New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-05-07
GRIND JURY USES PROBE.
Metropolitan Lies "Year End
Deals Noe Being Investigated.

The special grand jury began investigation of
the metropolitan Life Insurance Company yester-
DAY afternoon. Three witnesses were examined
They are George c. PenhaIlow assistant cashier
Of the company. ard Thomas ". Folsom and
Joseph 4. Braman, notaries, who are not connected
with the company.
Waiting in the anteroom part Of the afternoon
were John r. Hegeman. president of the Metro
roltan Life Haley Fiske. vice president Frederick
II. Ecker. the company's controller, and Henry "
George. a bookkeeper. With them were General
Thomas 1. James, president OF the Lincoln Ma
tonal Bank and Silas B. butcher. president OF the
Hamilton Trust Company. Of Brooklyn. who
directors and members of the fnr nee committee Of
the Metropolitan Life.
Il is expected that several of the ren who were
kept waiting yesterday VIII get before the jury
day. Another witness to be heard Is J. J. Thomp-
the cashier OF the Metropolitan Life. The in
vestigauon of the insurance company is expected
10 take about week, although the books Of the
company have been under examination by Assistant
District Attorney Kresel for several weeks.
II understood that the examination Of Wit
nesses yesterday was in regard TO the year end"
transactions the company, by which certain
loans made TO officials Of the company were sold TO
Nermilye & Co. bankers late IN December each
year and bought back early in the following Janu-
aTy, in order that mention Of the loans should
be made IN the company's annual reports the
State Insurance Department These loans it is
said, amounted about 81 00OOD each year
In the Investigation Of the metropolitan Life by
TIE Armstrong committee. Mr.. Hughes asked Mr..
Heseman on the witness stand what the company
die In the line Of unsecured loans. and Mr.. Hege-
man replied that II had tried to cultivate that
branch OF business Mr.. Hughes then read from
tie comDany's loan sheets show that each year.
from 1897 10 1905 the company had sold certain
loans 10 Nermilye & Co, December g. buying
them back the following January 2 In the
brlef interval between tie selling and buying back
u ne loans the company had made its annual re-
port 70 the State Insurance Department
one loan which Mr.. Hughes called 70 the atten-
ton % Mr. Hegeman was made to Mr. Hegema7
himself in 1853 for $1,000 " per cent interest
4 was sold by the company to VerrniIye & Co on
o+l"il1eI 81 % tHat year. and bought back 10y the
company on January l. 1904 Mr. FIagernan said
mat he had consulted with Mr.. Dutcher Of inc
finance committee. before taxing the loan fron, fba
AlIlail- MI. hughes then introduced evidence
e. aIulle loan OF $3.50 made by the company 70
~ " DtlcaeT IN 1872, at per cent. This loan was
sold on December O. that year and was renav,ed
VI January :, next year. for $4,000. This in turn
,"as SOLO at the end Of 1898, and renewed at ri,e
DEG inning OF 1904 at 2S6 500 The loan sheets aIso
showed similar loans John A. Mccall carried
..irougI several years My. HePenan said he some
r slaes nao an understanding with Nermilye & Co.
ttg4tolig the commission paid 10 that concern FOR
DuglhR and selling back the loans and that h. car
'Feo SUCH an understanding in his mind
II was brought in insurance ir,-eqtio,-i,,
aIso mat the metropolitan Life carried on its hooks
eHo reported holdings Of the second preferred stock
= ie foIe manufacturing Company lar
alte oI A1ooVto as having a market value OF s99
snare ~ben the stock selling in the market
a. 90 z share. Mr.. Hegeman' said the connanv car
tleo the stock with the understanding that II would
oe taken off its hands at 81.
:. The grand 1ury's present investigation Is he
xeted 10 be leading to the discovery Of proof thar
Isiss reports Were made by the METROPOLITAN Life
De expected. e'' are :"