The daily morning journal and courier., 1905-07-12
INSURANCE SECRETS
 RECEIVE AN AIRING
SIGNIFICANCE OF RYAN'S PUR- CHASE OFHYDE'S BQUITA-
 BILE LIFE STOCK.

abilities for Those Interested In This
 COntrOI-StOck Transactions in Which
 Levi P. Morton and H. P. Whitney
 Were Allied.
 New York, July I1.-When the atten- tion of the financial world was attracted to Thomas F. Ryan, traction operator and future builder of subways, by the purchase from James H. Hyde of the 502 shares of stock which controlled the affairs of the Equitable Life Assurance society, it was not known that Mr. Ryan and his associates already con- trolled one other life insurance com pany.
 Since January l of the present year the affairs of the Washington Life h. surance company have been managed entirely in accordance with the desires of Mir. Ryan and others who are asso- ciated with him ill the Equitable pur- chase. From the time mentioned, it has had as president 8 former official of the Mutual Life Insurance company who was given '1eave of absence" for three months by President McCurdy of the Mutual, when it was explained where he was to go, and by a vice president, who happens also to be vice president of the Morton Trust company, which, to say the least, has Mutual Life Insur- ance company affiliations.
 The circumstances under which the stock of the Washington Life was &C., quired by MT. Ryan are interesting, particularly in view of the fact that at the time of the transfer. there was 8 great deal of mystery which never, un- til the present, has been entirely dis pelled.
 Tn February last general attention was attracted to the affairs of the Washington Life by the report made to District Attorney Jerome by the state superintendent of insurance, who de- clared that the mismanagement of its affairs had been simply incomprehensi- ble." In the course of an interview which he gave to the newspapers at that time. MT. Hendricks said:
 While MT. Vanderpool's (chief ex- Rminerl report was being made, we notified the directors of the company, and Levi F. Morton, one of them, ask 2 Su IIiEtI 11Et EtIlu HIS dSSOCTdlGS UG EIFEI an opportunity to straighten out the affairs of the company, provide for the shortage of s60,000, and protect the in- terests of the policyholders.
 "We consented to this arrangement, on condition that the full amount nec- essary to guarantee the policies of the company be provided at once. This was done.'' @....
 The investigation by MT. Wander pool to which MT. Hendricks referred in this statement, was begun on Sep tember 20, 1904. At that time, the cap~ ital stock os the company was $125, ,000, divided into 2,500 shares at $50 a share. The control of this capital stock was held by what was known as the BrewS CT interests, William A. Brewer, jr., being the president of the concern, and Graham H. Brewer the secretary.
 One of the first discoveries made by the investigators WIS that the company not only was involved to the extent that its surplus was wiped out, but it's cap- ital stock was impaired. However, un- der it's charter, it was possible for the capital of the company to be increased to $500,0OO, and this was done, the company thus being given s375, 900 worth of stock to offer for sale.
 Now, as this was a per cent. stock, and of the $500,000 worth, $125,000, or one-quarter, had been declared to be badly impaired, there was little likeli- hood that there would be any wild rush to purchase, especially in view of the added fact that it was the desire of the company to sell at 200, ns the super lntendent Of insurance had said that it would take at least $750 000 to put the rompany in position to continue in business.
 So, while the officers looked anxious Iy for purchaser, none appeared. It is true that one or two persons appear ed for a short time to be interested, but after visiting the state insurance department, this interest dropped per- ceptib1y. It was when things were in this condition that Levi P. Morton, one of the oldest Of the directors of tho washington Life-in fact, the only re- maining charter member-requested an option on the control of the stock at par-i. e., at $50 a share.
 As a director, MT. Morton, president of the trust company that bears his name, and of which Thomas F. Ryan Is vice president, knew exactly what the "details were which had been disclosed by the insurance departments examin- ation. With this knowledge he made his offer during the month of December, and almost immediately the offer was accepted, and the resignations of the executive officers of the company were placed in his hands, as later those of the Equitable officials were placed in the hands of Paul Morton.
 There had been much talk of reinsur- ance prior to this by the state insur- ance department, and the end of the year year was very close at hand. On December 30, when only one day re- rnained in which action could be taken, meeting of the board of directors of the company was called at il o'clock in the offices at Al Broadway. It was known, of course, to the directors that ex-Governor Mortons offer for the controlling interest at par had been made, but no intimation had been re- ceived up to this time that the pur- chaser was in sight for the new issue at figure which, according to the es- tinlato of the state superintendent