The New York herald., 1921-06-05
DECISION BY TUESDAY
Bank and Other Official
Lenders May Be Hailed
Up for Examination.
DENIALS SCRUTINIZED
Lockwood PrObers Do Not See
Housing Aided by Unloading
Undesirable Realty.

Persons prominent in financial cir
cles were speculating yesterday con-
corning Samuel Untermyers plans for
tie Lockwood legislative investigation
e building conditions when the COM
nittee resumes it's public hearings on
Tuesday.
The executives of the large fire in
eurance companies are anxious to head
off further inquiry into their affairs.
They are concerned now over the like
lihood of legislative Investigation of
the whole fire insurance business.
While in no way admitting the neces
sity of such an investigation by any
expression of fear of the results, they
were going out Of their way yesterday
&c point out the disturbing effect such
an investigation might have upon
business generally.
1t is possible that some time before
Tuesday morning an agreement thor
oughly satisfactory to Mr.. Untermyer
and the members Of the investigating
committee will have been reached con-
cerning the reformation Of the New York
First Insurance Exchange. On the other
hand, following a conference between
the lawyer and officials of half dozen
representative companies on Friday. the
battle lines were pretty well drawn.
The committee and Mr.. Untermyer be-
ueve the interest earnings on the re-
serves Of large stock companies belong
to the policy holders rather than the
stockholders. The insurance men hold
that they constitute legitimate profits
to be reflected in dividends rather than
in premium reductions. This is the rock
upon which the pending negotiations
may founder.
Evans Leads in Negotiations.
The other considerations. including
The admission of mutual companies to
the local field without discrimination.
which were summarized in THE NEW
York HERALD yesterday, 1t was said yes
terday, can be met 1t was recalled that
Henry Evans, chairman of the board of
directors of the Continental and other
companies, and one of the powers in the
business, repeatedly declared before the
committee that personally he had no OBJ
lection whatever to the free admission
of the mutual companies. In addition
he characterized other practices OF the
insurance exchange about which the
committee complains as unjust and
Unreasonable" II Is due to Mr.. Evans's
influence that the present negotiations
were begun so that the assumption that
the companies are willing to meet the
committees demands on these points
seems fair.
The other point-the disposal of inter-
est accruing on reserves-is not so easy
of settlement In the testimony before
the Lockwood committee the aggregate
reserves for ten of the leading stock fire
fire companies In New York in De-
cember. 1920, was figured at S197 .0O0,-
900, giving an average income of 81 1,000,-
600 a year to each of these ten compa-
nies. The executives of most of these
companies, IL not all, hold that this reve-
nue. is legitimate profit, that II belongs
to the stockholders and that this theory
has been officially accepted by the Ma
tional Association Of Insurance Com
missioners. representing the public Mr..
Untermyer is adamant in his stand and
the Indications yesterday were that the
success of the negotiations instituted at
Mr.. Evans's suggestion turned on this
point.
1t Is possible also that when the COM
mittee resumes on Tuesday some life
insurance company officials may be on
hand. either as voluntary witnesses or
under subpoena. Mr.. Untermyer Is no.
In the least impressed with the charac-
ter OF the statements of bank and insur-
ance officials issued as n result OF the
committees exposure of the high interest
rates charged by this class of investors
on mortgages and building loans.
1000 Transactions on Record.
The committee did not follow this line
OF inquiry without having a fairly COM
prehensive knowledge of the situation
Questionnaires were sent 20 nearly 500
individuals and institutions and Mr.
Untermyer has n complete record OF up
ward of 1000 OF these transactions. In
addition. since the inquiry took this turn.
ne has been deluged with letters from
uncussessfuI borrowers which tell OF
conditions imposed by lending concerns
30 impossible OF fulfilment that the pros
pective builders we're forced TO abandon
their projects.
Yesterday there was n decided sentl-
ment among some of the members 90 call
some of these banking and insurance
officials before the committee with their
records and require them TO deny the
correctness OF the committees informa-
tion and point out II they can. cases dur
ing the housing shortage where building
loans were made without such conditions
attached
The statement, several times repeated.
that the borrower had been able on most
occasions 10 dispose OF undesirable prop
erty forced upon him by lending cor
porations as n condition 10 the negotia-
tion OF a loan the committee feels can
be disproved Not only that but some
members hold that the inevitable result
OF such a practice would be TO compel
foreclosures Of the mortgages for the
unpaid part OF the purchase price. thus
throwing the same undesirable property
right back into the same kind Of mar
ket 70 be unloaded upon the next unfor-
tunate borrower who happened TO appear
Another undecided feature of this
weeks programme concerns Peter Stadt-
muller, right hand man OF Robert r.
Brindeil. the labor leader now In Sing
Sing. Stadtmuler. convicted recently OF
extortion, wants TO reavel Hrindelrs
methods In the hope of getting lenlency
from the court. There is doubt as to
whether his story now is worth hearing
KILLED NY SURFACE CAR.