The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1910-04-18
Superintendent H0tChkiSs
Submits Record Of Findings
EXPENSES ARE CUT DQy$'
The Cost of Maintenance n " Adj
ministration Has Dec. By
Half Since ArmstronA law
Became Effective

New York, April 1.-THE first investi-
cation of the Mutual Life Insurance COM
pany undertaken by the state since Gov
ernor Hughes uncovered the malignant
scandals of 1906 has been completed by
Superintendent Hotchkiss and develops
these facts:
/. The final efforts of the new manage
ment to recover $3,0 900 from the late
President Richard A. McCurdy and his
associates of the old management re-
than the company received from the
McCurdys.
2. Since the Armstrong law went into
effect the Mutual's expenses of mainten-
ance and administration have dropped
from s15,7 ,901 in 1904, the year previous
to the Armstrong investigation, to ST.,
III. 1856 in 1909. while the volume of busi-
ness remained about the same.
3. AS late as 1906 agents of The company
were still active campaigners In the In
terest of directors seeking reelection, al
though the report does not charge that
this WAS done at the instigstion Of the
directors themselves, or with their con-
nivance. For these electioneering services
agents of the company received in 1906
sl6s, ,s51 of the poicyholders moneys
L. So late as 1903 payments to agents ag-
gregating 1854, IA, which did not appear on
the books of the company us bonuses for
getting new business, but are neverthe-
less believed by the department to be
such, paid In violation of the Armstrong
law, were traced to the Boston office.
There is no record of them In the home
office. In Boston they are charged to
supervision of old business" which is
to say, to prevent the lapsing of old
policies.
Superintendent Hotchlxiss characterizes
the report submitted by the company S
committee, which recommended the ac-
ceptance of the compromise with the Nc
Curdys as untrue in at least two par
ticulars, and deceptive in one more.
Report Is Complimentary
And 1t seems to u.s." the report con-
tinues. that either the committee does
not know the facts or purposely mislead
the board of directors
Nevertheless, it Is said that the e4report
on the whole. Is complimentary TO th
company. The examiners find that tins
company had complied, in the main witt
the insurance laws as amended by tne
Armstrong committee"
The examiners believe the expendi-
lures of the policy holders moneys for
questionable purposes has been dennite-
ly ended. THE examiners state, says
the report that proper restraints have
been placed by the company upon the
supply department, who're expenditures
for legislative and other improper pur-
poses were concealed by the previous
mana cement, and that the system In
operation at present will prevent the
recurrence of such practices
The returns to the policy holders have
been increased correspondingly. The
dividends paid In 1904 amounted to 81
674,206 and in 1908 to sS,311,255. The
report explains, however, that one rea
son for this significant increase lies in
the fact that many deferred dividend
policies matured during the years 1907
and 1908.
Charles A. Peabody. president of the
Mutual Life Insurance company, was
seen today in connection with the re-
port Asked to comment upon 1T, he
said:
Settlement of Claims
"The only subject in the report of the
examiner of the department which re-
ouires any comment is that relative tt
the settlement of the company's claims
against the former officers of the COM
panv.
"The proposals of settlement in tn ese
matters were referred by the board o1
trustees to a committee of trustees con-
sisting of Benjamin F. Tracy, lawyer
Edwin 8. Marston. president of the
Farmers Loan and Trust company; II
Rieman Duval. president of the Ameri-
can Beet Sugar company; H. w. Tai
of Strong & Cadwalader, lawyers, -and
Frederick Fl. Eaton. president of the
American Car and Foundry company
No one of these was connected with
the company during the period in which
these claims arose.
This company acted under the ad
vice and approval of Messrs. Joseph H
Choate and James McKeen the com.
pany's counsel already in charge. They
held number of meetings. extending
over three weeks. and examined the
facts and circumstances upon viii tht
claims of the company were based, ant
made report to the trustees recommend.
ing the settlement which was after.
ward made.
"The examiner of the insurance de
partment has reached a different con.
clusion on the same facts and circum
stances. As TO whether these sever
gentlemen acted wisely in their conclu
sion or. as stated In the reIort, did mo-
understand the subject. or 'purposelv
misled the board of k<ustess' 1 leave
the policy holders, to whom we are ac.
countable. to judge"