New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-06-23
DRYDEN Held I'm
Contempt Four
Times by Board

man Thomas McWhinney. acting chair
man. to instruct the witness to answer.
Nr DRYDEN again refused, and he was
saiudred in contempt. The procedure
uas repeated three more times in the
course Of Mr. Dryden's examination.
According to the testimony Mr.. I'm
termyer tried to show that as result
Of Mr.. Dryden's and other directors
association with various banks, large
amounts CT the PrudentiaI's funds were
diverted to these institutions at less
than the usual rates Of interest TO the
detrfment of the policyholders. The
committees counsel also contended
hat the company was not in fact
legally mUtuaiized and that it was in
control Of minority of stockholders.
Rates on Bank Deposits Shown
In this connection it was testified
that the Prudential received only per
cent for its deposits in the National
CITY Bank and 2 n per cent from the
Fidelity Union and the National Bank
Of Commerce. Mr.. Untermyer pointed
out that money was in great demand
last wear and that the usual rate paid
nv banks was from TO SIS per cent.
Mr. Dryden explained that in the banks
from which they receive the lowest in
terest tseir accounts were very active.
"Under these circums Stances" re-
marked Mr. Untermyer, with these
vast deposits, don't you see the in
trinity Of 3 great institution like this
carrying its money in financial insti-
tutions in which it has an interest,
where it had to bargain with them as
to the rate Of interest in order to get
the best returns for its policyholders?
81 see none" replied Mr. Dryden.
even though you owned sill the
bank it would make no difference
You would think it perfectly proper
for you &c own all the stock of the
bank and keep five or six million OF
the Prudential's money there"
Il am not going to answer ques-
tons" came back Mr.. Dryden, what
would do under conditions that do not
exist. Where I have 10 per cent of
the ownership of a concern I think it
proper The 10 per cent exists"
Going into the transaction between
the Prudential and the Fidelity Trust,
Mr. Unterlnver said the committee was
anxious TO know all the details of the
matter, to be used as a basis for rec
concentrations to the Legislature that
life insurance companies outside the
state holding licenses to do business
here shall be put under the same limi-
tations with regard to investments as
now cover New York companies. New
York companies, he declared, are now
prevented from investing in stocks.
yet it appears" said Mr.. Inter
myer that the Prudential, organized
under New Jersey laws, but licensed
to DO business here, has stocks in
trust companies. And it also appears
that TINS company's $1,000, 900 900
worth of risks in this state is the
largest Of any company's in this
state
Dryden Tells of Exemptions
"The New York Legislature had q
chance TO place restrictions on outside
companies in 1906" said Mr.. DRYDEN.
but these companies were expressly
exempted and see no need to change
it now
What we are trying to find out.
Gr Dryden" went on Mr.. Unteruver'
is, by reason Of transactions from
1902 10 1915. whether the money that
was distributed among the stockhoId-
ers Of the Fidelity Trust, in which