AMERICAN INSURANCE SCANDALS.

Otago Daily Times, Issue 13586, 7 May 1906, Page 10

AMERICAN INSURANCE SCANDALS.

IFiou Oue Own CobbespohmntJ

NEW YORK, March 24. Tho thrilling tragedy, known as the life insurance investigation, has contributed another very dramatic episgde. The occasion was the consideration by the Senate and Assembly of New York State in committee of the whole of the report of the Armstrong Investigation Committee, which advised a thorough reorganisation of the lifo insurance business. Distinguished lawyers were present before tho legislative body, some to plead on behalf of the reorganised managements of the companies opposed to furtlier reorganisation, and others representing organisations of policy-holders delcrmined to have a more thorough housecleaning along the lines suggested by the Armstrong Committee. One suggestion of tlio committoo had been that the present trustees of the New York Life Insurance Company should bo legislated out of office on November 15 next, in order to pave the way for uniform elections in the interests of tho policy-holders. When this point arose-James 11. M'lnlosh, general solicitor for the New York Life, began a fervent speech in opposition. Tho trustees, he said, bad proved faithful to their trusts; they knew what the necessities wove; the whole investigation by tho Armstrong Committee bad failed to disclose any wrongdoing by a single trustee; the interests of tho policy-holders demanded their retention in office. With effective oratory, Mr M'lntosh recounted the speed with which tho board had acted on the discovery of tilings to the members hitherto all unknown, laws had been amended, and suits had been started to the end that responsibility might be placed where it belonged, and money wrongfully expended by past executives ./be returned to the policy-holders. Upon [the past executivo officers and their

yagents rested tho blame. Suits were in against the estate of the deceased president of the company, and every step was being taken that an awakened public conscjence demanded. At this juncture came a' very unexpected interruption. Andrew Hamilton, former general solicitor sf the New York Life, the man who had handled the mysterious sums that were used to ward "off adverso legislation, the man who gave his personal receipts for tlieso sums, but who was asked for no further accounting, the man upon whom, since the death of President M'Call, has rested the chief odium, walked into tho Assembly Hall. That he would speak was rumoured, and this possibility caused excited interest. It was afterwards learned that a newspaper man, an old friend of Mr Hamilton's, had lunched with him, and had urged him to vindicato himself in a speech before the assembly, and, on the spur of the moment, with the memory thai President M'Call on the stand before the Legislative investigators had taken upon himself the responsibility of the whole affair, and dying had left him as his agent and spokesman, he decided to speak. A card making known Mr Hamilton's desire, was sent down to the master of ceremonies, Timothy L. Woodruff, who hurriedly penciled a memorandum that the committee would be pleased to hear from Mr Hamilton. "Yes," said Mr Hamilton to a questioner, "I am going to talk in favour of the proposition that all trustees of the New York Life be legislated out of office next November. Over to him rushed several acquaintances, among them John C.. M'Call, secretary of the New York Life. "Bon't do it," they urged. "Don't try to speak here above all things." Young Mr M'Call drew Hamilton out into a lobby for a niore urgent word of objection, but the "judge" soon returned, and, when Mr M'lntosh had finished, walked down the stairsto the pit in front of the speaker's stand, called for a glass of water at the stenographer's table, faced the assemblage, drew himself erect, and began:— "Mr Chairman and gentlemen of the committee,—l wish to thank you for permitting me to appear at this opportune moment in following my former assistant of the New York Life. 1 wish to state that my remarks will be confined entirely to the New York Life Insurance Company and the men who manage it. Fnr the managers of the other companies I have a high and loyal respect, because so far I have not found among them curs and traitors. I address you on one bill solely andl I address you in advocacy of that bill. I shall urge simply that itwill be your duty to report, in favour of the measure that will remove from oflice

the trustees of tho New York Life Insurance Company on November 15 next, arbitrarily." The speaker paused and looked about him. livery eye in the chamber was upon him and every ear was strained to catch every syllable. The crowd that.

had stood at the rear of the clumber now filled the aisles and some moved down from tho middle seats and sat 011 the steps near the front. Cornelius Doreimis, I'resident

of the Gcrmania Life, was one of these, and lie squatted down on the nearest step with two othei life insurance officials. Back in. the centre seats were the representatives of the New York Life, vice-presi-dents Buckner ami Kingsley, Secretary M'Call, and the company's counsel. Oilier New York Life men, including several trustees, were also in the room. Hamilton raised his voiec and continued:

'"I look around the circle and I see here members of tilt boiird. I see among them men who have sat and listened to the stories of my victories in their behalf and have applauded, and T wonder whether it was like the line in Goldsmith—that it

was counterfeited glee, or whether the attitude that they have since taken has been one of counterfeited honesty. I have no

prepared speech—no set speech, 110 typewritten notes to go bv; but at' my luncheon to-day, when I considered the bearing that was on, Tisaid: 'Well, there is a duty to be performed here, and I lmve been accused in performing my duty. I will come up to the front now 011 "a certain line.' And here I am." There was another pause, and then lie went 011: "One of the features that has been an important event in the investigations of your committee, Mr Chairman, lias been the .question of my transactions and mv You have heard all the sweet protestations of innocenco that have comcalong, and how the only one to blame was the dead, the killed, whom they drove into 'his grave and deserted, and—the yellow dog. It was this that- made an appeal to mo to come down here and say something for him and just a word for myself. Not that we are asserting any defence, or making any apologies, or asking for any immunity, but because what we say is sa.id in support of this measure. Why, when they say tlioy did not know what was going 011 it excites my laughter, my derision. The Pecksniff of three administrations, and who thinks that he is the Talleyrajid of the present one; the confidante of the Beers scandal and author of the Beer's pension, rotates through one administration and rotates through another, and. : as I say, thinks that lie is going to be, like Talleyrand, an indispensable member of another administra-

tion. Do you think that the man who held the same positions to Mr Beers that I did to Mr M'Call could sit for the 13 years since and not know what and iiow the expenditures that were made were to be and were disbursed. Remark, that- I , say that when I disbursed my expenditure money not a dollar was disbursed in a way that could be criticised; and yet he, and such like him, sit, not judging me as peers, but- judging me as conquerors, talking about 'yellow doss'!" An outburst of applause followed this, while many gasped. The name of the " Pecksniff "—that of a prominent lawyer— passed wound tho chamber in whispers. Hamilton continued Now. of course, in ©very administration of a great public concern, there are many things to be done which, in the hurried line of duty and in

the desire for victor) cannot always be delayed. But. there never was a line of a thing that was done in the New York Life iu my administration of my department but. the executive officers, "one and all, were conscious of what the purpose was, of what the object was, and of what the expense was. I say this now. and when I look aroiuid I see their faces before me, and I challenge contradiction." He waited for an answer, but 110110 was made. Then he went on:

"Now let ns consider for a moment- the criticisms made in regard to the payments tljat liave bccu made to me upon my.

singln voucher.. Now, remember I did

not go in there and own this company; I Trent in tliere as a lniml>le little lawyer, a country lawyer, and 1 got in there'because I beat Pecksniff in his Beers pension, and I beat him with all the legion of great names that lie had nround him, and 1 beat him single-handed and alone., And when I won my victory, then they said: 1 Well, we will give you a chance here.' And pien J started to perform iny duties. Now when the first month came and my voucher went in, that was the time to havo said to me, 'Sir, you have not submitted the proper voucher.' And whore duty was it to do that? The auditing committee of the trustees'. Were they perfunctory? No; aalaiies—a special salary foi a chairman, another salary for a deputy, a daily compensation for others that attended. Suppose that it passed the first month. When the accounts came in the vouchers were there in the hands of the controller. And it came to a second month, and it. went to a- fifth month, and it went to a tenth month, and it went to a year, and all the time I was carrying forward the business and the purposes and 1 the protection and saving money for these insurance companies. But the tenth month parsed and (Jiere no objection. And the first year passed and there was no objection. And the second year, and tho third y&ir, and the fourth, and the fifth, and the sixth, and the seventh, the eighth, the ninth, and the tenth, and then when tho cry comes out they say: ' Well, we did not know anything about it. . This is the fellow; this is the man that has done it all.' If they had stopped, if they had performed their duties when they should have done, if it was a duty—but, nwrk, I am not assuming, or asserting, or' acccpting that it was one,—but if it was, they should have slopped it at the inception of it. And l when they continued and continued the fault, the blame, the responsibility is Mieirs and it is not mine. I could have stopped the first month, and if I could not have performed my. duties without presenting detailed vouchers, I could have surrendered my contract. Never, as the evidence of your investigation shows, until yon reached it, was there a single criticism. Why should there be? They sa(, there meekly, cashing the emoluments that came to them for the performance of their duty, with tho vouchers there under their noses, and if they took- them and looked at.them, and then {hey approved what was done, I stood approved. If they did not take them and look at them, then they deceived me into (lie assumption that they perforated their duty, and that they were satisfied with the manner and rendition of my accounts. ... It simply excites my laughter when I hoar the gentlemen assert, those who are her and in my hearing, and others, that they did not know that Andrew Hamilton was defend-

ing the New York Life and the insurance interests generally throughout the Lnitcd States on behalf of the principles which the officers of the insurance companies believed to be necessary for their success and for the benefit, of the policyholders. If there ivas trouble, and an agent could write from a far off country, and say, ' If this bill passes it is going io kill our business out here,' they would rush in, you know, to the president, and say, ' Well, now, here is this agent's let-

ter. For heaven's sake, we will lose all our business out- there.' ' Well, send for the judge.' 'All right, the judge will come. Sit down.' ' Well, what is the trouble?' 'Well, heavens! if this bill passes we might a3 well get ont of that State.' ' Well, all .right. We will have

to see what the objections are to it, and will havo to agitate. We will have the press do something;, we will have to havo the politicians do something; we will have the policy-holders do some-

thing; we will get men of influence to go ahead, and see if we cannot heat it.' And they would come in and beat it. Then the word would come in, ' It is beaten.' And they would come in and pat. me on the back. The men that would not know

ne now would come in and pat tne oil

the back and say, 1 You did it.'" The speaker paused for breath, and to wait

or the apnlauso to die out. Then con-

tinued in detail concerning bis vouchers, and ended thus: 'And the reason I came forward now is not- to apologise for these vouchers that were given in the form that tlioy were given, but to say that these men with their responsibilities upon

their shoulders, and not upon mine, have something to account .for. They may talk about the Yellow dog, but. the Yellow dog is a dog of courage and of loyalty. But the curs that stood around this

funeral that lias occurred, 'and the mis who know of these transactions and

shrunk into their shoes, they are tho curs and that is the reason I come to speak before you and to say that the great interest of two billion of life insurance and four hundred million nf assc-ts can

never be safely entrusted to the hands and administration of a lot- of curs." When Hamilton was done and had started up

tho aisle there were wanv who stood up lo 'grasp him by the hand and many who 'lapped and clapped until the Assembly jhamher rang. Sena-I or Armstrong made 10 effort to still the demonstration. In the face of this dramatic attack upon :liem MlO trustees have not-, of course, been silent. Their most effective reply las been in the form of a letter written >v President M'Call before his death, in ivliich he said of Hamilton's employment: 'He refused to accept the duty unless it.

■as in secret, and I assented to that pro.

losition." Another feature nf the insurance matter vhieh is now receiving prominent atten-

ion is the question whether political con-

tribut.ions by insurance company officials can bo punished as larceny. A grand

jury at New York has had evidence concerning iheso campaign contributions under consideration. District Attorney Jerome,

upon whom the duty of prosecution would fall, has issued a brief setting forth the opinion that, evil intent to defraud must be

liown to prove a charge of larceny, and

that the giving of campaign contributions cannot therefore be proven to be larceny. The judge in General .Sessions, before whom this argument was heard, disagreed with this view, and charged the jury to investigate and determine whether tho

transactions had been honest, actuated by commendable motives, or whether they

were done under artifice, disguise, and concealment. If accounts had' been falsified or false reports had been mado to cover up the contributions this could be considered as determining whether or not there bad been intent to deprive or defraud tho true owners of the property. The district attorney suggested that if this were the view of the court 'he stood ready to submit affidavits that Goorge B. Cortclyou (chairman) and Cornelius M. Biss

(treasurer of the Republican National Committee) had received and receipted for insurance contributions, and he suggested that warrants be issued for their appearance for having accepted stolen property. The court, however, refused' to issue the warrants, but stood upon 'his original opinion as to the duty of the Grand Jurv.

Mr Jerome has been somewhat severely criticised by the newspapers for his conservatism, and even by so public ,a figure as Judge Alton B. Parker, the Democratic candidate for president at the last election. This has given Mr Jerome the opportunity to make some telling remarks on the yellowness of our press, and upon the hysteria of the public. Referring to Mr Parker's declaration that the way to convict is to convict, Jlr Jerome said of the officials who have made campaign contributions: "It. is because a grand jury would indict theso men with or without evidence that there is one public official in New York to-day who will not. permit them to indict without evidence." Mr Jerome then said: " Public opinion goes hither and thither like a ship, but in the long course it is sweet and sane and "mud. and will make its

_ -rt; but. it lies on you to see to it. that its tacks are 110 longer than they ought to be. It. is wasted power, that sentiment of the community that, goes up one trail and back again to another. To-day all through this nation what do we find— a case of absolute hysteria. . , David Graham Philipps is now writing about the 'Treason of the Senate' for a magazine. Treason is an ugly word.

It is punishable by death. We lnive got, so used to superlatives that- our own racy tongue has become debauched and we have no superlatives left. The Senate of

the United States—is it a treasonable body? A body that- holds a man like Murray Crane, of Massachusetts. Because some men are tlieie who ought- not to be.

there—some wlio bought the positionfilial I we say that the governors of our body politic are guilty of treason? Base men there arc, but when in the bright, breezy sentiments of modern newspaper life you assert there if treason yon either lie or misconceive the meaning 01 the English language." Mr Jerome related °a number of anecdotes that had come under his observation, showing the unprincipled policy of newspapers which feed 011 gensatiwialiem. Of the popular clamour over the insurance disclosures, ho said':—"l was informed the other night- by a director of the Mutual Life that-'nearly one hundred millions oE dollars in policies had lapsed in the last year. What policies were they? Those from 1200dol to oOOOc'ol—the policies of the poor—had lapsed. They had taken (ho cries of these wild newspapers. Xo one eonld doubt that- these companies- were solvent as the United States Government, but they had been scared by these hounds of yellow journalism, and the poor lnotornien n-iid conductors and mail earners have let their policies lapse. The newspapers had driven from their protection the wives and children of the poor." , MTI,TON- B. MARES.