The Birmingham age-herald., 1906-02-23

ness, +ile president has been paid a large salary. This salary is S36O00. Ac- cording to it's statement of December 3l, 1904 this company has unassigned funds to provide for all contingencies amounting to s652,767.
 The next company treated of in the report is the Reserve Life Insurance company, the charges against officers of this company as made during the investigation, are recited in detail, and the committee says that important as the matter is, it has been impossible to make an exhaustive examination Of the companys affairs.
 Better Administration Needed.
 In closing it's report on this company, the committee says:
 "The efforts of the company to read just it's risks accompanied by reports of questionable transactions have occasioned widespread dissatisfaction and distrust, and it is apparent that correct and eco- nomical administration is imperatively needed in order to insure the protection of the interest of the large body of pOli- cy holders to whom the maintenance of the company as a growing concern under strict supervision Is of vital importance.'
 The Security Mutual Life Insurance company which has its principal office at Binghamton. N. Y, was the subject of investigation by the committee. HIS company pldu of organization and the formation of subsidiary agency companies Is set forth by the committee. The com mittee holds that payments for new bus mess by this company has been excess sive.
 The expenses in 1904 exceeded the total loadings on the premiums by s2s2 900, amounting to 146.16 per cent of the load ings.
 Much space is given to the Metropou- tan Life Insurance company. The trans actions of It's president, John R. Hege- man, with Vermilye X Co.,, and with Will liam A. Read & Co., are recounted The committee characterlzes his account as a more or less speculative one. embracing numerous purchases and sales of seeur- tiles. This account was carried as a special favor with an interest charge of 115 per cent. This company does a large business in industrial insurance and in 1904 expended S11,000,000 for new business. The company has a surplus of $12,S TAO.
 The Prudential Insurance company of America, New Jersey corporation, was the only company not operating under 8 New York charter that was examined by the committee. This company has sur plus of S11, 324, ,S46 Both the Metropolitan and the Prudential do large business in child insurance On this subject the com mittee says 1t is without facts which would warrant the prohibition of nsur- ance on children.
 Investments of Life Companies.
 On the subject of Investments of life insurance companies, the committee after declaring against "syndicates" recomI- mends that the law be amended so as to provide:
 1. That no investment in the stock of any corporation shall be permitted ex- StOpkd of fOfF ations.
 ?. That investments in bonds secured to the extent of more than one-third of the entire security therefor, by the hypothecation of corporate stocks shall be prohibited.
 3. That no loans shall be made on stocks and bonds which are not the subject of purchase under the above publications.
 f. That every company now owning stocks or bonds of the prohibited class shall be required to dispose of the same within five years from December 3l, 1906, and each year prior thereto shall make reduction of the amount of such invest ments to an extent approved by the su- perntendent of insurance
 3. That the statute should also forbid all syndicate particpations. transactions for purchase and sale on joint account, and the making of any agreement, provid- ing that the company shall withhold from
 
 cretion of others any securities which it may own or acquire.
 (. It should also be provided that no officer or director should be pecuniarily interested either as principal co-prnepal. agent or beneficiary in any purchase sale or loan made by the corporation, except in case of a loan on his policy
 The committee recommends limiting the amount of new business which each of the larger companies may take to $15O.- 000 GOO any year and that no company doing business in the state except the industrial companies, shall issue policies in excess of certain prescribed limits.
 Political Contributions.
 Contributions by insurance companies for political purposes should be strict ly forbidden. Neither executive officers nor directors should be allowed to use the moneys paid for purposes of insur- ance In support of political candidates Or platforms. The devious methods taken to conceal the payments of this sort are confessions of their Illicit character. | They illustrate the manner in which ex- ecutive officers have treated the funds of the company virtually as their own, abusing their power to disburse them without proper accounting. Whether made for the purpose of supporting political views or with the desire to obtain pro- 
 buttons have been wholly unjustiflable. Tn the one case executive officers have sought to impose their political views on a constituency of divergent convic- tions, and in the other they have been guilty of a serious offense against public morals. The frank admission that moneys have been obtained for use in state cam paigns on the expectations that candi- dates thus aided in their election would support the interests of the companies, has exposed both those. who solicited the contributions and those who made them to severe and just condemnation The committee recommends the passage of an unequivocal. drastic measure to remedy this evil Not only should 1t be expressly prohibited and treated as waste of corporate moneys. but any officer, direc- tor Or agent making. authorizing or con senting to any such contribution should be guilty of misdemeanor and the pro- hibition should be extended to all cor porate contributions of this character.
 Lobbying.
 Nothing disclosed by the investigation deserves more serious attention than the systematic efforts of the large companies to control a large part of the manage ment of the state. They have been or ranized into an offensive and defensive al- | liance to procure or to prevent the pas sage of laws affecting not only insur- l ance but a great variety of important interests to which these subsidiary com nanies or through the connec tions of | their officers, they have become related. | Their operations have extended beyond l inc state and the country has been divd-