The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-07-09
PAUL MORTON TO LORD
Describes to British Peers How the
Equitable Is Conducted.

London, July 9.-The house of lords
life insurance committee today heard
how the affairs of the Equitable Life
Insurance society and the Mutual In
surance company were conducted.
President Paul Morton and Vice Presi-
dent Emory McClintock were the COM
nittees informants.
After explaining the business methods
of the Equitable Mr. Morton called 1t
tention to the special provision made fer
the security of British policy holders by
the $780, 900 deposit in the Bank of Eng
land. He considered that the investiga-
tions had clearly shown the sound
financial position of the society, but he
admitted that confidence in it had bean
restored more in America than abroad.
Mr. McC1intock handed the commit
tee reports of the Mutuars affairs,
claiming that the documents disclosed
a satisfactory condition of its invest
ments- In his opinion it was not desir-
able to make special provision for the
British policy holders. It was a mutual
company and the British and American
policy holders shared all the advan-
tages. He objected to the creation Of
any special reserve in this country.
Admits Dissatisfaction.
Earl Beauchamp asked how it was
that the state officials charged with the
supervision of the companies had not
discovered the abuses disclosed by the
legislative investigating cOff1Il1Il66, 10
which Mr.. McClintock replied that the
work of the state officials was confined
to the verifcation of the assets and IL
abilities of the companies. They did
not look into the nature of the bust
ness transactions. because they had not
the time to do so, and it would practi-
caIy be doing the work of the directors
Of the company. When the officers of
the company did not know what was
going on, he said, it was not surprising
that people outside did not know.
Mr.. McClintock declined to say
whether he would be in favor of the
companies officials in England sum-
moning occasional meetings of the Brit
ish policy holders
Answering other questions. Mr. Nc
Clintock said he could not say that all
fed, but he had reason to believe that.
on the whole, they were satisfied with
the position of the company.
Done Differently I'm England.
A. Hewlett, president of the faculty of
actuaries Of Scotland in testifying to
the differences in the methods of the
British and American companies, said
that in the case of the former it was
possible to find out at once the pr0vis-
ions for future profits and expenditures.
stance, an English company spent Ia
per cent of its premium receipts in con-
Quoting its business. but provided for
q per cent An American company
said it reserved the whole margin be-
tween the gross expenditure provided
for and the net sum expended. but
there was no means of finding out what
that margin was. Some We're spending
more than provided for.
Replying to a question, Mr.. Howett
said that in this country a policyholder
had a claim, which was enforceable,
against all the property of the COM
would be in the same position in
America.
Mr. Higham. chairman of the life
Office association. urged that foreign
companies doing business in England
be compelled to make returns, under
the life insurance act, relating TO their
business in this country.
Discuss Damage Done.
After the meeting of the committee
President Morton, in an interview on
the results of the recent insurance in
vestigations, admitted the revelations
had hurt American business seriously.
He thought the English people event
ually would see that the exposures.
after all were for the best and had
resulted in matters being placed on a
sounder and safer basis. He believed
time would remove the anti-American
prejudice and was hopeful it would
soon disappear.
It was useless to deny, Mr.. Morton
said. that new business had diminished
greatly. but he added his company hao
no present intention of abandoning
business in Great Britain. Rigid econ
omics would be introduced here as
elsewhere. He did not believe there
would be any legislation in Great Brit
ain antagonistic to American COM
panies. as such legislation would only
lead to retaliation. If Great Britain
passed laws unfair to American COM
panies. he said, there surely would be
/ laws passed in America which would
make doing business there by British
fire insurance companies more difficult.
- -
the Equitable company had ceased to
do business In Russia Norway,
Sweden. and Germany and the situa-
ton in France where he is going. is
serious Mr.. Morton said he hoped to
! convince the French government of
the unfairness of the new law.