The San Francisco call., 1910-04-18
new Law 0bEYED
BY MUTUAL LIFE
New York Examiners Find That
Expenses of Administration
Were Reduced

NEW YORK, April 17.-The first inI
vestigation of the Mutual life insurance
company undertaken by the state since
Governor Hughes uncovered the scan
dals Of 1905 has been completed by Su-
perintendent of Insurance Hotchkiss
and develops these facts:
/. The final efforts of the new
management to- recover $3,000.000
from the late President Richard
A. McCurdy and his associates of
the old management resulted in a
net outgo of s237,349 more than the
company received from the Nc
Curdys.
2. Since the Armstrong law went,
into effect the Mutual expense of
a has dropped from a ada72tss1'qn SIS. sSi in
while the volume of business re-
mained about the same.
3. AS late as 1906 agents of the
paigners in the interests of direct
ors seeking reelection. For these
electioneering services agents of
s1ss,s51 Of policy holders moneys.
4. AS late as 1908 payments to
agents. aggregated .$354,144, which
did not appear on<the books of the
company. as bonuses for getting
believed by the department to be
such. paid in violation of the Arm
strong law, were traced to the
of them in the home office. In
Boston they are charged to super
vision of old business" which is to
say to prevent the lapsing of old
policies.
OBJECTION TO REPORT
superintendent Hotchkiss character
ICES the report submitted by the COM
pany's committee, which recommended
the acceptance of the compromise with
the McCurdys as untrue in at least
two particulars and deceptive in one
more. And 1t seems to u.s." he con-
tinued, "either the committee did not
know the facts, or purposely mfsle6
the board of directors
Nevertheless, it is said, "the report
on the whole is complimentary to the
company. The examiners find the com
pany has complied, in the main, with
the insurance law as amended by the
Armstrong committee"
The examiners believe the expendi-
ture of the policy holders money fol
questionable purposes has been def
nitely ended.
Returns to policy holders have in
creased correspondingly. Dividends
paid in 1904 amounted to s2,674,20
and in 1908 to $S,311,255. The report
explains, however. that many deferred
dividend policies matured during the
years 1907-S.
PEABODY DEFENDS SETTLEMENT
Charles A. Peabody, president of the
Mutual life insurance company, wheT
asked to comment upon the report
said:
-
the examiner of the department re-
quiring comment is that relating
to settlement of the company's
claims against former officers of
The proposals of settlement were
referred by the board of trustees
to committee of trustees consist
ing of Benjamin F. Tracy. lawyer;
Farmers loan and trust company;
II. Rieman Duval, president of the
American beet sugar company; H.
w. Taft of Strong & Cadwalder,
lawyers. and F. w. Heaton, presi-
dent Of the American car and
foundry company. None of this
company during the period in
which these claims arose.
This committee acted under the
advice and approval Of Joseph Fl.
company's counsel having the mat
ter In charge. They held meetings
extending over three weeks, ex-
amined facts and circumstances
upon which the claims of the COM
pany were based, and made a re-
port to the trustees recommending
settlements which were afterward
made.
The examiner of the insurance
department has reached a different
conclusion on the same facts and
circumstances. Whether these
seven gentlemen acted wisely in
hair a n q
report did not understand the sub
ject, or "purposely misled the
board of trustees" I leave the
policy holders, to whom we are ac-
countable, to judge. The compar-
ing of their Judgment and integrity
with that of the examiner of the
department presents a question 1
do not care to discuss.