The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-06-03

| AZ ~ in 1900 receive $4,000 IN 1905, an IN
crease of 1856 per cent. In the second VICE
presidents Office SIX employee s.o r n ,ons
ceiyed SO, 72O in 1900 receive sA,o4o III ASoo,
an increase Of 1872 per cent.
aThe total salaries paid to employees OF
the president's Office has increased a. per
cent. since 1900. Of the vice-president' 8
Office 1874 per cent. ana OF tne sec Tha NJ
Office payroll of the society increased from
S77O 2s2 In 1900 to sl,177,5oi In 1904, or SO
per cent. As compared with this, the total
income Of the society increased but 80 per
cent. from 1900 10 1904
On the subject OF making advances 70
agents the report says that while the PRACTISE
is almost universal such advances have
never been recognized as assets by the
insurance departments, and there has been
very general inclination on the part OF
most companies to cease the practise anu ~
close out these accounts as rapidly a.
possible. In November, 1884, the Elutaple
carried s. 500 900 on its books as loans 20
agents. BY the transfer Of the bulk OF TINS
account to the trust companies, says vne
report. it has appeared as mucn snia.ei
amount on the socety's subsequent state
lnents. In the majority Of cases the amount
of one agents loan which Is carried by,
trust company is exactly five times the
appraised value Of his annual renewal.
The amounts carried on the society's BOOKS
are in most cases sums In excess OF tne
fvefold limit accepted by the trust COM
panies.
ing excessive cash balances, The society,
the reports says, is not subject to SUD den
or unexpected calls for unusually Iarse
sums in the regular course of s buisn ess.
Yet on Jan. 81 last 1t had cash baiance
of over 500, 600 600 deposited principally
with the National Bank Of Commerce. the
Mercantile Trust Company and the Equ-
table Trust Company.
"ENTANGLING ALLIANCES WITH AC1lLlAhf
COMPANIES.
Under the head Of ~Entangling Alliances
with Auxiliary Companies" the report
discusses the society's interest in banks
and trust companies and says that, Judg.
ing these investments either on general
principles or on specific results, their Wis
dom is 4gravely questionable
port says, 1the society finds it necessary to
project and nurse it. The society then
finds itself involved with interests which,
to quote the words Of President Alexar der
used in another connection, are not neces-
ssariiy parallel with those OF the policy
In the remarks under the heading Of
Excessive Cash Balances it has been
shown that the society carries abnormal
balances with those corcern' IN which IT
holds cor siderable stock interest; and
the society's comptroller says that the
reason for this must he obvious The
fact that the society does not carry exces-
sive balances in institutions In which u
does not have large stock owl ershlp
indicates that these large balarces are
maintained for the purpose of aiding the
coroerrs with which they are deposited.
In making these Investments, the society
is cor cerned not merely in the amount 1t
realizes in dividends as cor stitutin a proper
actively en- ged in the building up Of the
auxiliary cor Germ in order to show appre-
citation in market value OF the original
in vestment.
Having been committed to such policy
complications increase which force the
society away fro m the position of an in
weston. which it should occupy, into that CT
a promoter and manipulator, which it
should not occupy. Under date Of Aug
30, 1901, President Alexander writes to
ank and that it is doing SO well. hut we
must perfcrm some coup and increase
its size and Importance. Also in the case
of the Mercantile I would like, to buy
a CO uple of trust companies and ,doutl e
up that ccnoern.' 1t seems needless to
hanks or the tuying Of trust companies are
not proper SUI jects of concern TO life
insurance company.
Under date Of July %, 1903. President
Alexander writes: AS to me ney, several
thousand shares Of stock can lie bought,
as you recc gnize. for moderate sum of
money. We are just turning over mort
gage Of $500 600 to the Mercantile Trust
Company. which will give us some me re
funds, and we have got som further sales
ready for paying for that million dollars
Of securities IN Aug. g. and ! think We had
better arrange in some way with Kuhn.
Loeb & Co. aNout that Great Northern
lean, which doesn't fall due until the 10th,
so as to meet this
hare tho arrrpacoA 6aciro n
purchase securities. the mention that so
insignificant sum as $3o0.00 il available
and the hope expressed that certain loaIs
will he cleared off so as to provide funds,
yet on July 80: 1908 the society had on d.
posit nominelly subject to check. the sum
! OF S37,a4 ,oSs.72.
~Undr date of Aug. 49, 1908, Pr sident
Aexand'r speaks of the unusually favor
| able oppo unity to make investments,
and then says; I'VE would be buying
are so strapped for. money by engage
ments already made and All this ia very
annoying, because il we had five or ten
millions of dollars to invest now we would
| make a great deal OF money
"The society had on deposit Aug. ~,
| 1903 s3s, 800, 7ss,s2 At the times when Mr..
| Alexander spoke of tho great possibiliti 8
| of making money. if it only had availaf 10
| funds, the society had at least twenty
FIVE mill ms Of dollars yh lie p boae or
fectly available. but which. Trough alli-
| ances with other concerns. we've so tied up
| thrt the opportunity wac lost
These conditions may help to explain
the fact that during the Ave years 1899
| to 1903 inclusive the Equitable society
realized next to the lowest average rate of
interest on its invested assets Of the thirty
companies tabulated by the Insurance
Year Book, while in the year 1903 1t stood
| absolutely the lowest on the list.
THE foregoing has treated the subject
! from the standpoint Of general principles.
| Measuring the wisdom of this class OF in
vestment by specific results, an illustra-
ton may be taken Of the results OF the
| society, for the year 1904, of its relations
with the Equitable Trust Company.
The book value OF the socety's holdings
in Equitable Trust. plus it's average deposits
during 1904 in that institution, amount to
$17,S70,000. The society's income from that
investment. consisting Of per cent. interest
on deposits and l2la per cent. dividends on
the par value of its stock holdings, amounted
to $500 1852. or 2.S per cent. on the total in
vestment
The report says that the society should
puroh base no bonds or stocks which re-
quire manipulation or nursing 1t should
Fierce Fipht 7