The New York herald., 1921-06-24
$10,OOO,OOO LOSSES
FOR MUTUAL LIFE IN
SPECULATIVE STOCKS
Charles A. Peabody, Insur-
ance Head, Admits Disre-
garding Legislation
of 1906.
MAY REACH Sill, 900, 1000
Mortgage Loans Reduced
1854 P. c. During Period
When Housing Shortage
Was Acute.
TILTS WITH UNTERMYER
Heavy Holdings of Illinois
Central Bonds Shown Recalls
Harriman-Fish Fight
for Control.
TILTS WITH UNTERMYER

Charles A. Peabody, president of the
Mutual Life Insurance Company oc-
cupied the witness chair yesterday be-
fore the Lockwood legislative commit
tee that on Wednesday had been va
Gated by Forrest F. Dryden, president
of the Prudential, and, like Mr.. Dry
den, underwent searching examina-
tion of the affairs of his company by
Samuel Untermyer.
But, unlike Mr.. Dryden, Mr.. Pea
body answered every question Mr..
Untermyer put to him. Occasionally
he attempted to alter the form of
the question, and occasionally he sue
ceeded in answering in his own
way, despite Mr.. Untermyer's efforts
to thwart him. The two engaged in
several oral tits in which honors were
about evenly divided. On one occasion
Mr.. Peabody admitted that he made
a bluff of being a lawyer" but added
that In that respect he was mot in
Mr.. Untermyer's class"
The outstanding feature of Mr.. Pea
body's testimony was his frank admis-
sion that notwithstanding the legisla-
ton passed in 1906 requiring life in
surance companies to dispose Of their
speculative stock securities within a
period of five years, and even con-
sidering subsequent extensions, the
Mutual Life still has large blocks Of
such speculative issues as New Haven
Railroad, Pennsylvania, Delaware,
Lackawanna and Western, Chicago,
Central. which the committees ac-
countant testified showed deprecia-
ton of s10,00o.000 from the book value
rs of December 81, 1920, and Of $14,-
100000 from the highest point at
which the stocks might have been sold
during the period between 1907 and
1921.
offered to Correct Figures.
At no time during his examination did
Mr.. Peabody admit the correctness Of
the committees figures. Instead. he Of
fered to correct them for the committee,
but mentioned no specific instance in
which they were at fault.
Mr.. Untermyer drew from Mr.. Pea
body an admission that many Of the rail-
road and other stocks the Mutual was
carrying could have been sold during the
first five year period to better advau-
tage than at any time since 1911. or sew
eral times since then at better prices
than they would command now. Mr.
Peabody made no attempt to justify the
companys carrying these stocks except
TO point out that the time limit set by the
Legislature had been twice extended.
He also admitted that he had appeared
in Albany and urged the first extern
sion and added that he was opposed to
any such limitation being placed upon
the companies.
This developed testimony concerning
the Association OF Life Insurance Presi-
dents, of which Mr.. Peabody is a men,
ber. and which he admitted employed a
manager who acted as legislative agent
and watched legislation In various States
affecting insurance companies.
And you influence such legislation,
do you not?" Mr.. Untermyer asked
mo, am sorry to say we don't in
fluence 1t very much" Mr.. Peabody re-
piled.
An echo of the memorable Hartman
Fish fight for control of the Illinois Gen.
trail was heard during Mr.. Peabodys
testimony. Mr.. Peabody, who Is direc-
tor of the Illinois Central and was presi-
dent during the period Of Government
control. was asked II the late Il. II.
Hartman did not control tho Illinois
Central when he became a director thirty
. years ago and whether at about the
same time that Stuyvesant Fish began
his fight to wrest the control from Mr.
Hartman Mr.. Fish had not also started
a fight to change the personnel of the
directors of the Mutual Life. The perti-
i~nce Of this phase of the examination
lay In the fact that the Mutual still holds
between two and three millions of bonds
of the Illinois Central. Mr.. Peabody said
that Mr.. Fish never had suggested to
him change In the Mutuars directorate
and that line of the inquiry was not pur-
sued further.
Mr.. Peabody's Attitude.
Mr.. Peabody replied to Mr.. Inter
myers questions with an emphasis and
infection that all the committee inter-
preted as meaning What are you going
TO do about TT" At times he INDUCED
in bit of self-congratuiation. as, for
instance, when Mr.. Untermyer asked
him IL he was not n director of the New
Haven.
mo, thank God - Mr. Peabody re-
Piled. That's one sin you can't charge
up TO me-"
WELL are you willing to tell us
about the ones that we may charger"
Mr.. Untermyer asked.
"Oh, yes. put them all in" Mr.. Pea
body answered with laugh.
Besides the securities already men,
toned. some of the other holdings Of the
Mutual, which Mr.. Untermyer insists