New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-09-15
BIG ONE-NAN POWER.
SEEN IN TWO COMPANIES.
DEPOSITS and Purchases Made Often
Without authorization.


fo- placing millions OF depo IS the daily balances
C. THE Mutual with various trust counpzn es while
slss =. butcher Of the Metropolitan Life ind!-
rectly admitted that the vest syndica transactions
O. his company were practically entirely handled
hv C,e president John r. Hestrau Mr. Hegeman
seems n the light OF the testimony 10 deodo ebso-
luiey the question OF par icipatlon In syndicates
ard other transactions, merely mentioning the
deals 20 members OF the finance committee n in
formal meetings OF which no recoTd produced.
After a eeal had been completed the minutes OF
re 1rGace committee showed ap7-ova. by the
members. bat Mr. butcher. member OF the com
Tu,tt-e showed clearly his % close familiarity
with these greSt deals Equally interesting was
NJ butchers statement that transactions OF the
Metropolitan involving SOS $4,000 TO 100000 had
beea NEGOTIATED through two firms OF bankers
Ver~ilge Co. and ". A Read & Co. Mr..
Efuehes's examination Of the Metropolitan witness
indicated that he meant &c have 50 fun respon-
sfb.lity for al transactions hxed upon President
Eeeeraan that his testimony would subsequently be
u Utmost defnitoness and importance.
Three other points we're considered in detail in
what was the first duh day OF the proceedings.
The Hrst was the relations between insurance COM
psaes and their affiliated trust companies; second.
The fact that other members OF TIE finance com
1uitt-e OF the Mutual Life besides Frederick Croul-
Seu participated IN syndicates n which the
scrancs company was interested. and. third. that
another insurance company the Metropolitan Life,
also embarked in syndicates
The relation OF the Mutual Life TO its affiliated
A. the basis OF the questioning the evident
6es.-e of ~. Hughes 10 show why Fl that the
Z-tlEl aept comparatively large amounts ranging
khoTs 100000. with trust company enablicg the
company 10 lend money stocks at q rate hisha-
ihsn that paid TO the insurance company by
least one-half u ger cent instead Of loauirg d.
Tect.y. Frederick Cromwell treasurer OF the Nh
tual INSISTED that this process. by which the Nj
tual placed these large deposits there, was not
because The Mutual w1Shed to Jet the bank make
money ~ getting insurance rno-ey In large suma
II a low rate. but merely because tia trust COM
?Azy hao better facilities for leaning money.
-2rneS y Jarvie. Of Ar'I-ckIe Broth.-s; Charles /
hs1oerson OF Hersde>soa & Ca and George F.
Baker president OF the First National Bank al
a@Eoers o. the hnaIlss committee OF the Mutual.
testified that they had eiA<r personally OF through
aeir business councillors participated K synol-
Gates n which the MutGS- had takea pa--. Silas
butcher. OF the Metropolitan Life occupied the
stand during the entire afternoon. explaining the
syndicate operations OF the Metropolitan Life,
MR. CROMWELL on STAND.
Mr.. Cromwell, who was the first witness. testified
Al length on the trust companies and their rela-
Mons with the Mutual Mr.. hughes read to him
4ons list OF balances The Mutual had with the Ma
t1onaI Bank OF Commerce over several years, rang
ing above 100000. He then asked:
o--were no, these large balances kept there 20
0-is there any possible reason for leaving $500
company IS a large stockholder and thought it well
80 enable the bank 10 make money? A.-Yes. Look
only Ter cent We couldn't loan any more on col
o.-What Is your present holding in the National
CITY Bank? A--Thirty-sx thousand and eighty
A--l<o; We had no interest there
TI-'lng aside from this point for q moment Mr. /
Hughes sought show that there might be some I
conreciCa between the relations OF the Mutual 10 !
is trust companies and the comparatively low rate
ot return received by II for its He read a /
statement showing that the Mutual received All /
per On it's funds for the last year which
placed il No list O: insurance companies in /
this respect
Why are you unable 70 maintain g better relative
standing?' he asked
Ny. Cromwell declared that this was due 10 the I
policy Of the company on insisting first OF al upon
security and safety and refusing 10 take any risks
He explained THAI the company had So 90 in
vested IN bonds 2no that less than $1,000 interest
remained uncoIlected for the last six months ndi-
eating the extreme OF The officers in placing
FUNDS be declared tina. the securities OF stock
companies now worth S23o50,cJO had cost the /
Mutual only Sls,G9o.00f and that the 500 shares Of
the Guaranty Trust Company had been purchased
a. SLlZ0.eo and were now worth A,23O 90.
Mr Hughes al once began series OF questions |
clearly attempting 10 show that much OF the in |
creased value in trust company securities held by
tle Mutual due the fact that the Mutual /
stood behind ther and thar this could not be
EnaIAsIec FOR high figure II the Mutual tried 10
sel az large blocks Mr.. Cromwell conceded this 10
," doubtful out insisted upon the value OF the
COMPANIES The Mutual. The main reason for the
lower return realized Or the MutuAl on its funds 1
things, expIainCi- To TIC policy |
- conservatism ana 10 The fact tha. the company /
,oeRed money - The poAcyho-oers on its poI.!.s
.sr
Tas nsxI question was 70 tbs relations be
tween Tbs aaltaaI and the UE.led States Mortgage /
sao Ir4st Company. In thus regard ii brought 4
out that the Mutual had carried higl $1,000 1
coo bonds " tins company. issued by il against 1
securities which il hao lent money Mr.. Hughes |
asseo-
Q--ph ~ DO goa lend money at pc. cent the /
United slE.oE Company 10 lend al IA Pc cent! |
I'VE nA'e1 : th~ necessary machinery for LOAN !
lBrI As q -oAt.e- .: fact. you do reality |
.-he so1r -11Gey ~ Ike inori CAGES -2kea by the /
cU-3C.. - 600 from ItLr Ia Eseersheba from |
seat'e - A..a-.S. The trust company mas the /
Iaaobiasrr- TGe.. ~s couldn't LAKE sucn a risA
80 Ire none ne trust. cUnIpauEs BONDS. /
Hh9 represents yo-5 oee- n he trust company7 /
n HSo ~ S. i-Tpsnn.
~. cror seI ,..zn i-5t :he sLa-d. promising I.
Est 1soIes e. slew Lev .4uch the Mutual might /
nfs1 rst CT transactions with he trust COM
Priirs snfoUE- ,..e difference Of One half CT per
esrt L. Lne interest rate received.
TIER, = :sE!d succession. James N Jarvie |
cSarler T. iseGa-rso1 arc George F. Baker were !
called 20 tss-iry members o. the finance COM
H1iiiee NJ Sa-ris reafi-I.e1 al that Mr.. Crom- /
wen sale o.: me previous day about The al rantage
81 ss-ncicates Asked Z he had personally !
Participated IN q syndicate which tho Mutual I
wss also interested ne replied IN the negative
taeo volunteered The fact that his hru Arbuckle /
E0o-hers. mad. lie recalled two syEdcstes Of this
so-f BIZ declared, under protest sgInsr reference
- us private affairs that Ike propositions /
were entirely separate al ali times. neither /
Influenced the Other. Ire two syndi that /
buckle Brothers ana The Mutual had both been ;
ssrtes 10 in Pennsylvania and imperial Jap /
saese bonds IL the first Arbucke had put 100000,