The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1910-04-18
Takes Half to Run Company
That It Did Before Arm
strong Law
EFFORTS TO SECURE MONEY FROM
M'CURDY WAS LOSING GAME
Cost the Company sss7,s4s More to
Prosecute the Litigation Than II
Secured Returns to Policy Holders
Have Quadrupled in Six Years.

New York, April 18.-The first in
vestigation Of the Mutual Life Insur-
ance company undertaken by the state
insurance since Gov. Hughes uncoy-
cred the scandals of 1907 has been
completed by Superintendent Hotch-
kiss and develops these facts:
1. The final efforts of the new
management to recover $4,000
from the late President Richard A.
McCurdy and his associates of the old
management resulted in q net outgo
OF $237 ,349 more than the company re-
ceived from the McCurdys.
2. Since the Armstrong law went
into effect the Mutual expenses of
maintenance and administration have
dropped from $15,720,901 in 1904. the
year previous to the Armstrong in
vestigation. to $7,451,186 in 1908,
while the volume of business remain
ed about the same.
8. AS late as 1906, agents of the
company were still active cam
paigners in the interests of directors
seeking reelection, although the re-
port does not charge that this was
done at the instigation of the direc-
tors themselves, or with their con-
nivance. For these electioneering
services, agents of the company re-
ceived In 1906, $16S.351 of thespolicy-
holders money.
4. So late as 1908 payments to
agents aggregating $354.144, which
did not appear on the books of the
company as bonuses for getting new
business, but are nevertheless believ-
ed 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
nome Office. - In Boston, they are
charged as supervision of old bust.
ness which is to say, to prevent the
lapsing of old policies. Superinten.
dent Hotchkiss characterizes the re.
ports submitted by the company's
committee which recommended the
acceptance of the compromise with
the McCurdys as untrue IN at least
two particulars and deceptive in more
than one. And it seems to u.s." the
report continues, that either the
committee did not know the facts, or
purposely misled the board of direc.
tors"
Nevertheless, 1t is said, that "the
, report on the whole is complimentary
to the company. The examiners find
! that the company has complied. in
: the main, with the insurance law az
amended by the expenditure of the
policy-holders' money for question.
able purposes has been definitely end
ed. The examiners staIe,' says the
report, chat proper restraints have
been placed by the company upon the
supply department. wnere expendi.
lures for legislative and other i'm.
proper purposes were concealed by
the previous management, and that
the system In operation at present
will prevent the recurrence of such
practices"
| The returns to policyholders have
been increased correspondingly. The
dividends paid in 1904 amounted. to
$2.674,206 and in 1908 to $9,311,2 ,255.
Charles A. Peabody. president OF
the Mutual Life Insurance company
was seen today in connection with
this report. Asked to comment upon
it, he said:
/ "The only subject in the report OF
the examiner of the department that
requires comment is that relating to
the settlement of companys claims
against the former officers of the
company.
/ "The proposals of settlement in
these matters were referred by the
board Of trustees to a committee OF
trustees consisting of Benjamin F.
| Tracy, lawyer; Edwin S. Marsten
president of the Farmers Loan and
Trust company: H. Rieman Duval
/ president of the American Beet Sugar
company; H. w. Taft of Strong &
Cadwalader, lawyers; and Frederick
H.. Eaton, president of the American
Car and Foundry company. No one
of these was connected with the COM
pany during the period in which these
claims arose.
"As to whether these seven gentle
men acted wisely in their conclusion
or. as stated in the report, did not un-
derstand the subject or "purposely
misled the board of truste l
leave to the policyholders. to whom
we are accountable. to judge. Com
pairing on their judgment and in
tegrity as against that of the exam
iner Of the department presents q
question, which do not care to dis
cues.
AFTER HARVESTED