The New York herald., 1922-01-29
Will Fight State Control
and See No Obligation to
Public in Housing Crisis.
REALTY GETS ALL 1T BUYS
Lockwood Committee Hears
Amazing Testimony About
Companies Speculation.

After Samuel Untermyer, counsel to
the Lockwood legislative committee on
housing, had put into the record OF the
committees inquiry yesterday long
list of what he characterized as "cat
and dog" investments of the Continen-
tai. Home and other fire insurance
companies. showing losses aggregating
millions of dollars. it became increas-
ingly evident that the fire insurance
interests intend to exert powerful OPP
position and to marshall all their
fclces against the committees pro-
rcsed legislation for State supervision
of their investments.
This development was not altogether
a surprise to the members Of the COM
niittee. There have been indications
for months, in fact. they said ever
since Samuel Untermyer went to Eu-
rope last June. that the fire insurance
men, although apparently meeting the
committees wishes in the matter Of
the regulation and conduct Of the Fire
Insurance Exchange. would offer
strenuous opposition to any attempt
to regulate their alleged stock jobbing
activities.
Yesterday they appeared in the open.
put their cards on the table, and
through Henry Evans, chairman Of
the board of the Continental and di-
rector in several other large COM
panies. and Frederick C. Buswell.
senior vice-president. of the Home Fire
Incurance Company, announced that
they were unalterably opposed to any
State control Of their investments
whatever, except only that required
already by statute to assure solvency.
Di.reGards Housing Crisis.
Mr.. Buswell went even further. and
somewhat to the surprise Of the COM
mittee declared that he saw no obliga-
tion on the part of the fire insurance
companies with their tremendous as
sets to invest in mortgage loans in
order to stimulate building and meet
the housing crisis. He would invest
the companies funds in real estate
mortgages only where there was moth
ing better available, Mr.. Buswell told
the committee.
Mr.. Buswelrs statement that he saw
no obligation on the part of his COM
pany to invest any part of ITS assets
of 900 was made after Mr.. Inter
myer had shown to him an analysis Of
his own company's. investments cover
ing a period Of fifteen years which re-
vealed an average return OF only 3.74
per cent on stocks and bonds, as
against 5.34 per cent. from mortgages.
Senator Lockwood interrupted the
witness at that point to ask:
Then your statement Is the same as
that of the real estate owner: He
wants to get all he can in rent-all the
traffic will bear. You want to get all
the income you can on your assets
all the traffic will bear--without refer
ence to any obligation to help out the
sources from which you get your
money? Is that right?''
THAT Is correct" replied Mr. Bus
we'll
IT understood you further to say that
you would probably invest in bonds
and mortgages when they were more
profitable: when they would give a
better yield?"
mo precisely that; when there is
nothLp better available
insurance companies, getting large
part of its income from real estate,
are under any obligations to help this
market?" Chairman Lockwood pursued
IL think they give the real estate
owners all they get paid for"
what do you mean by saying you
give the real estate people all they are
entitled tor Mr.. Untermyer asked.
eve give them the service they pay
for. They buy a policy and we give
them the service"
Housing Separate Proposal.
But the fact that you make your
money on these properties you do not
think is any argument in favor OF your
helping out this crisis by investing
money in mortgages?" asked Mr. Inter
myer.
II think that Is entirely a separa te
matter and should be dealt with on its
merits" replied Mr.. Buswell.
Mr.. Evans OF the Continental did not
express the same lack OF sympathy
with the committees efforts to solve
the housing problem. but he was equally
opposed to any further State control OF
Investments. or legislation such as the
committee contemplates that would COM
pei an investment Of 10 or perhaps 20
per cent. on fire Insurance companies
assets in real estate mortgages. He
told the committee.
"In the first place. gentlemen. IL seems
70 me that our position is entirely diff
ferent from that of a life insurance
company or a savings bank. The funds
held by the life Insurance companies
are trust funds absolutely. They are
not In business to make money. We
are. We risk our capitalize stock
holders risk their capital for the pur-
pose of making money--nothing else
and IL is a very hazardous business.
They have the opportunity TO make
or lose money IN investment. That is
their business. lt is not the States
business any mo than IL would be 10
tell the ggrocer or anybody else In the
ma atural line OF business, in a competitive
line of business. that they should con-
find their In -cstments to this tha. or
THE other thing. We have mace money.
The figures that have been quoted hero
to-day, December 81. 1920. were prob
ably as low as any figures that you
had in the last five years.
The decrease n the value Of pre-
ferred stocks nd OF err securities of
that nature wAs Hu~. not to any bad
situation with ~t~cnce TO all OF them.
Some proved 10 be--we had a trying
time 10 go through and the situation
was bad In some of those companies.
but take them as whole. the reduc-
II