New-York tribune., 1906-04-01

clerical Jand perfunctory, whereas y should nave We
largely Supervisory in its character The work
OF jhis committee must be reorganized In the re-
Your committee is decidedly of the opinion that that
Is the duty OF the board tban ~ heretofore in the
supervision and management OF the company 3 az az
pro6osed report on reorganization and bylaws it's
views and recommendations as 10 What stJs
of the board in this regard how these committees
should be constituted and Indicate the duties anu
responsibilities of each.
The policy OF the management is considered,
with the following recommendations:
1t is only the deeply to be regretted, In view
Of it's RECORD and standing @ that some 4i tn1Se IN
thy ambitions and met hods to nave graduaily uaRoI
possession OF and finally controlled their policy ana
which were wrong in principle and which at length
brought dishonor and disgrace upon themselves; ana
policy yhoiders and the world generally. to an ex-
tent from which it cannot fully recover Tor some
our Investigations thus far lead us to believe
Life company can all be more or less directly
traced to the ambition of its management to equal
should wrlte and maintain. furthered by its other
great a financial powers Of this country The real
purpose of the companys organization, VIZ. 70
the lowest possible cost TO have given place
10 this ambition for power and influence In the
business and financial world.
After declaring that the foreign business of
that of a separate company and that the build
ing operations were most spectacular, the report
says:
AS entire proposition, your committee believes
and so finds that the companys foreign business
1t ever likely to be with the possible exception
b1 tbe oeas 1 to seo9tnue the Solicitation Of
new business in foreign countries excepting posi-
leo and France sA
DISCUSSES NEW BUSINESS LIMIT.
Discussing the proposed bill to limit new busi-
ness to $150OO0OOO year. the committee finds:
There is little doubt but what under such perma-
nent restriction % b applied gSpeg to the 5 ~ b
to sp nsn IF lis onessons and organize its agency
staff that 1t can readily write it's full quota of bus-
at much below the average of the last fifteen
Snd mor @o desirable Wi SsG selection Of risks ali Of Which
will result greatly to the advantage Of the policy
holders of the company.
The important question OF deferred dividend
policies is treated thus:
It Is difficult to resist the conclusion that the
the deferred dividend payment form of insurance,
in furtherance OF its ambitious financial schemes.
In any event It seems to have worked out in haT.
The situation created was simply this: A large
fund was steadily accumulated from premiums and
Investments the returns from which for ultimate
No regular annual accounting was required or made
to the benenciaries Of the latter such accounting
periods with no check opportunity for com
parison of results year by year or between different
such Situation is inherently weak and dangerous
TO all concerned and is undoubtedly directly respon-
sible for many of the troubles which have befalen
this company and those identified with its manage
ment.
The financial management Of the company,
especially its tendency to control outside insti-
tutions is criticised thus:
Your committee is most reluctant to question.
much less criticse the policy OF the management
of this branch of the companys operations in view
of the satisfactory results shown therefrom II
feels impeIed however, in considering this partcu-
a life insurance company. which under the pro-
Sn @ of It's aeos sasSs9 @ De In
mitted to do so by indirectiop In manner pursued
holder, controlling or otherwise, in various banks,
eofee Is of the Spon It Should nO Inc
SYNDICATE OPERATIONS CRITICISED.
Syndicate operations occupy several pages Of
the report, the conclusion beinsi
Your committee is satisfied that II would be bet
ter for the company not to engage in any opera
tions Of this nature, and rather to lose the profits
lay itself open to adverse criticism, '' '.,'' "
of any kind nor Is It expedieGt for trustees, who
are cond1ctng the financial operations OF the com
bey Might at esy time any RaTs occasion 0 o maSe
purchases of securities for the company.
Then comes the criticism of certain officials,
which, predicted in The Tribune, resulted in
the resignation of Vice-Presidents Granniss and
Gillette and may result in further designations.
The report says:
The committee strongly urges immediate
both as to personnel and methods
also rusees had PERSONAL W InoWIedgs of and for
nally approved numel Gus large disbursements
long been connected with the company; they were
reason thereof from n d.
yanced to the high and responsible positions occu-
experience and services. They certainly have fallen
far short Of doing their duty in knowingly permitting
protest to the ofhcials and board Of trustees In
the o2inl4n Of y9gr COMMITTEES these officials and
service % fannot longer serve the the com
held and should retire therefrom.
EXTRAvAGANCEs DISCOUNTED.
The chapter on extravagances was largely dis
counted by an interview which President Pea
body gave The Tribune Friday. In regard
to the extraordinary Paris expenditure for office
furniture, the report says
o The m books show that in the years 1903 and 1904
furniture for the presidents suite Of offices This
particular purchase seems to have been made
bills covering the same We're paid through this
agency and credited it without being presented
and audit ''-
1t seems 20 the committee some recourse should
be mad on behalf of the company TO recover from
whoever was responsible for such a piece of ex-
travagance, and that legal advice should be taken
TO ascertain whether same can be had.
President Paul Morton of the Equitable Life
refused to discuss the proposed legislative bill
to mutualize the Equitable. He gave out
written statement which read follows:
While doubt the wisdom of few of the
laws recommended, think the Armstrong
committee has earnestly endeavored to reach
right conclusions and that it is entitled to the
respect and good opinion of all good citizens.