Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-04-01
MUTUAL LIFE INQUIRY
Special Committee Files Its
Fifth Report.
SHOWS CAUSE OF TROUBLE
Real Purpose of Company Perverted
by Management.
AMBITIOUS FOR GREAT POWER
Syndicate Participations Are Disap-
proved-Political Donations Were
Unlawfully Discussed
AMBITIOUS FOR GREAT POWER

UnIawfully Disbursed.
NEW YORK March 31.-The special COM
mlttee of the trustees of the Mutual Life
Insurance Company, appointed to examine
into the company's affairs. made public its
NTH report today. The committee consists
Of ". II. Truesdale and John W. Auchin-
Gloss. another member, Stuyvesant Fish,
having resigned.
The committee finds that it's investigation
thus far leads 1t TO believe that the
troubles which have befallen the Mutual
Life Company can al he more or less di
rectly traced to the ambition of its manage
ment to equal or excel all others in the
amount of Insurance 1t should write and
maintain, furthcred by its other and pos
sibly controlling desire to be one of the
great financial powers Of this country
The report says: The real purpose of
the company's organization, viz, to furnish
to its members absolutely safe insurance
at the lowest possible cost, seems to have
given place TO this ambition for power and
influence in the business and financial
world
The companys foreign business. the re-
port sets forth, has been conducted with
the same ambition in view. and the general
management of the foreign agencies is criti-
cised, the committee saying on this subject:
Foreign Business Unremunerative.
AS an entire proposition, your committee
believes and so finds that the companys
foreign business has not been remunerative
to the company, nor is ever 1t likely to be,
with the possible exception named below
and believes steps should be taken by the
officials to discontinue the solicitation of
new business in foreign countries except
ing possibly Great Britain, Holland, Bel
GUM, Mexico and France"
The committee believes that the most
practical means of reducing the undue cost
of new business is by placing limit on
such, and TO this end it Endorses the recon-
mendation Of the legislative insurance in
Nestigating committee limiting new bust
ness written to s150.000090 per year.
Deferred dividend policies are character
lied as "a mongrel type of insurance" and
the Truesdale committee declares itself in
entire accord with the recommendation of
the legislative committee that the writing
OF deferred dividend policies be discon-
tinUed.
Investments Not Criticised
The Truesdale committee hesftateg to
0iuclse the investments of the company in
stocks OF banks and other financial institu-
tions IN view of the satisfactory results
therefrOm." but favors a limit of the COM
pany's holdings Of such stocks to 10 per
cent Of their outstanding stock. Dissent is
expressed to the conclusions of the legisla-
tive committee prohibiting life insurance
companies from investing in stocks of any
and all kinds. the Truesdale committee sa v
ing on that subject:
Il ne dividends on the stocks of bank and
trust companies are usually well within the
earnings Of the corporation so that barge
part Of the benefit to the investor lies In
the increase of price from the growth of the
surplus through saving and compromising
On the other hand If a bond sells at a
premium the position Is reversed and a
graduai loss takes place the bond ap-
proaches Its due date"
Syndicate Participations.
Syndicate participatons are disapproved
by the committee. which holds that n v,o,I5
be better for the company not to engage
IN any operations Of this nature. and rather
to lose the profits which might be obtained
rom this source than to lay Itself open to
ADVERSE criticism No officer should be in
terested in any syndicates of any kind nor
Is II expedient for trustees who arc ,,,
Quoting the financial operations ~ IN - ~
PdHy' 10 be interested in any syndfcata
from which they might at any time Ia(,, &C 20
the company" 81 ''4eS ioF
Inc committee says IT is advised tba+
saCH OF Le company's funds as were do
na'ed IoI poLucal or campaign purposes
were una"fuIly disbursed, and rec6vaTt,
can be had in behalf Of the cornra,,c s tetS
t nose OF ITS officials or trustees response
The committee understands from, tho
president that he has already c0ne,,1taS
counsel with regard to what legal sfena
may DC taken 20 secure the recovery, Of
S'tst moneys and that he will act accord
mSiF- The committee approves Of mis-
course Of action.
All Donations Unlawful.
In spite of all efforts since last Novarn-
Der no trace has been found OF Andrew c
Fields who was IN charge Of the COM
pany = stationery department, and through
whom disbursements for so-called legal ex-
P-nses were made. The committee saws:
1t must be apparent 10 all that as dona-
tons or contributions from the funds of
the company for political or any other Dur
poses cannot lawfully be made they shouId
not have been made in the past and must
not be permitted hereafter. Likewise is This
the case as respects the use of the moneys
OF the company for improperly influencing
legislation or the supervision of Insurance
commissioners. No recommendations from
the committee on this subject seem neces-
The committee recommends the reduc-
ton or the number OF trustees OF the Nh
tAai from thlrtE-SiN to tweuty-oue mem
beers and expresses the opinion that the
trustees should take n more active mart
than heretofore On the companys affairs
~ l5 suggested also that the three big New
1orH companies should cooperate TO les
sen the competition for new business
1OIudh OF the EqultaoIe Located.
AUGUSTA, Ga. March 31.-Thoinas d.
Jordan, formerly controller OF the Equitable
Life. who was found in Atlanta a few DAVIS
ago, and who was reported to have left
there for the north, is now in Washington.
Georgia, according 10 a special received by
the Chronicle. He IS visiting relatives ana
friends there. and il IS announced Will re-
main about a week He declines to discuss
the affairs Of the Equitable. but according
20 his host T. NJ Fitzpatrick, he is merely
trying TO keep himself and family from
annoying newspaper notice, and feels that
he has nothing 10 fear in connection win
his past actions.
Pa rdnrned hrr he De- IL