Evening star., 1939-02-16
Vast Capitalization
Seen in Insurance
Tieup With Banks
Arnold Voices Opinion
As Monopoly Group
Continues Study
BY JOHN C. HENRY.

BY JOHN c. HENRY.
Facilitated by interlocking direc-
torates, close working relationships
between the Nations greatest in
surance companies and banks has
resulted in enormous Capitalization
of power" Assistant Attorney Gen.
eral Thurman Arnold asserted today
as the Monopoly Committee con-
tinued its survey of the extent and
effects Of such intercompany con-
nections.
During the last three days the
committee has received evidence of
millions Of dollars of insurance
funds being deposited in banks
where officials also are insurance
company directors. In many in
stances, such deposits are made on
solicitation of the banking insurance
ofl1cial.
Emphasizing that there is no as
sumption Of improper use of this
power, Mr.. Arnold remarked that
the intimate business relationship
OF two dominant financial groups is
properly a condition for committee
notice and consideration as to future
implications.
$23,000,000 Deposit.
With David F.. Houston. president
OF Mutual Life, on the stand, the
committee received records showing
important portions of its bank de-
posits have ben placed with banks
with which Mutual's trustees are
connected.
Largest Of such deposits was one
OF $23 900 900 with Guarantee Trust
Co. of New York in 1887. Five of
Mutuals trustees are connected with
the Guarantee Trust.
In most cases, letters of solicita-
ton from the officer of both con-
Germs had been directed to the in
surance firm.
Mr.. Houston explained that in
cases where other circumstances
were equal, he felt it to be to the
advantage of the insurance company
to deposit in banks where officials
have an individual interest in the
welfare Of the Mutual Life.
I should very much prefer they
wouldn't solicit them," he added with
reference to such deposits
Charles D. Hilles, former Repub-
lican National Committee member
from New York. a member of the
board of New York Life and New
York resident agent for the EN-
ployers' Liability Assurance Corp,
testified briefly as to the extent of
New York Life business handled by
the assurance corporation.
Employers Liability Fees.
For the last IL years. 1t was
shown, Employers Liability has re-
ceived an average of $99,89 yearly
IN premiums from New York Life,
the 1888 fee being $182,658. New
York Life places the bulk Of its own
liability insurance. arising out of its
operation of extensive and varied
properties, with Employers Liza
bility.
Mr.. Hilles told the committee he
receives 10 per cent OF net profits OF
Employers Liability as his compen-
sation.
Turning to a slightly different
business relationship, the commit
tee received documents and testi-
mony showing Frank l.. Polk, one
time Undersecretary of State and
now a trustee of Mutual, had served
as one member Of a two-man COM
mlttee which decided on extension
and refinancing of a $4,000 mort
gage on his own home,
Mr.. Houston paid high tribute to
Mr.. Folks services for Mutual and
pointed out he could ref1nance the
nome mortgage at lower interest
elsewhere if he so desired.
Meanwhile, it was announced that
the Monopoly Committee and the
FEDERAL Alcohol Administration, act
ing jointly, have undertaken a
comprehensive survey of the dis
tilling and import sections of the
alcoholic beverage industry.
Questionnaires Circulated.
To this end, questionnaires have
been circulated through the industry
under direct supervision of Phillip
E. Buck, general counsel of F.. A..
who, In turn, will analyze and report
the findings to the Monopoly Com
mittee.
The questionnaires cover corporate
set-ups and intercompany relations,
manufacture and sales operations.
Financial arrangements are fully