The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-08-15
Blind Pools and Their Management


Tho most substantial defense Of the
various gentlemen who had their hands
IN tho Equitable till was that the cor
poration was solvent, sound and pros
porous. They waived and they depre-
Gated all criticism Of their conduct by
the unanswerable argument that the
Equitable was a successful insurance
company.
The principle is, unfortunately, not a
new one. We have known other in
stances of corporate management where
the praotises Of the administration, how
ever infamous, were complacently re-
garded, if not openly approved, by the
stockholders so long as the dividends
were regularly paid. As matter OF
fact, is it not the rule in all corporations
to give the administr alton it's head so
long as the dividends are paid, 30 long
a. pro perity, or the appearance OF pros
perity, is the rule?
Sometimes inquiry and criticism are
provoked from one cause or another,
q in the case of the Equitable by the
accident Of an intestinal contest for
asoendency-them Vaccinations Of HARR1-
MAN for control. One Of these episodes
leads not uncommonly to another, and
In the present instance the experience
Of the Equitable points to a probable
corollary in the profundities of another
corporation.
When Messrs HARTMAN and ScH1FF
helped themselves to the Equitable
millions in order to entrench the Harri-
man control OF the Union Pacific Railroad
that delicate operation was achieved
by having Mr.. JAMES HAzEN HYDE sub
scribe in his own name, as was his prac-
tise, to 81, 900 OF the total $4,000, 900
which constituted the pool. The sub
scription was paid for with the Equi-
tables checks. and the stock became in
cluded with the other ;sec,lrities in the
insurance company's vaults. Further
more, the transaction had the official
sanction Of the president Of the Equitable.
HARTMAN and ScHIFF's categorical
and explicit denial Of this, the consequent
exposure Of their mendacity, the sup
preston of the fact in the Frick report,
90 candid and ascetic upon the short
oomings of everybody but HARTMAN,
It's conoealment by the State Superin-
tendent Of Insurance in the line Of his
duty to his owners--all these are matters
now perfectly understood, and they will
be made even clearer when dealt with
by the legislative committee. They are,
however, a little irrelevant to the point
We have in mind.
What parallel does the management
Of q great railroad offer, if any, to the
management of the Equitable? Is there
any analogy between the administration
Of a $50, OoO, 900 blind pool in Union Pacific
stock and the administration Of James
H. Hyde and associates? Both the
Equitable and the Union Pacific are
solvent, sound and prosperous. Neither
q stockholder in the one nor policy
holder in the other could without gross
impertinence and malignant intrusive
ness say aught to the contrary.
The $4,000, 900 pool in Union Pacific
was managed by Mr. JAMES STILLMAN,
tho president Of the National City Bank,
and by Mr.. EDWARD H. HARTMAN,
each subscribing s1o,oOo,ooo on his own
account; and no faint eulogy of ours can
enhance the confidence of Wall Street
In the quality of management which
that pool enjoyed. 1t is said to have
been one OF the most satisfactory opera
tons Of the kind ever known, and we are
quite ready to concede the accuracy
Of the statement.
We notice that in the allotment of
profits, or other chooses of a like nature, ac-
cruing from the operations Of this Union
Pacific pool very sedulous and cred
table discretion was exercised whereby
Mr.. JAMES HAzEN HYDE received
none. 1t being a purely speculative
Transaction as much so as any Wall
Street episode Of its class, it would have
been manifestly improper to admit Mr..
HYDE into any intimate participation
In it's unholy usufruct. His subscription
was for the Equitable and it was the
Equitable's money that was at stake,
nc: his. Obviously trust funds, the
sacred Accommodations of the policy
holders, could not be exposed to the
contamination of sharing in the proceeds
Of blind pool! Besides, we believe Mr..
HYDE to have been quite innocent and
inexperienced, and not to have known
that blind pools had any other than a