The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-06-30
NEW MUTUAL SCANDAL HINTED
SOMEBODY SOMEHOW cor $780,
600 on UNSECURED LOAN,

Truesdaie Committees Final Report Urges
Suing McCusdy for $4,000 Cat Hire
and an Inquiry Into the Building Con-
tracts Trustees Names withheld.
The sixth and final report Of the Mutual
Life Insurance ~Company'B ~self-investi-
eating committee, composed Of William
H. Truesdale and John w! Auchincloss,
was made public yesterday.
The report hints at a new scandal in the
loan department involving $500 600, but fails
to disclose the names OF the persons con-
cerned. 1t looks as II somebody got $780,
600 without putting up any authenticated
security. The loan was still being carried
on December 81, 1905.
The report recommends a careful in
vestigation into payments made to build
ing contractors by the Mutual Life in the
last five years, which amount to moro than
81, 200, 900, and suggests that II the pay
ments have been in excess Of fair values
the matter be referred to the 0 mpany's
law department for action.
The report recommends further hat a
suit be brought against Richard A. McCurdy.
the former president, to recover $4,2oo
charged by him for cab hire. The doou-
ment tells the number OF trustees who
knew Of the $3.50 900 salary that was being
paid to President McCurdy and also the
number who were cognizant OF the cam
paign contributions, but II doesn't mention
a single one of them by name. The identity
OF trustees concerned in other transactions
which are taken up In the report isn't given,
either.
The hints at Irregularities in regard to a
$500 900 loan are contained in the COM
mittee's findings in the bond and mortgage
department. The report says:
Attention is called to discrepancy between
the books OF the company and those OF the
bond and mortgage department whereby
the latter. on December 81, 1904. show three
loans aggregating $40. 900, which are not in
cluded among the loans on bonds and mort
cages on the general books OF the company.
they appearing thereon as Temporary loans.
On December 81, 1905, one of these loans.
amounting to $500, 900 was still carried on the
general books as a temporary loan. The
law department has no knowledge OF this loan,
and no evidence Of title has been exhibited.
These three loans were all included. however.
In the gross amount loaned on bonds and
mortgages. as shown by the company's
balance sheets.
The committee doesn't say who got the
two other loans.
Although the amount which the COM
pany may loan on mortgages is held
by the committees experts to be about
90 per cent. OF the value of the real estate
offered as security, the report Of the expert
accountants to the committee shows that
$34 ,sel, 194.17 was loaned on property in
excess Of the 90 per cent. valuation. Says
the committee:
As many as isi loans. securing over 50 900. 900.
are over 100 per cent. of the appraised value
Of the property.
The appraisers and accountants reduced
the c~ompany's book valuation oftsuch loans
by SLOT, $50, and the reduction was approved
by the committee.
The company's books show further that
In the five years ending December 81, 1905,
the losses OF the company on real estate
foreclosed and sold aggregated more than
1894 ,279. The committee recommends that
the Mutual Life in the future place its mort
gal es direct instead Of through subsidiary
companies, thus saving the n per cent a
year which was in many cases going to sub
sidiary concerns.
The report shows that the original cost
Of the Mutual's real estate, including the
improvements on it, was S35 $3.50 ,254. 33.
The new appraisal Of the committees e1-
DC1 10 II 70 q 2 ogS IL III tIV VI - Soot
of s5, 723, 1888. az, although the new figures are
in reality 1922 1882 in excess Of the value at
which the properties were carried on the
Mutuals books. The net profits realized
on the properties have avera ged less than
213 per cent. on the money invested. The
committee recommends the immediate at
tention Of the new mana cement to the real
estate Investments and suggests that only
such OF it be retained as shall be required
for the company's use. There should be a
return Of at least 81 per cent. on money in
vested. AS to building contracts the re-
port says:
The purchase Of most of the real estat e
holdings OF the company. the impro vements
Of same or the changes in the Improvement
from time to time made were. 80 far as APP
pears. without the approval or sanction OF
any committee or the board OF trustees. In
the administration Of this branch Of the COM
pany's operations great extravaganza Ia
Rlaringly apparent on every hand. coupled
with entire absence OF ordinary business
methods and care. In the letting Of con-
tracts covering large expenditures no compe-
tition seems to have been invited or desired.
, These are some of the companies named
by the committee as having done work for
the Mutual Life in the last five years:
r. c. Fisher a Co.. marble. ...... 81 1892 SOL IS
George Mulligan. builder ........ 1,09s $40 90
]. B. Il J. NJ. Cornell. iron and
bronze northumberland S33, us "a
Tucker Electric Construction Co. 1856 1870 90
Baker, Smith A Co., steam heating 300,030 OS
John Downey. builder ............ 90i ,S38 So
Thomas Swain, plumbing. ........ 228,4 90
A. McMullen 4 Co................ 1891 20
Otis Elevator Com pany .......... l0I. O5s 2s
There are several other building firms in
the list, as are also Clinton d Russell, the
architects, who have offices in the Mutual
Life ouilding. Clinton d Russell are down
for s3o3, 100. 80.
The committee says that from a superficial
examination it judges that payments on
account Of alterations made to suit incom-
ing terants were charged up as improve
ments. An example of that is found in the
alterations made in-<he offices OF the Guar
anty Trust Company in which many Mutual
Life trustees are stockholders. ThoRe altera-
tons cost 5000 and we're charged as an
improvement. Regarding the payment Of
81, 362, SOL. B5 to r. C. Fisher d Co. for marble
n five years, the report says:
Rafarance IN this aunDlementaI raport Ifhe