Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1905-09-15
Between Railroads, Bank :;
ers and Insurance Cos.
Shown in Investigation in In
surance Co.'S Methods.


New York, Sept. 14.-When the spec
ial legislative committee probing life
insurance companies. methods adjourn
ed, today, Chief Counsel Hughes had
finished for the present the examina-
ton into the Mutual Life Insurance
Co, and the Metropolitan Life Insur-
ancc Co, was started on when Siias
E. butcher, a director and member
Of the finance committee was called to
the stand.
Mr.. butcher was questioned regard
ing the securities held by the Metro
politan and as to the syndicate opera
lions of his company. He was asked
the salaries of the company's officers
but could not remember them. He
will present the list of officers salaries,
to the committee. tomorrow. Mr..
butcher was still on the stand when
the committee adjourned.
Earlier in the day. Treasurer Crorn-
well had taken the stand to continue
his explanations of the Mutual Lies
syndicate operations. In explaining
the relations Of the Mutual with trust
companies. Mr.. Cromwell stated the
interesting fact that on the purchase
Of $1.120,000 worth of the Title Guar
antee g. Trust Co. the Mutual had re-
ceired i'll dividends s1,220.O 900. making
these shares cost nothing ard realizing
profit. Mr.. Cromwell stated these
shares were now selling at over 600.
On the advantage OF dealing through
syndcates in preference to buying rail-
roads bonds direct. Mr.. Cromwell said
he had actually tried TO buy bonds di-
rectly from q railroad company. Ha
went to his friend. Stuyvesant Fish.
president of the Illinois Central Rail-
road.
"Mr. Fish told me he could not af-
ford TO sell bonds to the Mutual" he
said.
Then the truth is that the railroads
must stand in with the bankers in or
Ger TO sell their sureties and the insur-
ance companies must stand I'm with the
bankers in order to buy at low priccs?'
Mr. Hughes asked.
Exactly
THE bankers control the situation?"
mo doubt about that"
In his testimony after the reccss
explaining a matter of a purchase of
Bank of California stock, Mr.. Crom-
well said the issue price OF the new
stock was $50 Mr.. Cromwell hoped TO
get the shares at this figure, but in
the end. the shareholders, to whom
under the California law the rights to
the new issu" belonged held out and
the Mutual obtained its 5000 shares at
an averag" price Of $50 S-1O.
The sal. was entirely by individuals
ana there was no syndicate. The
transaction was left entirely to William
ISn 70 t,N
was dealing fairly with the Mutual
Mr.. Cromwell was asked whether he
increased or decreased his holdings In
the debentures of the United States
Mortgage & Trust Co.. to assist the
trust company. He replied:
No. entirely 20; it is partly to help
our whole Western clientele to know
that through one of our companies
they can get money OF bond and mort
gage"
The advertising. printing. stationary
and postage accounts Of the Mutual is
sl,13f,S33.76; of the New York Life. it
is 1851 .2S4.5S: for the Equitable. $772.-
$3.50. Can you explain these very
large amounts"
II know nothing about II. Current cx-
penscs of the Mutual are under spe-
cial committee"
as the same true of the legal ex.
penscs to the sum of "36f,254?"
81 lave nothing to do with II. re
would be under the law department"
do you as, subsidiary companies.
make advances to agents?"
mo. SIR
"How are advances made to agents
by the Mutual?"
at is done through the general agents
of the departments. but understand
the amounts are not large"
1t was at this point that Mr.. butcher
was called. While his testimony de-
vcloped nothing of startling or SEN
sational nature, several statements
made by the witness were OF passing
interest. One of these was that the
company has no treasurer, the cashier
acting in that capacitv