New-York tribune., 1905-12-05
LOAN ON SALARY.
Mutual Reserve President @Bor-
rored' $4,000 for Unknozcn Purpose


rozced" $4,000 for Unknozcn Purpose
The legislative insurance investigating com
mittee devoted all yesterday to the probing of
the affairs of the Mutual Reserve and many
striking facts were brought out The most i'm
portant single problem, however.that of
whether the Mutual Reserve officers paid $40 900
to the former Superintendent of Insurance Lou
Payn, or not-pemans to be solved to-day 1t
was shown. however, that in 1895 the year in
which this payment was alleged to have been
made the legal expenses" of the Mutual Re
serve exceeded by $4,000 those of the preceding
year.
The charge that this payment was made was
printed several weeks ago in extracts from the
testimony of a former e-president of the
Mutual Reserve, James D. Wells before the
Canadian Senate committee. Mr.. Wells declared
that Frederick A. Burnham, president of the
Mutual Reserve. had told him that Payn had
offered to let the officers of the company write
the report of the State Superintendent on the
Mutual Reserve in return for payment to him
of 100000, and that a payment of S400 600 had
been made This denied by Mr. Burnham.
and this morning Mr. Eldridge, vice-president
of this company, will be examined regarding the
charge.
While the Payn subject was the most striking
astounding array of other incidents of not
entirely different variety. 1t also revealed the
fact that Mr.. Burnham. whose testimony Is
earnestly desired this and other points will
not be able to appear before the committee be-
cause of illness. His physician appeared before
the committee yesterday and certified to this.
One of the interesting details that Mr. Burn
ham might clear up Is the $4,000 gift made to
him by FL. H Brockway, proprietor of the Ash
Iaaz L
that he had been put the Mutual Reserve
payroll for a salary of $500 weekly and then
struck for $4,000 with great promptness by
Mr.. Burnham. This s6, 600 apparently went to
the yellow dog account of press bureau con-
Quoted by the late Hilary A. Bell, as another
later expended to buy peace from
]. T. Paterson, a former proprietor of THE In
surance Councillor whose charges against the
Mutual Reserve caused official uneasinesk. Mr..
Brockway admitted that the gift was made
because of his salary from the Mutual Reserve
for important service and that the salary
was discontinued he had got back
his $4,000 and $500, which he admitted might
be regarded as interest on the loan.
PAYMENTS TO BROTHER TOM"
Not less significant was the new light thrown
Brother Tom" the brother of the former
Superintendent of Insurance in California. A
j.
a former session testified that the Equitable
Mutual and New-York Life had in 1897 and
several subsequent years paid Brother Tom
$3.50 month apiece-that is, aggregate of
$4,000 annualy-as sort. of supernumerary
counsel while his brother. the superintendent
considered many important questions affecting
these companies This had been denied from
California but President Eldridge testi-
fed that the Mutual Reserve had paid Brother
Tom 81, 800 for similar valuable services from
1897 to 1902 in the form of retainers, ranging
from $500 to $1,000. During this period the
Mutual Reserves license was held in allegiance
from wear to year. and they were conducting
business in California literally 'fn suspense"
Noting that the payments ceased in 1902 MIR
Hughes inquired wOnderingly:
why did the payments cease then|
Because General Thomas Clunie died in that
year" was the unsympathetic reply, while the
audience Uttered audibly.
The really startling part of yesterdays ses-
sion began when Horace H. Brockway pro-
prietor of the Ashland House and a director OF
the Mutual Reserve was called 10 the stand
Mr. Brockway testified that he had taken out
several policies in the company and become
director at the request of Frederick A. Burnham,
the president. At the outset his benefits as
director were limited to so a week, received for
reward was raised to $50 a meeting. Mr..
Brockway was not quite sure to why the $50
was paid or withheld in case of absence Of di-
rectors from meetings but finally decided that
if a director were absent but had good ex-
cuse'' he received his $50. He also thought the
meetings were fairy well attended.
Following Mr. Hughes's guidance. and reply
ing to interrogations with an eloquent wave of
his expressive beard. Mr.. BrccEway testified that
in March 1898. he was put the payroll Of
the Mutual Reserve at salary CT $500 week.
An official was i'll. and he was requested by Mr..
Burnharn to assume the burden Of the salary,
and he consented His duties, he modestIy
plaiped. consisted mainly in doing what ne was
asked Judgment was apparently his chief
contribution in the eleven months this salary,
or the $500. to which it was later reduced. con-
tinued
LOAN To MR. BURNHAa.
Did YOU ever loan Mr. Burnham any money!"
inquired Mr. Hughes, turning one Of his char
acteristic short corners.
Yes, l once loaned him $4,000" was the IN
expected answer
Tell US all about it, was Mr.. Hughes's
prompt invitation
..Mr Burnham came 10 me a few weeks after
I went on the payroll and told me that was
gettsrg a good salary from The company and
that he wanted 10000 re said he wanted me
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