The New York herald., 1921-06-23
GRAND JURY THREAT
FOR DRYDEN DEFYING
LOCKWOOD inquiry
Prudential Head Refuses
to Answer Questions and
Is Held to Be in Con-
tempt.
ADVISED BY LAWYER
Dealing Yet i'll Stock Of
Old Company, Untermyer
Shows; Calls Mutuali-
ZatiOn a Farce.
MANY FIGURES DISPUTED
Low Interest on Deposits
Mortgage Loans Pay Better
Than Stocks and Bonds,
He Proves.
MANY FIGURES DISPUTED

The affairs of the Prudential Insur-
ance Company of Anerica--its invest
ments, distribution of deposits and the
returns derived therefrom: the in.
vestments of it's directors, the method
and extent Of it's naturalization plan
and its relationship with the Fidelity
Union Trust Company of Newark-all
of these. together with the personal
holdings Of Forrest +. Dryden, the
Prudential's president, were the sub
jects of searching inquiry yesterday
by Samuel untermyer. chief counsel Of
the Lockwood legislative committee.
During the examination, which con-
sumed the greater part of the ses-
sion, Mr.. Dryden was half a dozen
times adjudged in contempt of the
committee for refusing to answer
questions concerning the conduct of
the company's affairs on the advice
of Richard V. Lindabury, one of the
directors and general counsel to the
Prudential.
At the conclusion of the hearing
Mr.. Untermyer asked Mr.. Linda bury
II he would advise Mr.. Dryden TO
purge himself of contempt and the
Prudential's lawyer replied that he
would not.
Pointed Query by Untermyer.
Then you know what we will do?"
Mr.. untermyer asked.
WHAT" demanded Mr.. Lindabury.
cious witness" retorted Mr.. Inter
myer. send the record to the Grand
Jury"
In the earlier part Of the session, when
Mr.. Dryden took recourse to his lawyers
advice and refused to answer, he had
been subjected to running crossfre
OF questions from the committees coun-
sci designed to throw the searchlight on
the Prudentiars affairs from several diff
ferent angles.
At one point Mr. Dryden was con-
fronted with the testimony given by his
father, the late John i. Dryden. founder
of the Prudential, before the Armstrong
committee In 1906. while under examina-
ton by Charles T.. Hughes. This testi-
mony was that 90 per cent. OF the Pru-
dentiaPs surplus when IL was a stock
company belonged to the policyholders
in any case. The younger Mr. Dryden
said yesterday that this should refer
only to holders OF participating policies
and not to the entire group.
Mr.. Dryden's examination had. not
progressed beyond a few opening ques-
tions before Mr.. irndabury arose and
interposed an objection to the line of
questioning Mr.. Untermyer was pursu-
Ing. When told that counsel for wit
nesscss were not recognized In the COM
mittee's hearing Mr.. Lindabury replied
that in those circumstances he would ad
wise Mr.. Dryden to refuse to answer
questions. Mr. Dryden took the cue and
thereafter when any question touched
too closely upon any unpublish ed or un-
reported feature of the company's af-
fairs he took refuge in Mr.. Linda bury's
advice.
First Ba1k by Dryden.
The first instance came when Mr.
Untermyer began asking questions de-
signed to show that the Prudential In
surance Company In 1902 actually con-
trolied the Fidelity Trust Company. and
that when at that time the latter COM
pany obtain 1929 shares OF the Pru-
Dental stock--eight less than a majority
the money to DO so actually was
provided for the Fidelity by the Pruden-
tial itself. This stock was purchased by
the Fidelity Trust Company at 1900 a
share, involving approximately $4,000
600. while the Fidelity's deposits at that
time amounted only TO somewhat over
$4,000, 900.
The directorates OF the two companies
we're virtually identical. and as this
stock at the time Of naturalization was
turned in later at S455 a share. Mr..
Untermyer asked Just where the profit
went. At that time the late John +.
Dryden was president OF the Prudential
and vice-preeident OF the Fidelity. while
tho son. Forrest F. Dryden, was d.
rector OF both concerns
Mr. Untermyer from time TO time.
switched his angle Of attack. He sus-
pended this line OF investigation. for
instance. to question Mr.. Dryden con-
cerning the Prudential interest. through
the actual holdings of the now COM
bined Fidelity Trust Company and
Union National Bank of Newark In
the stock OF the Public Service Cor
poration OF New Jersey and the actual
loss incurred therefrom. Then again
he questioned the Prudentiai's president
about his own sale OF small quantities
OF the old and still outstanding stock
OF the company TO men qualifying as
members OF the board OF directors
This brought from Mr.. Dryden an ad-
mission that at the time Of mutualza-
tlon he had turned in all but twelve
OF his own shares: that he had since
parted with seventeen and still had
twenty-eight This was followed by the
further admission by Mr.. Dryden that
since the so-called naturalization took
place he had still been buying and SELL
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