Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-11-18
JEROME TELLS HOW
I MUTUAL RAN THINGS
District Attorney Makes First
Report to Gov. Higgins.
LACK OF A STATE LAW
Officials Cannot Be Prosecuted Grim.
inally for Some Acts.
DUTIES OF SUPERINTENDENT
Gross Breach of Trust in Regard to
the Salaries of Some of the
officials
DUTIES OF SUPERINTENDENT

OmclalS.
District Attorney Jerome has fin
ished his investigation of the Mu-
tual Life Insurance Company and
submitted a report to Gov. Higgins.
He lays the blame for many
abuses in the management of tho
Mutual to the superintendent of in
surance, who, he says, had the
power to discover wrongdoing, and
duty to call upon the legislature
to enact laws which would remedy
the evils. In many cases, Mr.. Je-
rome says that there is nothing in
the insurance laws which covers
acts committed by the officials Of
the company. Certain transactions
which to the lay mind would indi-
cate crimnalty are not covered by
statute law, Mr.. Jerome declares,
and although they indicate moral
|obliquity, there is no method of
|reaching the offenders under the
laws which were in force at the
time.
NEW YORK, November 17.--District At
torney Jerome tonight made public the
first report prepared by him upon the re-
quest of Governor Higgins and concerning
the conduct of the business of life in
surance in this state. The report is a doc
ument of some 14.CO0 words and is ad-
dressed to the governor, to whom a copy
was mailed today. 1t deals with the aft
fairs Of the Mutual Life Insurance COM
pany. In a later report the district attor-
ney says that he will consider the business
methods of the New York Life Insurance
Company.
Epitomized. the conclusions of the dis
trict attorney. based upon an exhaustive
investigation of the facts and the legal
points involved. are that there is no STATE
law under which insurance officials can be
proceeded against criminally for acts now
or formerly in common practice, some OF
which were made public during the recent
legislative inquiry, except in the cases of
two officers OF the Mutual Life. against
whom specific charges of forgery and lar
ceny have been filed.
Mr.. Jerome points out that while 1t IN
in the power of the insurance commissioner
Of New York to obtain law COVERING the
alleged evils Of insurance, the cases under
discussion do not come within the pro-
visions Of any statute now existent.
Two Glasses of Transactions.
The district attorney sets forth that his
Investigation discloses two classes of trans
actions: Tho first, matters partly devel-
oped by the Armstrong committee to the
extent of gravely suggesting the commits
sion of crimes: the second actions which.
In the light of the committees investiga-
ton, were commonly thought to Involve
the commission of crimes and had many
moral elements entering into certain WELL
known criminal offenses.
Mr.. Jerome says that he conceived IL to
be his duty to determine whether the sus-
picions falling under the first head were
well founded and could be proven by legal
evidence, and as regards the second class
to examine the law bearing on the facts
discovered and to seek out many supple
mentary evidences which might bring the
transactions disclosed within the criminal
law.
At this point Mr.. Jerome says:
The law does not impose any general
duties Of historical character upon dis
trict attorneys in reference to any class OF
corporations The insurance law clearly
devolves these duties upon the superin-
tendent of insurance in respect to insur-
ance companies
A Distinct Abuse.
The report gives the result of Mr. Je-
romes probing into the affairs of the Mu-
tual Life and his conclusions under sew
eral heads. Under the head "Exorbitant
Salaries" Mr.. Jerome says that 1.-The in
ference is strong that the salary paid to
the president of the Mutual Life Insur-
ance Company prior to the recent fixing Of
1t at $4,000 per annum was grossly ex-
Orbitant for the services rendered and con-
stituted a distinct abuse on the part of
the committee on salaries of the power
committed to 1t. But, assuming the con-
been a gross breach of trust, there is no
statute OF the state which makes their
acts in this case criminal"
Under the head ''Nepotism." the report
says:
I'm the investigation before the Joint COM
mittee It appeared that certain relatives OF
the president of the company were favored
to such degree that it has been suggested
that a crime was involved. AS in the case
Of salaries so In this case
Charges Neglect of Duty.
Concerning the transactions of the Mutual
Life with Raymond & Co., its general
agents in New York, Mr. Jerome concludes
after careful scrutiny that the crimes OF
larceny and conspiracy were not committed
Under the head .Nepotism.'' as under the
former head. "Exorbitant Saaries," he
criticises the superintendent of Insurance
charging him with neglect OF duty. The
companys legal expenses come next In the
report and are dealt with at considerable
length. The transaction In which Walter
r.. Gillette. first vice president Of the COM
pany, the Morristown Trust Company Of