Sunday, June 17, 2012

1877, The Condition of the Life Insurance Companies of the State of New York.

The Condition of the Life Insurance Companies of the State of New York. Revised Tabulated Edition of the Official Stenographer's Notes of the Investigation by the Assembly Committee (W.S. Manning, publisher, Albany, New York, 1877)

[page 3/21]
proper to state that in that number quite an amount of money was paid as surrender value.

Q. Then they were forfeited? A. They were forfeited, but it is proper to state that in that number quite an amount of money was paid as surrender value.
Q. After they were forfeited? A. After they were forfeited; the object of the company was to act with the greatest amount of liberality to the policyholders that it possibly could do with safety to itself.
By Mr. Skinner:
Q. You say so many were forfeited, and yet you paid over $3,000,000 for them; is the condition of a policy such that if it is forfeited you are bound to pay anything? A. Not legally bound to pay anything.
Q. Then that $3,000,000 was a gratuity? A. It may be so regarded; perhaps you had better change the language to suit your-self; we put them down as forfeited; that is, they were actually forfeited; yet we did buy up the claims.
Q. Why did you buy them up? A. Simply as a gratuity.
Q. You don’t feel bound to pay the policy-holder a penny after a certain time, do you? A. We are not legally bound to pay them anything; but a great many hard cases come to me every day; I don’t think there is any person subjected to such trials as the actuary of the Mutual Life is; a poor man or a widow comes and begs for bread, and, in the liberality of the government of the institution, they having paid a good deal into it, we pay them for lapsed policies.
Q. Suppose I have a policy for $10,000 which has run for ten years, MRI) I forfeited it by waiting sixty days, for instance, without paying my premium; can I recover any amount from you? A. That will depend upon the courts entirely.
By Mr. LANG:
Q. Is it not well settled by this time as a matter of law? A. No it is not; an insurance company has no more chance before a jury than they have anywhere else.
Q. You don’t consider there is any law now which compels you to pay anything on such a policy, do you? A. That depends upon the construction of the law by those who know it better than I do; we have been compelled to pay repeatedly, against what I thought the simplest elements of justice and equity; we are compelled to do that all the time to avoid litigation as much as we can by ministering to the wants of families who have come to trouble after paying us money.
Q. Your policy distinctly states, does it not, that if the policy lapses you don’t hold yourselves liable? A. Let me tell you what the practice of the company is: our charter requires us to settle up the account of every policyholder every year; if the premium be not paid on several of the policies, what there is or what there has been paid prior to the last anniversary under the charter, lapses, of course, to the other policyholders; what is technically called the reverse of the policy, another misnomer, passes to the other policy-holders.
[page 4/22]
Q. Instead of to the company? A. To the company first and then to the policyholders; then if the policy is brought to us, after it lapses, but before a division is made, and we can have the means of restoring the policy by restoring the reserve, we invariably do it after re-examination by a competent physician; that is a matter I heartily go into and the committee has a right to know.
Q. Suppose I take out a policy of $5,000 at a certain date, and in a certain number of years allowed it to be forfeited, and I have myself re-examined and find myself in good health; do you go on with the policy at the same rate, or have a new policy? A. We go on with the policy at the same old price, but he must furnish a clean bill of health.
By Mr. Lama:
Q. I want to ask you this question: I understand you to say that in the abundance of its heart the company would do these things but they are under no obligation to do so, as these policies are forfeited; suppose as a matter of principle in life insurance, is it safe discretion to leave in the hands of a corporation to do that if it works an injustice to the policyholders, in your opinion; for instance, suppose you were to go out and a worse class of men should get into office in the Mutual Life, and they should not feel so kindly to the policyholders whose policies lapse as the present officers do, is it sound in principle that a policy should be forfeited when the insured has no interest whatever in them when they are forfeited? A. I think it is perfectly sound in principle to leave the discretion with the officers.
Q. You are aware, perhaps, that other states have established non-forfeiting laws? A. I have heard of it; I want to remark that a great many of our policies require a surrender value.
Q. I introduced a bill on this very subject, and I want to be put right upon it if I am wrong; I think you will see what I am after; one thing is certain either some companies are making a great deal of toot, and getting a great deal of confidence by advertising that there is no lapse to their policies when they are not entitled to it, or--else it is sound in principle; if unsound, is it unwise for us to let them get anything through their mode of advertising; if it is sound, we--should have a law to compel every company to do it; so if the Mutual Life should have bad officers they cannot take advantage of them; I want to know if it is not possible to frame some system of legislation by which the insured, having made certain payments, and finding himself unable to keep his policy up, can have a quantum meruit for what he has paid, and a paid-up policy given him for a certain amount? A. can answer that; it will require the terms of the policy to be changed; the terms of the policy may require it.
Q. Suppose the Legislature should say the terms in the policy, to the contrary, should amount to nothing, what is to prevent your availing yourselves of it? A. It will be a great injustice to the company.
Q. I was inquiring whether it would not be safer not to have a forfeiting clause in a policy, and to provide that a policy should not [page 5/23] be forfeited so long as there was money sufficiently to pay it? A. I think a policy should always cease when the amount of the premium is not paid; the interest it receives is the life blood of the company, and unless a company can receive the money when it is due, and put it out at interest, it is impossible for it to meet its engagements.
Q. Do you know about the operation of the non-forfeiting plan adopted in Massachusetts? A. I do not know about its operation; I think it is a very vicious plan.
Q. Why so? A. I will state why so: in the first place a man is made by that law to lose everything he has paid at the expiration of a certain time, for under that law the reserve is taken as the premium to purchase what is known as term insurance; at the expiration of the term insurance he loses everything; if he were lucky enough to die within the time, his family gets the insurance, but if he lives to the end of it he loses everything.
Q. Unless he renews his premium, you mean? A. No; I don't so understand it; it would be much better for the company to give him a paid-up policy, and when he dies his heirs will get something back that he has paid.
Q. Suppose you have a policy in Massachusetts for $10,000, and you cannot pay the premium, the money they are required to have in reserve for you is made a single premium, and they give you a term policy, I don’t see that that can be any worse for the policyholder? A. As I stated before, if you are lucky enough to die in that time your heirs will get something, but if you are unlucky enough to die at the end of the time they get nothing.
Q. Is it not better to have it in that way than for the company to have the option of giving you nothing? A. It is a mere contingency.
Q. Is there any objection to giving the policyholder a paid-up policy for the value of his reserve? A. No; there is this objection; no company can issue paid-up policies for annual-paying policies without injury to itself; the policy is good to the company just in proportion to its contribution to the other death policies, and the very moment you cut this down you cut down the death reserve; or in other words, the very moment you give a paid-up policy it ceases to be producing. Q. Is not that better than forcing a man to stay in a company after he has once got in and desires to withdraw from it; or else forcing him to lose everything he has paid? A. Yes; and I tell you again that our company resorts to every possible means to keep a policy alive.
Q. I want to get your idea whether a law could be framed, and if it would be better for the policyholder, which would provide against the forfeiting of policies? A. Yes, I think I could; I have drawn two or three laws myself; but I doubt if they have ever reached Albany.
[page 6/24]
Q. You prefer a paid-up policy very much to the Massachusetts plan? A. Yes; I think it is a great deal better.
Q. You stated that you understand the Massachusetts law to be that when the reserve is exhausted, unless the person dies within the time before it is exhausted, he forfeits everything? A. That is my understanding of the law.
Q. If that be the law, could a company successfully conduct business by having an additional provision giving the party the right to renew the payment of his premiums before that was exhausted? A. I should think it might; yes, sir; but it is almost impossible to answer the question, unless I could go into a computation; the company must be made whole for the risk it assumes, and it is much easier to ask the question than to answer it; in order to answer it to your satisfaction, would have to go into a computation of the amount of risks the company takes.
Q. I don't expect you to be strictly exact, because I know it involves a mathematical computation; could the companies of this State, in your belief, transact business successfully and issue paid-up policies, as you suggest, if anything was done that way? A. Yes, sir.
Q. Do you think the business could be carried on successfully? A. Yes, sir.
Q. At the present rates of insurance? Yes; I think so.
Q. That would be an additional protection to the policyholders, would it not? A. Yes, sir; certainly; let me answer that you are striving in the Legislature to make some proper law for the protection of insurers; it seems to me that when a man has an ordinary policy upon which he is paying an annual premium, and he is over-taken by difficulty, and cannot pay his premium, the simplest possible way to dispose of the case is to give him a paid-up policy for what amount the company has put away on his account, charging him no more, and no less, than the price at which it advertises to the public to sell for cash; let me further say, as this committee is in search of information in regard to a bill, a suggestion I would give you is this: the suggestion made of giving a man is choice is very fortunate. If a man is taken with inability to pay, there is another way by which you could tide over the trouble; you can take the amount of money he has contributed to the company's reserve fund, but not his reserve, and make that the basis of a new policy, dividing it up into just as many premiums as you choose, and thus tide. Him over for three or four years, and let him pay his premium in advance; it gives him a certain sum of money on his death, and if at the end of the time he can pay, and pays up his premium, there is a little addition to his policy. and by that means you tide him over.
Q. If he has taken a paid-up policy, that will not help him? A. If he has, there is the reserve on the paid-up policy, and that may be treated the same way as in the other case; it is a complex problem, and yet it may be so worked as to give justice to all concerned; let me suggest to you that you do not pass a bill unless you have called [page 7/25] before you experts whose business it is to know everything about it; I shall be very glad, at any time, to come up to Albany and meet the committee.
By Mr. MOAK:
Q. I think you said you became connected with the company in 1871? A. Yes, sir. I – Q. You were then employed by the company in what capacity? A. In my present capacity.
Q. As actuary? Yes, sir.
Q. What was your salary fixed at? A. It was then $12,500.
Q. And has it been increased since? A. Yes, sir; it was increased the following January to $15,000.
Q. And has remained so since? A. Remained so since.
Q. Are you a member of the board of directors? A. No, sir; I have nothing to do with them.
Q. You have no other connection with the company except as actuary? A. That is all, sir.
Q. Have you attended meetings of the board of trustees? A. I have only been called in to give information in regard to particular points, but not to attend the board. Q. Have you been present at any of the meetings when the salaries of the officers were acted upon? A. Never.
Q. Do you know anything about the fixing of the salaries, or the amounts thereof, except what you get from the books of the company or outside information? A. Nothing at all.
Q. You have no personal knowledge upon that subject? , A. No personal knowledge upon that subject.
Q. Can you say of your personal knowledge whether any of those officers received more than the salary fixed? A. Not from my personal knowledge, I cannot.
Q. You can only speak for yourself? A. Yes, sir.
Q. And you do not? - A. I have never received one farthing beyond my pay; I believe that is the case with all.
Q. Do you have anything to do with the medical department? A. Nothing, sir.
Q. Are you consulted when risks are taken? A. Frequently.
Q. On what particular subject are you consulted when risks are taken? A, With respect to a person whose grandfather or grandmother, or aunt, or uncle, or someone else connected with the family may have had consumption, what risk would be good for a certain number of years, or a greater number of years, and what risk the company would run upon such a life.
Q. You are consulted upon the subject whether a person is a proper risk; is that so? A. Very seldom; it is only in cases of doubt, and very seldom then; not very frequently, because the rule of the company is to take no unsound lives.
Q. Have you any personal knowledge, so far as you have been called upon in these cases, whether any inducement has been held out to the company to take the risks? A. I have not the least knowledge of it.
Q. You have no knowledge of it? A. Not the least.
Q. In no case whatever? A. In no case whatever.
Q. Now, did you have anything to do, or were you ever consulted with reference to the loaning of moneys? A. Never.
Q. Do you have anything whatever to with it? A. Nothing what- ever to do with it at all.
Q You have no knowledge on the subject of making loans? A. No, sir.
Q. Nor information? A. Nor information whatever.
Q. Now, in reference to this document, has it been marked for identification; this is a report of the company in answer to a resolution of the Senate? A. Yes, sir; audit is addressed by the vice-president to the chairman of this committee, explaining the cause why the information sought for was not submitted in time.
[page 8/26]
Q. Have you any knowledge as to the correctness of the statements contained in this paper? A. I have as much knowledge as I have on any subject that I did not do. Q. Are you willing to state that you have knowledge of the correctness of everything stated in the paper? A. I don’t know what you mean by that.
Q. Have you read it through? A. I have read it through, and believe the statements are true.
Q. Can you state that the contents are true of our own knowledge? A. I have as much knowledge of that as can have of anything, because I have consulted the books and the officers charged with the examination of the books.
Q. There are statements in there in regard to an examination pending at the time; you know whether that was so or not? A. Yes; know that; but in regard to the other I would say that I have no actual knowledge. By Mr. WEIANT:
Q. I want just an answer directly to the single question whether you have knowledge that the statements contained in this report are true? A. Well, I have as much knowledge of that as I have of anything.
Q. That is not an answer to my question? A. I don’t know what the committee wish me to state; want to be honest about this matter.
Q. Don’t you understand this matter? A. Yes; I am afraid I do; that is precisely my trouble; I believe that the statement is entirely true; and I would predicate any act of mine on it; but to assert that I know a thing is to go a great ways; very few of us know anything, and a great many people nothing.
Q. That is what I am afraid about these insurance affairs; I think that is the trouble; now I offer that question in good faith? A. [page 9/ 27] I believe it to be entirely true from beginning to end, but to swear that I know it of my own knowledge to be true might involve considerations that don’t now occur to me; I don’t intend to be entrapped at all, nor do I intend to attribute to any one the disposition to entrap me.
Q. You mean to say you-don’t know, of our own knowledge, that all these statements are true? A. No; I don’t know of my own knowledge.
Q. I suppose you do know, of your own knowledge, that there was an examination pending at that time? A. Yes; I know that.
Q. I would not, under any consideration, ask any question that might be deemed impertinent, or by which you might think I sought to entrap you; this is a subject upon which I have no knowledge or information, and that question was asked to get information upon certain subjects; I am asking the question in good faith, and have no desire to ask any thin improper? A. I don’t attribute any motive of that sort, and would be very sorry to; I confess to you there would seem to be a doubt implied in the question as to whether I had the right to testify to anything in a paper, simply because I did not happen to have absolute and perfect knowledge of the facts; that is a thing I don’t pretend much to; I said that the paper is true; that is, I know it to be true as I know anything, but to say I know it of my own knowledge, beyond all peradventure, is going too far.
Q. Now, I want to know whether you know this statement to be true of your own knowledge; that is a plain question? A. I don’t think I can swear that I know it to be absolutely true.
Q. You know certain statements contained in it, as to an examination being pending by the department, are true? A. Yes; I know of my own knowledge that a great many things stated there are true, and infer the other things are true, simply because of my intercourse with the office, and seeing things there; I know we have been engaged in an examination, and I have been engaged in one myself; I infer that the statement is true. Q. Now, let me get our idea on the subject, as to whether an officer in one company s lOl1ld be permitted so to be an officer in another company; that is, in a life insurance company? A. That is a mere matter of opinion; I have no opinion to express about it.
Q. What is your idea about it; whether they should be permitted to do so in the interests of a successful company? A. I think the officers should be confined to a single company; that is my idea about it; but it is only my opinion.
By Mr. MOAK.
Q. I understood you to say there were 7,501 forfeited policies? A. Yes. sir.
[page 10/28]
Q. In 1876? A. Yes, sir.
Q. In that do you include this 4,517 that were surrendered? A. Yes, sir.
Q. They are included in this 7,501? A. Yes, sir; that is to say, those are policies that cease to exist.
Q. Now, the whole 7,501, can you tell us the aggregate amount of insurance which they represent? A. Yes, sir.
Q. How much do they represent? A. Twenty-two millions, six hundred and sixty-six thousand and fifty dollars.
Q. Can you tell us how much the 4,517 policies you called surrendered policies represented? A. No; they are not separate; they are all included in this statement.
Q. What is the usual rate of compensation paid to agents, in procuring a policy, out of the first premium? A. That is varied at different times; thirty percent. I think is the present amount, with six renewals at seven and a-half per cent. Q. Then, after that, does the agent’s interest in the premium cease entirely? A. Yes—let me make myself understood; that is what we pay to the general agents, but the local agents receive their compensation from the general agents.
Q. The company allows the general agent who sends in the insurance, thirty per cent out of the first premium? A. Yes, sir.
Q. And then allows him seven and a-half per cent on six subsequent renewals. A. That is on life policies.
Q. And then agent’s interest ceases entirely? A. Yes, sir; after seven years, but they are allowed a certain percentage for collection; I think it is two per cent. Q. Is that allowed in addition to the seven and a-half per cent? A. No. sir; that is for collecting the money.
Q. What is the highest amount your company has paid to agents for procuring insurance? A. I think the amount I have stated is the highest rate; according to my recollection it is.
Q. Do your policies usually contain a clause that when the premium is not paid at the time it is due, that the insured may, within thirty days, obtain a paid-up policy on application? A. No, not in general; it is not a general term of our policy.
Q. Then there is nothing in our policy giving the insured the right to a paid-up policy it he does not pay up the premium? A. Yes, there is in certain of the ten-year policies; our old policies gave them the right to demand a paid up policy as many fractional portions as the premiums paid might bear to the entire policy.
Q. That is in the old policies? A. Yes, sir.
Q. But those of late years do not have it? A. No, sir.

[page 11/29]

Report of the Committee.

Friday Evening, April 17, 1872.

To the Honorable Assembly of the State of New York:

The resolution of the Assembly passed January 11, 1872, on motion of Mr. Moulton, recites an extract from the Governor’s message that there is a popular belief that important legislation has been influenced by the direct use of money, and that there should be a thorough inquiry to ascertain whether it is well founded, and that the guilty should be brought to justice under existing laws, or proper laws should be passed to meet cases which may hereafter arise; that the people demand reform in every department of government, municipal, State and Federal, in which abuses may be shown to exist. Said resolution also recites that various charges have been made in the daily and insurance press and otherwise that the superintendent of the insurance department has been and still is (1) receiving fees and perquisites for his own personal use and emolument which should by law be paid into the State treasury, particularly the one fifth of one per cent. chargeable to insurance companies under the supply bill of 1870; and a so, (2) that inordinate and illegal fees have been collected by the superintendent for making special and other examinations of insurance companies in this and other States; and also, (3) that money has been raised in large amounts in order to pass alterations of the insurance laws conferring additional power upon the superintendent in the appointment and election of receivers and otherwise; and also, (4) that other irregularities have occurred and still exist in the administration of the insurance department. Said resolution, therefore, authorized, empowered and required the standing committee on insurance to enquire into, investigate and report upon the truth or falsity of the said charges and any others relating. to the administration of the insurance department in any respect In accordance with the above resolution the insurance committee beg leave respectfully to state that the testimony of numerous witnesses has been taken before the committee at Albany, and also a sub-committee in the city of New York, in pursuance of a resolution of the Assembly; the testimony has also been directed to be printed by order or the House.

The conclusions of the insurance committee in the premises have been reached after careful consideration and deliberation, and are embodied and set forth in the following:
[page 12/30]



The first specific subject of inquiry and investigation under the resolution of the Assembly relates to the one-fifth of one per cent. collected by the superintendent on the transfer of the securities under the clause in the supply bill of 1870. There is no, dispute as to the fact of the superintendent’s having received one-fifth of one per cent. on the transfer or withdrawal of securities, and appropriated the same to his “personal use.” This is proved to have been an open transaction, and an accurate account was kept in the department of the amount of fees thus received. The superintendent claims that the fees thus collected lawfully belong to him by way of increase of salary, and that in appropriating them to his own use he has violated no law upon the statute books. The amount thus collected and retained by the superintendent since the passage of the supply bill in 1860, is $4,606.50.


The second specific subject of enquiry with which the committee have been charged by the resolution of January 11th is as follows:

That inordinate and illegal fees have been collected by the superintendent for making special and other examinations of insurance companies in this and other States.

Your committee is not aware of any provision of law authorizing or allowing of fees for the examinations of companies to the superintendent or his deputies. All that they can in any manner be al-lowed to charge for such examination is actual travelling expenses and board while they are thus engaged. The superintendent and his deputies are paid liberal salaries by the State, and any amounts received as fees or perquisites must be considered in the nature of "additional salary, for which "there is no authority of law. To admit more than this, as the law now stands, would be to give to a State officer unlimited authority to exact such fees as his avarice might dictate. Neither, in the opinion of your committee, is the superintendent entitled to receive gratuities for services performed in" the examination of companies, as in the case of the Continental and International Fire Insurance Companies, where, for a few hours’ work, $500 was paid to the superintendent as a gratuity, no charge having been made. He acts in a judicial capacity, and must, if he properly performs the functions of his office, be impartial as between the companies on the one hand and the policy-holders and the public on the other. It is not in human nature to accept gratuities from one of the parties in litigation, and at the same time maintain an attitude of impartiality. Abuses and corruption must necessarily follow such a course.

Has the present superintendent of the insurance department, during his incumbency, exceeded the limits we have here indicated?
[page 13/31]
The mere fact of an examination being in progress, or any long delay in making a report, after an examination is completed, may in some cases sap away the foundation of a company, and if too long continued might even destroy its solvency and very existence.

The following table shows the number of examinations made of Life Insurance Companies under Superintendent Miller’s administration:



Mutual Life, .............…G. W. Miller,….. $3,000 …Counsel Declines to Answer
Great Western,............G. W. Miller,.............250
Knickerbocker,............ G. W. Miller,.......$2,750.…$5,000
Farmers' & Mechanics'..G. W. Miller,
Merchants'...................G. W. Miller,.............40
Standard,.............Southwick & Carr...........300
Hercules,.............…..T. R. B. Eldridge,.......200
World Mutual,...Southwick & Eldridge,.......350
Ashbury,........... Southwick & Eldridge,.......500
Amicable, .........Southwick & Eldridge,........200
Hope, ....................Southwick & Carr,.....1,000
Metropolitan, ................G. W. Miller,......1,000..........250
National,.................T. R. B. Eldridge,.......2,500
New York State, ............W. G. Carr,.........200
American Popular,....T. R. B. Eldridge,.....Nothing.
Mutual Protection,....Bryant & Southwick......100.......5,000
British Com., suit,....Before Judge Cardozo,................5,000


Republic, Chicago, H. E. Sickles,.....................250
N. J. Mutual, Newark, Southwick & Eldridge,..400
Anchor, Jersey City,...Southwick & Carr,.........500.....1,000

Total amounts paid for examinations
........................................of companies,....$12,042....$19,250


This examination was made in reference to certain charges in writing (ten or more in number) referred against the officers and trustees of the company by Mr. McCullogh, a policy-holder.

It was not an official examination, authorized or contemplated by the statute for testing the solvency of the company, which was admitted unquestioned.

It was admitted that the officers and trustees were charged with official misconduct. McCullogh appeared to support the charges.
[page 14/32]
Mr. Sewell, of the firm of Sewell & Pierce, counsellors, &c., appeared for the company. No evidence appears upon the record of the appearance of Lyon W. Briggs, as counsel for the superintendent or in any other capacity except as a witness to the deposition of Lucius Robinson, at Elmira, New York, in answer to eleven written interrogations.

Two stenographers were employed, one by Mr. McCullogh and one by the company.

The testimony, however, was not filed by the superintendent with his report in the insurance department, but by a resolution of the house is now in the possession of the assembly.

The taking of testimony was commenced on the 21st day of March, 1870, and was continued as follows: Commenced March 21, 1870, continued March 22d, and adjourned to March 26, 1870, and then adjourned to March 28, 1870, continued and adjourned subject to notice by the superintendent; commenced again May 4, 1870, continued and adjourned to 1 P. M., May 10, 1870; continued May 11, 1870; continued May 12, 1870. Thus making portions of eight days only occupied in the taking of testimony, viz., four days in March and four days in May. Mr. L. W. Briggs does not appear to have performed services of any consequence in the examination, beyond going to Elmira to take the written deposition of Lucius Robinson in answer to written interrogations, for which and his other services he was paid live hundred dollars by the company.

Being, therefore, in the pay and employment of the company itself, he could not well act in the double capacity of counsel to the superintendent also, for which duty it does not appear he had any previous education and no particular qualifications.

It seems to strike the committee also, that no counsel was necessary to be employed by the superintendent, Mr. McCullogh having offered to furnish counsel for the prosecution, and the company being represented by Mr. Sewell, and the superintendent acting in any judicial character in the trial of the charges against the company.

In the opinion of the committee the charge of $2,500 in this examination, besides $500 to Mr. Briggs, was altogether too large and exorbitant, and should have been confined to mere travelling and boarding expenses, which could not have much exceeded two hundred and fifty dollars.

The payment of a judge’s salary or expenses to an unlimited amount, by the person on trial, or by one of the litigants before him in civil cases, is such a flagrant violation of all principles of public policy, as need no further elucidation and explanation, than is embodied in its mere statement. This is especially true in this case, when grave charges of official misconduct have been made against the officers, and these same officers pay the superintendent, not out of their own funds, but from those of a corporation, the accumulations of which now reach $50,000,000. Is it a matter of astonishment that the officers were entirely willing to pay a much heavier sum, if any willing recipient could be found? The amount paid to Sewell & Pierce in this connection, the firm declined to answer.
[page 15]
Another point to which the committee desire to draw attention is the fact testified to by Mr. Briggs, that although he was present during the whole examination acting as counsel for the superintendent, he was paid $900,for his services in the matter, aside from the $500 paid by the company, while Mr. Miller was paid for his expenses during the same period the sum of $1,600.
The superintendent did not claim to the committee nor attempt to show the employment or payment by him to any other person out of this $2,500, any sum whatever except the $900 paid to Briggs, nor did he claim or attempt to show that it was necessary or proper to have counsel present.


This company was examined by Southwick and Bryant in the year 1871. Bryant was at that time a clerk in the department, and paid by the State. Mr. Freeman testified in substance that he procured the examination through Sewell and Pierce; that several applications were made to the department for an examination which were not complied with; that he met Mr. Miller in New York, and accompanied him to the office of Messrs. Sewell and Pierce; that Mr. Pierce requested him to go into another room; that shortly after Mr. Miller and Mr. Pierce came out together, and Pierce told him in Miller’s presence, that the matter was arranged, but that the examination would cost him $1,000, to the payment of which he then and there assented; that subsequently his company was examined, for which he paid $1,000 through Messrs. Sewell and Pierce (now Senator Pierce).

It further appears by other testimony that the $1,000 was paid by Mr. Pierce to Southwick, who paid Bryant $100 and retained the balance. Mr. Pierce denies that he had the private interview with Mr. Miller testified to by Freeman, and also that the amount to be paid for the examination was a reed upon in his office, and also denies other statements made by Mr. Freeman.

The examination occupied about a week: the amount charged was exorbitant; the president testified that it was worth not to exceed $250 to make the examination. The principle that clerks of the department should be only paid their actual expenses was here recognized, for Bryant only received $100 for expenses, while Southwick received the balance, $900. Messrs. Sewell and Pierce had been employed by the company for three years to attend to their business and legislation, for which they were paid in advance $5,000.

No third parties or brokers of any kind should be permitted to interview or interfere in any manner between the companies and the department.

Your committee do not deem it necessary to advert to all the examinations made by the superintendent and the commissioners appointed by him; but  referring to the testimony it will be seen that there are many other cases where exorbitant fees have been received by the commissioners, in most of which they refused to take
[page 16checks payable to their own order, but required the payment of their fees in currency or checks payable in blank.


The third subject of inquiry and investigation with which the committee were charged by the resolution of January 11th, was whether more had been raised in large amounts in order to pass alterations of the insurance laws conferring additional powers upon the superintendent in the appointment and selection of receivers, and otherwise.


This bill seems to have been drawn by the superintendent, after consultation with the representatives of several of the large insurance corporations. At least these companies approved of its provisions. This bill enlarged the powers of the superintendent, and was evidently to the interest of the large and well-established companies.

To pass the bill, it is in evidence, that a fund of $20,000 was contributed by seven of the leading insurance companies in New York.

Mr. James H. Goodsell seems to have been the active agent to dispense this amount at Albany, where he spent several months of the session, and in his efforts seems to have had the co-operation of Mr. Miller, in appearing before the committees and in other ways. The Mutual Life contributed $3,500 of this fund, inclosing a check to Mr. Miller, directing him to use the same in “such legitimate and proper way as your judgment may direct.” Mr. Miller cashed the check and paid the same over to Goodsell, as testified to by the latter, who was also the custodian of the balance of the $20,000.

It does not appear from the evidence who were the recipients of this large amount after it went into the hands of Goodsell, or in what specific manner it was employed. It is, perhaps, sufficient to know, as we do know from the sworn testimony, that this money was contributed by the large companies to influence legislation on this bill, and that the superintendent was privy to the fact of its being used.

There was no lack of opportunity for the defense to show that the amount was legitimately expended if such was the case.

But no attempt was made to account for the same, whether disbursed in a legitimate manner or otherwise, and the conclusion cannot be avoided that the parties concerned in this transaction were guilty of a gross perversion of trust.

The people’s money was being used for illegal purposes, and the fountains of law corrupted for selfish ends.

Facts disclosed by this investigation in relation to the prodigal and extravagant, not to say criminal, use of money in large amounts by many of the companies to secure selfish ends, are so manifest, that your committee feel that they would come far short of performing their duty if they fail to condemn in the most positive manner the practice which has been pursued by them.

The extravagance of the superintendent, in the matter of the examination of companies, has been fully supplemented, if not directly encouraged, [page 17by the companies themselves. And your committee feel bound in candor to state, that the evidence in this case has failed to sustain the charge that the superintendent has extorted money, except inferentially, from the companies in the examinations which he has instituted or made.

In the cases of the Mutual Life, the International, the Continental and several others, the witnesses testify that they not only paid the amounts freely, but urged the superintendent and his examiners to accept larger sums.

The officers and managers of these companies seem, in the minds of your committee, to have willfully misconceived the purposes of insurance. The law by which they were organized, and the confidence reposed in them by the insured, supposes that the affairs of the companies will be administered by their officers and directors, not for selfish purposes, but in the interest of the policy-holders and the public. Theirs is a sacred trust. Widows and orphans are dependent upon these institutions for the means of support. And property owners otherwise bankrupted by unavoidable calamity, rely upon them for the means wherewith to rebuild their broken fortunes ; and the insurance interests of the country are now so vast that the welfare of society itself is dependent, to a serious extent, upon an honest and economical management of these corporations.

Liberality is best exemplified when we expend or bestow that which we ourselves possess, and not that which we hold in trust from others for safe keeping and profitable investment. The prodigality of many of the companies in proffering large fees for examinations, in expending large sums for “counsel ’ and upon outside parties in the performance of doubtful and unwarrantable services, and in contributing to large funds, as in the case of the “ Miller Life Bill,” by which to secure unwise and injurious legislation and to corrupt legislators, should receive the most emphatic condemnation. Your committee believes that at no time since the insurance department was organized has it been necessary to use money to secure the passage of just and proper laws to further the best interests of insurance, whose humane purposes when rightly carried out commend it to the good will of all. The fact that such large sums have been thus used in an illegal manner, discloses not only corrupt and selfish motives, but an abuse of the various trusts reposed, which must sooner or later destroy all. confidence, and effect the overthrow of the entire insurance interest as at present administered.

In some instances insurance officers are believed to receive a salary equal to that of the President of the United States. This comes directly from the people. And the people ask in return fidelity, economy, and honest management.


The fourth subject of investigation with which the committee were charged was tq ascertain whether any other irregularities have occurred and still exist in the administration of the insurance department. Evidence has been taken upon several points which are hereinafter mentioned:

page 18


The printing of the insurance department during the administration of the predecessor of Mr. Miller had been done by Messrs. Weed, Parsons & Co., a well-known Republican firm, residing in the city of Albany.

Mr. John Parsons of that firm was before your committee on three several occasions. From his evidence it appears he was consulted by one Henry C. Southwick, a clerk in the canal department, having no connection with either the printing or insurance departments, who informed him that, in order to retain the department printing, he would have to pay a percentage or commission therefor.

After some considerable negotiation the rate of commission was fixed at twenty-five per cent., of which Southwick informed Parsons twenty per cent. would go to Miller, and five per cent. would be retained by him for his services in the matter.

Southwick in pursuance of this arrangement came to Parsons, got the bills, took them to Miller, had them certified, and then informed Parsons, who usually called upon Miller and received the certified bills, although in some instances, where the bills had been mislaid or lost by Miller, new bills were made out by Parsons, and certified by Miller, who delivered them to Parsons, who drew the money thereon and paid twenty-five per cent. thereof to Southwick.

There has been paid to Southwick, under this arrangement, $4,542.25, and there is still a considerable amount his due.

Your committee have been unable to obtain the testimony of Southwick, he having left the State about the time this investigation was ordered. There is no direct testimony showing Miller received any portion of this commission, but the circumstantial evidence, in the opinion of your committee, tends to show that in this transaction Southwick acted as the agent of Miller, and that Millet did in fact receive twenty per cent. of the commission paid by Weed, Parsons, & Co., upon the printing. The facts disclosed tend to show connection between Miller and Southwick, and called upon Mr. Miller to take the stand and deny the connection or the receipt of any percentage upon this printing; this he failed to do.


In the year 1870, the superintendent, instead of paying into the State treasury the fees collected by him, opened an account in the Albany City National Bank, and deposited there to his credit as superintendent, from time to time, t e sum of $46,863.99. On the third day of May, 1870, he drew from said bank and deposited in the bank of Monroe, located in the city of Rochester, the sum of $15,000, and on the twenty-first day of June, the further sum of $10,000, and the same remained in said banks and said banks had the use thereof till on or about the first day of October, 1870, when the same was paid by said Miller into the State treasury.

page 19

In the year 1871, the said superintendent deposited in like manner, the fees collected by him between the 1st day of October, 1870, and 1st of October, 1871, amounting to the sum of $85,703.63, in the National State Bank, and located in the ‘city of Albany. On the 17th day of February, 1871, he drew from said bank, and sent to said Bank of Monroe, the sum of $10,000. And on the 29th day of April, the further sum of $15,000; and on the 13th day of June the further sum of $20,000, making in all the sum of $45,000. And said bank had the use of the whole of said money from the time the same were paid in until on or about the first day of October, 1871, when the same were paid over by said superintendent to the State treasury. The State by reason of the money being withheld from the State treasury was obliged to, and did, advance and pay the salaries and other expenses of the superintendent and for various purposes, was obliged to and did borrow large sums of money, for which the State had to pay interest.

There was also an arrangement with the banks in which the State received interest on all the balances belonging to the State on deposit in the banks in which it was kept, the rate being three and four per cent on daily balances, depending upon the time for which it was deposited.

"The banks in which these deposits were made were controlled by intimate personal and political friends of the superintendent.

It cannot be claimed that there is any law justifying such a transaction.

In conclusion, your committee desire to say that to their minds it has been roved, among other things, to their entire satisfaction,

First, that the said superintendent has received and appropriated to his own use the fee of one-fifth of one per cent. on transfer of securities which he claims he is legally entitled to.

Second. That he has without authority of law, received, and in some cases charged for his own use, sums largely in excess of his legitimate expenses in making special and other examinations of companies, and that he has likewise received large sums in payment for is services in making such examinations.

Third. That he has allowed clerks in the department who are paid regular salaries by the State to charge and receive illegal and excessive fees for making special and other examinations.

Fourth. That he has appointed commissioners to make examinations who have received large and excessive fees, entailing great expense u on the companies.

Fifth. hat the department has been so managed that many of the companies have believed it necessary to employ brokers and attorneys who were known to be on intimate terms and favorites with the superintendent, to obtain examinations and protect the interests of their companies, and the payment of large sums for their personal interest in that behalf.

Sixth. That the testimony tends to show that he has received through H. O. Southwick, Jr., a commission of twenty per cent. On the printing of the insurance department,

Seventh. That he has withheld from the State treasury the fees [page 20] belonging to the department and which should have been paid into the State treasury within a reasonable time.

Eighth. That $20,000 was raised by seven companies for improper legislative purposes last winter to secure the passage of what was known as the “Miller Life Act,” a bill conferring extraordinary powers upon the superintendent, and that the superintendent was cognizant of the use thereof.

The evidence herewith presented is voluminous and instructive in more points than one:

Your committee have herein fully expressed their opinions upon the various points of this investigation without prejudice against the superintendent, and yet with a desire fully and fairly to represent the testimony.

Possibly different individuals, equally honest, may arrive at different conclusions.

The laws in relation to examinations of insurance companies are very lax, and abuses have grown up under them, which the legislature should at once correct by the passage of adequate and stringent laws, as suggested in the body of this report. Whether the superintendent has been guilty of intentional violation of law, and whether or not he should be removed from office, are questions which we will leave to the consideration and wisdom of the House.

All of which is respectfully submitted,
J. W. Lippitt, Chairman.
A. L. Van Duzen.
l. H. Babcock.
W. H. Enos.
F. W. Tobey.

page 21




ALBANY, N. Y., April 23d, 1873. 

The Assembly Committee on Grievances resumed their investigation into the management of the Mutual Life by the officers and a clique of the Trustees as set forth in the allegations of Stephen English, by petition presented to the Assembly of the State of New York.

Present—The Hon. C. W. Herrick, Chairman, E. Townsend, A. Blessing, and Frank Abbott, J. Thomas Davis, clerk, and O. T. Atwood, Counsel to Committee. Thomas Darlington, Esq., appeared for Mr. English.

The Hon. JAMES M. Husted, appeared before the Committee and made a statement, but declined to be sworn, asserting that a member of the Assembly was always taken as a man of honor (laughter). Mr. Husted denied having received $500 for making a speech at the Board of Brokers in favor of Mr. Winston. He had been employed by the Counsel of the Mutual Life as associate counsel in two cases, for which he received a retainer as lawyer.

Hon. FRANKLIN W. TOBEY, Chairman of the Insurance Committee, sworn, stated that last year he was chairman of a sub-committee to investigate certain charges against Geo. W. Miller, the Superintendent of the Insurance department, under a resolution of the Assembly, passed on the 11th 0 January, 1872. On the 17th of February, 1872, Mr. Lippit made a motion in reference to Mr. Miller, that he should file the testimony which he had taken in his investigation into the management of the Mutual Life by F. S. Winston and Richard A. McCurdy. Another resolution was made by Mr. Lippit, on the 29th of February, which recites the communication from Superintendent Miller, in which he respectfully or rather disrespectfully declined to file the testimony taken against the officers of the Mutual Life. On the 2d of March the testimony was sent in as appears by the Assembly Journal Vol. 1. We made enquiry in reference to moneys appropriated by Life Insurance Companies for the purpose of affecting the Legislature in their action upon certain bills. Twenty thousand dollars was contributed by seven of the leading companies of New York. The Mutual Life contributed $3,500 of this fund. Mr. English appeared at the investigation and assisted Mr. Barnes in getting out t e facts. Mr. Winston was in Europe at the time. ere was a good deal of feeling displayed in the examination and excitement in regard to it in Insurance circles. Part of the testimony in the Miller trial read as follows:

page 22


"John M. Stuart.—Secretary of the Mutual Life testified that he produced a copy of the check, No. 11,856, on the Bank of New York, for $3,500, but cannot specify the purpose for which it was drawn, any more than is specified in the stub. It was charged to tax account. The writing on the stub is in my handwriting. The $2,500 paid to Miller for the examination was also paid by check."


"Richard A. McCurdy, Vice-President, testified that he held the position between seven and eight years. An examination was made by Mr. Miller into the affairs of our company in the winter (spring), of 1870. It occupied over three months, two or three days every week. (The examination took only portions of eight days. We paid Mr. Miller for making this examination, $2,500; thought the charge was very moderate and asked him to make out a bill for a larger amount, but he declined. Messrs. Sewell and Pierce were counsel employed by us, they were our regular counsel. Mr. Pierce was then in the Legislature. The Mutual Life did not to my knowledge pay anything to the Deputy Attorney-General for anything connected with that examination. I can swear no such payments were made by the company.

"Chairman.—Could you say there were no payments made by Sewell & Pierce to the Attorney-General's office?

"McCurdy.—I don’t know anything about Sewell & Pierce's arrangements.

"Chairman.—When was that bill made out?

"McCurdy.—My impression is, it was made out at the time of its payment in the office.

"Chairman.—What was that check for $3,500 paid for?

"McCurdy.—That check was paid for the purpose of presenting properly before the minds of members of the Legislature and other persons, the advantages of the bill then before the Legislature. Mr. Winston favored the passage of the bill. I knew that we paid the $3,500. I directed the Secretary to draw the check by Winston’s orders. Mr. Winston came into my room on one occasion with another gentleman and commenced to talk about certain measures

that were before the Legislature. Mr. Winston assented to a payment of $3,500 and after the person (James H. Goodsell), went out of the room, he said to me. I don’t know him (Jas. H. Goodsell), very well, I don’t think we had better make that check payable to his order, I have not met him but once or twice before, and I had rather make it payable to the order of somebody that I know, and for that reason it was made payable to your (Miller) order.

"Mr. Miller.—It was the understanding between you and me that it was to be used for proper and legitimate purpose of presenting to the minds of the Legislature and Committee in both houses

thereof, the merits of the bill, with a view to secure its passage.


"Mr. Miller.—Look at that letter I show you.

page 23

"McCurdy.—This is Winston’s hand-writing.

"Miller.—Is that a letter appropriate to cover that check?

"McCurdy.—I have no doubt of it. It is of the same date.



New York, March 13th, 1871.

"GEO. W. MILLER, Superintendent:

"Dear Sir:—We send our check for $3,500 to be expended ii such legitimate and proper way as your judgment may direct.

Very respectfully yours,
F. S. WINSTON, President."

* * * * * *

Evidence of O. H. Palmer for Defence.

Mr. Darlington.—Were the charges against Mr. Homans ever served upon him?

Mr. Palmer.—I am not aware of the service of any charges (sensation), except as embraced in a letter I addressed to him.

Mr. Darlington.—Was there a meeting of the committee at which he was invited to be present?

Mr. Palmer.—Not that I am aware of (sensation).

Mr. Darlington.—Was he ever allowed to produce witnesses before the committee?

Mr. Palmer.—I not aware that he ever asked permission. The question was never up before the committee that I am aware of.

Mr. Darlington.—Did the Special Committee ever have a conference with Mr. Honians on the charges, or afford him a personal explanation?

Mr. Palmer.—I don’t think he was ever before the committee.

Mr. Darlington.—Was he ever invited to attend the Committee?

Mr. Palmer.—Not that I am aware of. Mr. Winston in the first place called the attention of the Finance Committee. We made a report, Mr. Homans not being called before us. * * *

Mr. Darlington.—At whose expense was this book printed?

Mr. Palmer.—I asked the company to have it printed, for the purpose of laying the facts before the committee, of which I was chairman.

Mr. Darlington.—Printed with the money of the policy-holders?

Mr. Palmer.—I don’t know anything about that.

Mr. Darlington.—Do you call this ex-parte examination proofs of testimony?

Mr. Palmer.—It was the facts I gathered. * * *

Examination of Lewis C. Lawton for Defence.

Lewis C. Lawton—Assistant Actuary of the Mutual Life since 1866, testified as to the practice of the company relative to post-mortem dividends, although not familiar with the method of determining postmortem dividends until Prof. Bartlett came in. Could not tell who determined them. It must be somebody in the office.

page 24

Hopkins’ case was finally adjusted at about $40. The amount Mr. Winston ordered not to be paid was $123. The $40 has never been paid. Mr. Homans was appointed guardian for the minor children. Neither any of the clerks or I had any difficulty in working out the formulas furnished by Mr. Homans.

Mr. Sewell.—Did not the Committee tell you that they were obligated to call upon you, because they could get no information from Mr. Homans?

Mr. Darlington.—I submit that instead of investigating Mr. Winston, we are now about investigating Mr. Homans.

Sewell—We don’t know who will get investigated before we get through (laughter).

Darlington.—The witness is asked if some of the committee didn’t tell him that they couldn’t get information from Mr. Homans, would that prove that Mr. Winston had or had not mal-appropriated funds?

Chairman.—You are diverging from the real question; you must dispense with that part of it. Mr. Bewley’s policy bore Mr. Homan’s endorsement.


Darlington.—In the computation which Mr. Homans made on Hopkins’ post-mortem dividend, was it in accordance with the forms adopted by the company?

Lawton.—Yes, sir; so far as I know.

Darlington.—Who set aside that calculation? Who directed you not to pay it?

Lawton.—President Winston.

Darlington.—At that time was there any rules, regulation or bylaw of the company, which had repealed the former regulation in regard to it?

Lawton.—No, there was not.

Darlington.—I believe you once audited the accounts, did you not?

Lawton.—I once audited the quarterly accounts.

Darlington.—Did you go over the items?

Lawt0n.—All of them from the ledger.

Darlington.—Did you know that the items were correct or that they were merely transcribed from the books?

Lawton.—That they were correctly transcribed; that is all I had to do with it (sensation).

Darlington.—What was the form of your audit?

Lawton.—"That I have carefully examined the foregoing statement and find the same correct."

Darlington.—You don't say, "correct transcript from the ledger," do you?

Lawton.—No, sir.

Darlington.—Didn't you know that Mr. Homans had refused to audit that account?

Lawton.—I think I did.

page 25

Darlington.—Do you know whether the $2,250 mentioned in that account as paid for rent of the Boston office was so paid?

Lawton.—I had no personal knowledge about the payment. I didn't pay the money over. I didn’t see any receipt for it, or have anything to do with it.

Darlington.—Then you audited that without knowing whether it was correct or not?

Lawton.—I had every reason to believe that a charge made upon the books for a sum of that kind was right.

Mr. Darlington.—Do you know whether the company had incurred any liability for any Boston office, or for rent of any Boston office?

Mr. Lawton.—No, sir.


Sheppard Homans.—I asked to be allowed to address you, as a question of privilege simply, and not as a witness. I was subpoened here on two or three occasions, and attended, and answered the questions put to me, and gave my evidence in as fair and straightforward a way as I knew how. * * * The cause of my removal from the company, the direct cause, was my refusal to audit an

account, which I thought was incorrect, and which any honest auditor would say was incorrect. There were false statements in it, that led to an investigation of the dividend system of the Company. I have given my evidence in that respect. After the Company had made this fearful blunder, it was taken out of my hands entirely. They made a fearful blunder, and violated the Charter, and all principles of equity, and violated the resolution of the Board of Trustees and of the Referees, who were appointed to decide the matter finally, and ’twas taken out of my hands. They made a fearful blunder, which has been corrected by the payment of Two Millions of dollars within a few months to rectify that blunder! ! I have the most ample evidence that I protested at the time, and I was not responsible for it; and I repeatedly offered proof to show that I was a faithful and efficient officer, and faithful in all my duties. * * *

Mr. Abbott.—What was this mistake that cost them Two Millions of Dollars to rectify?

Mr. Homans.—It was by distributing the surplus of the Company, in violation of the resolution of the Trustees, and the decision of the Referees, to whom it was submitted for final decision. * * What I complain of is, that the affairs of the Mutual Life are kept from the trustees! ! Mr. Vice President McCurdy keeps the minutes, and I say that in reference to the Insurance Committee, about which I had most knowledge, THAT IT WAS MANIPULATED IN SUCH A MANNER THAT THEY COULD NOT KNOW THE TRUTH OF THE MATTERS BEFORE THEM! They were kept from them AND MIS-STATED, TIME AND AGAIN! What that Company wants is a fair and full investigation, by disinterested persons on those allegations. I have made them in my official capacity, as Actuary, and they have been investigated, and the facts have been proved. They have been condone and covered up.

page 26

Mr. Blessing.—What do you mean by condoned?

Mr. Homans.—I mean they have been covered up and concealed, on the ground that their exposure and ventilation would do some harm—the investigation of the Hudson loan, the Seymour and North loan, and young Winston’s policies, and other matters. * *

The manner of making post-mortem dividends was one among them. They must be paid. There is no getting out of it. Mr. Winston caused to be written, and gave the order, that in future no post- mortem dividends should be paid to any one by the company. There was the order! It was my duty for fifteen years to audit the receipts and payments of money. Here was an account which I said was wrong. I tried to object to it in the manner least calculated to make any trouble or friction, and all resulted from that. * * *

It is now the rule of the Mutual life, and they have had to go back to the system which they abandoned and departed from, to the injury of the-policy-holders, and at a great expense, solely to protect Mr. Winston from the consequences of his illegal order. I have the most ample proof. Two Million Dollars have been paid to correct the error!

Mr. Sewell.—Do you mean to say that in the distribution of a new dividend to the amount of $2,000,000, errors in the distribution of a prior dividend have been corrected?

Mr. Homans.—Not at all. I mean apart from the distribution of the surplus, they appropriated and paid $2,000,000 besides, out of the surplus, to correct the errors of the former distribution, to make amends for the erroneous distribution three years ago. I mean to say that they have been obliged to appropriate $2,000,000 to correct this particular blunder, which Mr. Winston made in defiance of the rules of the Trustees and the resolution of the Referees. Some of the parties had died in the meantime, and have not received their shares.

Lewis C. Lawton, re called for the defence.

Mr. Lawton testified that in the dividend of January, 1870, an error was committed, by which policies dated in February, for example, received very large sums, too much perhaps, while policies dated in December received nothing, or very little. In order to correct that, the trustees ordered immediately that a sum be appropriated to adjust all such inaccuracies. There was no time to do it in 1870. In 1871 Prof. Bartlett was instructed to rectify the error, but we were not able to send out the certificates of surplus rectifying these errors until 1872. About two million dollars were required. to rectify the error of 1870.

Chairman.—To comply with the Charter.

Mr. Darlington.—Is that Mr. McCurdy’s handwriting, if so, read it.

Lawton.—It is. "The following minute is made at the request of the Actuary (Mr. Homans)." "The Actuary deems it his duty to dissent from the action of the Committee, directing an addition of

80 per cent. to the contribution as first reported, as being incorrect in principle, and in his opinion deranging the equities of policy-holders."

page 27

Darlington.—That minute refers to this dividend which was subsequently rectified at a cost of two million dollars.

Lawton.—I have no doubt of it.

Darlington.—I produce a copy of a long letter from Mr. Homans to Mr. Winston, explaining scientifically the grounds upon which he objected to the addition of 86 per cent. to the dividends.


Richard A. McCurdy, the Vice-President of the Mutual Life, testified that he brought the subject of Fred. M. Winston’s policies before the Committee, whilst Mr. Winston was at the funeral. The question of the amount of his policies was not raised. I didn't know at the time. It was only resolved that his policies, whatever they were, should be revived in favor of his orphan children, and paid to them in the form of an instalment. * * * I knew nothing about the Husted loan, or the loans to Seymour and North. With regard to the 80 per cent. dividend characterized by Mr. Homans "as the most extraordinary division of surplus ever made," there had been a grave difference of opinion between Mr. Homans and the officers of the Company, especially the trustees, who were very obstinate men, and did not quite agree with Mr. Homans. The practical result with regard to that 80 per cent., however, was that the dividend to the policy-holders was delayed for some months, and gave great dissatisfaction to agents and all parties. There was certain dissatisfaction about Mr. Homans.

Homans.—Did I ever see that pamphlet?

McCurdy.—No, sir; because you resigned before the matter was completed (sensation). * * *

Sewell.—Do you hold some proxies?

McCurdy.—I hold some proxies; they have been sent to me voluntarily (sensation). I agreed to put Mr. Homans on the Board of Trustees and cast some proxies for him.

Homans.—Did you do it?

McCurdy.—I would have done it if you had not written me a letter. I told you that I would carry out my bargain if I lost my place in the company.

Homans.—I deny ever making a bargain with you.

McCurdy.—The $2,500 for Boston office rent was aid to the lawful Boston agent (sensation). Mr. McCurdy entered fully into the Bradford policy job, but could not tell the number of proxies he held. He never counted them and never intended.


Mr. Richard A. McCurdy, in his testimony (see page 328 ), concerning the taking of bonuses by the officers or trustees, testifies as follows:

Q. Have you within the last five years to your knowledge, received directly or indirectly from any person or corporation, or has

page 28

your president to your knowledge or information received any sum of money either directly or indirectly for the loan or deposit of the bonds, or security, or assets of the insurance company? A. Never.

Q. Neither has there been any profits received by you or any officer of the company, for the investments of the funds of the corporation? A. Not one penny; if there were, and it should be known, any such officer would loose his place immediately. * * *

A few days after this testimony was given the publisher of this work made known to Mr. McCurdy the facts contained in the following affidavit. There has been no removal.

[This is a copy handed to the publisher]


Samuel B. Tobey, of the town of Conquest, county aforesaid, and State of New York, being duly sworn, deposes, and says, that there is now pending and undetermined before the Honorable Sterling C. Hadley, Referee, an action in the Supreme Court of the State of New York, brought by The Mutual Life Insurance Company of New York, against William Penn Howland and others, for the foreclosure of a certain mortgage originally amounting to $100,000.

The facts of the case as appear in evidence by the testimony of the defendants are as follows. In the month of October, 1867, said defendant, William Penn Howland, made application to Oliver H. Palmer, then a trustee of said Mutual Life Insurance Company, for a loan of $100,000, on about four thousand acres of land in Cayuga county, said loan was obtained by said Howland on these conditions, namely, the execution of a second mortgage, on said premises, for $20,000, to Hiram Libley, of Rochester, one-half interest of said second mortgage being soon thereafter assigned to said Palmer, trustee as aforesaid; also the payment to said Palmer by said William

Penn Howland, of one thousand dollars in cash, said conditions were fulfilled, and the loan obtained, and said deponent, Samuel B. Tobey, further says that the said defendants, William Penn Howland, and others, contest the foreclosure of said mortgage, by a defense of usury, and said action is as this deponent verily believes, yet undetermined, and deponent further says, that L. & . C. Robinson, of Elmira, N. Y , appear as counsel for the plaintiff, and H. V. Howland, Esq., of Port Byron, N. Y., as counsel for defendants, William Penn and Cornelia Howland, and Samuel B. Tobey, and D. D. Walworth, of Chittenange, N. Y., of counsel for S. F. Tyler.


Sworn to and subscribed before me this 8th day of September, A. D., 1873.

(Signed) J. W. BARNES, Notary Public.

page 29

The Report of the Examination, by the Insurance Department, of the Washington Life Insurance Company of New York.—Cyrus Curtiss, President.


ALBANY, January 23d, 1877.

To the Editors of the Evening Journal:

Having caused a personal examination to be made of the condition and affairs of the Washington Life Insurance Company of New York, as of the 31st day of December, 1876, by Hon. John A. McCall, Jr., Deputy Superintendent, duly appointed by me for that purpose, and deeming it for the public interests that the result of his investigation should be published, I herewith enclose his report for publication.

Very respectfully yours,
Acting Superintendent.

ALBANY, January 23d, 1877.

Hon. WILLIAM SMYTH, Act. Supt. New York Insurance Department:

I respectfully report that, in accordance with the provisions contained in your appointment, No. 362, dated December 26th, 1876, and with the assistance of Messrs. Ballard, Willis and W. H. Smyth, I have completed an examination of the Washington Life Insurance Company of New York City.

The very satisfactory condition of the Company, as exhibited below, is attributable to the management of its affairs by able, prudent and honorable men. It gives me pleasure to state that in a minute and exacting investigation I find nothing to condemn, but, on the contrary, much to commend.

Complete schedules of mortgages, deferred premiums, and real estate investments as of December 31st, 187 6, being the date of examination, have been placed on file in the department.

page 30

The following are the assets and liabilities:


Real Estate, - - - - - $159,284 80
Bonds and Mortgages, - - - - 2,334,252 79
Cash in Bank and Office, - - - 116,654 18
Accrued Interest on Investments, - - - 53,071 26
Loans on Policies within their value, - - 19,109 46
Net Uncollected and Deferred Premiums; - - 180,429 95

STOCKS AND BOND. Par Value. Market Value.

U. S. 6's, Registered, $510,000 00 $581,400 00
N .Y. State 7's, Registered 100,000 00 100.000 00
N. Y. City 7's, Registered 990,000 00 1,138,500 00
N. Y. City 5's, Registered 122,200 00 122,200 00
Brooklyn 7's, Registered 260,000 00 299,000 00
Brooklyn 6's, Registered 100,000 00 107,000 00
Kingston City Coupon Bonds, 11,000 00 11,000 00

------------------------------$2,003,200 00 $2,359,100 00

-------------------------2,359,100 00

Agents' balances, - - - - - 43,592 92

TOTAL Assets, - - - $5,265,495 36

Deduct items not admitted :

Morgages taken for debt, - $10,838 81

Value of Real Estate over

Department Appraisal, ------37,784 80
Agents’ balances, - - - -------43,592 92

--------------------------------92,216 53

TOTAL ADMITTED Assets, - -- ------$5,17 3,278 83


Net Value of Outstanding Policies,--$4,337,644 00
Unpaid Losses and Endowments not due,-43,306 82
Premiums Paid in Advance, - ---------------2,388 51
Unpaid Dividends to Stockholders -----------346 50
Salaries, Rent, &c., ------------------------3,000 00

TOTAL LIABILITIES as to Policyholders, $4,386,685 83

SURPLUS as regards Policyholders, ----------786,593 00

AGGREGATE, - - -------------------------$5,173,278 83

CAPITAL STOCK,------------------------$125,000 00

Respectfully submitted,

Deputy Supt.

page 31




[Organized July 16, 1860.]

H000 WESENDONOK, President. Goimsnins Donnuns, Secretary.


Capital stock paid, $200,000.


Cash received for premiums, without deductions . . . 81,894,598 90
Cash received for annuities, . . - . . . 418 40
Total premium income . . . . . . . . . 81,395,071 3')
Interest upon mortgage loans . . . . . . . . 877,620 37
Interest on bonds and dividends on stock . . . . . . . 56,212 01
Discount on claims paid in advance . . . . . . 184 85
Rents for use of company's property . . . - . . . 8,864 18
Policies fees . . . . . . . . . . . 222 82
Total income during the year . . . . . . - . $1,832,170 53
Balance of net or ledger assets December 31, 1876 . . . . . 6,824,685 41

Total . . . . . . . , . . . Ti, 94


Cash paid for losses and additions . . . . . . $453,743 83
Cash paid for matured endowments and additions . . . 22,832 47

Total amount actually paid . . . . . . - . $476,576 30

Cash paid to annuitants . . . . . . . - . 8,539 95
Cash paid for surrendered licies . . . . - . . 243,124 56
Cash surrender values, inc uding reconverted additions applied in payment of premiums . . . . . . , . . . , 14,199 61
Cash dividends aid to policyholders applied in a ment 0! premiums . 151 495 "3

Total paid policyholders '. . p.y . . . $994,530 16 ' '

Cash pald stockholders tor Interest or dividends . . . . . 24,000 00
Cash paid for commissions to agents . . . . . . . 102,450 11
Cash paid for salaries and traveling expenses of agents . . . . 60,660 22
Cash paid for medical examiners‘ fees . . . .' . . . 10.816 05
Cash paid for salaries and other compensation of oificers and other ofllce employees 68.578 B0
Cash paid for taxes, . . . . . . . . . . 10,468 S5
Cash paid for rent and expenses of real estate . . . . . 16,503 31
Cash paid for commuting commissions . . . . . . . 4,754 69
Cash paid for furniture and fixtures and safes for home and agency oflces . 1,519 84
Cash paid for advertising . . . . . . . . . 10,781 40
Cash aid for the following items, viz.: stationery, postage, etc. . ' 15.775 ‘Z0

Total miscellaneous expenses , . . . . ‘$21,344 47

Total disbursements during the year . . . - - - C1-215,330 62

Balance December 31, 1876 ' . . . . , . . s1,440.§§a s2

Invested in the following :


Real estate, unincumbeied, cost value . . , . . . . $893,688 65

Loans secured by mortgage on real estate, first liens . . . . . 5,118,904 52


Par Value. Market Value. Ammmt Loamd.

United States bonds, $200,000 00 $229,292 50 $200,000 00

m; i _ " mi Z 2()(),[)()() Q0

page 32

STOCKS, BONDS, Etc., Owned by the Company.

Par Value Jllarket Value.

United States bonds, . . . . $744,000 00 $830,412 00
Virginia State bonds, . . . 30,000 00 8,850 00
Mississippi Slate Auditor's warrants, . l0,0ll0 00 7,500 00
New York City warrants, . . 575,000 00 662 3,0 0"
New York County warrants, . . . 25,000 00
Brooklyn City warrants, . . . 150,000 00 168,440 00
Total (carried out at cost value), . $l,§4,_0<T0_00— $l,E7I512_00 _

~—-a - '— ’—’ "_' 1,609,025 07

Cash in company's oflice, $3,912.24; deposited in bank, $120,384.84 ; total $124,307 08

Total net or ledger assets as per balance . . . . . . $7,440,925 32
Deduct depreciation from coat of assets, . . - . . . 21,851 52
Total net or ledger assets, less depreciation, . . . . $7,419,518 80

Interest due and accrued on bonds and mortgages . . . . 99,669 68
Interest due and accrued on bonds and stocks , . . . , 39,616 00
Interest due and accrued on collateral loans . . Q - . . 169 92
Market value of bonds and stocks over cost . . . . . . 68,486 98
Gross premiums due and unreported on policies in force December 31, 1876 $94,732 91
Gross deferred premiums on policies in force December 31 . . 268,532 60

Total . . . . . . . $353,265 61

Deduct the loading on above gross amount . . . . 70,663 10
Net amount of unoollected and deferred premiums . . . . 282,612 41
Total admitted assets . . . . . . . . $7,910,108 74

Net present value of all the outstanding policies in force on the 31st day of December, 1876, computed by the New York Insurance Department, according to the American Experienee Table of Mortality, with 4}; per cent inteiest . . 843656.524 00
Claims for death osses due and unpaid . . . . - $12,704 04
Claims for death losses and matured endowments not due . 92,381 63
Claims for death losses and other policy claims resisted . . 17,285 11
Total policy claims . . . . . . . . . 122,320 78
Dividends of surplus, or other description of profits due policyholders, . I 89,486 70
National, State or other taxes due . . - . . . . . 6,040 27
Amounts due on account of salaries. rents and ofllce ex enses . . . 1,583 33
Amount of any other liability of the company, viz.: eserve for extra risks and policies lapsed liable to be surrendered . - . . . . 18,688 57
Liabilities on policyholders’ account, . . . . . . $6,;-7,64-z 65
Gross surplus on policyholders‘ account, . . . . . . 1,065,460 09

Total liabilities, . . . . . . . . . ;T,suo,Es_1_4

Estimated surplus accrued on Tontine or other policies where the profits are specially reserved for that class of policies . - $5,841 25
Estimated surplus accrued on all other policies . . . 180,000 00

Hon. MATTHEW HAL1~;—I would ask the indulgence of the committee on behalf of Mr. Hyde to read the following communication which has been handed to me; it is as follows:


New York, March 19, 1877.

To the Insure/nee Committee of the House of Assembly pf the State of New York: .

On or about the twentieth day of January this society was notified by the Superintendent of the Insurance Department of the

page 33

State of New York of the resolution passed by the Senate on the 16th day of January, 1877.

At the time when this notification was received, the force of the Superintendent of Insurance, including the deputy superintendent and his clerks, was engaged in making an exhaustive examination of the condition of this society, in its office in the city of New York.

At the same time a committee of nine, composed of policyholders, was engaged in a separate but equally searching examination of the society s affairs, in its office.

From that day to the present date, these examinations have been in progress, and coupled with the usual business of the society, which is especially engrossing at the beginning of the year, have occupied the time and attention of the officers and employees of the society, to the exclusion of every thing which was susceptible of postponement.

The resolution of the Senate called for the information desired "at the earliest date practicable," and in delaying the report therein required, there was no intention on the part of the officers of this society to disregard the legal requisitions of the Legislature. It was natural to suppose that the late superintendent would, from his own examination, supply the omission of the society, in case it was necessary to report at once, as he had every account in his possession.

Our annual statement, required by the laws of the State, has been necessarily delayed to await the report of the different examining bodies, and when completed would have contained and will contain the desired information in the aggregate, and it was the intention of the officers to furnish with that statement all details, legally required by the Legislature, or the department of insurance ; it was from these causes and from no disrespect to the Legislature that the information has been delayed, and I desire to express my regret that the omission occurred.

I now beg leave to submit a full statement, under oath, in accordance with the requirements of your resolution of the twelfth instant.

In presenting this statement, I trust you will pardon my venturing a few observations pertinent to the matter inquired of, and quite necessary to enable an one to form a correct judgment in regard to the amounts paid by this society in salaries:

The Equitable Life Assurance Society of the United States was organized in 1859, since which time there has been forty-one (41) life insurance companies organized in this State, with equal opportunities for success. These companies were, for the most part, formed contemporaneously with, or within the five years succeeding the organization of the Equitable Life.

Of this number, twenty-nine (29) have been wound up in one manner or another, leaving twelve (12) in the field.

Now, the cash assets of the Equitable are upwards of $31,500,000, while the combined assets of the twelve companies amounted, according to the last published oflicial reports, to be but $30,000,000.

The surplus of the Equitable Life is over $5,500,000, and no part of it is composed of premium notes.

The combined surplus of the remaining twelve companies by the

page 34

last published oflicial reports, was $2,700,000, and these combined companies hold premium notes, as assets, exceeding $3,600,000, or nearly a million dollars more than their combined surplus.

This comparison is made, not to disparage other companies, many of whom have done well under difficulties of no ordinary character, but that your honorable body may, at a glance, understand the results which have been accomplished in eighteen years by the management of this society, and for the attainment of which the salaries, mentioned in the accompanying list, have been authorized by the directors of this society.

The total salaries for the year 1876, including salaries and traveling expenses of managers of agencies and general, special and local agents, were $285,000, while the total reported by the other twelve companies in the latest published official reports were $528,000, or nearly double.

At the beginning of 1877, the salaries of the Equitable Society were reduce $26,320.72 for the current year.

It is but just that the salaries of a large and successful company like the Equitable Life should be viewed in conjunction with the results achieved, at a much larger expense, by other companies organized contemporaneously or since.
Very respectfully yours,
H. B. HYDE, President.

H. B. HYDE, sworn.

Examined by Mr. HALE:
Q. Will you produce a statement of the salaries paid by your company? A. I have a statement, in which I confine myself closely to the wording of the resolution; it is very brief.

Salaries, Fees and other Compensation of Officers and Employee of the Equitable Life Insurance Society of the United States for the year 1876.

President . . . . . . $37,500 00
Vice-President . . . . . 22,000 00
Actuary . . . . . . 20,000 00
Secretary . . . . . . 16,500 00
Assistant actuary . . . . . 7,500 00
Assistant secretary . . . . . 5,000 00
Auditor . . . . . . 5,000 00
Cashier . . . . . . . 5,000 00
Superintendent bond and mortgage department . 4,500 00
Seventeen book-keepers, at an average salary of $2,437,

to a total of . . . . 41,430 00

Twenty-five accountants and clerks, at an average salary of $1,246.48 . . . . . 31,162 00

page 35

Thirty-five under clerks and boys, at an average salary of $342.83 . . . 11,999 32

Salary in commutation of constructing engineers’ percentages on buildings . . 15,000 00

Eight special agents, mspectors and adjusters, at an average salary of $1,995.55 . . 15,964 30

Ordinary fees of fifty-two directors for board meetings and meetings of standing and special committees 9,071 00

$247,626 62

Salaries and Traveling Expenses of Managers of Agencies and General, Special and Local Agents.

Superintendent of agencies . . . . $7,500 00
New England manager . . . . 5,000 00
Adjuster and confidential traveler . . . 4,500 00
Cashiers at agencies . . . . . 9,036 42
Traveling expenses . . . . . 10,557 77
$36,594 19

Salaries, etc., of Medical Examiners.
Chief medical examiner . . . . $16,500 00
Associate, part of year . . . . 7,000 00
Associate, part of ear . . . . 1,041 66
Other examiners’ fees . . . . 22,731 81

$47,273 47

Paid Attorneys and Uounselors for the year 1876.

Principal counsel . . . . $12,000 00

Attorneys in New York for litigated business, advice and incidental disbursements . . . 9,949 19

To thirty-three other law firms in different parts of the United States . . . . . 13,346 10

$35,295 29

CITY AND County of NEW York, ss. :

Henry B. Hyde being duly sworn, says that he is president of the Equitable Life Assurance Society of the United States, and that the foregoing statement truthfully sets forth the sums paid by said society for salaries, fees and compensation of, or donations to the

page 36

president, vice-president, secretary, medical examiners, attorneys, counselors and other employes for the year 1876.

Sworn to before me this 19th day of March, 1877.

Notary Public (65), N. Y. County.

Mr. HYDE—I have also prepared an additional aper which I presumed would be called for, although not contained in the text of the resolution I received from your honorable body. It is with regard to my compensation from the organization of the company to its present moment, the total sums paid to me from the commencement to which I testify under oath. I will read first the salaries and afterward the extra compensation I have received for years:

Salary May 1, 1859, to Dec. 31, 1860 . . . $1,000 00
Year 1860 . . . . . 1,749 99
Year 1861 . . . . . 2,666 63
Year 1862 . . . . . 3,000 00
Year 1863 . . . . . 5,000 00
Year 1864 . . . . . 5,000 00
Year 1865 . . . . . 7,500 00
Year 1866 . . . . . 7,500 00
Year 1867 . . . . . 7,500 00
Year 1868 . . . . . 7,500 00
Year 1869 . . . . . _7,500 00
Year 1870 . . . . . 7,500 00
Year 1871 . . . . . 7,500 O0
Year 1872 . . . . . 7 ,500 00
Year 1873 . . . . . 7,500 00
Year 1874 . . . . . 7,500 00

Then comes an amount I have not included, which was paid to me for disbursements in the early history of the company; we raised $100,000 the whole of which sum was immediately paid to the authorities at Albany: there was a premium on that of $1,600, there were disbursements I made at the time determining never to call upon the company for it if the company was lame; the company went well and they paid me $5,000, which I have not include as I had no personal gain from it; my extra compensation is as follows:

For 1864 and previous - - - - $16,199 83
1867 and previous - - - - - 20,060 21
1868 - - — - - - 28,000 00
1869 - - - - - - 26,171 37
1870 - - - - - - . 34,598 64
1871 . - - - - - 42,458 59
1872 - - - - - - 50,000 00
1873 - - - - - - 50,000 00
1874 - - - - - - 50,000 00

page 37

Mr. Hyde’s contract with the society expired at this date and no new contract was made on the basis of a per centage on the surplus of the society; from this date the resident was paid a salary of $37,500; in 1875 there was due to llfr Hyde $63,822 under his contract for the past five years; this amount he surrendered to the society; at the close of 1875 the society added to Mr. Hyde’s compensation $20,000 from the sum so surrendered; the society made a similar addition to Mr. Hyde’s compensation from the same source at the close of 1876.

Salary for 1875 - - - - - $37,500 00
Salary for 1876 - . - - - - 37,500 00
-------------------------$485,905 25

The average compensation which Mr. Hyde has received during his eighteen years’ connection with the society, has been, from all sources, $29,217 per annum.


Henry B. Hyde being duly sworn, upon his oath, says that he is the president of the Equitable Life Assurance Society; that the fore-going statement is a true exhibit of all the moneys received by him in the way of salary or compensation, from the foundation of the society in 1859, to the present time; and that he has received no other sum or sums of money from said society during that period as compensation or for his personal benefit, either directly or indirectly.

Sworn before me this 19th day of March, A. D. 1877.

Notary Public (131), N. Y. County.

By Mr. HALE.
Q. You have been president since the formation of the company? A. No, sir; I was vice-president from the organization of the company, and president since, I think, 1873; I would state that on the organization of the company, I left a lucrative position; I was the real moving force in the organization of the company; I took a less salary than the directors desired to pay me, telling them at the time that was willing to base my future compensation on the success of the company; if the company succeeded it was to pay me a liberal salary; if it had a moderate success, or a failing success, I should not expect to receive a large compensation.

Q. During the time you were vice-president were you the most active officer? A. I have always been the active officer of the company on whom the company has relied for energy, protection and the pushing of its business.

Q. You say your contract expired in 1874; state whether the

page 38

directors offered to continue the contract, and whether you voluntarily offered to give it up? A. The directors of the company offered to continue the contract on the same terms, and I, after a little consideration, made up my mind that it would be unwise to do so; there has been a good deal of scandal and a good deal of overstatement and misstatement made in regard to my compensation, and I decided to give up that plan altogether.

By Mr. MOAK.
Q. When did the theory of your being paid by a per centage upon the surplus of the company cease? A. It ceased with 1874; with the close of the year.

Q. You have stated incidentally that you made a contract with the company that your salary should be dependent upon such a per centage; when was that contract made? A. It was not a contract, but an understanding with the board of directors.

Q. Was it a written contract? A. It was not.

Q. Simply a verbal understanding? A. Simply a verbal understanding.

Q. What was the understanding? It was that I had relinquished a position which paid me about $4,000 a year to receive a salary of $1,500, and that entirely contingent upon making it up; that they should make it up to me if I would do that; and in consideration that in the early years of the company my salary was very small, it was agreed that I should be correspondingly paid.

Q. Was any per centage agreed upon? A. Not at the early time.

Q. For how long a time was the salary fixed when you began? A. After about three years, I think,

Q. It was then fixed? A. Yes; about two or three years.

Q. Take for instance, the year 1859; our salary was $1,000; was the salary fixed in advance, or at the end of that time? A. It was fixed in advance; $1,500 and no more.

Q. Was there any per centage on the surplus that you were to receive in addition to that, that was agreed upon? A. Not at that time; it was left entirely in abeyance.

Q. And you received no compensation, upon the basis of a per centage, until 1864? A. No, sir.

Q. Then you received $16,192.82? A. Yes, sir.

Q. Was that for all the years previous--from 1859 to 1864? A. Yes sir; I think it was; at all events it was in full for the claim.

Q. It was all you received? A. All I received; every dollar.

Q. From that time down to 1867 you received nothing upon the basis of a per centage compensation? A. No.

Q. At that time you received for three years $20,060.21? A. Yes, sir.

Q. That was upon the basis of two and a-half per cent of the surplus? A. Yes, sir.

Q. In the hands of the company at the end of each year? A. Yes, sir.

Q. In 1868 you received upon the same basis $28,000? A. Yes,

page 39

sir; at that time we were making dividends every five years, and it was upon the surplus got at the end of every five years.

Q. In 1868 you received for that year $28,000 upon the same basis? A. Yes, sir.

Q. In addition to the salary you regularly received of $7,500? A. Yes, sir.

Q. In 1869 you received $26,171.37 in addition to the $7,500 on the same basis? A. Yes, sir.

Q. In 1870 you received $34,598.64 in addition to your salary on the same basis? A. Yes, sir.

Q. In 1871 you received $42,458.59 in addition to the 7,500? A. Yes, sir.

Q. Which made about $50,000? A. Yes, sir.

Q. In 187 2 you received $50,000 upon the same basis of per centage in addition to the $7,500? A. Yes, sir.

Q. In 1873 you received $7,500 regular salary and $50,000 per centage in addition. A. Yes, sir.

Q. And in 1874 the same? A. Yes, sir.

Q. So that for three years previous to the expiration of 1874 you had been in fact receiving $57,500 per annum salary? A. Yes, sir.

Q. Have you had, at any time since your connection with the company, any connection, directly or indirectly, as agent or officer, director or trustee, or any thing else with any other company? A. I have not, sir, with this exception, that my father was the agent of the Mutual Life Insurance Company in Boston, and I was the nominal agent—the man in whose name the commission stood; I have never been actually joined to any company, or actually an officer of any other company.

Q. The compensation that was paid for services at the Boston office, did any portion come to you? A. Not one dollar.

Q. Were any of the services rendered by you ? A. I could answer that in this way: I was ready to do any thing I could to serve my father at any time, but no more than that, the contract stood in his name.

Q. What was his compensation paid by them? A. He was paid by commission.

Q. Can you give us an idea about what it was? A. I cannot state what it was; I did not expect to be questioned about it.

Q. About what time did it commence? A. About 1855, I think.

Q. Is it still continuing? A. My father has since deceased.

Q. Did it continue down to the time of his death? A. Yes, sir.

Q. When was that? A. In 1873, I think.

Q. Since that time you have had no connection nominall or otherwise with them? A. Yes, sir; I have been their nominal agent.

Q. Who has carried on the business? A. A gentleman by the name of Mr. E. L. S. Hammond has been the active agent.

Q. Is he a relative of yours? A. No, sir.

Q. Have you received any portion of the compensation paid him? A. I have, sir.

Q. What proportion of that? A. He has been the managing man of the business here, and I have paid him a salary for his services.

page 40

Q. How much salary do you pay him? A. I think $2,000 or $2,500.

Q. How much do you receive annually for the entire service? A. I have received for the services about $20,000 during the last year.

Q. Well, how much in the year 1874? A. I think about the same.

Q. About the same? A. Yes, sir.

Q. And the same in 1875? A. Yes, sir.

Q. And in each of these years you paid a person who had the actual charge of the office about $2,500? A. Yes, sir.

Q. And the balance was received and retained by you? A. Yes, sir.

Q. Had your own company an agent in the city of Boston; this was an agency for the Mutual, I understood you? A. Yes, sir.

Q. The company which the gentleman just sworn represented? A. Yes, sir.

Q. Had your own company an agent in Boston? A. Yes. sir.

Q. Who was that agent? A. We had a Mr. Blodgett; I think he was the latest agent.

Q. Your father continued to be agent down to the time of his death? A. Yes, sir.

Q. And you continued the nominal agent, as you had been previously; and substituted for the name of your father the name of Mr. Hammond? A. Yes, sir.

Q. Has Mr. Hammond been at any time nominally or actually agent of the Equitable in the city of Boston? A. My father was agent, in part of the Equitable, an agent of the Mutual Life in the late years of his life.

Q. My question is whether Mr. Hammond was nominally or otherwise the agent of the Equitable? A. No, sir; he has never been.

Q. Has he ever received any compensation for services, or alleged services, either directly or indirectly from the Equitable? A. I think he has, at times, put business into the Equitable.

Q. Have you any means of stating what compensation has been paid to him by the Equitable, or what amounts? A. I cannot say, for I have not the information here.

Q. You have the information at the office? A. Yes, sir

Q. I think it would be very desirable to attain it? A. He has been paid no more than the regular per centage,

Q. What is that? A. The interest we pay is twenty-five per cent on the first year, and seven and a-half per cent on the renewal.

Q. How long does this continue? A. According to the contract we make.

Q. What is the rule? A. It may continue twenty years, or twenty-five years, or during the life, according to the contract made.

Q. You have no rule then? A. We have no rule that is not flexible.

Q. Have you no general rule as to how this compensation runs? A. Generally the compensation is made to run about twenty years; sometimes during the life of the person, and in particular cases we have allowed persons to nominate lives of those who would be con-

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nected with the agency, and on whom the business would run, and by whom the commissions were drawn.

Q. Have you an means here, or can you in any way approximate to the amount Mr Hammond has received from your company? A. I cannot say.

Q. You cannot approximate? A. No, sir; I would like to state that I have been thinking in regard to the matter, and I think that should be about fifteen years; I think I was wrong when I said twenty.

Q. Have you any means of knowing? A. I have the means of knowing, and I think that is as near as you can get it; I think I am mistaken when I put it at twenty.

By Mr. LANG :
Q. Why is the twenty-five per cent and interest paid? A. That is about the average grade of our commissions; sometimes we make it more on renewals, at other times less; sometimes, when we have been paying office expenses of agencies, we would put it in a shape so that we would have to pay no expenses; we endeavor to do the best we can for the company, and grade it, and so make our arrangements that if there is no business there is no expense.

Q. Are you restricted in any way, by law or by your charter, as to the amount you should pay your agents; in other words are you in any way restricted, in case the company should virtually decide to employ too many agents, as to how many it should pay itself? A. The finance committee examine into these cases; our contracts come before the finance committee, and the rule of the company I have stated; sometimes we may give more and sometimes less on renewals, but we endeavor to make it approximate that; sometimes, if we think it wise, we may allow an additional commission on the business done, for the purpose of not allowing the agent office rent and to pay the expense of advertising; we always like to do it if we can, for if we can get an agent on commission and have him do his business that way, so that in case he does no business there is no expense we think we are doing a good thing.

Q. You stated that the salary of the vice-president is $22,000? A. Yes, sir.

By Mr. MOAK:
Q. Beginning with 1859, what was the salary of the vice-president? A. Our vice-president was not connected with us at that time; I was the vice-president; I think the vice-president connected himself with us in 1867.

Q. You became president when he was vice-president? A. No he was second vice-president,

Q. Commencing in 1859, you were vice-president down to what time? A. To 1873.

Q. From 1859 to 1873, did you have any president? A. Yes, sir; H.C. Alexander was president of the company until 1873, when he died.

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Q. From 1859 to 1873 what was his annual salary? A. His salary never exceeded $12,000; it commenced, I think, at $1,500, and was gradually put up to $12,000, and that perhaps two or three years before his death.

Q. Did he receive any compensation on the basis of a per centage?

A. He did not.

Q. He received a round sum? A. Yes, sir.

Q. And from 1859 to 1873 you were the vice-president? A. Yes, sir.

Q. From what time did you have an assistant vice-president? A. I think about 1867.

Q. And did he receive any compensation, or has he ever received any compensation from the company upon a basis of a per centage?

A. Yes, sir, he has.

Q. What was his salary as it first began? A. It was, I think, $3,500.

Q. That was his regular salary? A. Yes, sir.

Q. What did he receive in addition ? A. I think he received a-half per cent of the surplus for five or six years.

Q. That would be one-fifth of what you received by way of per centage? A. Yes sir.

Q, Down to what year? A. Down to the close of 1874.

Q. Then was the vice president’s salary increased above $3,500; the regular salary above the per centage ? A. Yes, sir.

Q. When was that increase made? A. I should think about 1870; it went through several grades of increase, until he received a salary of about $10,000.

Q. In addition to the per centage? A. In addition to the per centage.

Q. How long did it continue at $10,000? A. It continued up to the close of 1874.

Q. For about how many years was it $10,000? A. I should think his salary was $10,000 for three or four years.

Q. How much was it before that ? A. I should say about $7,000; one year it was $5,000

Q. And all those years, down to 1874, he had received a-half per cent of the surplus? A. Yes sir.

Q. Or one-fifth of the per centage commission that you received? A. Yes sir.

Q. Have you, at any time since your organization, had more than one assistant vice-president? A. No, sir.

Q. You became president, when? A. In 1874, I think.

Q. Now, were there any other ofiicers of the company who have received, at any time since its or organization, any compensation depending upon a per centage? A. The only other person that has been the actuary.

Q. When the actuary began, in 1859, how much was his annual compensation? A. $1,200.

Q. And any per centage compensation in addition? A. I cannot say exactly the time that his per centage began, but I think about the time the vice president’s began.

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Q. That was in 1864? A. In 1867; I should say about 1867 or 1868.

Q. Then up to about 1867 or 1868 he had received no per centage compensation according to your recollection? A. I should say not.

Q. About what was his annual salary from 1859 down to 1867? A. I should say $10,000 or $12,000 ; I am not absolutely certain.

Q. Then in 1867, or about that time, the annual compensation of the actuary was $10,000; that he received absolutely? A. I should say so approximately.

Q. And about that time you began, in addition, to pay him a compensation depending on a per cent-age? A. Yes, sir.

Q. From 1867 to 1874, did his annual salary continue the same, at $10,000? A. My impression is, it did sir.

Q. From 1867 to 1874, what per centage compensation did he receive? A. A half of one per cent.

Q. That was the same as the assistant vice-president? A. Yes, sir

Q. One-fifth of what you received? A. Yes, the same thing; the salaries of the actuary and of the vice-president were about a balance, about the same thing.

Q. In 1867, when the actual extra compensation or per centage compensation began, was he paid a sum for back years in the aggregate, or for only for one year? A. It commenced flush with the year.

Q. He was allowed no back compensation as you know? A. No, sir.

Q. His arrangement continued down to the close of 1874? A. Down to the close of 1873.

Q. Since that he has received the compensation which you have stated here——to wit, $20,000 a year? A. Yes.

Q. Have any of the officers stated, in the list you have produced, received, directly or indirectly, for any alleged services in any direction whatever, any sum of money which belonged to the company—except what you have stated—since 1873? A. Not one dollar.

Q. Has any member of the family, or either of them, received any money whatever from the company except what you have stated as having been received by your father in connection with the Boston establishment? A. No, sir.

Q. I think you have stated that you have no connection with any other company except in the way you have spoken of in regard to this Boston company? A. No, sir.

Q. Has the vice-president had any connection, directly or indirectly, with any other company, corporation, or organization, either as agent, officer, director, or in any other capacity? A. No, sir.

Q. At any time since 1867? A. No, sir.

Q. Or the actuary? A. No, sir.

Q. Or any of the officers? A. No, sir; we have had just as much as we could do to attend to our own business.

Q. Well, that does not quite answer my question? A. Then. I will answer it in this way, no, not in any way, shape or manner..

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Q. Has your company re-insured the risks of any other companies? A. I think about fourteen or fifteen years ago we reinsured the Baltimore Life Insurance Company, a very good little company.

Q. That you say was about how long ago; A. I should think about sixteen years ago.

Q. How much was the aggregate amount you reinsured then? A. It was a little mite of a thing.

Q. You would call a small company what we might call a large one? A. It was a very small company.

Q. Well give us, as near as you can, about the amount you reinsured them? A. I should not think they had a risk of more than a million and a-half, at a rough guess.

Q. Do you think your company reinsured about that amount for them? A. I should think so.

Q. What was the name of the company? A. You could find out what it was by calling it the Baltimore Life Insurance Company.

Q. Were the officers of your company allowed a per centage on the reinsurance? A. No, sir.

Q. None whatever? A. No, sir.

Q. Did any one connected with the company receive any compensation whatever, either directly or indirectly, for any services, or the alleged services, growing out of the reinsurance? A. Not one dollar.

Q You spoke of another reinsurance; what was that? A. It was a small company in Montgomery, Alabama; it amounted, in reality, to the transferring of a little company, through the president

and directors, into a good agency; that is what it amounted to, and it was a very small company.

Q. About what was the amount of the reinsurance on that? A. I should not think it was larger than the other.

Q. About the same amount? A. I should think so.

Q. Did you, or any one connected with the company, receive any compensation, either directly or indirectly, for that reinsurance? A. Not one dollar.

Q. Has your company made any other reinsurance since its existence, with the exception of those you have spoken of. A. No, sir.

Q. Has it not made any of late years? A. No, sir.

Q. Won’t you state the manner in which this arrangement was brought about? A. Well, sir, the reason the larger companies have given up the business of reinsurance have been--

Q. No; I want to get at the manner in which you reinsure them? A. The way we did was to take the liabilities of the company, and see what would be the sum they would have to pay us.

Q. You did do that? A. Yes; we did take the liabilities of the company, and did calculate how much money should be paid to us, which, in addition to the premium received, and a liberal margin according to the laws of the State of New York, valuing at four and a half per cent, would make us whole, and enable us to do a good thing

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for our policyholders; so that it would approximate with the ordinary business we should do across our counter.

Q. Had the consent of the policyholders anything to do with the reinsurance? A. I have had frequent opportunities of knowing both these cases, that it was at the desire and instigation of the policyholders.

By Mr. MOAK:
Q. You mean of the policyholders of the company you reinsured? A. Yes, sir; and they were very glad to come.

Q. You are able to state that they consented, are you? A. We never heard a remonstrance, and so far as we could learn they were very glad of it.

Q. You infer that, then? A. I inferred that from the unanimity in which it was done, and they were well pleased and satisfied; we never had a complaint from them.

Q. Did your company make any agreement with that company in reference to the matter? A. Yes, sir.

Q. The case was talked of and considered in your board of directors and trustees? A. In our board of trustees, it was.

Q. And also in the other case? A. Yes, sir.

Q. And a written contract was made? A. I presume so; it is so long ago that I can scarcely recollect; it is twelve or fifteen years ago; I know the things were all done with great formality, and I know we received our full price for the thing, and it was a great satisfaction for the policyholders of the company and ourselves.

Q. You did not see many of the policyholders? A. Yes, saw a good many of them.

Q. Did you treat with them in making the contract? A. We met a good man of them in business.

Q. Did they take any part in making the contract? A. I should say they did; I think we were waited upon by a committee of the policyholders.

Q. Have you a written contract of those companies? A. I really could not say; I can’t say in regard to the contract, as it is so long ago.

Q. You can’t say whether you have the contract or not ? A. No; I can’t say whether we have or not.

Q. Or whether it could be produced here or not ? A. No; I can’t say anything about that.

Q. Here is an item of salary which reads: “In commutation of constructing engineers’ per centages on buildings, $15,000; will you explain that? A. We found, sir, that in the employment of an architect it was wise to employ one to draw the plans merely, and to employ a gentleman who was an expert builder.

Q. You are now speakin of the building your company put up in Broadway, known as the Equitable building? A. Yes, sir.

Q. Well, your company determined to put up a building? A. Yes, sir; and we gave this person a salary, in commutation of the ordinary commissions, thinking it would be better for the company than to pay the ordinary commissions paid for such services.

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Q. Is that building the only real estate the title to which is in your company? A. Well, the title of our company consists in and we hold, in addition to the new Equitable building, numbers 112 and 114 Broadway, a little building we bought from the bank.

Q. Then you do own other real estate? A. Yes, sir.

Q. When did your company determine to erect the building known as the Equitable building? A. Well, about 1867 we came near having all our documents destroyed by fire; in fact, we have lost many documents by a fire that took place in our old office, and I made up my mind we would have a fire-proof building; we suffered a great deal of confusion and annoyance in consequence of that fire, and I bestirred myself to have a fire-proof building.

Q. About when did your company determine to erect that building? A. In 1867.

Q. Did the company purchase the land on which the building stands for the purpose of erecting it? A. It did.

Q. What was the expense of the real estate on which it is erected? A. Of the land?

Q. Yes; of the real estate I am speaking of, as you purchased it? A. I could hardly, with accuracy, give an answer to that question.

Q. You can get pretty near to it, can’t you; I don’t want you to give the actual figures? A. I should say about seven or eight hundred thousand dollars ; it was bought of five difierent parties.

Q. What I want to get at is the amount paid in round numbers; then you determined upon the real estate to erect a building, and when I say , you, of course, I mean your company? A. Yes, sir.

Q. And the plans were prepared, under arrangement, for its erection? A. Yes, sir.

Q. About how much was paid for the preparation of the plans?

A. I think we had a half a dozen architects who were given, perhaps, three or four hundred dollars, each of them, to draw a plan.

Q. Give, as near as on can, about the agregate paid for the plans? A. I say, I think we had paid a half a dozen architects, and each of them drew a plan, and were paid four hundred dollars each.

Q. Then from two thousand to twenty-four hundred dollars it cost you? A. Yes, sir.

Q. Then it was determined to erect a building upon the plan of one architect? A. Yes, sir.

Q. Then you paid him a percentage upon the cost of the building? A. We aid him a percentage on the cost of the building for drawing all tlie necessary life-sized plans; then the compensation was fixed of the gentleman who is paid that salary; he occupied the position known in England as clerk of the works; he attended to all the business details.

Q. He was the superintendent, wasn’t he? A. Yes, he is the superintendent; he is generally with the architect a unit; but in this instance we separated them and paid him a salary so that his

interests should not be against us in making the contracts and purchases; if you pay him a commission the contracts, as a general thing, will be large.

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Q. You paid him, how much per cent.? A. We did not pay him any per cent.; we paid him so much a year and he attended the construction of the work.

Q. How much did you pay him? A. Fifteen thousand dollars a year.

Q. For how long? A. For two years.

Q. Did you pay the architect any thing in percentage? A. I should say about two and one-half per cent.

Q. Upon the actual cost ? A. No, upon the estimate of cost, which was less than it actually cost.

Q. On about how much did you pay him that percentage? A. I could not tell you.

Q. Well, give as near as you can ? A. Say from two to two and a half millions on the New York building;

Q. This $15,000 is what; part of the commutation, you say; explain that? A. It is part of the commutation of the commission that would naturally be paid to the superintendent.

Q. How much was paid to the superintendent in the aggregate from beginning to end? A. I think that run over a period of about two years.

Q. Fifteen thousand dollars a year? A. Yes, sir.

Q. Then why does he receive compensation in 1876? A. Because the building was not complete until that time; indeed, We have just about got the building finished now; there are many things about the building that require attention ; that salary was continued a year after the building was nominally finished, as we had a million and one things to attend to; he was worked harder than he was before as he was a practical engineer, and we found his salary would be saved by paying it that year; it has since been cut down to $7,500.

Q. When did this compensation commence? A. I should say some time in 1874.

Q. But I thought you said you commenced building in 1867? A. We determined to erect the building in 1867.

Q When did you commence an erection of the building? A. I should say about 1867.

Q. And from that time this superintendent’s fees or salary I suppose began ? A. No, sir; he had nothing to do with it then.

Q. When did he have anything to do with it ? A. About 1874.

Q. Then you had no such officer during the erection of the building? A. The building was erected in two sections, and in the last of it this person was connected in that capacity.

Q. You had no such ofiicer before? A. No, sir.

Q. About what was the aggregate expense of the erection of the building as it stands? A. It stands on our books at about three millions and three-quarters.

Q. The building alone? A. No; the real estate and building together; the entire unit.

Q. About what amount does it pay upon the cost? A. It pays, after deducting taxes and all possible expenses in connection with it, from actual examination of our books, an income on the property of about five and a half per cent net.

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Q. That is, net income independent of all expenses? A. Yes, sir.

Q. Estimated at what value? A. About three and three-quarter millions; I have to give them a little bit rough in this statement; I am perhaps very near the facts.

By Mr. MOAK:
Q. The question I want to get at is, whether it is a good investment? A. We cannot put our money out to pay us as much as that; we have money put out at three and a half per cent.

Q. What other building does the company have or own the title to? A. Nos. 112 and 114 Broadway.

Q. That is just below you there? A. Yes, sir.

Q. Any other? A. And a little building that we bought of the Metropolitan bank; it was absolutely essential for us to have it for the preservation of our light.

Q. About what is the value of the real estate to which you have the title, deducting the Equitable building proper? A. I think about $450,000.

Q. Those are let, I suppose? A. Yes, sir.

Q. About what per cent on the investment do they bring? A. I think they bring a net income-—this thing is all going to be stated by the committee of which Governor Morgan is chairman, in a few days-—I think about five per cent in the net.

Q. Do I understand you to sa the company don’t own any more real estate? A. We own a building in Boston.

By Mr. MOAK:
Q. They own a building in Boston? A. Yes.

Q. And about what was paid for that? A. The building, teetotally cost us about $1,100,000.

Q. Have you a branch oflice there? A. Yes, sir; a very important branch office there.

Q. Who has charge of that? A. Mr. H. T. Blodgett.

Q. Is the title of that real estate in Boston in your corporation? A. Yes, sir.

Q. And about what income does that bring upon the expense ? A. I think that building yields, as near as I can remember, about four and a-half per cent. net. ‘

Q. Does that include all the real estate of which your company has the title? A. Yes, sir.

Q. Don’t you own real estate that you have taken on mortgage foreclosure? A. Yes, sir.

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By Mr. MOAK:
Q. Do you own real estate, the title of which has become vested in the company by foreclosures? A. Yes, sir.

Q. To what extent? A. I think about $350,000 or $400,000.

Q. About where is it located? A. It is within the State of New York.

Q. All of it? A. All of it; we have never availed ourselves of the privilege we enjoyed of going out of the State of New York, except into New Jersey, and fifty miles off.

Q. You say you have $350,000 or $400,000 worth of real estate purchased on foreclosure; how much was the amount in mortgages, in the aggregate, upon which the property was purchased? A. I should say, in amount, it brought the price at which we held it.

Q. In other words, what you mean to say is, you bought the property at about the face of the mortgages in the aggregate. A. Yes, sir; about the face of the mortgage.

Q. Have you any means of knowing the actual value of the real estate so purchased? A. The committee, of which Governor Morgan is chairman, have made, during the past three months, a most exhaustive examination of all our real estate, and it has been appraised by appraisers, and each parcel of real estate we own has been thoroughly examined by one of three appraisers; their report will be published in about three days.

Q. Can you state whether the real estate is valued at what you purchased it for on the mortgage foreclosure? A. I don’t believe there will be a difference of ten per cent either way.

By Mr. HALE :
Q. Suppose you name who the committee are? A. The examining committee consists of E. D. Morgan, James M. Morrison, B. B. Sherman, M. K. Jessop, C. N. Bliss, Charles S. Smith, W. A. Wheelock, C. J. Franklin and F. D. Tappen; these gentlemen have engaged appraisers and made a thorough examination of every piece of real estate we own.

Q. Suppose you state who those gentlemen are? A. Governor E. D. Morgan is, I suppose, well known in this locality; James M. Morrison is president of the Manhattan Bank; B. B. Sherman is president of the Mechanics’ Bank; M. K..Jessop is in the banking house of Jessop, Paton & Co.; C. N. Bliss is of the firm of Bliss & Fabien ; Charles S. Smith is of the firm of George C. Richardson & Co. ; William A. Wheelock is president of the Central National Bank; C. J. Franklin is the American representative of the Cunard line of steamers; F. D. Tappen is president of the Galvin Bank; they have employed, for the purpose of valuing their real estate, Mr. Isaac Walton and Mr. Willis Blackstone, and between them they have made a rigid examination of our real estate in remote country places; and other persons have, of necessity, been employed by the committee; they have also employed Mr. Fackler, the actuary, to compute all our liabilities; our liabilities, within the last three months, has been computed by three separate valuations.

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Q. Do you know whether any of the members of this committee really visited the property themselves for the purpose of estimating its value? A. No, sir; this committee directed.

Q. So they rest their case and statement upon some one else who did? A. They selected some one else for this purpose; the best recognized experts in New York, more competent to value real estate than any one else, perhaps.

Q. You were reading the titles of those men but they never inspected the property ? A. Those men have picked out the men that should do it ; we have not.

Q. Have any members of the committee inspected it and valued it? A. It is done by the person appointed.

Q. I understand these gentlemen have had charge of the examination; they are all well known in New York and hold high positions, but being business men, have not had time to examine the real estate, but employed the best men to do it in their judgment? A. Yes, sir.

Q. How were they selected in remote counties to make the estimate? A. I cannot tell you ; they were selected by the committee, not the officers; this committee came into the office and got their authority to employ experts, and they went on of their own accord; we were not consulted; they have done the thing in their own way; they have picked out their own appraisers, actuaries and a-half a-dozen accountants of their own, and have done the thing in their own way, and we were not consulted.

Q. By what authority did they come? A. By the authority of the finance committee; they were selected by the finance committee.

Q. This examination is at your own request? A. At the request of the finance committee.

Q. Can you give us the amount that was loaned on this property purchased in? A. I shall say that it would be about the same that we bought it in at.

Q. Give us the figures? A. I should say we had originally $350,000 in real estate.

Q. You had that amount invested in bond and mortgage upon that property? A. Yes, sir. I

Q. What did you buy it in at? A. I should think at the face of the mortgage, varying perhaps ten or fifteen per cent.

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