New-York tribune., 1919-06-06
Insurance Firms
Rebuke Unfer'nlyer

Insurance officials struck back at
Samuel Untermyer yesterday for his
attack on Wednesday, when he charged
the insurance companies with partial
responsibility for the serious housing
situation in the city. Mr.. Untermyer,
in letter to Nathan Hirsh, chairman
Of the Mayors Committee on Rent
Prohteering, asserted that the housing
difficulties are due in a measure to the
refusal of the insurance companies to
invest in loans on real estate. He said
they preferred to deal in stocks in
stead
Among those who replied to Mr..
untermyer yesterday were Frederick
II. Ecker, ce-president of the Metro
politan Insurance Company; Darwin P.
Kingsley, president of the New York
Life Insurance Company, and Charles
A. Peabody, president of the Mutual
Life Insurance Company.
All three contended that the insur-
ance companies are unable to invest in
real estate mortgages at this time be-
cause they have lent all their money
to the government on Liberty Loan and
Victory bonds. Mr.. Kingsley said that
the insurance companies of New York
and Newark still owed the government
$75,00O,000 on war bonds, the New York
Life alone being in debt to the extent
of $4,000 900 to the government
In letter sent to Mr.. Untcrmyer
yesterday, Mr. Ecker said in part:
"Since April /. 1917, the Metropolitan
Life Insurance Company subscribed to
United States government loans and
war loans issued by the Dominion of
Canada S140, 100000. These subscrip-
tions were not materially cut down
except our last subscription of S3O,-
100000 to the Victory Liberty Loan,
which was cut in half.
"Not only did the life insurance
companies devote their available in
vestment funds to the purchase of gov
ernment securities, but most of them
pledged their credit to enlarge their
subscriptions. The Metropolitan Life
Insurance Company found it necessary
to borrow S33 500 900 to enable it to
make its subscription of $6O,0OO,OOO
to the fourth Liberty Loan, and has
still outstanding S22,5OO,OOO on &C
count of such obligation. which should
be paid before considering other in
vestment.
"If it be true the practice of loan
ing on real estate was abandoned, it
was for the purpose of responding to
a greater necessity.
in order that the government might
Immediately have the benefit of accu-
mulating funds of this company for
war purposes, purchases of United
States Treasury certificates of in
debtedness were made as issued TO the
amount of S32,0O0,000, which were in
due course applied to payments of
bonds subsequently issued.
at is a strange criticism to make of
the management of an insurance com
pany that it refrained from investing
money upon most favorable terms dur
ing time when the demand was such
that high rates were readily obtaina Bile
and all available funds, enlarged
through pledging the credit Of the cor
porations, were placed at low rates
of interest at the governments service
Notwithstanding our still having
outstanding obligations incurred to
purchase government bonds to the
amount of s22 100000, this company
has been making a serious effort to
find a way Of assisting the housing
situation. AS a practical matter we
have agreed to make some loans on
properties designed to relieve the ex-
isting situation.
1T is plain to see from the record
why the Metropolitan Life Insurance
Company's investment in bonds has
grown out of proportion to it's invest
ment secured by mortgage on real es-
tate.
CAS- to your comment on the invest
ment in stocks, it may be of passing
interest to note that, with the excep-
ton of those acquired in lieu of bond
investments, this company's holdings in
stocks are Of total par value of about