New-York tribune., 1921-06-02
''Sky the Limit as Fire
Risk Companies Cam
bic in Stocks, Lock
wood Probers Are Told
Abuses Admitted
BY Higi, Official
n. Y. Exchange Virtual
Monopoly; Rates Unre-
viewable; Combine Hit

Henry Evans, chairman of the board
Of directors Of the Continental and
two other Of the largest fire insurance
companies in the country, admitted
with great reluctance on the witness
stand before the Lockwood Commi ttee
on Housing yesterday that many OF the
practices OF the New York Fire In
surance Exchange constituted an abuse
Of power and were unreasonable.
He testified under examination by
Samuel Untermyer, the committees
counsel, that these practices should not
be allowed to continue and that the
power of fixing rates, now vested ab-
solutely and uncoptrollably in the ex-
change, should be made renewable by
the state.
Significance is attached to 1ir.
Evans's testimony in view Of the fact
that the companies he is controlling
power in are among the largest in the
fire Insurance field, and their influence
in the local exchange, with which they
ars all affiliated, is proportionately
large.
Funds Used in Stock Market
Mr. Untermyer also developed in the
course Of the testimony that as a re-
suit oil TIE littic restriction Gu tne
torn OF investment permitted, fire in
sIfance companies, the latoer v-cr.
reMolmg in industrial, oil ana other
hl%AlE speculate securities. Wit
uGEgeS declare rloA +ba
cSMe III and oNt o. the market day
a4tar DAY all throueh the year, that
the SKY was the limit" and that az
hl@h as LOCO transactions. It was init
mated. We're noted in some COMPANIES
in g years time.
y was alleged, too, that the auto.
matte SIlrhiElers' coIabine worked hand
~ glove with the Fire Insurance Ex-
chah"e,, fes3:tinG n practically b. r
the corebine.
Fir, Evans began his testimony Wit,
the remarls ttst ha had been inMtha
insurance business for folty-tllres
years and that he had began as run
ner &or the cashier % the Continental
rare Insurance Company, Of which he
IS now chairmen OF the board of li-
'ectors. Re said he also vas chair
man OF the boards of the Fidelity
phenlx Fire Insurance Company and
me American Eagle Fire Insurance
Company. lie also is interested in The
Farmers Insurance Company, OF Cedar
haplds, iowa. lie said that q number
o. stockholders of the Continental
were also large stockholders In the
other three companies, and that all but
1he farmers, concern We're members Of
the New York Fire Insurance Tx.
change.
Exchange Governs Rates
He himself, he said, owned 10000 Of
the 100000 shares Of the Continent ntaI
co'n panJ, the shares having par value
OF $25 each.
Mr.. Evans admitted that practically
every stock fire insurance company in
ms Jurisdlctlon was in the New York
exchange, and that in this respect II
was monopoly. Where there was no
discrimination between rates. he
added, the rate fixed by the exchange
governed.
81 have advocated," he testified.
Chat the state should have the control
OF the measure that is used in making
rate, but I don't believe that any
state officer would have the knowledge
that would enable him 20 make rates
properly or to judge whether this or
that rate is wrong. I think he could
say whether our schedules upon which
we fix rates are right or wrong"
"But you can see," questioned Mr..
Untermyer, "the possibility Of oppres-
sion and injustice in lodging the abso-
lutte, urreviewable and uncomfortable
power to make rates in any body whose
private interest is conserved by the
making of the rates"
ayes"
Not Opposed to State Review
"And you believe that that power
should be subject to governmental re-
view?"
II would not object to it personally ~
replied Mr.. Evans.
"You know that it is subject to re-
view III other statcs?" asked Mr.. Un-
terlnyer.
Eyes, and in the hands of wise maj,
It has done no harnl,' answered Mr..
Evans.
'Thcn I take it that you agree with
fCentlnued on Daae four)