New-York tribune., 1908-01-20
REPORT HTS IH0MASES
FINDS F4ULT NTH DEALS
celor0do Coz missioner Griljs Provi-
dent Life Management.

= Z
.poe Commissioner in a letter to E r. Thomas III
-sra-a - ta2e purchase o. certain stock by the
so,;a-v Of = road Of which L. z. Thomas WAS
oaca l-osi6cli-. says: "Tte Insurance law CT
;hg Slate az New York has been unquestion-
s5ly violated
At the end of tAe report Nj RiItenhcuse
SAYS: The common good certainly demands
that a direct and swift road 10 the penitcntiary
he provided for men who secure control of d
corporation TO manipulate or speculate with its
.r.1s: fand. IL order fill their own pockets or
70 use such funds to assist them in unloading
on such corporation undesirable or valueless
securities in which :hey are personally in
ferested."
The Philadelphia syndicate which attempted
- purchase the society from the Thomases
cones in for almost equally severe criticism
While the report shows an actual impairment
OF The capital of the Proyident Society amount
ing S4146ol IS, it says 1t IS practically GER
tain the impairment may he replaced and the
society emerge sound and solvent and resume
writing new business in the not far distant fut-
ure.~ Ii adds that there is therefore no reason
for alarm on tie part of policynoIders IL an
economic plan Of nagement Is aoopled anu
thai in the opinion OF the commissioner no need
exists al the present time for the lapslnG Oh
policies withdrawal of funds
Tie depositing OF a large amount OF lle 9o-
ciety's money in banks in which the Thomases
were interested is especially criticised Inc
Colorado examiner remarks that the 1hohases
took an active interest IN the society Tor inc
first two months they controlled i, hut aIter
that rheir interest tagged In connection with
this. the report says:
An adverse legal opinion, now in the cornpany's
Iies lno.eaieS maj 5e LH1aS 1 ii mana the
funds Of the pohcgnolders by '1oanlng securiti 5
Of The society 10 their own or other banks,
presumably. upon which deposits or circulation
Is signaoant fact that their loss OF interest in
The soceIs management was colnclcenI win tle
receipt q this opinion. At t1e time when the in
ergy and skill on the part OF the management to
overcome adverse egnd5ti1;+s the Tomas manage
sold !-sh class boTcs pay lg ~ TO per cent IN
string of banks. II many o. which they were then
personally interested and which paid a much lower
rate of interest
LETTER TO E. r. THOMAS GIVEN.
The report included q letter written 20 E r
Thomas by AIr- Rittenhouse regarding the pur-
chase Of bonds Of a railroad by the society. in
which he says the insurance law has been
unquestionably violated The letter cites among
Others the following facts" which the commits
sioner has addUced:
Taet you haFs been msn6Sr Of The anasee
70 . the present tiI1le.
at you q, as s. q l 7s auF52g 52t sns So5 he
That rs STOCK transfer Office is al No. II Broad
way. NeR York City. and its fiscal agents are, or
were. Hessrs. Thomas. Aaciay & Co
That tie Thomas OF The above firm is Herbert
Thomas. son Of o F Thomas 49,.
r Ia "a On Ma5s5 re- & % o, The yre nn3PSe f5 Sai2man5
al 2 meeting oEe. which you pIes.dee' apProysd OF
an reliably informed that bonds of this rail
lower Hgure than The one al which the society
r. limited 4ed 81 operations Of this railroad.
r. slight margin between its earning powers ano
6s-sfie i1Testr1ents offered for sale at lower
prices lead M = c3ncade taa[ ne Ile pnif5T 3siTosd
bonds was inadvisahle and detrimental to the IN
n also ar7ca-s 70 me from the afor5 mentioned
facts that .ot only has the society Palq P IN IN jn
fJ-rance Law of the state Of New York mas oeeh
- ce-arz cs +Fe-efo-e Of Insurance Commis-
stone II tfe STATE of Colorado hereey oroer oa EU
"a return T. the Provden Savings LIE AsSI "a 7o9-
- er-o-Ir- rad this society TOT me ll
CIV " - = azcF-nre therefor these bonds
" Rs--er.,ause criticises the Philadelphians
fo- depaz=-ins funds Of the society IN oafhs III
rhich members of tle syndicate we're lnIefe7'ed,
ana ssvs. Noting these transactions, It seenl'H
reasonable To assume that the misuse OF Ile
seciety's funds 1as 70 continue under the ne"
management. and Il was at once made known TO
his management that no such policy would be
permitted"
Tie Commissioner says one OF the strongest
reasons for the investigation Of the society WAS
because h believed its funds ana 1ulU-e "eiN
endangered by me Coyie interests. VINO Purposeu
merging II with the Pennsylvania MutuaI Lie
Insurance Company. which hsd total admitted
assets Of IS s2G IL eEr. Coyle was president OF
tas company and also head Of the syndicate
DEPOSITS N THOMAS BANKS.
The report gives q list OF the deposits the
society hac II different banks al the close OF
business on October Il. 1907. This list includes
mainly the banks IN which the Thomases were
interested and he deposits aggregated Sl'i75'-
@S3o9- The report states that the fact Of keep
ing deposits in 50 many banks is explainable
only the ground that in this way personal
purposes OF the controlling officers could best be
served L continues:
ter investment and for Speculation; u Is t!lei
Ne n-eisteuarce C. rEese bank accounts - assert
~ securities can now br more a-fa1 -
p.-c-aseo than tlel could Il the time :. eh M M
oeposlts Eede Nv belief in tEe correctness
81 lhe Statement that these deposits were intehun
enea BY The facr hat the officers OF these
s3lloors have stated ia my presence that II - w
.aers-ooS that these deposits were 10 remain WIN
ter' as long certain loans moi made 10 the So
CRY TT 70 outsiders remained unpaid.
Il the report II ir shown that inc Insurance
Deps-trert reduced The society's valuation Of
rs dt1erent parcels q real estate s451254 81 !
Ihe report does not aliow bank deposits
sAlZss Es ~ depcsit with The Standard Trust
company Il >ew York. nor Sl9.7s0 II on de-
posi- with ;he american National Bank Of
louisville These deposits are thrown out be-
'Lse = seems 10 r.. Rittenhouse tllat they are
Sser's notes ,ri.ch were discounted by the
e-etE ana not purchased by the banks The
lfcrt says the present officials allese that they
ss-ieFed the banks had purchased tre notes,
VI adds thai as interest was paid quarterly
Wit