New-York tribune., 1921-06-08
Acceptance of Untermyer
Plan of Reorganization
to Save State 30 and
Nation l2O Millions
To Begin Inquiry
Tuesday i'm Buffalo
More Thorough, Probe
Conducted Here Later,
Lockwood Counsel Saws

An, early reorganization of the fire
Insurance business in the state, with
the eradication of the obnoxious fea-
lures exposed by the Lockwood COM
mittee on housing, was announced at
the resumption of the committees
hearings in City Hall yesterday.
Samuel untermyer, chief counsel to
the committee, declared that repre-
sentatives of forty-three of the largest
fire insurance firms in the city, in ao-
dtion TO committee of underwriters,
had agreed to reforms outlined by him,
With view to correcting the abuses
revealed in the course of the investi-
CATION. Many of the reforms not re-
quiring legislative action the fire in
surance heads, he said, had promised
to put into effect at once. Others will
be brought about through proposed
legislation at special session of the
legislature or at the next regular
meeting of that body,
The development is declared to be
the most important work thus far
achieved by the committee. 1t is ex-
pected to save the people of the state
about S3O,o0o,0oo year, while the en-
tire nation viii be benefited to the ex-
tent of about $12o,ooo,ooo.
More Thorough Inquiry Later
On top of this, Mr.. Untermyer an
nounced there would be more thor
ough investigation of the fire insur-
ance business, either by this committee
when its other work is finished or in
some manner prescribed by the Legis-
lature.
Forrest f. Dryden, president of the
Prudential Life Insurance Company
and & power in numerous other fnan-
ciai institutions, was the star witness
o.. the stand yesterday. He had been
'subpenaed along with some other
financial leaders by the committee in
oTder to give them the opportunity to
tell their side of the story in connec-
ton with the conditions imposed on
builders desiring loans. Mr.. DRYDEN
admitted the five transactions in which,
it was testified, borrowers were re-
quired to take parcels of property in
Hoboken, Newark and other New
Jersey towns as part of loans. He de-
clared, however, that the property
deals were in every case proposed by
those associated with the borrowers
and that the Prudential had not made
the acceptance of the property con-
dition OF the loans. He did not know
whether the borrowers could have OBJ
talned the loans without taking prop
erty as part payment.
Charles a. Peabody, president of the
Mutual Life Insurance Company, and
Taurus e. Sutton, controller of the
Brooklyn Savings Bank, also appeared
at the hearing under subpoena, but
were excused until this morning
Loan Charges Repeated
Further evidence of the action of
fire insurance and other financial firms
IN requiring builders to take properties
Of dubious value and Liberty Bonds
ct par as part of loans was offered
by George Morrison Hubbard, manager
Of the mortgage loan department of
William a. White d Sons, As Cedar
Star.
Before the committee adjourned for
the day, Mr.. Untermyer announced that
.he committee would go to Buffalo next
Tuesday to conduct an investigation
into the building situation there. The
decision was reached, he said, as the
result of insistent demands made by
Buffalo civic organizations, the grand
Jury, members of the Legislature and
the Board of Education there. Build
ing in that city, was reported at a
standstill, he said, adding that the COM
mittee had had Investigators on the
ground for some time. The inquiry
there will last through the week if
necessary.
The reforms to which the fire in
surance companies agreed, and which
the insurance men have agreed to sup
port as part of the proposed legisla-
tlon on the subject, are:
A-That all FIRE insurance rates and
the manner in which the same are
made. and all the regulations and
practices of rating associations, Shall
be subject to the supervision and re-
view of the superintendent of Insur-
ance, provided that either party shall
pc accorded the right of appeal t. the
courts on the merits from any de-
elslon of such superintendent.
In this connection Mr. Untermyer
gald that the New York Fire Insurance
exchange is now engaged in revision
OF the rates, (which is expected to do
away with many of the inequalities
ana lnJustices of the present rates.")
b-There is to be similar right Of
review of the action of the rating as
tconilRuod on page three)