Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-12-02
TO PUNISH TAWNEY
Bonding Trust Will Defeat Him
If It Possibly Can.
RELIABLE REPORTS SAY so
Commission Employs Actuaries to
Begin Investigation.
TO REPORT AT THIS SESSION
Appropriations Chairman to Con-
tinue Fight on the Trust Despite
All Yelled Threats.
RELIABLE REPORTS SAY so
TO REPORT AT THIS SESSION

Representative Tawney of Minnesota,
chairman Of the House appropriations
committee, today announced the employ
ment. by the congressional commission
appointed TO investigate the so-called
bonding trust. of David Parks Fackler of
New York, president of the Actuaries'
Society of America, and one of the fore
most men in his line in the country.
Herbert D. Brown of Chicago will be
resident actuary in Washington, and
these tNo men will have charge Of the
work of collecting and tabulating the
data upon which the commission will
base it's findings and recommendations.
Mr.. Tawney admitted to a Star reporter
today that he had received partial cor
roboration of the report that the bonding
trust had threatened to defeat him for
reelection in his district next fall and
had taken steps to subscribe a large sum
of money for this purpose. Mr.. TaUney
would not say. but it is understood from
other sources that the evidence corrobo-
rative of the report has been obtained
from an official and reliable source.
Statement by Tawney.
The investigation which has just been
begun by Mr. Fackier," said MIR. Tawney
to Star reporter today. will involve
the collection Of data in the various ex-
ecutive departments OF the government to
determine the losses OF the government
during the last fifteen years on account
OF defalcations and failures to comply
with the conditions of corporate or.per-
sonal surety bonds given in that time.
With this information the commission
will be able to determine what reason
able premium rate would be, and also to
determine other matters connected with
the business of the fidelity bonding COM
oy,io Oo1 in, iy,y
on officers and employees of the govern
ment'
The bonding commission consists of
Senators Gallinger. Curtis and Foster and
Representatives Tawney, Smith and Bow
ers. with James c. Courts. clerk Of the
House appropriations committee, as sec
rotary.
Up to date Mr.. Tawneys activity in
this matter has resulted In protecting
the 2OO.uO bonded employees Of the gov
eminent, as legislation Of a temporary
character adopted at the last session. fol-
lowing the 800 per cent raise In rates by
the bonding trust, provides that until
otherwise provided by law no bond shall
company for any officer or employe OF the
United States which shall cost more than
35 per cent in excess Of the rate Of pre-
MUM charged for like bond during the
calendar year 1903.
Put Out of Business.
The enactment of this provision has
served to put the bonding trust. which
was organized in the latter part of 1908.
out of business, for the time being at
least.
There are twenty three corporate surety
companies writing fidelity insurance, and
during the summer Of 1903 seventeen OF
these formed what they described before
the committee on appropriations as a
91TAPmpnf'
premiums on fidelity bonds to officers
and employees OF the government an aver
age Of 800 per cent. The effect Of this
arbitrary and enormous increase was ma
terially to reduce the salary Of every
officer and employe Of the government re-
quired to execute bond.
The investiga''oa made by the appro-
priations commute e into this so-called
trust showed that the loss experience of
the government covering a period of more
than ten years vs. only a trifle more
than 10 per cent OF The premiums then
charged, while the statement of the COM
pam themselves showed that their loss
experience upon government business was
only 90 per cent of the premiums charged
in 1908 before the trust rates of January
/, 1909. The committee considered that
the testimony showed the companies had
utterly failed to justify the great increase
they had agreed upon.
They'll Try to Get Even.
Several department officials are au-
thority for the statement recently that
because of Chairman Tawneys activi
ties In this matter the bonding trust
would attempt to secure his defeat APP
preciating that his majority had been
considerably cut in the last four years.
owing to factional scraps ~ his district,
and believing that the judicious use of
a good-sized campaign fund would ac-
complish it's purpose. 1t was also
said at the time, and apparently is now
partially corroborated, that seventeen
Of these companies had agreed to sub
scribe to the fund necessary to attain
this result 1t is known on reliable au-
thority that statements have been made
to government officials here in Wash
ington recently that it was the purpose
of these bonding companies to punish
Mr.. Tawney and that the money would
he forthcoming with which to do this.