The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-04-01

that such loose. carol eas methods, as were
shown to exist could possibly have been
permitted under the very eyes Of the numer-
Gus high salaried officials occupying these
Offices,
The committee promptly brought this
matter to the attentionyof tho officials of
the company. who have feorganlzed the stat
In charge OF this building and taken other
steps which will increase the income from 1t
and effect economies. These combined will
soon show much better results.
WOULD LIMIT BOARD OF TRUSTEES.
The committee recommends that the
number Of trustees In the Mutual Life board
should DO reduced from thirty-six to twenty
four, divided into three Glasses OF eight
one Of the classes TO expire each year and
their successors to be elected for three
years instead Of four. as at present. 1t
recommends further that the president Of
but that no other officer or employee should
be eligible for election TO the board.
The report declares against the practice
which has prevailed Of allowing the presi-
dent or. any other officer OF the com
pany to hold proxies which will vest in
him complete control of elections and
recommends the appointment Of a COM
mittee of five by the board to formulate a
definite plan by which the ~pohcyholders
shall have representation at the annual
meeting for the election Of trustees.
The entire working organization Of the
company as we'll as the company's system of
accounts is criticised as having been formed
for and adapted to the requirements of the
was restricted to a limited territory. The
committee Ia Of the opinion that a general
reorganization ought to be made, n it
announces that 1t is at present collaborating
with the president and his assistant In ar
ranging such a scheme and a new code OF
rules for the company's management.
The committee holds that the super
vision and direction OF the company's af-
fairs by the members of the board Of
trustees has, generally speaking, been very
the standing committees Of the board the
report says that the affairs Of the company
which have come under the Jurisdiction of
the finance committee have been handled
with skill and ability coupled with excellent
judgment"
There are, however, certain transactions
In the financial department Of the company
which have occurred in the last ten years,
involving the relations Of the company
and some Of it's trustees and officials with
outside financial corporations in which the
company is interested, as also a certain
other class Of transactions which your COM
mittee believes are not above criticism,
and which will be fully dealt with in a later
report"
The committee on expenditures is de-
olared to have performed its duties in a very
perfunctory, superficial way. The inves-
tigators believe that certain expenditures
been so gravely criticised, should not have
been approved and passed by the COM
mittee, but that the attention of the board
should have been specifically called to them.
Your committee 9 is decidedly OF the opin-
ion" says the report, that it is the duty
OF the board Of trustees In the future to
take a more active part than heretofore In
the supervision and mana cement OF the
company's affairs
LOST SIGHT OF REAL DUTIES.
The committees investigations rave led
IL to believe that the troubles which have
befallen the Mutual Life can all be more
or less traced directly to "the ambition of
it's manag ement to equal or excel all others
In the amount Of insurance 1t should write
and maintain, furthered by is other and
possibly controlling desire to be one of the
great financial powers Of this country
b report says:
sThe 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
1t is frankly admitted that the things
done by some Of the persons in charge of
the %company's affairs, which were wrong
in principle and which at length brought
@dishonor and disgrace" upon themselves.
shave d~iscredited the company In the eyes
| of its p~olicyholders and the world generally,
10 an extent from which 1t cannot fully
or the o%ompany's foreign business, the
committee reaches this conclusion:
THAT, to a great extent, the Improbable
character of the business, and the methods
pursued generally in the management OF it,
was the direct result of the personal interest
which the executive officials of the company
in charge Of this branch Of its business had
in seeing it increase in gross. regardless OF
its net value to the company"
This refers chiefly to Son Robert "a.
McCurdy, who got enormous commissions
on the foreign business, as manager OF 1t.
The committee finds that the foreign
business, as an entire proposition, has never
been and is not likely ever to be remunera-
tive except in Great Britain, Canada, Hol-
| land, Belgium, Mexico and France. The
| committee recommends the discontinuance
of the solicitation of business In all other
| foreign countries. 1t also advises a re-
organization of the departments In charge
of domestic and foreign agencies.
UPHoLDs ARMSTRONG WE'VE.
The committee declares with the Arm
| strong committee for a limitation Of the
| annual business which may be written in
any one year to $3.50 100000.
Although the Mutual Life has written de-
ferred dividend policies almost exclusively
in recent years, the committee Is in entire
| accord with the Armstrong committee bill to
prohibit the issuing Of these policies in the
future.
1T is a mongrel type Of insurance In which
the investment and speculative features are
prominent" says the report.
The committee concuTs also In the opinion
of the Armstrong committee that the com-
pany should not be heavy holders Of the
stock Of subsidiary institutions, but instead
Of prohibiting the holding Of such stocks,
altogether it would allow the Mutual to hoe
not more than 10 per cent. OF the total QUIZ
standing stock of any one of these COM
panies. The committee recommends also
that the company refrain from engaging in
any syndicate operations and that no officer
of the company engage in such transactions;
| The committee announces that 1t VIII
push its work from now on with the greatest
possible energy. The report is signed by
william H. Truesdale and John W. Auchin-
Gloss. Joseph H. Choate is counsel to the
committee.