
the whole financial community. The pro-
| posals were first passed on by a subcom-
mittee. which eliminated the impossible
ones. II the proposals came on the day of
the finance committees sitting the whole
| finance committee considered the proposals.
Big Loan to Trust Company.
| Mr.. Randolph said that the object Of the
New York Life in keeping such large sums
with the New York Trust company at an
interest of III per cent less than the current
rate was to provide the New York Trust
company with deposits against which it
could make loans. During the first three
months Of 1902 the New York Life Insur-
anoe company kept 100000 continually
on deposit with the New York Trust COM
pany. Mr.. Randolph said in explanation
that this was due to the fact that large
blocks of preferred stock of the Chicago &
| Northwestern railroad and OF Chicago, Mil
waukee & st. Paul had to be removed from
! the assets of the New York Life Insurance
company to satisfy the Prussian govern
| ment. They were taken from the insur-
ance company by the New York Trust
company. Later the transaction, at the
| wish OF the trust company, was changed
| into collateral loan from the trust COM
pany to the insurance company. Then COL
lateral notes were signed by two employees
of the company, one of whom, named Mar
| shall, was a messenger of the company at
$500 year. 1t was customary in banks for
employees TO sign notes for their banks and
notes involving millions were often made
| by clerks and messengers. Mr.. Randolph
said he supposed it was to prevent the
names Of the principals from appearing.
Mr.. Randolph explained other transactions
arising from the sale OF securities necessi-
tated by the provisions OF the insurance
I laws of Prussia. In another transaction in
volving United States Steel bonds Mr.. Mar
shall gave a note for 100000 and John A.
Newbery, another clerk, signed note for
| 81, 900. BY means of these notes the
bonds were removed from the assets of the
| New York Life Insurance company They
| appeared on the books as a sale, but had
! really been given as collateral TO the New
York Trust company for loan on the sig
| natures of the clerks Marshall and New
bury. The money borrowed was deposited
with the New York Trust company.
| The committee then adjourned until 1880
I