New-York tribune., 1906-07-18
M'CARTER ON STAND.
FideEtgs President Tells about Its
Relations sgith Prudential.

The New Jersey Senate insurance investigation
committee resumed it's session in the Chancery
Chambers in the Prudential Building In Newark
yesterday morning II busy and interesting
day. but not very fruitful outside of the ending
of the testimony of David Pray Fackler the New
York actuary who did the insurance examinations
for the New Jersey Banking and Insurance Depart
ment most Of the evidence consisted of rehasn
Of what had been submitted to the investigating
committee in New York last spring
There were peasantres indulged IN anu
/ some sarcasm evoked that amused the spectators.
| For example. when Uzal H. McCarter. president OF
the Fidelity Trust Company, was on the stand ana
was little bit bothered by the questions put 10
him. Mr.. Corbin suddenly inquired:
''About what does your trust company DO MY.
| McCarter?" the latter promptly replied:
About the same yours. Mr.. Coroin.
The counsel of the committee is also president or
a large Jersey City trust company. For moment
he was decidedly feazed To add to his embarTass-
ment Mr. McCarter proceeded to off a list OF
his concerns surplus, deposits and the like The
committees counsel remarked, after he had recov-
cred himself:
That's a very fine statement. Mr.. McCarter."
YES" said Mr. McCarter in undertones; match
It if you can
Then one of the committee suggested that Mr.
Corbin had the privilege of showing the condition
of his institution, but he did not take advantage
of it, He did. however render eulogium on the
splendid position occupied by the banks and trist
companies of New Jersey. which Mr.. McCarter
nodded approval or practically said Amen at in
tervals.
Are we authorized to look into the state of the
trust companies?" sarcastically queried Senator
Minturn.
Being assured that trust companies only to
be examined, according to the Senate resolution.
when they were closely connectei with some in
surance company, and Mt. Corbn stating that he
had called Mr. McCarte- only because of the Fidel
ity's relations with the Pruds - Al Insurance Com
pany. the regular business was resumed.
Mr.. McCarter, in his examination. gave first the
names of the officers and directors Of the Fidelity
in 1904. 1905 and 1906 He said that the Fidelity had
held 1888 of the 10000 shares of the Prudential 1t
had been proposed to obtain contro. of the Prude1
tial, but was enjoined by the Court of ChanceTy
three years ago. The Prudential held 4sCO OF the
shares of the Fidelity but not enough to control
There had been no further purchases by either
company of the others stock since June. 1905. He
handed list of the stockholders OF the two
companies and the amounts of Prudential shares
that had been sold by individual officers of the
Prudential to the Fidelity before the court inter-
fered He admitted that if there should be fric
ton at any time the officers of the companies
troled enough shares TO carry the day al an elec
In response TO numerous questions from botn tne
that the only relation between the Fidelity and the
Prudential was that of broker and depositor, The
insurance company at the regular commission.
and the Prudential deposited money with the
ing that the two companies had ever gone together
quently bought parts OF the same issues of stocks
He said that, needing money on one or two occa-
sions, he had not borrowed anything from the
PRUDENTIAL he had asked the insurance company
to make an extra large deposit with MIN LOT IeW
Ibid they do So" asked Mr. Corbin.
II believe So although we afterward found we
did not need it.. 80
Did the Prudential ever borrow from you?"
TT never did'' replied Mr. Mccarter. with
iIsis Mr. es Mccarter said securities were purchased
panies The committees are practically the same.
He gave one. the Fidelity committee. which con-
F. Dryden. Uzal H. NicCarter and Thomas N. Nc
He said that. owing to some dispute between the
Massachusetts Insurance Department and the Pru-
ao to depo T the sq f S any naa e
than one half its surplus As matter OF fact @ re-
posits had since that time ranged from a.60eo to
S1SO0Oo0 Previously the deposits had been as high
Mr.. McCarter was the last witness for the day.
because senator's Wakeiee and Minturn have to
attend the first meeting Of the Senate riparian in
vestigation committee in the Senate Chamber at
Trenton tomorrow: On Thursday Senator Dryden
David p Fackler. expert actuary of the State
Department of Banking and Insurance who was on
at Trenton was the first witness yesterday. Mr..
Cor6in showed him the reports he had made during
Benefit and Prudential Life Insurance companies
Be1ehf cost about sioOo While each examination
of the Prudential cost about $4,000. After the
marked exhibits.
did you pay any of this amount to any state
officer any person other than those who assisted
m the Work?' asked Mr.. Corbn.
NO sir replied the witness.
Mr.. Corbin then read extracts from the reports
referring to suggestions that had been made by
witness to the State Comissioners These consisted
of recommendations of the reduction of commissions
to agents and the limiting Of salaries to officers
Asked why he had made these suggestions. the
witness replied Because of the way expenses
were climbing in the insurance companies owing
to the strife for business
Senator Mihturn here took part in the examina-
tiCn. saying:
'I see by one of your reports before me that you
recommended that when the Fidelity Trust Com
pany and the Prudential Insurance Company were
examined again. the examination be simultaneous
as to prevent any interchange of securities re-
ported as assets Now. how cam YOU to make that
recommendation
Because the two companies had reporter among
their assets considerable blocks OF the same issue
of bonds"
DO you mean that t,.ess Identical bonds:'
he asked
NO. not as far as | can learn hus simply of the
same ISSUE continued the witness
Mr.. Corbin took the witness in hand again. and
in answer to question he said that the excessive
salaries and commissions paid by the insurance
companies to their officers and agents exposed at
the time of the investigation in this city, had been
very disastrous to the insurance companies and the
insurance business in general