Newspaper Page Text
MINTS OF IDE HI- PORT
Continued from ninth pin*.
the report eayo that President Frederick A.
Burnhaxn received a salary of $12,000 in II - as
couneel, and since 1895 his salary as president
has been as follow*:
»»•<*•» Jsv.OOO;if:jK> JS.V.PO
JJ,?7 nn.OOO lJMt<> 8T.700
MM Sa.WuilWl to Cult, usually £9.000
The salary of George D. Eldrldge. vice-presl-
CONTROL FOR POLIfYHOLDERS
LET THEM VOTE OR MAKE INDEPENDENT NOMINA
TIONS- TERM OF I)I HECTORS OF MUTUAL
COMPANIES SHOULD EXPIRE NOT. 15.
The committee declares unequivocally for the
full control of mutual companies by the policy
holders and advises that the terms of the pres
ent directors of such companies, eince they were
not elected by the policy holders, shall expire on
November 1."., after which date the holders
shall elect new directors. The committee be
lieves that policyholders heretofore have been a
nonentity so far as elections of directors end
trustees have been concerned. It would give
them the right to make independent nominations
and force the companies to inform them seven
months In advance of the election of the names
of the candidates.
The committee advises that stock Insurance
corporations be empowered by law to allow pol-
Jcyholders to vote for directors, and believes the
law Bhou!d give such companies the opportunity
to become mutual companies. The part of the
report dealing with these subjects says: "All
existing proxies, the committee holds, should be
MUTUAL AM' MIXED CORPORATIONS.
Of the fifteen life insurance corporations (exclu
sive of Mwimininl compani— a..d A»tero>l »ocle-
KrF> organized under the law.- t>f this State four,
the : Mutual, tho New-York Ute. the Mutual Re
serve and the Security Mutual, are purel> mutual
comDanW in four other?, the Manhattan, ■?''*„"
manfa. it,. Ham und the Metropolitan, alt hough
«ock corporation*, policyhoiden arc entitled to
vote for directors, hnd in each case, despite various
provisions as to qualifications and manner of vo -
Injr. the- poliryhcl.krf would, if they exercised their
richt !»e able t« control the corporation. These
«-omp;inK-.s while a bare majority in number rt-i.r.-
F <nt moiv than two-thirds of the - -landing in
ruram*. excluJdve of industrial policies, written
l>y tin; fiftofii co:ni>anl«>6.
Notwithstanding their theoretical right*, pol
icyholders have had little or no voice in the
management. Intrenched behind proxies, easily
collected by subservient agents and running for
long periods, unless expressly revoked, the offi
cers of these companies have occupied unassail
able positions and have been able to exercise
Ownership of th*» entire Ftock of an unmixed stock
corporation Kftrcely could Five a tenure more se
cure The most futile source of evils In adminis
trauon lia« been irresponsibility of official power.
However much this may bt cxptcted in the case
of absolute stools control, in that of a mutual com
i>«ny 1t procr-p<i«> from a -rant disregard of the ;
law of its br-i^g.
The end to be rttalned is to provide the means i
for a free and effective expression of the wish
of the policyholders at all times. and particu
larly in an emergency, and to destroy the ma
chinery by which in the past they have been ren- j
dered all but helpless.
The corrciif.ee Is sat!s*VJ that -.he risht of poV.cy
holders to cast th<ir rotes directly for their trus
tees should be retained, find that in case it becomes
Important that They should combine for the protec
tion of their interests they should not be tram- '
roelled ty any reference to geographical or ou*er
It lies also been suggested that all voting by
proxy should be prohiliit^d. This seems to the
committee to be en I.l advised remedy.
Not oniy shouM the polieyholder not b« disfran
chised by iepri\-ing him of the right to cast his
vote directly, but h* 1 sliould be privilege! to com
bine with other policyholders within or without
hN vicinage l.y civing proxies to trusted agents
who may either vote for Fpeoirttd candidates, or. If
desired, exercise their authority according to their
On the other hand, It 1 c the Judpmcnt of the .
committee that proxies should not only be revoca- J
Me at pleasure, but rhould be required to be given i
within two months of the election, and should bo i
valid only for that election. All existing proxies i
ehould be declared vo'd. i
But while a polioyholder «hnuli not be limited to j
voting in person or by mail. tl;*re seems to be no I
tuflici^nt reason why he Ghould not be permitted •
to vote in either Of thes* ways if be so ri<»«!res. j
hallo; pent by mall may be dmilarly authenticated.
*ir.o voting In this manner may property be confined
to th* use of forms of ballots furnished for the
PUBLIC LIST OF POLICYIIOLDERS.
Polley!iolo>rs shou'.d have appropriate mean* of
Kaminp who are their fe'.low policyholdere. bo that
they may readily communicate with e^ch other and
«^ert DombtasAfons. The management fhould name
its car.d.days. m that tbehr quail Scat inns for the
office of director may be discussed and appraised
Sin the Importance of orpositlcn duly esiimuted.
Jlh' 1 oPP^rt ur.it yphould be afforded for direct and
Irdfpeiidfnt nominations hy the poUejhOlden. Bad
the comr-arr pho;i)d be com; r.\>i to place In the
n»m« «f "Vr ry PfJ'ThoW** « ballot containing tho
vm , i ' " Olnlnf - cs - In order to avoid the poss;
fcility of an ottttnpt to forrprall opposition by the
?»W« a °? Of *22Sf? !ptte ? aUa candidateg and the
PuW-quent substitution of an inferior ticket, the
f,L« . b« hmited to those who have been
noTL'nated la a. prescribed mar.r.T.
With these objects in view, the following plan
It recommended: At least five months prior to
f . «'' ! *™r' 0n ;- llStB of P.oiicyholders having at
•cli *Z ' ° insurance in force, properly class
ified by States and countries, giving names and
addresses, but not the amount of insurance,
*hou!d be filed with the Superintendent of In
surance, and eimiia- lists ehoUd be open to in
cpectron at the home office of the corporation.
Lists, also open to inspect! >n of policyholdera
within each S'.ate and foreign country, should be
filed at the general rgencies of the company in
such jurisdictions. The above limitation es to
the amount of insurance will serve to exclude the
holders of industrial policies, who in the Metro
politan company number several millions.
Voting should be limited to those who have
been insured at least one year before the election,
and whose policies are still in force when the
•lection is held. The board of trustees or direc
tor* should annually nominate candidates to be
voted for at the next election, end should file its
nominations with the Superintendent of Insur
ance at least four months before the election,
together with a designation of persons to re
ceive proxies to vote for such candidates.
It should also be provided that any group of
one hundred members should be privileged to
make and file with the Superintendent inde
pendent nominations, together with names of
persons who will receive proxies to vote for the
candidates, at least three months before the
The corporation should be required at least
two months prior to the election to mail to each
policyholder notice of the election, together with
a suitable ballot containing the names of all the
candidates whose nominations have been duly
filed, with properly addressed envelope inclosed
for the return of the ballot.
OUSTING OF PRESENT DIRECTORS.
The present direct om of mutual l!f« Insurance
companies in this State have been elected without
the actual participation in their selection of any
contiderable cumber of policyholders. It It, Im
portant that an opportunity should be given to
the policy holders to elect entirely new boards of
directors us won as the provisions of law above
recommended can be made applicable.
To that end the committee recommends that a
special act should be enacted providing for the
expiration of the terms of office of existing di
rectors of such companies on the 15th day of
November next, and that the annual meetings,
which would otherwise be held at an earlier date,
should be postponed to that time. In this way it
Will be possible for lists cf pollcykoldera to b«
filed under the statute, for nominations to b* made
and for the policy-holders to cast uiti.i votes In per
son, by proxy or by mail, us they may desire
All existing proxies ehould be declared void so
that no proxies should b« voted at such election
other than those which are riven und«sr the statute
within two months prior thereto. The fli« election
Should be under the .-u..t i vision of the Superin
tendent of Insurance, »[.. should be directed to
appoint ir.sjM-ctors of election and se« that It is
conducted according to law. The new boards of di
rector? should divide their-relves ir.to two classes,
•so that thermfter • -hi. If of tho board may Oh
•looted annually and errors in matuigctuenl iiromiii-
A« the annual election In one of there ••■•inp'anles
would otherwise take rluce in Ap»lt. It is im
portant that this special act ehould be parsed Im
The - 4var»a£e* supr . - to reside In the control
■*)f a majority of the, etix-k in corporations where
irmrrhcV«-r« r>l«M are < ntitl«d to void have been
iiluatiuw: ..• :;ie excea*twa airou;jts offered for tl.e
rio-'U o; ti»t. i.^j'Jiinble Society, v,;s.ii dividend* liru
«;*4 l<* levea &tr ce&t annuidy u;oa a pax vain*
dent, has been raised from $9 400 In 1805. to '
$31,000 In 3004. The report adds:
Oeore« nrrnhan »r.. the brother of th» Presi
aeluftcame counsel in 1895. His annual salary
from 1896 to IS9S was J9,00w. In 1899 he bacem*
oour-el and Second Vlrr-Pre.«M-nt with a salary
of SU.W In Il» an.l JH.700 in 1900. and as counsel
received 111.4 M In 1901. In l? 02. while Mr. Mable,
former! v I»rei«id«>nt of the Northwestern, served as
Fvond Vlce-Pre*id#nt of the Mutual Reserve at a
Kilarv of fls O«X>. Mr Burnham as counsel and Third
Vice-president received 511.560. Since 1900. as coun
sel and Second Vice-President. he has had an an
nual salary of J17.000. G«orB« W. Harper, treas
urer was employed In the claims oppartmeni
from is? 4 to IS9S. at varying salaries, and since (
18S0 has been treasurer. receiving annually $6,500.
of SlOO.OOO, and the business of which has been
conducted upon the most explicit representations
that the society wan committed to the mutual prin
ciple. Repeatedly have its officers stated under
oath that Its stockholders had no interest in Its
surplus, and yet the purchase by a prominent
financier of KOTO of its 6tock in par value at a price
of $2,500,000. depite an unequivocal statement of the
absence of selfish Intention and the Immediate
transfer of the purchased shares to distinguished
trustees under a plan inviting the co-operation of
pollcyholdera in the choice of directors, awakened
no little public protest, and was viewed as a matter
of serious concern by other financial Interests.
The manner in which the stock of the Provi
j dent Savings was acquired some years ago,
largely through the use of the company's own
funds, and the efforts to secure a control of the
Banker's Life, as a prominent feature oF an
investment company, point clearly to the
dangers of stock ownership, with exclusive vot
ing privileges, as Inviting speculative purchases
with an eye to the benefits which may directly
or indirectly flow from the control of the busi
ness and property of such corporations.
The policy-holders, while having only contractual
rights, are not in a position to withdraw without
loss In case the control of the company Is abused
they have engaged in a venture and contributed
their money for the success of a corporation with
out prospect of return unless they continue their
policies. Jt Is but just that in view of the peculiar
nature of the institution they should be admitted
to a voice in the selection of directors, and that
this should be accomplished by direct permission
of law, without compelling those who are desirous
of giving them this right to resort to the indirect
method of a voting trust, which necessarily, under
existing statutes, is a temporary expedient.
While the constitutionality of giving to policy
holders the right to vote for directors in stock
corporations without the unanimous consent of the
stockholders has Dot specifically been adjudged, the
recent opinions rendered by the Appellate Division
of the Second Department in the case of Lord vs.
Equitable Life Assurance Society favor the con
clusion that such a law would be sustained.
VOTES FOR STOCK DIRECTORS.
While the determination of its validity must
necessarily be left to the courts, the committee
believes that all doubt of legislative intention
should be resolved by amending the law so as to
confer upon the directors of stock life insurance
corporations an unmistakable authority to grant
to policyholders the right to vote for directors,
and thus to have that voice in management to
which their preponderate interests justly entitle
It seems to the committee that an amendment to
the Insurance law should be enacted, giving to the
directors of life insurance corporations with capi
tal flock authority to confer upon policyholders
the right to vote for directors with me concurrence
of a majority of the stock, and the committee so
recommends. Whenever the voting privilege shall
be given to poKcynoMers, statutory provisions for
open lists, nominations and balloting, as In the case
of mutual companies, should become applicable.
RETIREMENT OF STOCK.
Not only should stock corporations be permitted
to give to policy-holders the right 10 vote, but an
opportunity should be afforded for conversion Into
purely mutual companies. The committee does not
believe that this conversion should be made com
pulsory, but the law should not stand In the way
of its accomplishment upon a just basis. If desired
by trie parties In interest. After the stock has
served its purpose by providing a suitable guaranty
at the beginning of business ana the company has
reached a Etage where without injustice it can bo
retired and the company be managed exclusively by
and In the interests of the policy-holders, this object
should be attainable under legal sanction.
In other words, the law should provide that the
stock may be retired upon an equitable plan pro
viding for the payment to the stockholders out of
the accumulations of the company of such an
amount as may fairly be taken to be the value of
the Block with reference to its par value, the divi
dends lawfully payable thereon, and the eventual
right, if any, of the stockholders In any accumula
tions of the company, and without impairing the
eventual rights or the policyholders in such accu
Provision should be made for the consummation
of the plan only after it shall have been adopted by
a majority of the directors and approved at a
meeting of stockholders called for the purpose by
a vote representing the majority of the stock, and
shall also have been approved In writing by the
Superintendent of Insurance and by a maioruy of
th« policy holders voting at a meeting of policy
holders called for the purpose under the supervision
of the superintendent and at which policyholJera
snail be entitled to vote in person, by proxy or by
mail. The superintendent should be instructed to
withhold his approval unless the company upon
reincorporaiion and after the retirement of its
stock under the proposed plan shall retain funds
sufficient to maintain Its deposit with him and to
meet ail liabilities. Including its legal reserve, ac
cording to the valuation of its policies and ell Bur-
Bias funds and accumulations, save the amount
agreed to be paid to the stockholders.
CHANGES IN FORMATION.]
Knell of Assessment Companies
At the very beginning of Its report the com
mission advises the abolishing of assessment or
co-operative companies, and advises that mutual
life Insurance companies without capital stork
be formed. On these subjects the report says:
Under cxlstliiß law a mutual life insurance cor
poration without capital stock cannot lie organized
cave for the purpose of - transacting business upon
the co-operative or assessment plan or upon the
so-called "stipulated premium" plan, or aw a fra
ternal society. In other words. Article II of the
insurance law. under which life insurance corpora
tions transact business upon the ordinary level
premium basis with full legal reserve, seems to be
inapplicable, unless the company has a capital
stout. Prior to 1849 the business of Insurance had
Up<tj transacted largely by corporations created
under special acts
We have in this State, exclusive of assessment
and fraternal organizations, mutual life Insurance
companies created by special act, mutual life In
surance companies subject to the provisions of
Article II through relncorporatlon and stock cor-
I>orations, either formed under the present Insur
ance law or previously created; but there is no gen
eral provision or plan for the organization of
mutual level premium companies
It would appear to be an anomaly in the law that
ii life insurance corporation may be formed upon
a purely mutual basis to transact business as a co
operative or assessment concern without adequate
reserves, while a mutual company la not permitted
to be formed in such a manner that a full re
serve through a proper valuation of its risks may
be required. *
Without going bo far as to prohibit the further
organization of stock corporations, it would seem
to be wise not to prohibit, but rather to encour
o*'-,tße i formation of mutual companies upon a
full legal reserve basis, provided suitable guaran
tees are given of the bona fides and soundness of
MUTUAL. COMPANIES WITHOUT CAPITAL,
; Th^.1 onlmm ' ' therefore recommends that Article
of the Insurance law be so amended as to per
mit the ruination thereunder of mutual corpora
tloM without capital stock to transact the bSsinel.
it, it ,* L( *".<w(» to be insured upon their lives an*
; Section 200. permitting the Incorporation of
companies upon the co-operative or assessment
plan, should be amendsd so as not to permit such
comp.mei to bo incorporated in the future, and
forel 8 n compan.es of this sort not already
transacting business in this State should not be
permitted to enter the State.
«£™Hn l .n n «r ri °r IoM u P° n ?hM« "who 1 have'
anco and are ur/n' C H V * •«>>*««« 'or cheap Jnsur
which in tferm? le . to pa y tho readjusted rates
mllnded course of tlme must inevitably be de-
I .*, L'* on account of the serious injury which
I hok£r£ Ti lKht be , inflicted upon innocen? poii v
li, « i .v th * co , m I 1I 1 " ltte V '" not prepared to recom
mend hat existin X domestic assMsment or co
rJ,n, r fn H% corporations should be Prohibited from
, Z B J, r r bus ' n 787 8 - an" that foreign com
panns h.mofore admitted to transact business
a .(hut the 8 .11 upon this basis should be debarred
laereiroxo. <«i lU coouultu* U C«cld*(XJ^ ut uu«
NEW-YORK DAILY TRTBUNE. FKTPAY. FEBRUARY 23. lOOfx
WHAT THE COMMITTEE THINKS OF THE STATE INSURANCE
Practloally It may be said that In the case of these large companies no serious effort
to insure the correct administration of their affairs has been made until within the last
year, while misleading reports, conveying the impression that such matters had been the
subject of investigation, have from time to time been presented officially to the legislat
ure and distributed as pubiic documents, thus placing upon the management of these com
panies transacting their vast business throughout the world the seal of official approval.
Most of the evils which have been disclosed by the investigation would have been
Impossible had there been a vigorous performance of the duties already laid upon the de
partment, a vigilant watchfulness in the interest of policyholders and a courageous ex
ercise of the powers which the statute confers.
It is apparent that no suitable step* have been taken to insure thoroughness of the
examinations with reference to official fidelity or so to direct, by special instructions, the
course of inquiry, as to safeguard the interests of policyholders by an exposure of waste
ful expenditure or corrupt practices. The final responsibility for this neglect, however,
must rest with the Superintendent of Insurance.
Superintendent Hendricks and his predecessors seem uniformly to have relied upon
the reports of the examiners, and have permitted them and the deputy in charge to con
duct the examinations in their own way, practically without direction or interference.
opinion that new corporations should be formed
or admitted within the State to do business of this
It Is also the opinion of the committee that run
opportunity should be afforded to existing com
panies, which have accumulated sufflc ent re
sources, to retncorporate under Article 11 or me
Insurance Law. (subject to a requirement for full
WMTW, with reference to policies issued ptt 'V* r
prior or subsequent to such reincorporation. me
law should be amended aocordingljr.
The "Stipulated Premium 1 Law (Article Xof the
Insurance Law), now practically of no importance,
but still furnishing legal authority for the forma
tion of corporations upon an unsatisfactory plan
and also for the reincorporation of assessment Rr
cociations, with a pretence of adequate reserves.
Should be repealed.
OIWEHS SENT TO FIELDS.
Jordan's Instructions to Agent on
Watch at Album).
Some spicy Information is given in the report
regarding the activity of Andrew C. Fields as a
watcher of legislation at Albany while he was In
charge of the Mutual Life Insurance Company's
"supply department." The report says of Fields
For many years the company maintained under
hi* care a house at Albany, and through him and
his agents a clo*e watch was kept upon the pro
ceedings of the legislature. The rent of this house,
the supplies there consumed and the wages or tne
cook ana other servants w«-re charged to "legal ex
penses." Fields kft for parts unknown soon alter
the committee began Us hearings, and it has not
been able to procure his testimony. It appears,
however, that he acted also for the EQUltabie. and
from itu records have been produced a series
of memoranda of instructions sent Fields by
Thomas D Jordan, its Controller, whose where
abouts the committee has been unable to ascer
tain, although It has madf diligent effort to do so.
It may be supposed that Fields s work on behalf or
the Mutual was at least as conipreh«nBive as In
the case of the Equitable, and hi« Instructions
from the latter show an exceedingly wide range of
supervision of matters of legislation.
ThPre were general instructions and also numer
ous speoinc commands during the session directing
that particular bills should be opposed, "killed
A memorandum sent to Fields by Jordan on
March 25, IS9B. was the following:
I desire to call your attention to the following
blllß, boih of whl^h are objectionable to us:
Bill 709. introduced by ilr. Sullivan, to Incor
porate the New-York water and Electric Power
company and to define il» powers. This has been
amended and recommitted.
BUI (Senate) inirouced .March 18^ No. 434, Sena
tor Munzinger. to incorporate the .New-lork \\ aU-r
and Electric Power Company and to derm« Its
powers, which came before the Committee of the
Whole of the Senate.
Other memorandum!, with their dates, are
the following: Feb
Please note the following three bills recently
introduced In the legislature which we do not
Assembly, No. 630. by Mr. Ten Eyck, referred to
Committee on General Laws, an Act to amend
the Block Corporation JUaw t>y inserting a new
section to be known as Section 67 In relation to
furnishing of statements of lots of stockholders.
Assembly, No. 712, by Mr. Hill, referred to Com
mittee on Insurance, an Act to amend Section
(A of the Insurance Law In relation to actions and
proceedings against insurance corporations.
Senate, No. 448, by Senator Ellsworth, an Act
to amend the Insurance Law In regard to actions
and proceedings. Fame as Assembly No. TS2.
April 4. 1899.
Senate, No. Wo— Mitchell. This bill should be
killed. Act provide* that whenever surplus of any
domestic life Insurance company shall exceed
8 per cent of the amount of insurance out
standing such excess shall be distributed
Jan.. 20. 1902.
Please note that we are vigorously opposed to
Senate bill Int. 150— Malby. I want to keep track
of this measure until It Is killed.
Jan. 31, 1902.
I desire to again, call your attention to Senator
Malby's bill. No. 16"». We are opposed to this
measure tooth and nail.
Feb. 14, 1906.
We are of course decidedly opposed to Mr.
O'Neill's Assembly bill Int. 63?, amending the
Insurance law in relation to the distribution of
surplus of life insurance corporations.
Following the memorandums, the report says:
Fields for some time was a member of the Demo
cratic State Committee, and for many years has
taken an active part In the politics of VVeatchester
County, but his work in connection with legisla
tion was done quietly and without attracting much
attention to himself. At times members of the
Senate, while serving on its Insurance Committee,
lived at his house In Albany, which the Mutual
maintained. This was true of Senator William J.
Oianey, and In IKB. during his last term, of Senator
Charles P. McClelland. Mr. McClelland testified
that he consented to be Fielils's guest at Albany
because of a friendship of long standing, and that
lie knew nothing of any effort on Fields'* part im
properly to influence legislation. Mr. McClelland
wan under retainer of the Mutual for some years,
and rendered services relating to proposed or pend
ing legislative bills, but this was not while lie was
a member of the legislature. A former clerk of
Fields, on his recommendation and that of Mr.
McClelland, was appointed In lS9t> «n examiner in
Hi" State Insurance Department, and still con
tinues In i=uch service.
The testimony taken by the committee makes it
abundantly clear that the largo Insurance com
panies systematically attempted to control legisla
tion In this and other States which cojld affect
their interest*, directly or indirectly, and that in
this effort Fields, who concerned himself mainly
with this State, played a most Important role.
The three companies divided the country, outside
of New-York and a few other States, go as to avoid
a waste of effort, each looking after legislation in
Its chosen district and bearing its appropriate part
of the total expense.
TOO FEW CITY STOCKS.
Insurance Men Think Restriction
Attention In insurance circles seemed centred
last night on the Armstrong recommendation
that stock Investments, except in stocks of mu
nicipal corporations, be prohibited. Such insur
ance official* as cared to talk appeared to share
the belief that there was not enough municipal
stock available and that some compromise must
perforce be effected.
Oscar S. Straus, a trustee of the New-York
Life, while declining to discuss the report in any
shape or form, made the following statement
apropos of this phase:
On general principle* I am In favor of whatever
win secure the greatest amount of safety consist
ent with the proper conduct of the life insurance
business I think the restrictions should follow
closely the savings bank law. and that publicity
and examinations should be along the lines of those
in vogue in the United States national banks
i II i 6i 6 limitation or investments, however, there
Is the danger of groins too tar and of strangling in
surance commercialism. There may not be enough
municipal bonds to go round. The present Invest
?ri»*r.Sl th V ™« , leadil « insurance companies
ce t F e "> 8°. O<3 -, /«"■ a « I know the investments
of the New-iork Life are beyond crlUcism. They
are as good, In my opinion they are better, than
those of any flnancia . institution in the world.
George W. Perkins declined to make any com
ment on the report. Stuyvesant Fish, at his
home in Garrison. N. V., while saying that he '
had -perused cursorily the evening newspaper
accounts, had nothing to say "vaper
th^t h rf, lx l e in Lake vllle. Conn., it was said
that District Attorney Jerome was absent.
Neither Senator Chauncey M. Depew nor Jus
tice £ K. McCall could be reached up to a late i
The executive committee of the Equitable held !
its weekly meeting yesterday. Paul Morton pre- I
Biding. The committee held a five hours' .ses- '
sion. It was announced afterward that only
routine business had been transacted. It is said
that the committee discussed the names of offl- '
cere to be elected at the annual directors' moot
ing on Wednesday, and that it Is possible the
present offli are slated for re-election I
Charles E. Hughes, of counsel to the Arm- '
strong committee, was in town last night He •
would make no comment on the report, however i
In view of the Armstrong report and the death i
of ex-President McCall it seems to be agreed !
Out New-York Life trustees and others "lave i
no alternative but to sue themselves for the i
recovery of certain moneys unaccounted for or !
alleged to have <>c-en paid out wrongly. Mean- i
while, publication of the terms of Mr. McCali'B i
will it fcwaUwl with ir«ai IaUMM, '
K. E.M'CALL TWICE PAID?
Report Say* Justice Got $70,000
from X. Y. Life on Judgment.
[By Telegraph to The Tribune]
Louisville, Feb. 22.— "The Courier-Journal"
gives out to-day the report signed yesterday
by State Insurance Commissioners Henry R.
Prwwttt, of Kentucky; Zeno M. Host, of Wiscon
sin; Thomas O. O'Brien, of Minnesota; J. L.
Pierce, of Nebraska, and Robert E. Folk, of
Tennessee, appointed In September last to In
vestigate the affairs of the New-York Life In
surance Company, in which the direct charge Is
made that E. E. McCall received more than $70,
000 on a judgment of half that sum.
That section leading up to the use of E. E. Mo-
Call's name reads as follows:
The company has paid money for political con
tributions, and has charged such items to other
nciounts. A specific example of this is found m
the payment on February 18. 1000. of $35,555 69
to E. E. McCall for the purpose of paying judg
ment secured against the company by James
Allison. This amount was charged to the real
estate sinking fund.
On March 21. 1901, E. E. McCall got $37,572 68.
The warrant for this payment stated It to be
made by the authority of the third vice-presi
dent, who claims, however, that this statement
was an error, and that he was not In the city of
New-York on that date. Upon looking up this
matter we find that these payments were made
for the same purpose, namely, for the satisfac
tion of the same Judgment. Upon further in
quiry it was stated by the former president that
the first payment was used for the New- York
Life's contribution to the campaign fund."
John A. McCall. former president of the N«w-
York Life Insurance Company, who died this week,
had a brother. Edward E. McCall. who li a Justice
of the Supreme Court of this State.
FIND $2,000,000 SURPLUS.
Synopsis of Commissioners' Probe of
N. Y. Life Made Public.
St. Paul, Feb. 22.— The following synopsis of
the report of the Investigation of the insurance
commissioners of five States into the affairs of
the New-York Life Insurance Company was
given out by the Minnesota Insurance Depart
ment to-day. In the main the commissioners
of Minnesota. Kentucky. Wisconsin. Nebraska
and Tennessee will report that the figures in the
last annual report of the company have been
verified to the extent that the J2.000.000 surplus
claimed actually exists.
The report will contain four principal criti
cisms against the way the company is doing its
business at present.
The deferred dividend plan will be condemned,
the investment of too great a proportion of the
assets in bonds will be deprecated; greater pub
licity in certain figures of the business will be
recommended, and a more representative form
of government will be advocated.
As to deferred dividends, the objections are the
same as have been ventilated in other recent in
vestigations. With regard to the bond invest
ments the report will point out that the company
has $317,000,000 invested in securities of this
nature, as against only $2r>,000.000 on mortgage
loans. The bond investments have been mostly
through syndicates which have consulted their
own interests before those of the company. This
form of investment, the report will say. is too
great a temptation to the officers of the com
pany to make speculative loans on their own
accounts with funds belonging to the policy
As to publicity, the report will recommend
that the time of the acquisition and sale of
bonds be published in the annual reports, and
also other information of definite nature regard
nig the investments made by the officers of the
lunds of the polk-yholders.
lhe recommendations as to the representative
form of government go into considerable detail
with suggestions as to how it can best b« ac
The investigation into the affairs of the com
pany has been jointly made by the five commis
sioners, and has been in progress slnoe Septem
ber 22. 1905. Nearly thirty men have taken part
in it continuously, and twenty men have been
engaged In appraising the property of the com
pany, which Is found to correspond closely with
the valuation placed on it in the last annual re
The report is a voluminous document, com
prising eighty printed pages and contains tables
and statistical material relative to the affairs of
the company for the laat ten years.
TAKES FATAX DOSE OF MEDICINE,
Business Man Dies After Using Entire Bottle
of Prescribed Tablets.
James G. Reynolds, proprietor of a cleaning and
dyeing establishment at No. 260 Fulton-st.. Brook
lyn, died after swallowing half a bottle of tablets
which a physician had prescribed for him. Rey
nolds's death was not reported to the police until
late Wednesday night, although his death had oc
curred early In the day.
For some time Mr. Reynolds had been Buffering
from a nervous disease and had been taking the
tablets In Increasing doses In the hopo of findine
HUH Ue X * ednes<1 *> morning his son heard him In
the bathroom of their home and finding the doo"
!o -kcd kK-ked In the glass parels. Reynold*
St., was the bottle. Dr. Pool, of No 154 1 Clint™
hefp He died soon after. It la su™po,ed ffi
whule temporarily crazed by hla ailment ha had
taken the contents of the phial. m "" cnl n « «aa
WHY M'KINLEY BECAME A MASON.
Told by General Kingr at the Masonio Dinner
at the Savoy Last Evening.
General Horatio C. Klngr. at the Hotel Savoy last
nlarht. at the Masonic dinner to tha Sovereign
Grand and Grand Conslßtor.es of th. Ancient and
Accepted Scottish Rite by the Conslstorlea of the
Metropolitan District, told how President McKln
ley became a Mason. Mr. McKinlay explained It
to General King a. followi:
the first opportunity. Joined the. order at
COLER TO REFORM HEALTH BOARD
Borough President Color 9 . ,w
Kin*. County M. dl JtcJy. * 1, "Xare^ ffil
to have the Brooklyn Health n !! prepare a bill
U.hed on an independent b«i. .nS "" Mtat>
or health appo.nfed^r'^^rorß^yr
New- York, and give him the sami «« ' lhe clty ot
LASH FOR HEXDRICKS.
XO LACK OF POWER.
Committee Finds Xo Real Effort to
Get at Abuses.
Caatigatlon Is administered with an unsparing
hand to Superintendent Henrtricko and the State
Insurance Department To Its door In la! 1 the
fact that the abuses brought out by the Inves
tigation have been allowed to continue and ac
The Superintendent of Insurance, the commit
tee finds, has ample power to stop the- violation
of the laws it has unearthed, "but the »u
pervlsion by the department has not proved a.
sufficient protection against extravagance anl
The committee's chief recommendation as ti
the Insurance Department Is that It do ita duty-
After reviewing the Insurance laws. th«* report
The matters necessarily presents! for considera
tion are those relating to the authority of the su
perintendent, and tue manner In which It has been
construed and exercised, with particular reference
to abuses In the management of life Insurance
SUPERINTENDENT HAS AMPLE POWER.
It would seem that the superintendent has had
ample power, and has been charged with the cor
relative duty, to Inquire into and to ascertain the
transactions of Insurance companies, to the end
that abuses may be exposed and correct adminis
The scheme by which the superintendent may
require detailed written statements, duly verified,
as to any matter of corporate business, and may
supplement these statements by an examination of
the company's books and of the officers and agents
under oath, would appear well calculated to pre
vent the secret growth of Improper practices.
Not only through the visitatorial powers of
the superintendent were a wholesale publicity
■nd the consequent enforcement of the law to
be assured, but the * superintendent was also
charged with the duty of recommending to the
legislature annually such amendments to the
law as in his judgment were needed to correct
evils found to be without the purview of exist
But the supervision by the department has not
proved a sufficient protection against extravagance
and maladministration. Annual statements from
the corporations have been received, filed and pub
lished, but In many particulars without sufficient
detail to exhibit the real efficiency or honesty of
Nor has there been suitable effort upon the
facts actually reported to detect and expose
evasions of departmental requirements and the
resorts to artifice and double dealing In order
to avoid a true disclosure of the companies' af
For the most part a critical examination of the
reports bo made seems to have been neglected,
and the verification of the annual statements has
been left to examinations conducted at irregular
Intervals. No rule seems to have been adopted with
reference to the frequency of examinations. Thus
the Security Mutual Insurance Company has been
examined four times since its relncorporatlon In
1898, at its request and apparently with no other
object than to enable It to use the department's
certificate in support of its annual statement, while
the Provident Savings Life Assurance Society has
been examined only once In the past ten years
(1837). and It would seem th<tt this was the- only
examination In its history.
The Metropolitan Life Insurance Company has
also been examined only once during ten years
that is. In 1900. The advisability of frequent exam
inations Is sufficiently Illustrated by the case of the
Washington Life insurance Company, where It
appeared on the examination In 1904 that during
the interval of four years since the prior examina
tion it had in it least two annual statements de
ceived the department by glaringly false returns of
its existing liabilities, and that Instead of having
an alleged surplus of considerable amount Its capi
tal was seriously Impaired.
In connection with this company It may be noted
that a more careful scrutiny of the reports to the
department of lapsed and restored policies would
have led at an earlier date to the Investigation
which appears finally to have been Induced by out
EXAMINATIONS TOO LAX.
Infrequent as have been the examinations of
particular companies, they would still have availed
In many Instances to disclose the conditions made
apparent by this investigation, had they been rigor
ously conducted with the purpose of exposing what
ever abuses existed.
It la said, however, that It has long been th«
tradition of the department" not to concern itself
with a close supervision of the management of life
insurance companies apart from the ascertainment
of their solvency. It Is urged with much insist
ence that it is Impossible for the department to
manage the companies, and that, despite Its sweep
ing powers. It performs its function if Its investi
gations go to the extent of determining that th.
companies have sufficient assets to warrant their
continuing in business.
In this view, whether the administration of a
given company was economical, whether excessive
sums were expended in an unjustified race for busi
ness, whether officers were availing themselves of
official relations to advance personal fortunes,
whether relatives and favorites were being enriched
through exorbitant commission contracts, whether
the companies were confining themselves to the
business for which they were chartered or were ex
tending their operations Into other fields through
the control of subsidiary organizations, whether
books were regularly kept and amounts disbursed
were accounted for by proper vouchers, whether se
cret accounts were maintained for corrupt pur
poses, whether directors did their duty or simply
acted as the appointees of an autocratic manage
ment, whether pollcyholders were obtaining their
proper returns through just methods of distnbu
lon would tbe questions with which the Superin
tendent of Insurance would be under no dutr to
™n C v 9 h n a,i hl ?rV h * Were satisfied that the com"
pnnj had abundant resources to meet al Its liabil
ln^ln?°h^M rOra tlrn * to tlm « ma to the super
intendent his examiners are not consistent with
so narrow a conception of official duty In soma
ZT, n * U^ qu< " tlons nave been closely examined
andJn others, as. for example, that of" the V
hSZIZr/?"? L! ? *»«*'« "on sertou£ JhSK
k, W JBelyJ BeIy l"l "' et! '* nor «l- But the position taken
by the. department with regard to the mxtVnt «f «£
as contrasted with the facts now- shown •7333*"
Of the examination of the Mutual In 1908 the
committee says, after quoting the report of the
NO REAL EFFORT TO FIND ABUSES.
In striking contrast with this official reDort i« th
actual course of the examination which preceded it
as disclosed by the testimony taken by your com
agr- smarts sj&'kb sEsSS
attain the amount paid the so? of the tfre^den?
attempt was nvide to ascertain whether^™
had been spent properly or Improperly ThT fly?
tha' a disbursement was approved by the stimn
of the committee on expenditure. J. * stamp
sufficient justification^ f" P ?h« parent" »
the question whether thY m«unt\ r "",? f
cealed pavm* nts under vouchers for mr>^ * Lon "
tfi 9 enormous totals disbursed in th« tte ,°' an<l
as without significance. alwnUon or were treated
No officer, or committttman », -___.
i £•&- < £S&*£
I Of the report on the- examination of th« New.
York Life In 1904 the committee «ay.:
to^ny^f^hV^K^Vf^hrc^ ° n# •*«
have attracted attention in the n«,' °? 1 P a ny which
mention wa* made of the ext-^ord?^ fn( " ll T r - No
for legal expenses or of AndrV- w a »T payments
work Although the treasury dl B«?rmB «?rm2 n . a ? d . h!a
was before the examiner non. r*".' Udjrer
naturally sugge.ted by the account. '£* ln *?™~
profits were pro.eeuted. and l the iJani .^ dlca f e
lg n n°o n r;^ ger " MOUrUI " S®j*s S^Sa o?
ve^VTh^a^u^tUmen^^e^a. 11110 ? —*>
the proceedings by which tr™«2*»^~*.-4 • aIJ ot
of the company werl concealed fV«Im ?»* n<l lnf «"'<»«t-
The Equitable Ll> \ss^r* n^. hTu ' re P° rt»
through the New-York office and n.™r, Cl i n ''"
complete examination. Put itC T»^fun^t '? b * a
ter I. sufficiently si own by the fact th« .V. Oh * r^'
of the examiner falls to JlvS the" M«ht-2. • r f. port
tlon of the existence of any of the £ hi. -a 1a 1 lnt » ma *
rerently disclosed, have outraged publlo 11^'
There Is no hint of extravagant «xpendff?,l ment -
Irregular accounts, or of the nanlpuH Uls*«U I5*« ° :
E<?«-ate Investments for the profit 1 of »," «m Cor *
I The palpable evanlon of the law *„!.?„. mm ° et>
annual statement in the makln* n t \XL mln * i h »
"end of the year" loans. .Uhoign known STm? 11 * 11 * 1
amlner. was left unchallenged * now n to the ex-
The first criticism of the 'management » w.
company was in the report of th« ..fnTiJl 1 °.f. f thls
June. IMB, after .Ilss.nV.lon. »mon*r Ft* rl "if m*««»«m *««»« In
brought censurable practice, *« VhVfiwte JJg
# TH i gndlilo^ljj.^ ggUjU^jha. bffi
quire into the Irregularities now exposed or »
compel reports which would have disclosed thai
No substantial amplification of th« powers <»•»
thorlty of the department seems necessary. °*
It Is recommended hereafter in thii report —
the superintendent be empowered to exaiuino ry«£
sons not officers or agent.** of the corporation 5£
may be deemed to possess material Information^ ?.
Is also recommended that the companies be reoriri*
to furnish additional information In their ann -«i
statement, but such Information could haT«TI2
required by the superintendent. "°
THREE WILD RUNAWAYS.
Trco .Persons Hurt— Horse Killed^
Many Narrow Escapes.
Scores of persons had narrow -scapes, two ■»,—
sent, to the hospital suffering from severe injuries,
two vehicles were wrecked and a horse was kUj«i
In three exciting runaways yesterday.
A team attached to a coach In which were tw%
persons took fright at 2d-ave. and Kd-st., dashlM
through to Avenue A and going north at a terrta
rate as far as th« Astoria ferry house, at SSd.n.
Several hundred person* were waiting outsld* a
ferryhouse. The animals crashed Into a corner <*
the ferry office, smashing the carriage and throw.
ing the driver from tha box.
The horror stricken persons who witnessed tm*
mad flight of the horses thought that they won!-!
surely plunge Into the river, but the driver with
few dexterous tugs on the lines, managed' to 7*2
them slightly to tha left, and the .'vryhJ-.
checked their flight. "Tjaou**
The man and woman In the carriage said —--
( were Mr. and Mrs. J. H. Lander, of No. C 3 £«
Ington-ave. When a reporter made Inquiry at t^
address It was learned that FUner Levine a «!»
estate dealer, with an omce at ■* 125 Broad*!?
lived there. •, : "*"»•*.
One of the horses was so badly injured that P..
trolman Nelson, of the East Bta-.t. station. -- .
mened an officer of the Society for the Prev'eaidta
of Cruelty to Animal, and had the horse «£*
The carriage was wrecked, but both the worn
"iiJjff n " sband escaped unhurt, as did the drh3
About the same time a horse attached tl'
hansom cab. owned by Donoh .c A isis ";\-3° •
tast .sth-st.. and dr.ven by ratrl.-k / 1 V™ f °*
No. «X tast likl-sc. became fri S h^ -,[ WW h t ?f
standing at oth-ave and 9*in-ai.. ana^aaW U
the avenue at top speed. Carroll was i n a k?"»
near by at the time and the horse was *ft £?
guarded. Galloping down to Kd-st. the ari^T
turned east, running to Madison- whereat rS
Into a northbound car crowded with paasen-I^ 1
The Impact shattered several p«tn«s of giald "T,,fJ;
Ing Intense excitement among the passe:;-*-^* t^
?t h ** ts were driven through a window, knocking
William J. Brockway. of No. 106 East 13ta-s- *
the floor. He sustained a severe scalp wound'aid
contusions about the body. lie was removed to tha
Presbyterian Hospital. in *
The runaway horse was caught by Patrolman
Meyers, or the East BSth-Rt. station, as it ira,^7
ing to extricate itself from the wreckage Th<»
hansom was demolished. Carroll was arrested.
It was said that Brockway, the Injured car oas>
senger. is secretary of the Oldfleld Mining .;, 3aß .
of Mexico. v ° T
James Patterson, of No. 113 East !4th-st. warn
driving a carriage along the East Drive la t >nt-aT
Park, when at 7Oth-9t. the rear wheel of his car
riage struck a coupe driven by Louis Minsky of
No. 506 2d-ave. The horse ran away but was
caught after a chase of a few blocks by Mounted
poUceman Callan Patterson, in trying ■ , halt tiia
animal, was thrown from his sea,., sustaining a.
compound fracture of tne right arm.
GETS MEMBERS OF GANG,
Petrosino Attributes Many Crimea
to Five Italians Arrested.
Five Italians, said to be member* of the CroecM
gang, named after a notorious Italian bandit who
killed and robbed In his country for many years,
were arraigned in Jefferson Market police court
yesterday and held In Sl.OtiO ball each until this;
morning. Detective Sergeant Petrosino believes
they are some of the cleverest and most desperate
criminals of that nationality in this city. They an
specialists, he says, in the use of knockout drops.
The leader of the Crocchl gang-, according to
Petrosino. la Gregorio Dellavia. of No. 210 East
109th-st. He was arrested, with four others, yes
terday afternoon In Mulberry Bend Park. Upon
him, according to Petrosinc. was found a bottle
containing chloral hydrate, or knockout drops.
which It la a felony to carry without a license.
The four other prisoners were Gluseppl Do Oon
9IHO. of No. 118 Mott-st.. who had a Jimmy In his
clothes; Mlchelllno Polino. of No. 120 Mulberry-si,
who Just finished a tan months' term for counter*
felting, Raffaelo Capalupo. of No 231 llulberry-at,
and Giuseppi Clemenlto. of No. 128 • rry-st
One of the crimed which Petrosino is trying tt>
fasten upon the gang, aryi particularly upon Delia
via. is the theft of JSuO irom Salvatore Canlzio of
No. 34 Spring-st.. several months ago. Fe;ro 3 ini>
U also tryln« to connect the gang with the dru;r
grin* and robbing of Mrs. FYancesca Famollare a:
No. 78 Thompscn-st. on January li Knocko"t
drops were administered and SCOO was taken froS
a money belt next her body.
SUII another crime believed to be the work 0*
the Crocchl gang wan the- choking to death and
robbery of an old Italian woman, about to return
to- Italy, at No. 5* Spriug-st.. a few months «a
She was found dead, with a handkerchief s-f^
down her throat and her savings, about JJ.JOV
BENGUIAT AirnaTns~BanrG $8,537.50.
Old Embroideries, Brocades, Laces aad
Fans Sold at Auction.
Bargains in ecclesiastical embroideries, rich
brocades, old laces and antique fans were nuaerou
yesterday afternoon at the American Art Galleries
at the first day's sal* of th* collection of Vital!
Benguiat. The sale, which was conducted by
Thomas E. Kirby. realized $8,587 .=*>
The highest price. $260. was paid by Frank Keella
for a fine Italian silk baldaquin, richly embroidered
In colored silks and gold. For J2M "lira. George
bought a pair of Italian Florentine panels, with
scrolls of foliage, green tulips and lilies •■>
broldar«d In shaded colored silks and gold on crtaa
Mrs. C. B. Alexander obtained for J145 an ItaUaa
lace "care cloth." with small embroidered I'Mt
squares, trimmed with narrow point lace edge; for
$56 an oil Italian flounce of floral design, for 1439
a Louia Qutnze embroidered cover, and for US »
Louis Qulnze fan. the panels containing decoration
of figures. Mrs. Alexander also bought for J373
a Portuguese blue velvet embroidered cover: for «
an old English fan. with a pained decoration of
Romeo and Juliet, and. for $12 50, an old Italian
ran, painted on chicken skin, with views of ruau.
temple and landscape.
Mrs. Oaklelgh Thome purchased for $.; • a P*~
of Spanish Manila curtains of embroidered yellow
satin; Mrs. John E. Oowdln for JUS a Spanish
lambrequin embroidered in soft colored silks, •■*
Mrs. W. R. Hearst for $*. Spanish lace work, cca
alstlng of dragons and blrd» facing a vase.
RA Spanish Renaissance metal lamp and an Ens
plre lamp, of Roman vase shape, were sold •»
Stanley*' for JIGS each, and eight other sanctuary
lamps at from $30 to SK apiece.
Among other purchasers were Mrs C L. Morgaa,
Mrs. Colgate. Albert Stieglitz. Mrs. Cor:d* >•*
Mrs. J. J. Goodwin and Miss Ruth Parkins. T&»
sal* will be continued this afternoon and to-morro*
PLAINTIFF AND PHYSICIAN" FIXED.
Justice Thinks Collusion Is Shown in Ca*«
Against City Railway.
Justice Hoyer. of th« Municipal Court, has £a»*
William H. Mar.ney. of No. S3 East S3th-st.. » tot
contempt of court, and Dr. Samuel H. Prank. •* '
No 87 Henry-st.. HO for impeding the regular pro*
ceedlngs of the court. Mana«y has a suit against
the New-York City Railway Company to r«cov«?
160 for. the refusal of a conductor to give &l» • *
transfer. The case came before Justice Hoy«C on
February 8, whoa a doctor's certificate wM P 1 **
Mnted purporting to bo signed by Dr. Frank. •»*
aettlng forth that Mann«y wu 1U and would ■*>•
b« able to leave hi* home for two or three week*.
Royal H. Weller. counsel for th* company. M** l
for an adjournment to inveatlgate the caae. H**
ney appeared In court later, and said that Dr.
Frank had given a prescription to be filled »* •
certain drug store. Justice Hoyer went to the tiruf
•tore himself, and found that the druagist -* 1
v?*'*^.? , 1 a Prescription for Manney. He directed
ilr \\etler to begin contempt proceeding* *]»»*
mentlonedl and Justice lIo >* r *Mea*ed tb* 4a*»
HINDOO DANCE BY AMERICAN.
In the studio of the painter. WUhelm FunK •■
No. 119 West «ad-at.. last night, an exemplification
of th* Hindoo sacred dance was given by Ml**
Ruth at. Denis, an American, who has maOe •
study of th« dances of the Fir East. «ne •••
clad in a shimmering rob« of Almay suit and ••*■»
her arms, neck and ankles encircled by fantistJO
The studio was tilled with well known p«opl»»
among them Prlnc* Troubetskoy. Mr. sini x: *
Oliver Herford. Gilbert White. Countess Ilka Kin*
•ky. Nils* Vlrgtnia Vaughan. Mm. Sv*rry. Mr. s«i
vV,«n blm^ *i )rtt - lcVvUl M.>rr*it »»d cuarw