The Wanganui Chronicle "Nulla Dies Sine Linea." TUESDAY, JANUARY 30, 1906. THE AMERICAN INSURANCE SCANDALS.

Wanganui Chronicle, Volume L, Issue 12716, 30 January 1906, Page 4

The Wanganui Chronicle "Nulla Dies Sine Linea." TUESDAY, JANUARY 30, 1906. THE AMERICAN INSURANCE SCANDALS.

As indicated in 'bis letter, recently published in fclhe " Chronicle," Mr Alfred I Grey, of Wellington, is interesting himself to obtain proxies from the New Zealand policy-holders in the three great American Life Insurance Companies—the New York, the Mutual, and the Equitafole—in favour of Mr Thomas 'Lawson, of Boston, whoes book, " Frenzied Finance," caused such a sensation last year. In a circular letter addressed to th© Press of America, Mr Lawson points out that 'he lias already spent over a million dollars in this work, and is prepared to spend a million or two more-in the exposure of " System's Structure," and that far from seeking to profit by it," 'he is only collecting these proxies in order to turn them over to a committee to be composed of the representative active men of Amei-ica, men whose .names when'they are published "will carry Complete proof that no mam, men, or interest can control, steer, or influence them. Mr Alfred Grey considers that enough has appeared in cablegrams published in our coloumns " to amply justify the colonial policyholders in these companies in sending their proxies to a strong roan like Mr La'wston, who ebood alone when a year ago he called attention to tho deplorable state of things connected with the management." But the cable messages, reporting from time to time tihe progress of the inquiry, 'have necessarily been of a 'brief and fragmentary description, and probably but few of cur readers have realised how shocking and amazing the disclosures have been. Particulars to baud by the mail show how, day ! by day, as the inquiry has progressed, pillars of " high nnanos " have been toppled over, and the millionaire officers, whese greed and whoso alliance with the forces of corruption have hcen revealed, 'have been forced into retirement. President Alexander, whoso attack upon young Vioe-Presideht Hyde (holding by inheritance a controlling interest in tHe Equitable Company), compelled this inquiry, is out of office and in a sanatorium, a broken man. Hyde, himself is out, and has said his shares. He has also gold his horses arid coaclios and fine furniture. In Paris Be will seek a more pleasing environment, Thomas J. Ryan, who paid 2,500,000 dollars for the shares', has" placed at the head of the company Paul Morton; during whese brief service in Mr Roosevelt's Cabinet a cloud much larger than a man's hand hung over him, because of his official connection, as a railway officer, with violations of the law: Mr 'Morton (receiving a salary of 80,000 dollars) has established some reforms, and the character of the board of directors has been much improved by the labours of tihe three truistees to whom Mr Ryan transferred his power to exercise control. Recent testimony as to the offences of the Equitable does not reflect discredit upon the present management of that company. Richard A. M'Curdy, president of the Mutual, resigned at the beginning of December last. He had been drawing a salary of 150,000 dollars from the money paid in for the benefit of widows and orphans, and his sanctimonious testimony had excited general disgust. With him have gone his interesting son, Robert, his son-in-law, his brother-in-law, and his cousin. This family has drawn ■ 4,918,607 dollars irom the company in salaries and commissions in the last 20 yeitrs, and their annual compensation had risen to 454,000 dollars. In the third great company, the Now York Life, the. M'Call family have been supreme, yr'vJh the aid of a''smart and conceited young .financier named Perkins. John A. M'Call, the president (salary 100,000 dollars), John C, his son, Darwin P. Kingsley, his son-in-law, Leon iM'Call, a, nephew, and one or two pi'lier relatives; have drawn a huge sum, from the .treasury every year. It. should be-snid'thaV the ruling families and cliques in all the companies ■have had fine opportunities for profit by reason of their interest in the subsidiary banking institutions and similar concerns, and in tho promotion of syndicates that have b&t-n so largely supported by the companies money. The three cc.mj.anie*' assets are about 1,200,000,030 dollars, their annual income exceeds 250,000,000 dollars, and each has an enormous surplus. Both M'Oall and Perkins havo had to go. Of all the revelations ot "rhe investigations thb ; most disquieting'and- ■depreusing are t.hcs-3 which show lit/w great» s^ms of tfte policy-holders' money ■have^been *m?----pendc-d to control legislators and 'legislation, and 'What the influence of this expenditure upon politics and politicians has been. For instnioe, it was ascertained that the-payim-nts of "..Judge " Andy Hamilton, the lobbyist stationed at Albany (Che* capital of New York state) havo been 1,630,803 dollars in the last five;•• years, and that 1>245,927 dollars were paid by the New York Life, which; required no voucher! for the items of expenditure. Th« remainder

came from the other Companies or their oubsridiairy banking concerns. As a rule, however, the other companies spe-nt money at lAlbany and at other state capitals through agents distinctly their own. Thus, the iMiitual's operations at Albany were generally conducted by an officer who nominally had charge of the company's supplies. In Albany he was the landlord of a honea owned by the company, and familiarly known as the House of Mitfth. Soane legislators found 'it a very attractive and comfortable place; some dined there and enjoyed the company's good wince; some lodged 'i'hero continuously. One M'Olelland, formerly a state senator, and a member c-f the Senators' Insurance Committee, but now, by Mr Roosevelt's appointment, holding an important federal office at this port, confessed to the investigating committee that he was a lodger and a boarder at the House of ■Mirth (or Graft), that he had received 3,000 dollars a year from the Mutual and at least cue contribution of 3,500 dollars from the Equitable.. It can easily be**se&ii far what purpose tho house wa.s owned and kept opc-n. It is in evidence that Fields, the officer in charge, received many instructions by wire from the responsible officers of the Mutual. He was to oppose and " kill this, that, and the other Bill. And these were not blackmailing Bills. Some of them related to the restriction of child labour, the proper construction of tenement houses for the poor, and the like. The Mutual's officers disliked such legislation, and the policy-holders' funds were used corruptly to defeat it. In fact, these funds appear to have been used for all sorts of things. For example, one of the witnesses was an old man named Manning, who 27 years ago procured and printed a correct copy of tho testimony taken at an investigation of the three companies in 1877, testimony which they had sought to suppress. Hia copies soon disappeared, and ever since they disappeared he has been "retained" at an annual salary by the companies, with the knowledge and assistance of United States Senator Depew (an Equitable trustee), apparently to keep him in good humour. ?And so it has been with scores of other men, politicians for the most part. There was an enormous abundance of money in the companies' treasuries, and their officers dreaded an exposure of their own greed. For similar legislative purposes there were separate funds, held by th« subsidiary companies. The Equitable had one of 685,000 dollars in its Mercantile Trust Company. When the old management was ousted,- this fund, which was in the form of a " loan" to the president and the greater part of which had been expended, had to be made good. Young Mr Hyde testifies that he paid 228,000 dollars, or. onethird of it, out of his pocket. The record of the objects for which the money was epont has been "lost." It could not bear the light of day. Such mysterious accounts (there are 'several, some of them under the head of "tteal estate "), were called " yellow-dog " funds. It is in evidence that for ten years past ©avid B. Hill, formerly Governor, and United State* Senator, has received 5,000 dollars a year from the companies. Hilt was for a long timethe Suite Boss of the Democratic party. In New York, one Thos. Coman, a-TanV manj' politician, who was very prominent ii the days of Boss Tweeds ring/ ~) a& fur the last twenty-seven years reC lived a salary of about 6000 dollars. For what? No one seems to know-Pi-ob'ibly he was,a useful agent for communication -with the Tammany municipal government. Many similar exfiinples might be added, together with intjirat'ons that not on?y a part of the "Leg:' iJature, but also the state's Department of Insurance, has been regularly subsidised. In no other way can the leniency a<nd blindness of the depart-' ment with respect to the companies' manifold offences be explained. Notwithstanding these prolonged and wholesale robberies, it appears that the; financial stability of these huge institutions remains unshaken, and that the interests of the policy-holders are still secure. But it is clearly desirable that the people most interested should henceforth &e<? to it that the management of t'ha companies is kept in clean hands. That is what Thomas W. Lawson proposes to do. Those who have read his articles on " Frenzied Finance " know who and what he is. Tbx>S3 who want information about him will no doubt be able to obtain it from Mr Andrew Grey, who is a holder of policies for £3000 in the New York and Equitable Companies, and whose address is P.O. Box 316, Wellington. Meanwhile, any of our readers who are policy-holders in either of the offices, and who wish to send proxies to Mr. Lawson, can on application obtain forms at the "Chroni- , cle " office. .