Preliminary Report and Testimony Taken Before the Committee on Insurance, Relative to Life Insurance Companies. 1877

From: Documents of the Assembly of the State of New York.
One Hundredth Session---1877.
VOLUME VIII.- Nos. 70 to 139, Inclusive.
JEROME B. PARMENTER, STATE PRINTER
1877.

Assembly Document 93

March 28, 1877,

Preliminary Report and Testimony Taken Before the Committee on Insurance, Relative to Life Insurance Companies.

To the House of Assembly:

The Committee on Insurance make the following preliminary report of testimony taken before them, on the several resolutions of investigation heretofore referred to them by the Assembly.

JAMES G. GRAHAM.
ELLIOT C. COWDIN.
CHAS. R. SKINNER.
E. C. MOODY.
GEO. W. WEIANT.
JAS. E. COULTER.
ELBERT FLOYD-JONES.

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TESTIMONY.

Mr. J. G. Graham, from the Committee on Insurance, makes the following preliminary report of testimony taken, under resolutions of investigation referred to them:

In The Matter Of The Investigation Into Life Insurance Companies.

Tuesday, March 20, 1877.

The committee met at its room on Tuesday morning, at nine o'clock.

Present — Hon. J. G. Graham, Chairman, and Messrs. Cowdin, Husted, Lang, Skinner, Moody, Weiant and Floyd-Jones; Hon. N. C. Moak, of counsel for the People; Hon. Matthew Hale, of counsel for the Equitable Life Insurance Company; Judge Davies, of counsel for the Mutual Life Insurance Company.

The Chairman — We will proceed with our inquiries this morning, and, as Judge Davies was here first, we will proceed with the examination inreference to the Mutual Life Insurance Company.

Judge Davies — I have a letter here which, with the permission of the conrmittee, I will read, and then you can proceed to the examination of Mr. W. H. C. Bartlett, the actuary of the company, who has a statement, which he has reduced to writing, containing all the information, I think, the committee desires. The letter is as follows:

Mutual Life Ins. Co. Of New York, 

140 To 146 Broadway, 

New York, March 17, 1877. 

To the Hon. J. G. Graham, Chairman of the Assembly Committee on Insurance, Albany, N. Y.:

Sir.— Subpoenas to attend in Albany, at nine o'clock on Tuesday morning, March twentieth, have been served upon the vice-president of this company, acting as president, the second vice-president, the actuary and the secretary.

The president being in California, a literal compliance with the terms of such subpoenas would strip the company of official direction, and render the transaction of ordinary business impossible. It is respectfully assumed that the insurance committee did not contemplate so grave an injury to thecompany's interests, but that a substantial compliance with the mandate of the subpoena will be accepted.

Under any other circumstances than those about to be detailed, the vice-president, as acting chief officer of the company, would personally present himself before the committee, and furnish the information sought; and he expressly disavows intentional disrespect in failure to attend at the time stated, for the following reasons: On Wednesday, March twenty-one, occurs a meeting of the board of trustees, pursuant to its by-laws, preceded on the same day by a meeting of its finance committee, at both of which meetings the presence of the vice-president is absolutely essential to the interests of the company. And the time and attention of the vice-president will be necessarily, and almost exclusively, consumed on Tuesday, the day before such meetings, in preparation and arrangement of important business to be brought before the meetings, and therein acted on.

The absence of the president is due to a bronchial affection from which he suffers at this season, and which has necessitated his visit to a milder climate during the spring months, annually, for several years past. He left on the twenty-second of February.

The second vice-president, Mr. Granniss, has been connected with this company only since January last.

The vice-president, therefore, craves to be excused for non-attendance before the honorable insurance committee, for the reasons stated, and proffers the attendance of the actuary of the company, Professor William H. C. Bartlett, LL.D., and of the secretary, Mr. Isaac F. Lloyd, who will thenpresent themselves before the committee on the day and hour named, furnished with the information the committee desire, and prepared to answer on oath as to the truth of the same.

The Hon. Henry E. Davies, of the company's counsel, having occasion to be in Albany at this time, has been requested to hand you this letter.

Respectfully submitted.

RICHARD A. McCURDY,

Vice-President.

Mr. Bartlett — I have a statement here which, if the committee please, I will now proceed to read.

The Chairman— The statement you proceed to read is what?

Mr. Bartlett — I was going to read this letter addressed to you by our vice-president, in continuation of the same subject that Judge Davies has been addressing you upon. It sets forth in more detail why an early compliance with the requirements of Mr. Bixby's resolution introduced in the Senate was not furnished. With your permission I will read.

Mr. Lang — If this statement consists of essential facts with reference to which we are making inquiry, it should be made on oath.

The Chairman —Does it contain information?

Mr. Bartlett — Yes, it is full of statistics.

The Chairman—Are they facts of which you have knowledge?

Mr. Bartlett — I have knowledge of them.

The Chairman — Does it contain the information asked for?

Mr. Bartlett — It contains all the information asked for, and a great deal more.

The Chairman — Is it within your knowledge?

Mr. Bartlett — Yes, sir; both of these papers'are sworn to by the president and the vice-president; I will also swear that I have investigated the subject pretty thoroughly, and I believe them all to be true in fact.

The Chairman — It is for the committee to say whether they will have the statement read, and take it for what it is worth as far as -it goes.

Mr. Lang — We cannot tell whether it contains what we are inquiring after until it is read through.

The Chairman — Mr. Bartlett says it does.

Mr. Lang — The question for us to decide is, whether it gives what we are after.

The Chairman — The committee will only receive what is inquired after, and what is within Mr. Bartlett's personal knowledge.

Mr. Bartlett — The officers of the company do not wish to be regarded as contumacious. It was absolutely impossible for us to collect the information asked for at the time. We were engaged in a very exhaustive examination at the time, not only by the Superintendent of the Insurance Department, but also by the trustees, and we were just on the eve of making our annual statement to the State department, consequently we wereoverwhelmed with business. One reason for this was the change made in the insurance commissioner. We had to look over our books and collect the information required, and this we could only do when we could get a little suspense from the labors of the office.

Mr. Cowdin — I think we shall save time by letting Mr. Bartlett go on and make his statement in his own way; he has a statement here, and I think the company should be allowed to make any statement they wish in their own way.

The Chairman— Are the statements contained in that communication such as you know you yourself to be true?

Mr. Bartlett— I know them to be true as well as I can know any thing. I have examined the book and know all the transactions through the various officers, and there is nothing contained therein that I would not be willing to swear to myself, to the best of my knowledge and belief. It must be borne in mind, however, that the facts contained therein were prepared for the Superintendent of the Insurance Department.

The Chairman — Proceed with your statement.

Mr. Bartlett— The letter is as follows:

To the Hon. J. G. Graham, Chairman:

Sir. — In furnishing a written answer to the questions embraced in the resolution, passed by the Assembly of this State, as follows:

Resolved, That the insurance committee of this House be required to summon the president, vice-president, secretary and actuary of the Equitable Life Assurance Company, the Globe Mutual Life Insurance Company, the Knickerbocker Life Insurance Company, the Metropolitan Life Insurance Company, the Mutual Life Insurance Company, the New York Life Insurance Company, and the World Life Insurance Company, and require a statement, under oath, from each of them, as to the amount paid in salaries, fees, compensation or donations to their respective presidents, vice-presidents, secretaries, medical examiners, attorneys, counsels, and all other employes for the year 1876, and report the result of such examination to this House in ten days."

The following explanation seems proper to be made:

A resolution similar to the foregoing, but imposing the duty of eliciting the information sought upon the Acting Superintendent of the Insurance Department, was passed by the Senate, by the motion of Senator Bixby, in January last, and a copy addressed to this company.

At that time, two minute and exhaustive examinations of the company's condition were in simultaneous progress at its office, one conducted by acommittee consisting of six of its trustees, appointed by the board for that purpose; and the other by the said Acting Superintendent of the Insurance Department, aided by his deputy and several assistants.

Oppressed by the arduous labor imposed on the clerical force by these two examinations, and the necessity of attending on the company's regular business at the same time, the officers asked that they be allowed to procure from the books a portion of the information v called for, viz.: Thatrespecting the amount paid to attorneys and to medical examiners, during the intervals of other labor, and promise to complete and furnish their report on receipt of notice from the acting superintendent of the time when his report to the Senate was ready for transmission.

This was acceded to, but by oversight or inability to send a notice in time, the late acting superintendent presented his report to the Senate, no notice of his intention having been furnished to this company.

The communication, which is hereto annexed, contains full and true answers to the questions contained in Senator Bixby's resolution, and by consequence to those contained in the resolution of the honorable the Assembly of this State; it was completed on the day of this date, and verified by the president on the date of the jurat appendant, and would have been forwarded to the late acting superintendent, except for the misunderstanding above referred to.

All of which is respectfully submitted.

RICHARD A. McCURDY,

Vice-President. March 17, 1877.

City And County Of New York, Ss.:

Richard A. McCurdy, of said city, being duly sworn, deposes and says that he is the vice-president of the Mutual Life Insurance Company of New York; that the facts set forth in the foregoing statement are true to his own knowledge, and that the facts set forth in the statement hereto annexed are true to his own knowledge, except as to such as are stated on information and belief, and that as to such facts he believes them to be true.

RICHARD A. McCURDY. Sworn and subscribed before me this 17th day of March, A. D. 1877.
William G. Davis, Notary Public.

The Mutual Life Insurance Company Of New York,
Corner Liberty And Broadway,

New York City, February 13, 1877. Son. William Smyth, Acting Superintendent Insurance Department:

Dear Sir. — We are in favor of your letter inclosing the following resolution passed by the Senate:

"Resolved, That the Superintendent of the Insurance Department be and he hereby is requested to obtain from the various life insurance companies incorporated under the laws of the State of New York a detailed statement showing the amount paid in salaries, fees or compensation, or donation to their respective presidents, vicepresidents, secretaries, medical examiners, attorneys, counsellors and other employes, in the year 1876; and that such information bo furnished to the Senate at the earliest day practicable."

We presume the Senate would deem it an incomplete and unsatisfactory report were we to give that honorable body, in response to thatresolution, a bald statement of figures, limited to the points of inquiry which they have addressed to the different life insurance companies through you. This would not only be unjust toward that respectable body, but toward the companies reporting, as they embrace corporations of small accumulation and limited business, together with those which, by the force of circumstances, control large accumulations and extensive-business.

We, therefore, consider it within the line of our duty in the items requested, to give also such existing facts as will enable the Senate to judge of the propriety of the company's course in reference to its expenses for salaries with intelligence and full appreciation of the subject.

This company has been in existence since 1843. 'It is without capital, and the first cash it received and possessed was the first premium paid on apolicy, amounting to one hundred and eight dollars and fifty cents ($108.50). All of its accumulations have been from its premium receipts and the interest and income growing out from the same.

At present it has in force ninety thousand one hundred and twentyfive (90,125) policies, insuring three hundred and one million two hundred and seventy-eight thousand and thirty-seven dollars ($301,278,037); and its business, specified in your letter and the

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resolution accompanying it, that is, the year eighteen hundred and seventy-six (1876), was the issue of eight thousand one hundred and twenty (8,120) policies, the receipt of fifteen million one hundred and thirty-six thousand seven hundred and three dollars and thirtysix cents ($15,136,703.36) premiums, the issue monthly of over twelve thousand (12,000) receipts over the country, and connected with the same and in addition, the mailing of a like number of, called for by the action of the Legislature, during the past year.

It purchased for cash four thousand five hundred and seventeen policies on surrender, and paid for the same during that period $3,619,623.18 (three million six hundred and nineteen thousand six hundred and twenty-three dollars and eighteen cents).

Its medical department conducts the necessary correspondence, with over six thousand physicians in different parts of the country, the examination of applications for insurance, the examinations into causes of death claims, and the collection of such statistics as will throw light on our business and benefit the community at large.

In its law department it has examined and certified the titles to four hundred and seventy-one loans on bond and mortgage, amounting to three million six hundred and thirty-five thousand and four hundred dollars ($3,635,400) without charge to the borrowers, except the necessary disbursements for official searches. That department has the supervision and management of all foreclosure proceedings and litigations in any way relating to the company.

The company has also permitted during the year the use of two million six hundred and ninety-four thousand forty-three dollars and thirty-four cents ($2,694,043.34), being the cash value of the dividends standing to the credit of policyholders in the payment of their annual premiums, each ofwhich required separate and careful estimate and examination.

It has also paid, after proper scrutiny, claims by death under its policies, amounting to three million three hundred and eleven thousand six hundred and fifty-one dollars and two cents ($3,311,651.02), with the additions to the same of four hundred and thirty-nine thousand seven hundred and eight dollars and eighteen cents($439,708.18).

In its department of securities it controls and cares for twelve million six hundred and seventy-three thousand five hundred and seventy-nine dollars and thirty-three cents ($12,673,569.33) in stocks of the description approved by the State laws and the Insurance Department in the bonds and mortgages on the real estate, amounting to sixty million eight hundred and fifty-six thousand two hundred dollars and eighteen cents ($60,856,200.18). These mortgages are to the extent of about $50,000,000 upon property within the State of New York, and scattered throughout the towns from Lake Erie to the ocean in sums of $1,000 and upward.

On these sums interest has to be collected semi-annually, and the sufficiency of the security examined from time to time, and, where necessary, strengthened. The loans are nearly all due and subject to the call of the chairman, and subject to the call of the company.

The company holds, as collateral security to its loans, policies of fire insurance from one hundred and fifty (150) companies, amounting to thirty-four million five hundred thousand dollars ($34,500,000). Our loans during the year amounted to five million nine hundred and sixty-two thousand nine hundred and twenty-six dollars and seventy-seven cents ($5,962,926.77).

The aggregate of the securities of this company, as stated in the recent report of the insurance superintendent, is eighty-two million seventy-six thousand seven hundred and six dollars and eighty-seven cents ($82,076,706-.87), a sum larger than that of the capital of all the national banks ofNew York city, and, it is believed, the largest sum owned and controlled by any moneyed corporation in this country or the world.

The persons necessary to carry on its business, and officially connected with it, are, in addition to the president, two vice-presidents, two secretaries, one head of the law department, two medical examiners, one actuary and two assistants, and 110 clerks and other employes at the central office.

This statement, in brief, will enable the Senate to judge intelligently as to the responsibility and extent of the business of the company, and whether the staff and employes who manage it during such times as these are either too large or are too largely paid.

We believe its expenses, all told, are a less per cent of its present and future obligations than those of any similar institution. They are, for officers and clerks, thirty-eight hundredths (.38) of one per cent on the assets of the company which they have in charge. On the active business of the company in receipts, one and fifty-six hundredths (1.56) per cent; and in insurance, one-tenth of one per cent.

We subjoin the answer to your question as follows:



Amount paid, in salary, to the president during the year 1876 $30,000 00
Amount of salary paid to vice-president 18,000 00
Amount of salary paid to second vice-president 12,400 00
Amount of salary paid to secretary 8,000 00
Amount of salary paid to assistant secretary 5,100 00
Amount of salary paid to actuary 5,000 00
Amount of salary paid to assistant actuary 7,200 00
Amount paid to assistant actuary 4,800 00
Amount of salary paid to medical examiner 9,600 00
Amount of salary paid to medical examiner 9,600 00
Amount of salary paid to solicitor, attorney and counselor 14,400 00
Amount paid to 110 clerks and other employes 191,463 61

No officer, clerk or other person in the company's office receives any fees, compensation, donation or perquisites of any kind, except the salary voted to him by its board of trustees in consideration of his services.

Medical examiners residing in different parts of the country are compensated by fees ranging from two (2) to five (5) dollars for each physicalexamination of applicants for insurance. The amount so paid during the year was thirty-eight thousand five hundred and sixty-nine dollars and thirty-one cents ($38,569.31).

The amounts paid to attorneys and counselors residing in different parts of the country, was seventeen thousand seven hundred and fifteen dollars ($17,715).

All of which is respectfully submitted.

F. F. WINSTON,
President.

City And County Of New York, 88.:

Frederick F. Winston of said city, being duly sworn, deposes and says that he is president of the Mutual Life Insurance of New York, and that the signature affixed to the foregoing document is the true signature of deponent. That said document, consisting of eight pages, contains a full, true and accurate answer to the resolution of the Senate of the State of New York, darted January 16, 1877, and recited therein.

F. F. WINSTON,
President. Sworn and subscribed this 21st day of February, A. D. 1877, before me,

William G. Davies,
Notary Public.

William H. C. Bartlett sworn.

Examined by Mr. Moak:

Q. How long have you been connected with this company as actuary? A. I joined the company the 1st of February, 1871.

Q. And you have since been connected with it? A. All the time.

Q. Had you previously had any connection with it? A. I had on several occasions solved several difficulties for the company alleged bythemselves to be encountered in the adjustment of their accounts.

Q. You had no regular connection with them? A. No recollection.

Q. You said in that statement you read that the company had, at the present time, 92,125 policies; in that did you include the number surrendered during the past year, or did you exclude them? A. I have given you the number which the company had at the end of the year.

Q. The year 1876? A. The resolution calls for the information we had in 1876.

Q. Then it is exclusive of the number surrendered during the

fresent year; as to the number, have you any personal knowledge; mean for this year? A. Nothing more than I get from the books. Q. Have you personal knowledge of it from the books? A. Yes, sir; I want to state to the committee that it is utterly impossible for any man to carry with him all the numbers of the company so vastly engaged in business as this company is; when I want any information I call on the heads of proper departments for it and then go to the books; as to the detail of keeping the books I know nothing.

Q. Then, if I understand you, the number you get from the book which is furnished to yon by other employes? A. Yes, and which I believe to be true.

Q. That is the only knowledge you have on the subject? A. Yes, sir.

Q. As I understood you, those policies represent $301,278,037 insurance? A. No, sir; I expressly stated that that was the cash value of the insurance.

Q. That is to say, that is the present value of them? A. Yes, of the insurance and the cash value; are you speaking now of the cash values?

Q. No; I am speaking of the 92,125 policies. A. That is the amount of the policies we have incurring; about $300,000,000.

Q. Then the $301,278,037 covers the entire amount insured by all these policies? A. Exactly.

Q. But that does not give the present cash value of them? A. Oh, no.

Q. I understood you to say that in 1876 there was issued 8,120 policies? A. Yes, sir.

Q. Insuring the persons to whom the policies were issued to the amount of $15,136,703.36; is that correct? A. Yes.'

Q. Now, as to the number of policies issued, and amount insured, you obtained that the same as the others, of which you have spoken? A. From the books.

Q. And you said that during the year 1876 there was surrendered 4,517 policies, the value of which and for which they was paid $3,619,623.18? A. That is right.

Q. Now let me ask you whether you have any knowledge as to whether the company has had any persons in its employ for the purpose ofprocuring those surrenders? A. Well, I can't say positively.

Q. In other words, what I want to get at is this — A. I understand perfectly what you want; the company, I am certain, has never countenanced the employment of anybody to procure the surrender of the policies; on the contrary, it has assisted persons to every possible extent within a range of years to keep their policies alive; I regard it as a matter of great importance to the companies to keep their policies alive, for as actuary for the company, 1 look at it that the getting of a policy by surrender is the stopping of a little rill through which is to flow the means to pay the death claims; I know it has been done recently by those records, and so forth, which, by the way, is a new word introduced into life insurance, but we have no sympathy with it.

Q. The question is, has the company had any one in its employ in the last year to obtain the surrender of policies? A. Not to my knowledge.

Q. Wore those surrenders, so far as you know, all of them voluntary surrenders without an application by the company or any one in its interest?A. So far as I understand they were voluntary surrenders on the part of the holders.

Q. Was any thing paid for procuring the surrenders, except what was paid to the parties? A. Not to my knowledge, nor do I believe any thing was paid except to the parties themselves; whatever the agents may have extorted I cannot say, bnt I know if an agent was detected in doing so he would be dismissed from the company.

Q. I understood yon to say you had paid physicians for examinations, during the past year, $38,569.31; if there were 8,120 policies issued thatwould be nearly five dollars for each policy, would it not? A. Well, I have not made a computation, but that is the amount taken from the books actually paid; we paid some a little more, some a little less.

Q. What is the usual price paid by your company for physicians' examinations? A. As near as I can remember, five dollars.

Q. Throughout the country? A. Yes, sir; from two to five; they vary.

Q. That is paid out of the premium, is it? A. That is paid by the insurer.

Q. That is, the company receives the premium in addition to this amount? A, Yes, sir.

Q. So really this is not an expenditure by the company? A. No, but we do examine a great many by our examiners and don't charge any thing for it.

By Mr. Cowdin:

Q. That is in New York? A. Yes; but it might be that there is a charge by those local physicians, but I think: persons who have been re-examined for insurance were always required to pay the charges.

By Mr. Moak:

, Q. What you mean by that I suppose is, if a party insured has not paid his premium, and it is a question under deliberation whether the policy shall be allowed to be continued, you require a re-examination? A. Yes, sir; and it is always at his own expense.

Q. Then really this $38,569.31 is an expenditure by the insured rather than the company? A. I don't know about that; I don't know but that may have been stopped out from the premiums by others; I am riot certain, and cannot tell yon the amount paid by the insurer and by the company.

Q. You don't mean to say, considering the manner in which you make the examination at the expense of the insurer, that the company has paid that in addition? A. That, I understand, is the amount the company has paid.

Q. Independent of the amount paid by the insurer? A. Yes.

Q. Then what was the amount paid by the company for, if every pergon applying paid for his examination? A. I don't know that I exactly understand that question.

Q. Well, I will explain it to you; you have said that there were 8,120 polices issued in 1876? A. Yes, sir.

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Q. Each of those persons was examined by a local physician? A. Yes; either by our own physician or a local physician.

Q. Either by your own examiner in New York or one of your other examiners? A. Yes.

Q. And each person so examined was required to pay out of his own pocket for the examination? A. Yes, sir.

Q. Then no part of the examination of the 8,120 persons was paid by the company? A. No.

Mr. Lloyd — I think Mr. Bartlett is in error there. The expense of the medical examination is paid by the company, and not paid by the party applying for the insurance.

By Mr. Moak:
Q. Then it is perhaps fair the witness should state he was mistaken in saying the examination was paid by the insurer; is that the fact? A. Yes, sir; I was mistaken.

Q. Would that explain this $38,569.31 fees that was paid by the company to all those examiners during 1876? A. Yes, sir.

Q. Except to the examiner at the leading office? A. Yes, sir; I wteh to have that straightened; I state that where a policy has lapsed, and he wishesto be reinstated, then a new examination is required, and in such case the applicant is required to pay the expense of the examination.

Q. I understood you to say that during the past year of 1876 there were 471 loans made by your company on bond and mortgage? A. Yes, sir.

Q. Amounting to $3,635,400? A. Yes, sir.

Q. They are loans in the city of New York only? A. Yes, sir.

Q. And in those cases the entire expense of searching the titles and of preparing the papers is paid by the company? A. They are done by the officers of the lower department.

Q. The expenses are paid by the company, are they, in general salary? A. They are paid in salary, except the expense of searching the titles.

Q. The searches are paid for by the borrower? A. Yes; to the attorney who makes the search.

Q. Who makes the search usually, the law officers of the company or the attorneys of the borrower? A. The attorneys communicate generally with the company; for instance, at White Plains we can't attend to it in New York, and have an agent there.

Q. Well, take an instance in New York, and say a person applies for a loan of $20,000? A. We apply to the clerk for a search, and the fees are aregular charge to the borrower.

Q. Is any thing charged except the fees paid to the clerk for the search? A. Not that I know of.

Q. The $3,635,400 were loans in the city of New York only during the past year, I understood yon to say? A. I believe so.

Q. You said there was $2,694,043.34 used in payment of' annual premiums from the cash balance remaining to the credit of the insured, as I understood you ?. A. No, sir; let me explain that; at the end of every year we make what is called a dividend, and the cash amount of that dividend iscomputed to the reversions, and is credited to the policyholder; and when the anniversary of the policy comes around, and he wants to pay his premium, he may not have the money, and would want to use that credit to pay his premium; that is then reconverted into cash and his premium is paid with it.

Q. Then, nominally, although not actually, you pay him so much money and he applies it on his premium? A. Yes, we cancel his reversion to thatextent.

Q. You mean you cancel his premium to the extent of what you call the reversion? A. No; the reversion is the thing to be paid at death; the present cash value of the reversion is quite another thing; it is the present cash value that is paid to him.

Q. I understood you at the end of every year you gave certain credits to what you call the insured? A. Let me explain that, so that I can make myself qlear; as I said before, at the end of the year we make the dividends, and we notify our policyholders at the anniversary of the policies that they have the dividends so that they may use them; I have interested myself to get them in advance so that our policyholders may use them as so much cash when they were declared; they rest for thirty days, and if used within that time they arc cash dividends themselves, and we pay that overto the policyholder, and he pays us for his premium from that money; if not used in thirty days we enter this as reversion; that goes on as a new insurance, and is equivalent as a new policy, and so much to his credit; after awhile, say the next year, he may have the same amount of dividends,but not enough to add to it to pay his premium, as it is not always the case that the reversion will pay the premium, he says then reconvert my old conversion and get me enough money to eke out my premium with.

Q. Say I am insured in your company for $10,000; at the end of the year you declare me a dividend for how much; say I have been in ten years? A.Well, we will declare yon a dividend of fifty or sixty per cent of the premium; more than that, perhaps; sixty or seventy, perhaps.

Q. That amount you give me credit for on your books? A. Yes.

Q. What do you call it — dividend or reversion? A. We have on your special account a cash dividend.

Q. Call it dividend ; is that what you call it? A. It is a misnomer; it is cash paid.

Q. Well, that you call a dividend? A. Yes, sir.

Q. We will assume my premium becomes due within thirty days; I may have the $150, or whatever amount it is, credited on the premium if I chooseto do so? A. Yes, sir.

Q. Do you mean this $2,694,043.34 was used in that way to pay up policies? A. No; I do not wish to be understood that all was, but a very large portion was used that way; as I stated, you will come to the company and may be a little pressed, and it may not be convenient for you to pay your premium; it may be more convenient for you to use the money another way; you say I have a reversion standing to the account of dividend, and I want that converted into cash and the premium paid, and that embraces all those paid in that way.

Q. Does this $2,694,043.34 include all the dividends which your company declared to your stockholders in 1876? A. No, sir, nothing like it; we declared dividends amounting to over $4,000,000.

Q. Have you any means of stating the entire dividend declared during the year? A. Yes; I can give it at once.

Q. And give the year, please? A. I have a paper here which I think contains it; I know it is $3,700,000 odd this year.

Q. That was the aggregate of all the dividends declared? A. Yes; I think .so; I am very anxious that you should get all these points out; I see it is$3,701,700.

Q. Now, I understood you to say your company had paid during 1876 $3,311,651.02 losses? A. For death claims.

Q. Yes; I mean losses in insurance? A. Yes, sir.

Q. Was any portion of that amount litigated? A. I think probably some portion was, but what amount I cannot state.

Q. Have you any means of stating what the proportion of the amount was? A. It is very small; I forget the proportion, but I know it is exceedingly small; the company did not litigate to exceed eight or ten cases during the year, to my best recollection.

Q. How much would they represent in amount, the whole eight or ten, probably? A. I should not think more than $25,000 or $30,000; perhaps $40,000.

By Mr. Lang:
Q. Does he mean by that that they are the only contested cases on the policies of insurers? A. Yes, sir; the only cases.

By Mr. Moak:
Q. And they were all the cases where policies were litigated on losses during the last year? A. Yes, sir.

Q. Now, let me ask you whether that would represent, say for the

East ten years, a fair proportion of the amount of claim your company as litigated? A. I should think it would; it is a matter I don't concern myself agreat deal with, as being connected with the actuary's department, it does not come under my immediate notice; I am not certain about it.

Q. You stated that to this $3,311,651.02 there was to be added $439,708.18; I don't quite understand why that was to be added? A. Those are additions; I just told you those dividends are given or converted into reversions; they form new policies of insurance, and that is the amount.

Q. Then you mean that in addition to the first amount of over $3,000,000 you paid $439,708.18 to the same parties? A. Yes, sir; in addition.

Q. Then that would make the entire amount paid by your company during the year, as I make it, $3,751,359.20? A. Yes, sir; something about that.

Q. I understood you to say your company had at the present time invested in stocks, of the character approved by the statutes of this State,$12,673,569? A. Yes, sir.

Q. That is in stocks exclusively? A. Yes, sir; which could be converted, if necessary, in six hours, into cash.

Q. Describe the general character of the stocks? A. I can give it to you from the report; the amount and character of each will be found upon page twenty-six of this little pamphlet. [Pamphlet produced.]

Mr. Weiant — Won't you inquire whether he has any knowledge himself of the amount of the securities, or whether he bases his answer entirely upon the report?

Witness — No; I base it entirely upon my general intercourse with the officers of the department and the information I obtained from them.

Judge Davies — I was chairman of a committee which made an examination at the same time the Insurance Department of the State was examining the company; every single stock was examined personally by us, and we can make an affidavit that every dollar is there as stated.

The Chairman—There may be facts specially in the knowledge of Mr. Bartlett rather than any other officer, and those it is important we should get.

Q. Will you state whether you have any personal knowledge of the company owning these various amounts of bonds, and of the character stated here? A. I know it as I know any thing; I have this knowledge, that I looked over the books; I have seen them in the books, and have seen them counted, and know they are in our possession ; that is my knowledge about it; it is the same amount of knowledge a person gets of every commercial transaction where he has to base his knowledge on the correctness of books.

Q. Tiie first item is United States registered bonds, $7,473,550 par value; do you know of your own knowledge the company has in its possessionthat amount of registered bonds? A. Well, I can't swear to that, but I believe it; I cannot swear they have that amount in their possession.

Q. Or that they had it at this time, December, 1876? A. I have no doubt of it; I believe they had.

By Mr. Weiant:
Q. Yon know it of your own knowledge? A. No, sir; not of my own knowledge.

By Mr. Moak:
Q. And you would say the same as to each of the various items? A. Yes, sir; every one; it don't fall within the range of my duties to have apersonal knowledge of these matters, but I have examined them and have a great deal to do with the adjustment of the accounts in making up the annual statement.

Q. I am requested to ask you to describe, briefly, the general outline of yonr dutie8? A. My duty is to take charge of, direct and manage, the mathematical department of the Mutual Life Insurance Company, hy which, it must be understood, I regulate and control the formula by which all calculations are made and estimated, reversions of all kind of premiums, reserves, the distribution of surplus, and all things pertaining to the paymentto policyholders of the money of the company.

Q. Is that distinct to yon or not? A. Ir will require me to write a book almost to give you all the facts, for things are coming up every day entirely new, and, if I were to explain to the committee, I think it doubtful if they would understand me, as it is so full of technicalities.

By Mr. Weiant:
Q. Do you have any other duties to perform connected with the company? A. No, sir; I am the actuary of the company.

Q. You have no other duties there than those you have specified? A. No, sir.

Q. Is it not your duty to examine the secureties? A. No, sir.

Q. Or whether the bonds are invented according to law? A. Not unless I am required to do so by the president and officers of the company.

Q. It does not fall within your line of duty « A. No, sir.

Q. It does not fall to your duty to examine whether the securities are intact and in the possession of the company? A. No, sir.

Q. Is it your duty to know whether the representations here made are correcti A. Yes, sir.

Q. Those made now to the committee I mean? A. Yes, sir; we have a great deal to do with it, and that is the way that I get my information by my general intercourse with the books and personnel of the company; I get my knowledge thaj way.

By Mr. Moak:
Q. You stated that there were outside of the city of New York, if I understood you rightly, $50,000,000 of the assets of the company invested inbond and mortgage; am I right in that? A. No, not outside of the city of New York; I think not; in the State of New York at different points.

Q. Then in the $50,000,000 which you give as invested in the State of New York would be included in the $3,635,400 which you said was investedin the city of New York? A. Certainly ; yes.

Q. Have you any personal knowledge of the value of any of the real estate covered by those mortgages? A. I have not, sir.

Q. So that you can give us any information in regard to the value of these securities as to whether the money is well or ill secured? A. No, sir; it isleft to the committee of trustees pretty much; the committee whose business it is to examine it.

Q. Describe to the committee the manner or mode by which a loan is obtained?

Judge Davies — I would suggest that I can give that information

18-22

better than Mr. Bartlett; it is outside of his department—I will give yon all the information you desire.

Mr. Moak— Then, with the permission of the committee, I will leave the subject for the present.

Q. You stated that your company held $34,500,000 of fire insurance policies; it is policies, I suppose, which are collateral to the mortgages which you hold upon the premises and real estate mortgaged? A. Yes, sir.

Q. So they are really collateral security for some amount? A. Yes, sir.

Q. And don't represent an independent fund? A. No.

Q. Your new loans during the past year, as I understand yon, were $5,962,926.77? A. Yes, sir.

Q. Those were new loans? A. Yes, sir.

Q. And those are included in the $50,000,000 as you have stated? A. Yes, sir.

Q. Let me ask you whether you have any loans or any securities by bond and mortgage upon real estate outside of the State of New York? A. Yes, sir.

Q. Where is that located? A. Our charter authorizes us to go within a circle the circumference of which is fifty miles and the centre being the city hall in New York city; our charter has since been increased, I believe by the Legislature and we can go into Ohio and Pennsylvania, but I do not think we have availed ourselves of that right as yet.

Q. Have you any mortgages outside of this limit? A. I don't know, sir; I know that the charter boundary has been extended, over which our loans may be spread, but whether there are any loans there or not I cannot say.

By Mr. Weiant:
Q. You cannot say whether money is loaned outside of that radius? A. No, I could not say1 whether they had loaned any outside of that limit or not.

Q. Is it not part of your duty to know whether they had loaned outside of it or not? A. No.

By Mr. Moak:
Q. I see there is an account of losses not yet paid amounting to $758,750? A. Yes, sir.

Q. Why, if your company pays losses, as yon say, was there so large an amount unpaid at the time of the report? A. We have sixty days grace inwhich to pay our losses in.

Q. The item is, unpaid losses not yet due, including resisted claims, $758,750? A. That is unpaid losses not yet due, and refers to those which will become due in sixty days after the proof of death.

Q. And that is the only reason why they were not paid? A. Yes, except in cases of litigation.

Q. You stated how much during the last year was litigated, or gave an approximate of it, can yon give us an approximation of how much is the entire amount you have in litigation, say on tha thirty-first of December? A. No, I cannot; that belongs to the lower department.

Q. Your first item of expense is the amount paid in salary to the president during 1876, $30,000? A. Yes, sir.

Q. Did the president receive from your company, or from any of its officers, any sum, either directly or indirectly, beyond that? A. I do not believe he did.

Q. Do you know? A. I aannot swear absolutely positively that he did not, but I do not believe he received a single cent.

Q. Do you know whether he did or not, of your own knowledge? A. No, I cannot say that he did or did not.

Q. Let me put this state of facts: did your company, during the year, make any reinsurance with other companies against risk? A. No, sir.

Q. Not a dollar? A. No, sir; not that I know of.

Q. Did your company procure any reinsurance of any company? A. No, sir; I have no knowledge of it; it would not come in my purview.

Q. Have you any knowledge that it was done? A. I am certain it was not done.

Q. Does your company take any reinsurance? A. No, sir.

Q. Nor does it reinsure in other companies? A. No, sir; we think we are our best insurers ourselves.

Q. How is the amount of the president's salary arrived at, by resolution at the commencement of the year, or by a compensation or per centageupon the amount of business? A. It is by a resolution, so much in a round sum, by the board of trustees.

Q. The board of trustees, at the commencement of the year or at the expiration of the year, fix it? A. It is fixed and is the standing salary for some time; I think the president's salary was increased a certain amount some three or four years ago; I have got it here.

Q. If you can give us the salary of the president for a series of years do so? A. The president's salary was increased in 1869, and it has not been increased since.

Q. From 1869, down to and including 1876, the president's salary has been $30,000 a year? A. That is what I understand, sir.

Q. Was it fixed each year at the commencement of the year, or fixed in 1869 at that sum and allowed to run along? A. I believe it was fixed in 1869;that is my belief about it.

Q. And it is fixed at that sum in round number without reference to a per centage on the amount of business? A. It has nothing to do with theamount of business; there might be some such instance, but it was before I was connected with the company; I have only been connected with the company since 1871, and can only testify since then.

Q. And the figures you have given for the two years previous are upon information? A. Yes. .

Q. What was the salary, from your information, previous to that time. A. I don't know.

Q. Of that you have no knowledge? A. No.

Q. Since 1871, when you became connected with the company, has the president received, for any other alleged services, any other sum from the company, or its officers or agents? A. Not to my knowledge.

Q. Have you any information of his having received any? A. Not at all.

Q. Does, the president devote his time exclusively to this business? A. Yes, sir; entirely; I find him there in the morning when I get there myself, and he remaius there all day.

Q.- I want to know whether tIns compensation is for his entire services? A. Yes; for his entire services.

Q. Is he connected in any way, either directly or indirectly, with any other corporation? A. No, sir.

Q. Either as director, manager, trustee, or in any other way? A. Not to my knowledge.

Q. Or "that you have heard of? A. Or that I have heard of.

Q. The amount of salary paid to the vice-president you said was $18,000? A. Yes, sir.

Q. How long is that been fixed? A. Since 1872.

Q. And has he been paid since that time, to your knowledge or any information yon have, any sum, either directly or indirectly, either by the company or any of its officers, beyond his salary? A. No, sir; not to my knowledge or belief.

Q. Does he devote his entire time to this one company? A. Yes, sir.

Q. Has he any other business? A. I am not aware that he has.

By Mr. Weiant:

Q. Do you know?" A. I don't know whether he has or not, but I believe he gives the whole of his time and attention to the company.

Q. Has he, to your knowledge, or from any information you have, any connection, either directly or indirectly, with any other company, either asdirector or agent or in any other capacity? A. I don't know.

By Mr. Moak:

Q. As to the second vice-president; has he any connection with any other company? A. Not that 1 knew of.

Q. Or that yon have heard of? A. No.

Q. Let me ask, does he devote his entire time to the company? A. Yes.

Q. As to the secretary; when was his salary fixed? 'A. The secretary; that refers to Mr. Stewart in 1875.

Q. I thought he was vice president? A. He was first secretary, and I find in 1875 he was appointed vice-president and Mr. Lloyd's salary began —

Q. I was asking you when the salary was fixed, regardless of what it was? A. I think in 1875 it was fixed; yes it was fixed in 1875.

Q. Do any of those persons whose salary you have given here, perform any other services for the company except in the way you specified; for instance, does any one man act as second vice-president and secretary at the same time and receive compensation for both offices? A. No, sir.

Q. What I wanted to get at is this: does the secretary act as vicepresident and secretary and get two salaries? A. No, sir; he does not get compensation for two offices; when the vice-president is absent some one must do his duty, but he gets no additional compensation for it.

Q. At any time has the same person held two offices? A.1 Not that I know of.

Q. I suppose that answer is the same as to all the persons stated here; your answer as given would apply to all of them? A. As far as I know.

Q. And none of them have received any compensation, either directly or indirectly, under any excuse whatever, beyond the amount you have stated as salary? A. No, sir.

By Mr. Weiant:
Q. Do you state that under your knowledge? A. Yes, I think I am able to state,that.
Q. Now, as to the solicitor, attorney and counsel; they are employed and paid by the company? A. Yes, sir.

Q. By the year? A. Yes, sir.

Q. And that salary was-fixed when? A. That salary was fixed in 1874.

Q. And that has been paid at regular rates since? A. Yes, sir.

Q. And has he received either as counsel, for any purpose connected with the company, or for making searches or examining titles, any thing beyond that? A. I don't believe he has; I have no knowledge that he has.

Q. And these 110 clerks you specify, are these all clerks employed at the home office? A. Yes, sir.

Q. Employes of various'grades? A. Yes, sir.

Q. And do any of those persons receive any compensation beyond the amount of their regular salaries? A. Not that I know of.

By Mr. Weiant:
Q. You don't know, do you? A. Well, it is impossible for me to know any thing absolutely; I have no knowledge of it whatever, but I don't believeit; I think I would know it if it happened; I will further remark that I think I would be pretty certain to have known it if it was so.

Q. I want to have the examination thorough, so that if that is going on and you know it, we may get it? A. I know, and yon will get it if it be true.

By Mr. Moak:
Q. Do yon know whether any member of any of the families, or any connexion of either of those officers, have, either directly or indirectly, received any compensation or money from the company not stated in these amouuts? A. I have no knowledge of it whatever, sir.

Q. You have never heard of it? A. I never have heard of it.

By Mr. Weiant:
Q. Do you know that they have not? A. No, sir.

By Mr. Lang:
Q. Can you state how many policies lapsed during the past year? A. I can give you the exact number, sir, by referring; the number is very large inour company, and it is impossible for me to remember them all.

Q. Make any reference you please? A. Now, in order that I may be understood, I will state here that lapsed policies would include those thatlapsed by death and forfeited policies.

Q. That is what I want to get at by my question; it is forfeited

Q. Policies; I don't mean policies that lapsed by death? A. We have ,501 policies that were forfeited.

By Mr. Skinner:
Q. How many did yon issue ? • A. Eight thousand one hundred and twenty.

By Mr. Lang:
Q. And yon say 7,501 were forfeited i A. Yes; it is proper that the committee should understand this subject, and 1 will say, in order that they may do so, that a great many of these will be restored; it does not follow that because they are lapsed that they are entirely forfeited; you see we are obliged to make up our accounts for the insurance commissioner, according to our charter, on the last day of December.

Q. I understand you to say that those that were lapsed under the charter, technically lapsed or forfeited, was 7,501? A. Yes, sir.

Q. During 1876? A. Yes; and of these a great many will be restored.

Q. Let me ask what you mean by that; is the company under any obligation to restore them? A. No, sir.

Q. But as a matter of policy you mean to say they do it? A. It is a matter of policy and also of liberality; it would be injurious to a company not toact that way.

Q. But the policy is good for nothing if you elect to treat it so; but if you see fit, in the kindness of your corporate heart, to let them back again,they can? A. We coax them back if we can; I told you 7,501 policies were forfeited*; of that number we bought a large amount in cash ; we paid$3,000,000 upon these policies ; they lapsed because persons gave them up for their equivalent in money.

Q. Well, do you mean by that, that they were first forfeited and then you bought them? A. That is a mere technicality by which

23-27

we enter them; but in the number I have given you these are included.

Q. When you say 7,501 were forfeited, as you understand the force of the technical term used by you, had they any force unless the company saw fit to give them cause? A. Not at all.

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 boundto pay any thing? A. Not legally bound to pay any thing.

Q. Then that $3,000,000 was a gratuity? A. It may be Bo regarded; perhaps you had better change the language to suit yourselves; 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 policyholder a penny after a certain time, do you? A. We are not legally bound to pay them any thing, but agreat 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 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 you have a policy for $10,000 which has run for ten years, and I forfeited 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.

By Mr. Skinner:
Q. You don't consider there is any law now which compels you to pay any thing 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 tis 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 istechnically called the reserve of the policy, another misnomer, passes to the other policyholders.

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 beforea division is made, arid we can have the means of restoring the policy by restoring the reserve, we invariably do it after re-examination by acompetent 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 I 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 ou with the policy at the same old price, but he must furnish a clean bill of health.

By Mr. Lang:
Q. I want to ask you this question: I understand you to say that in the bounty 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 acorporation 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 ofmen 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 isperfectly sound in principle to leave the discretion with the officers.

Q. You are aware, perhaps, that other States have established nonforfeiting 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 1 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, it is unwise for us to let them get any thing through their mode ofadvertising; 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 quantum meruit for what he has paid, and a paid up policy given him for a certain amount? A.I 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 yourself of it? A. Itwill 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 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 itreceives 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 avery pernicious plan.

Q. Why so? A. I will state why so: in the first place a man is made by that law to lose every thing 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 every thing; 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 every thing.

By Mr. Weiant:
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 hima paid-up policy, and when he dies his heirs will get something back that he has paid.

By Mr Lang:
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 he 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 that way than for the company to have the option of giving you nothing i 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 tothe other 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-uppolicy 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 every thing 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 forfeitingof policies? A. Yes, I think it could; I have drawn two or three laws myself; but I doubt if they have ever reached Albany.

By the Chairman:
Q. You prefer a paid-up policy very much to the Massachusetts plan? A. Yes; I think it is a great deal better.

By Mr. Wexant:
Q. You stated that you understand the Massachusetts law to be that when the reserve is exhausted, unless the person dies within the time beforeit is exhausted, he forfeits every thing? 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 1 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; inorder to answer it to your satisfaction, I 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 any thing was done that way? A. Yes, sir.

Q. You think the business could be carried on successfully? A. Yes, sir.

Q. At the present rates of insurance? A. 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 payingan annual premium, and he is overtaken 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 advertisesto 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 his choice, may be attended with great evil; 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 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 yon 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 before you experts whose business it is to know every thing 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. •

Q. You were then employed by the company in what capacity? A. In my present capacity.

Q. As actuary? A. 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 toattend the board.

Q. ITave you been present at any ot the meetings when the salaries of the officers were acted upon? A. Never.

Q. Do you know any thing 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. Yon 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 any thing to do with the medical department? A. No, 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 some one else connected with the family who may have had consumption, what risk would be good for a cer

28-32

tain 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 seldomthen; not very frequently, because the rule of the company is to take no unsound life.

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 any thing to do, or were you ever consulted with reference to the loaning of moneys? A. Never.

Q. Do you have any thing whatever to do it? A. Nothing whatever to do with it at all.

Q. You have no knowledge on the subject of making loans? A. No, sir.

Q. Nor inclination? 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; and it is addressed by the vicepresident to the chairman of this committee, explaining the cause why the information sought forwas not submitted in time.

By Mr. Weiant:
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 every thing 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 your own knowledge? A. I have as much knowledge of that as of any thing, because I have consulted the books and the officers charged with the examination of the books.

By the Chairman:
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; 1 know that; but inregard 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 tilis report are true? A. Well, I have as much knowledge of that as I have of any thing.

Q. That is not an answer to my question? A. I don't know what the committee wish me to state; I want to be honest about this matter.

Q. Don't yon 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 any thing, and a great many people know 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. I believe it to be entirely true from beginning to end, but to swear tbat I know it of my own knowledge to be true might involve considerations that don't now occur tome; I don't intend to be entrapped at all, nor do I intend to attribute to any one the disposition to entrap me.

By the Chairman:
Q. You mean to say yon don't know, of your 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.

By Mr. Weiant:
Q. I would not, under any consideration, ask any question that miglft 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 thing 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 any thing 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 any thing, 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 swearthat I know it to be absolutely true.

By the Chairman:
Q. You know certain statements contained in it, as to an examination being pending by the department, are true? A. Yes; I knowof 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 istrue.

Q. Now, let me get your idea on the subject, as to whether an officer in one company should be permitted also 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.

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 inthis 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 per cent 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 interests ceases entirely? A. Yes, sir; after seven years, but they are allowed a certain sum 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, obtaina 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 your policy giving the insured the right to a paid up policy it he does not pay up the premium? A. Yes, there is incertain of the ten year policies; our old policies gave them the right to demand a paid up policy for the amount which his premiums paid might bear tothe 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.

Hon. Matthew Hale—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:

The Equitable Life Assurance Society,
120 Broadway,
New York, March 19, 1877.
To the Insurance Committee, of the Rouse of Assembly of 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 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 employes 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 wasno intention on the part of the officers of this society to disregard the legal requisitions of the Legislature. It was natnral to suppose that the latesuperintendent 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 withthat 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 you 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 toenable any 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 official 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 last published official 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 reduced $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 ofthe resolution; it is very brief.

33-37

Salaries, Fees and other Compensation of Officers and Employes of the Equitable Life Assurance Society of the United States for the year 18Y6.

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
Superintent 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

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

Salary in commutation of constructing engineers' per centages on buildings 15,000 00

Eight special agents, inspectors 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 year 1,041 66

Other examiners' fees 22,731 81

$47,273 47 [Assembly, No. 93.] 3

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

H. B. HYDE. Sworn to before me this 19th ) day of March, 1877. {

Charles C. Deming
Notary Public (65), ST. T. County.

Mr. Hyde — I have also prepared an additional paper 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 sumspaid 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 Dee. 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 00
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 11,600; 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 included as I had no personal gain from it; my extra compensation is as follows:
For 1864 and previous $16, 199 82
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

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 president was paid a salary of $37,500; in"1875 there was due to Mr. 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.
STATE OF NEW YORK, ) gg .

City And County Of Nkw York, j *'

Henry B. Hyde being duly sworn, upon his oath, says that he is the president of the Equitable Life Assurance Society; that the foregoing statementis 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.

H. B. HYDE. Sworn before me this 19th ) day of March, A. D. 1877. \

David Paton,
Notary Public (131), iV. 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, andpresident 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 I 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 directors offered to continue the contract, and whether you voluntarily offered to giveit 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 itwould be unwise to do so; there had 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 plau altogether.

By Mr. Moak:
Q. When did the arrangement of your being paid by a per centage upon the surplus of the company cease? A. It ceased with 1874; with the closeof 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; whenwas 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? A. It was that I had relinquished a position which paid me about $4,000 a year to receive a salary of $1,500, andthat 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 ; your 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 yon received no compensation, upon the basis of a per centage, until 1864? A. No, sir.

Q. Then you received $16,199.82? 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, 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 yon 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 1872 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 Lite 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 to any other company.

Q. The compensation that was paid for services at the Boston office, did any portion come to yon? 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.

38-42

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 continued? 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. • f Q. Since that time you have had no connection nominally or otherwise with them 1 A. Yes, sir; I have been their nominal agent.

Q. That is, carried on the business? A. Only by name; 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 ot 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.

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 uame of Mr. Hammond? A.Yes sir.

Q. Has Mr. Hammond been at any time nominally or actually agent of the Equitable in the city ol Boston? A. My father was agent, in part, of the Equitable, and 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 for the Equitable? A. No, sir; he has never been.

Q. Has ne 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. Yon 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 coutinne twenty years, or twentyfive 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 connected with the agency, and on whose policies the commissions were drawn.

Q. Have you any 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 putit 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 haveto 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 agencies; 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 a different commission on the business done, for the purpose of 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 1869, 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.

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 at $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 yon 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 about $3,500, the regular salary above the percentage? 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 percentage? 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. t

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 yon, 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 officers of the company who have received, at any time since its organization, any compensation depending upon aper 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.

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 soapproximately.

Q. And about that time you began, in addition, to pay him a compensation depending upon a per centage? 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 down to 1874 what per centage did he receive? A. A-half of one per cent.

Q. That was tin 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 only for one year? A. It commenced flush with the year.

Q. lie 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 you have 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 hare 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.

By Mr. Moody:
Q. Has your company reinsured 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. Yon 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. Yon could find out what it was by calling at the Baltimore Life Insurance Company.

Q. Were the officers of your company allowed a per ceutage on the reinsurance 1 A. No, sir.

Q. None whatever? A. No, sir.

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

0^. 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.

43-47

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 yonr 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.

By Mr. Weiant:
Q. Won't you state the manner in which this arrangement was brought ahout? 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 reinsnre them? A. The way we did was to take the liabilities of the company, and see what would have to 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 additionto the premium received, and a liberal margiu 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 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 any thing 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 acomplaint 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 ofthe company and ourselves.

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

Q. Did you trea"t with them in making the contract? A. We met a good many 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 any thing about it.

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 anexpert builder.

Q. You are now speaking 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.

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 additionto 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 havea 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 was 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 yon; 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 different 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 yon can, about the aggregate paid for the plans? A. I say, I think we had paid a-half a dozen architects, and each of them drewa plan, and were paid three or four hundred dollars each.

Q. Then from two thousand to twenty-fonr 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 per centage upon the cost of the building? A. We paid him a per centage on the cost of the building for drawing all the necessary life-sized plans; then the compensation was fixed of the gentleman who is paid that salary; he occupied the position known in England asclerk of the work; 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 acommission the contracts, vs a general thing, will be large.

Q. Yon 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 lessthan 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 wonld naturally bepaid 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 wasnominally 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 any thing 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 personwas connected in that capacity.

Q. Yon had no such officer 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 costs? 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 live and a-half per cent, net.

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

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

Q. What other building does the company have, or own the title to? A. Numbers 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 life.

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.

By Mr. Weiant:
Q. Do I understand you to say 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 yon a branch office there? Q. 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.

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

By Mr. Husted:
Q. Don't you own real estate that you have taken on mortgage foreclosure? A. Yes, sir.

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 pun-based 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 yon purchased it for on the mortgage foreclosure? A. I don't believe there will be adifference of ten per cent either way.

By Mr. Hale:
Q. Suppose you name who the committee are? A. The examination 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.

48-52

Q. Suppose you state who those gentlemen are? A. Governor E. D. Morgan is, I suppose, well known in this locality; James M. Morrison ispresident 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 Galviu 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 arigid examination of our real estate in remote country places; and other persons havej of necessity, been employed by the committee; they have also employed Mr. Fackler, the actuary, to compute all our liabilities"; our liabilities, within the three mouths, have been computed by three separate valuations.

By Mr. Weiant:
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. Yon 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.

By Mr. Cowdin: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.

By Mr. Weiant:
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; theyhave done the thing in their own way; they have picked out their own appraisers, actuaries and a-halt a dozen accountants of their own, and have done the thing in their own way, and we were not consulted.

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

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

By Mr. Weiant:
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 in in that.

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

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

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

Q. You bought it in? A. Yes; and whatever deficiency there is the bonds will be prosecuted for.

By Mr. Skinner:
Q. You also stated that the Insurance Department is making an investigation? A. Yes, sir, a searching investigation ; I would like to say here thatthe Insurance Department has examined the title to every piece of property we own.

By Mr. Moak.
Q. Will you state to us what is the plan, or theory, upon which you loan money upon real estate? A. Persons make application to us, and sign apaper requesting a loan; that is viewed by the officers, and if they think it is a proper loan and a proper piece of property to loan on, together with a proper place to loan in, the property is valued by the appraisers, and then it is presented to the finance committee.

Q. What appraisers? A. Appraisers appointed by the finance committee; if it is an extraordinary thing, upon which the officers know we would not loan, we don't go through with that routine, but tell them it is improbable we should loan on it, and it is withdrawn.

Q. Are those appraisers the same right along, or are they different? A. All the appraisers are employed by the finance committee; two or three we employ in New York; none are employed who are not thoroughly known to the finance committee.

Q. The question is, whether you have the same appraisers for the great majority of cases, or different appraisers for each case? A. No, sir.

Q. These persons, yon have spoken of, appraised the valve of the real estate? A. Yes, sir.

Q. Exclusive or inclusive of the buildings? A. If it is a farm, exclusive of the buildings; if a house and lot in New York, inclusive.

Q. If you conclude to loan, how much of the value do you loan with it? A. We loaned forty per cent of our own appraisement; sometimes fifty, sometimes thirty-three and a-half, depending upon the locality.

Q. What is the highest you go? A. Fifty per cent.

Q. As to the expense of the loan, and that attending the search of the title, by whom is that paid? A. By the person who applied to us for the loan.

Q. Is that service performed by your own officers? A. Yes, sir.

Q. Are they compensated for by that for this salary, or do they have that in addition thereto? A. They have it in addition.

Q. Have you any idea or means of determining how much it amounts to? A. I have not, because it is almost impossible now to get good property on bond and mortgage; we have to invest our money in governments.

By Mr. Weiant:
Q. How do you mean it is almost impossible to find good bonds and mortgages? A. Simply, because it is impossible to get them; there is anenormous feeling against loaning on country property, and we have to loan on such a small line that it makes men vexed if yon offer it to them; as ageneral rule, the amount we are willing to offer a man on a farm rather makes that man an enemy than a friend, and I generally refrain from making the offer, although if we have a good chance in the country to make a loan we make it; we are ready to loan in any part of the State of New York, and have abundant chances to do it, but, as I said before, there is more trouble about it than yon imagine; there is one thing, I think it would be well for the committee to understand, that is, the vast benefit to the State of New York this company has been; although you,may scarcely think it, the healthy insurance companies are bringing enormous sums of money into the State which materially benefits the State. .

By Mr. Moak:
Q. Has it loaned much in the State? A. It has, and I will say this, that if a healthy insurance company can get good bonds and mortgages theyprefer them to governments.

Q. What is the aggregate of your bonds and mortgages? A. I think the aggregate is about seventeen or eighteen millions.

By Mr. Hale: Q. Almost exclusively in this Slate? A. Almost exclusively in this State, except in New Jersey and the fifty miles radius that I have spoken of.

By Mr. Moody:
Q. What is the length of a loan usually? A. We never call in a loan when the security is good, and interest paid.

Q. But your mortgages have a specified time? A. Yes.

Q. How long do your mortgages run for? A. A year.

Q. You loan all over the State of New York, and out of it? A. We are willing to loan any where in the State of New York.

Q. Have you not a loan in Binghamton? A. I don't know that we have.

Q. Have you loaned any on a big hotel there? A. No; we have no big loan in Binghamton that I know of. » By Mr. Moak:

Q. You speak here in this list of various officers, such as the chief medical examiner and so on; have any of them within ihe last five years received any compensation other than their regular annual salary? A. No, sir; we have paid nothing but what is represented in that paper.

Q. Have any of them, within the last five years, received any higher salary than you have stated the salary for 1876 to be? A. No, sir, with theexception perhaps of myself.

Q. You speak here of the chief medical examiner's salary, $16,500; does he do any business other than that which he performs for you; in other words, is he a practicing physician? A. He does not as a rule do any thing else; he t.-.ight possibly make an examination, and I think all physicians if called on by a company would make an examination, and they might have people that they attend, but to a very small amount.

Q. Who is your examiner? A. Dr. Edward W. Lambert.

By Mr. Weiant:
Q. You have local examiners as well? A. Yes, sir; certainly.

By Mr. Moak:
Q. You speak of the principal counsel; he is paid $12,000 a year? A. Yes, sir.
Q. You also speak of attorneys for litigative business, $9,949.19; does that include your actual expenses, or only such as you pay during the year; or, in other words, does that include the money paid out by the company during that period for legal expenses or cover the whole legal expenses ofthe year? A. That makes the year a unit; there may be expenses that were paid in January that have in reality belonged to the year previous, but itincludes the year as a unit.

Q. The principal counsel, does he receive any thing in addition to the $12,000? A. No, sir.

Q. Who receives the compensation for investigating the titles of property in New York, and making the necessary searches? A. The counsel and attorneys.

Q. Do you have any attorney and counsel independent of the principal counsel? A. Yes, sir; we have Mr. Henry Alexander, as counsel, and Mr.Henry Day, as attorney.

Q. How is that amount which they received divided? A. Each receives half of the fees for an examination ; there is no rule about it.

Q. Do you know how much the examinations amount to in the city of New York, say for the last ten years, on property? A. I really could not tell.

By Mr. Moodt:
Q. These examiners make an examination of the abstract of the title of the property, I suppose? A. Yes, sir.

By Mr. Moak:
Q. Well, what does it amount to—these examinations for the last ten years of titles on loans made by the company? A. I really could not tell you; we have hardly made any loan on bond and mortgage for the last few years.

Q. I put the question, for ten years, to avoid the present stringent condition of affairs? A. I would like to give an estimate if I could, but I eannot; it is not money that we have paid, so I cannot get at it very well.

Q. How long have you paid your principal counsel $12,000 a year? A. I think for a few years past.

Q. Well, about how long? A. Say five or six years.

Q. And before that you paid him more or less? A. Less, I should say.

Q. You have an attorney in addition; what is his compensation? A. He has no compensation except for work done.

Q. He has no annual salary but charges a commission for fees for each case? A. Yes, as it comes up.

Q. How much has been his annual compensation, more or less than in 1876—say for ten years preceding? A. His compensation has been verysmall indeed ; I could hardly give an estimate of that myself. ■

Q. I want to get at it relative!y, whether it is more or less than in 1876? A. I should say in 1876 perhaps it was less than it had been in previous years.

Q. How much less? A. I don't think his average compensation would exceed not more than $2,000 or $3,000.

Q. Well, but there is $9,949 paid; was that paid to more than one attorney? A. Yes, sir.

Q. Take the aggregate of attorneys' fees in the city of New York for ten years previous to 1876, would it be greater or less than the amount paid in1876? A. I should think it would be about that.

Q. And the thirty-three other law firms in different parts of the United States, the amount paid to them being $13,346.10 arc amounts paid counsel for the defense of cases you defend, I presume? A. Yes, all over the country we are in litigation; agents trying to defraud us lots ; of troubles.

Q. At the commencement of the year 1876, about what number of policies had your company out? A. At the commencement of the year 1876?

Q. Yes? A. Why, J think about $175,000,000.

Q. I am speaking about the number, not amount? A. I consider the amount nearer than the number; I haven't the number in my mind; the amount of a thing in life insurance is the most important.

Q. I want to get the number as near as I can? A. I don't think I could give you the number,

53-57

Q. Can't yon give us the number within a thousand or two? A. I can send it to you, sir; I never, in making up how much we were doing and how wewere prospering, think of the number; I have figured up the amount rather than the numbers.
Q. About how much an amount has your company insured at the commencement of the year 1876? A. About $175,000,000.

Q. About how much an amount did your company insure during 1876? A. The insurance report will be here in a very short time, and I am not really prepared on this expert question, because I prefer to answer your questions with great accuracy; the late report is not here.

By Mr. Moody:
Q. You have not your report in the Insurance Department here; yon have not reported yet, have you? A. No, sir; we have been waiting until all the things should be sent iir together.

Q. Is that usual? A. No, sir, very unusual; we have been waiting to have the report sent in to the State Superintendent verified, that is, in all respects; there has been an understanding that he should verify it, rather than have it sent in without being verified.

By Mr. Hale:
Q. He has been engaged in an investigation of the affairs of the company, has he not? A. Yes, sir, for several weeks.

Q. The report has been withheld to await the result of the examination? A. Yes, sir; we have been waiting, at the desire of the department, to have the report verified.

By Mr. Moak:
Q. The question I put to you was, what was the amount of your insurance for the year 1876 ; lam speaking now of new insurance? A. The new insurance procured by application, I should think, was some seventeen or eighteen millions.

Q. Now, what would be the aggregate of premiums due upon the old policies which were in existence at the commencement of the year 1876? A. I cannot answer.

Q. Can't yon approximate it? A. No, sir, I could not give it; I would be very happy to give you the information, but it is something I am notprepared to give; I cannot guess at it; it is one of those things that it is utterly impossible to guess at, but our books will tell that.

Q. About what would be the aggregate of premiums received during the year 1876? A. The aggregate of premiums received during the year 1876was about $9,000,000 rising; that is, premiums and interest, our total income.

By Mr. Moody:
Q. Do you include renewals in that? A. B.enewals, interest, and every thing else; it would rise between $9,000,000 and $10,000,000; our total income for premiums, old and new, interest, and every thing else, would be that.,
By Mr. Moak:
Q. About what would be the premiums for the last year? A. I am talking about 1876.

Q. I am talking about premiums for new insurance? A. I cannot tell you that.

Q. Can you state either the number or amount of the policies lapsed during the past year, 1876? A. All that expired and such expert knowledge will be stated at length in the report to the superintendent which we shall send; but it is utterly impossible for me to carry it in my head; I would be gladto do it if I could; we are hard at work at that report, and it will be finished shortly.

Q. You have no means of stating it now? A. No, I cannot.

Q. Either the amount of the policy lapsed or the numbers? A. I cannot state it; that information is being picked out, and you will have it.

By Mr. Moody:
Q. What provision do you make to secure policyholders from lapsed policies? A. Nearly all of our policies have a protective provision in them for the policyholders, and many of them have a clause guaranteeing that after three payments they shall have its value; there never has a man yet walked out of the Equitable door say, whose premium was six months past due, that he did not get the value for his policy; it is a custom so absolutely settled by life insurance companies, that a company who did not treat people fairly would have to go to the wall.

Q. It is discretionary with you? A. No, sir, it is not; it is a custom as strong as law.

Q. Do you mean to say the custom is such that it is legally binding on you? A. No, I don't mean to say so, but it is a custom prevailing in large life insurance companies almost as strong as law; no large life insurance company that I know of, and I have been in business twenty-five yeajjs, but I knew a company do a policyholder an injustice in refusing to give a policy value, even long after sixty days has expired.

Q. Do you mean to say your company has done it? A. I do.

Q. You have that clause in your policies? A. Yes, we have in most of them.

By Mr. Lang:
Q. Do you issue several kinds of policies? A. Yes, sir.

By Mr. Weiant:
Q. Would it not be well to insert in the policy a clause giving them the legal right to demand it? A. It is in most of our policies.

Q. Do yon mean to say they are non-forfeitable? A. Nearly all of our policies have a protective provision in them for the benefit of the policyholder; there are protective provisions which guarantee the value in case the policy is given up.

By Mr. Moody:
Q. You stated that you Lave several kinds of policies? A. Yea, sir.

Q. Give a statement of the different kinds? A. We have life policies and endowment policies.

Q. State how this is rendered non-forfeitable, or what there is in regard to the forfeiture of the policy? A. I cannot state that without seeing the policies before me; I can only say there are protective clauses in them guaranteeing the rights of the policyholders.

Q. Give the names of the different policies? A. We have the life policy — that is the ordinary life policy—the endowment, the ten year and the Tontine.

By the Chairman:
Q. Will you state the character of the respective policies? A. The life policy is a policy on which the person insured pays a regular annual premium throughout life, and the surplus premium is returned either in a reversionary manner, and this reversion may be used for the benefit of the policyholder in a variety of ways, such as he may direct; the next, the ten year policy, is where the party pays for ten years, and if he gives at the endof two years he secures two-tenths of the policy; if at the end of three years he secures three-tenths in the same way, and so on; in the endowment policy he receives a certain endowment at the end of twenty years, and if he pays two payments he secures one-tenth, and in five payments one-quarter, and so on.

Q. So that he may stop at any time and receive a paid-up policy for what he has paid. A. Yes; after two or three payments.

Q. Now as to your Tontine plan? A. That is an ordinary life premium, in which the party enters into an obligation with the company that he will waive the right to the surrender value in view of the profits being accumulated and being divided among those who survive a certain length of time.

Q. And in case of death? A. In case of death the policy is paid?

Q. You insure a certain number under those policies; how high in regard to amounts; or is there a certain nnmber that you insure that way, selecting them in regard to liability and risks? A. We issue for any amount they desire, either $1,000, $5,000 or $10,000, as they may wish.

Q. And that they are divided into classes? A. Yes, sir.

Q. And the statutory provision in regard to non-forfeiture would prevent the company's making such contract? A. Yes; these policies are selected by a class of men who would, perhaps, not insure their lives at all; the object of life insurance is, that a certain amount should be paid to the survivorin the event of death; now, in justice to the public and the company I would say, if you make the surrender of a policy easy, if a man can go into aninsurance company like going into a savings bank, and say, here I want to sell you my policy, and get a certain value for it, and then go and spend it,the object of life insurance will be lost; the object is, that the money shall be paid to the company so that the representatives may receive the amountinsured for at death; if yon put in a penalty that is going to compel a man to pay his premium he is more likely to keep them up, but if I could go intoa life insurance company and draw out the value of my policy like I could draw it out of a savings bank, without loss to myself, why, good-bye to aman paying tor a long term of years for a life insurance, and good-bye to any thing being left to the survivors; if I make a contract with A B, make it in good faith, make my provision and spend my' money on the contract, as a life insurance company does, that contract should not be broken without a penalty being enforced; a life insurance company cannot break its contract under any circumstances, and if you are going to make it easy for any policyholder to break his contract, you are going to do a great injustice to the companies; on the contrary, the breaking of all those contracts ought to be made as difficult for him as for the company to do so; if I insure a hundred men and seventy-five become impaired in health, under thatsystem the good men have every facility for going out, while the bad men are left in my hands, and that will as certainly bring disaster on any company as that two and two make four; you have got to exercise great care in protecting and nourishing life companies, on the principle that a man cannot enter contracts and voluntarily break them without injury to himself, as without such a provision there is no security for a company; if you are going to give them the right to break their contract, give us the same chance; but, so long as we are held by the severity of the law, there oughtto be a penalty imposed if others break their contract with us, otherwise we are ruined by that course; you make it easy for policyholders to go out, and you have the debris on your hands; you find small companies fail, but not one of those which are justly called large and respectable companies has ever failed in a million, and all this fright and excitement now existing is because a few illmanaged companies, that have taken bad policies and held too many notes, have failed; a great deal can be said on this subject, and the large companies are very much in favor of a proper system of law,but I don't believe we are going to get it without great care and calmness and deliberation, and it won't be done unless people take their time in doing it.

By Mr. Weiant:
Q. Do you understand that legislation is being asked that policyholders may break their contracts? A. No,sir; I merely offer it as a suggestion for discussion.

By Mr. Lang:
Q. Do you not think it is possible to legislate to protect the policyholder, and still be just to the insurer, to the effect that in case his policy becomes forfeited, in case the same facts which now forfeit them should come about, that he should have a paid-up policy for such an amount as he by equity may be entitled to; I do not mean to refuud the money, but to give him a paid-up policy for such an amount as the surplus coming to him on his life insurance should buy; would it jiot be well to do that, in your judgment? A. I think a fair law on this subject, well considered and well discussed, would be a very wise thing; I would like to say one thing; I should very much doubt whether, after all, you could go to work and make laws on this subject; and whether you would dare to make laws that would be as favorable as the customs and practices that exist on the part of the companies for the protection of all interests; they are variable and adaptable to all circumstances; we would not dare to have them a cast-iron rule or law ; but there is nothing that will make them so liberal to the policyholders as the reputation they must have for liberality, honesty, and fair dealing,in order that they may do business in the future; it is impossible for a life insurance company with a blighted name to do business.

By Mr. Weiant:Q. You stated your company was doing business in Massachusetts? A. Yes, sir.

Q. Are the policies you issue there the same as those you issue here? A. Yes, sir.

Q. In the form of a contract? A. Yes, sir.

Q. You don't issue your policies there under the Massachusetts non-forfeiture law, then? A. They are issued in New York.

Q. Do I understand yon to say you could safely do business and issue a non-forfeiture policy similar to that, in principle, used in Massachusetts?A. Well, sir, I think there are grave objections to the Massachusetts non-forfeiture law.

Q. In what respect? A. Objection that it is injurious to the policyholders.

Q. Will you state wherein? A. I could, perhaps, hardly do so at this time ; I could prepare a paper on the subject.

Q. Give us your idea wherein it is injurious to the policyholders? A. I can state this, for illustration: I can take one point; supposing, for example, aman had a policy and had to pay his premium on it, say to-morrow, or three months from now, and a law was passed that he should not pay his premium until two years from now; it would be an exceedingly embarrassiug and wrong thing, and a damage to the policyholder; I am not opposed to a wise law passed for the protection of the policyholders; but it would be unwise for me, in this interview, to lay down my views as to non-forfeitable laws; 1 would not trust myself to make a speech, bat would only trust myself to read a. paper.

Mr. Moody — You have had this matter under consideration, you say, for twenty-five years; we come here not having had it under consideration two or three months; how are we to arrive at a decision on the matter except from such men as you are?

Mr. Halb — I venture to say if this committee would become acquainted with the officers of a large life insurance company, and have confidence with them, that they would have confidence in them, that they would be honest and act fairly, laws could be made that would be fair all around.

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Witness — I have been in it twenty-five years, and have devoted my life to it, and I say here distinctly that any life insurance mistake is worse than acrime; it would be very easy for the committee to draft and the legislature to pass a law that would be a great damage to the institution in the State; so far as the officers were concerned they will go to any extent to serve the committee or the House.

By Mr. Weiant:
Q. Let us suppose a man has taken out a life policy for $10,000, and, after having paid the premium for ten years, finds himself in embarrassingpecuniary circumstances and cannot pay up the premium, what have yon to say about the passage of the law that he should be protected for themoney he has paid? A. I have no objection to it, and am in favor of proper protection, so far as you state.

Q. Don't you think that his rights should be properly protected? A. I think he should be properly protected.

By Mr. Lang:
Q. I want to ask you whether, in your judgment, it would be wise to put a restriction in the way of an individual being secretary and vice-presidentof one company and general agent of another, and by such swapping around business, for instance, as there was between you and that Boston man having a double salary, you understand the point, whether it would be wise to prevent such a thing as that? A. lam perfectly willing to sacrifice myself on the altar of public good.

Recess until 3.30 p. M.

Afternoon Session— 3.30 p. m. The examination of Mr. Hyde was resumed by Mr. Moak:
Q. This building, called the Equitable building, in New York, about what is its front on Broadway? A. Eighty-nine feet sir.

Q. And about what is its depth on the cross street? A. About 235 feet.

Q. Its hight is how many stories? A. It is about eight stories high.

Q. About what proportion of the building is occupied by the insurance company itself? A. From a quarter to a third.

Q. Is the remainder of it substantially rented now? A. Almost entirely rented.

Q. This company is a company started with a capital stock I believe? A. Yes; at the time we organized we were obliged to comply with the laws ofthe State of New York, and have a capital stock of 8100,000.

Q. You started, then, with a capital stock of $100,000? A. Yes.

Q. And what is the market value of that stock now? A. I think the market value of that stock is a little rising of $150 per share of $100.

Q. Does it not stand as high as four or five hundred? A. There was an occasion, about four or five months since, when some of the stock wasoffered at auction; we became satisfied that parties, whose motives were at least questionable, and opposed to the interests of the policyholders, proposed to buy the stock, for the purpose of acquiring it to injure the company, and it was bought in the interest of the company to protect the company from the assaults and machinations of persons hostile to the company.

Q. How much was it bought at? A. I think four hundred.

Q. By whom was it purchased? A. I think it was purchased by Mr. Hosea Navarreau.

Q. On his own account? A. It was bought on his own account, for delivery to some officer in the company, for the interest of the company.

Q. Was it designed to be paid for by the company's funds? A. No, sir.

Q. Was there any design that it should be owned by any individual in the company, but for the company? A. No, sir.

Q. How much stock was there sold that way? A. I think $1,000.

Q. He purchased it, and what became of it subsequently? A. It was subsequently transferred to myself, and I now hold it.

Q. In your individual capacity? A. Yes.

Q. And paid for by your individual fund? A. Yes, sir.

Q. In other words, he bought it for you? A. Yes.

Q. Has there been any other stock sold or offered on market within the past two years? A. Yes, sir.

Q. When is the first time within the past two years? A. Perhaps once or twice a year.

Q. What was the price at which it has been sold usually? A. It has been sold from $150 to $195, as near as I can remember.

Q. When did the company make its first dividend? A. In 1864.

Q. What was that dividend to its stockholders? A. Its dividends then were to its policyholders; it has only paid a few dividends to the stockholders.

Q. How much was the first? A. Seven per cent in gold.

Q. How much was the second? A. Seven per cent in gold.

Q. What is the interest declared add paid to stockholders? A. Seven per cent in gold.

Q. Has there been any dividend paid to the original stockholders exceeding that? A. They cannot receive, according to the charter, a higher rate than that; the charter is explicit.

Q. Has there been any surplus set aside as property for distribution to the shareholders of, for reservation to the shareholders? A. Not a dollar.

Q. Has there been any addition to the original capital stock, or, in other words, to use a homely phrase, has it been watered or increased in any way? A. No, sir ; there has not, in any way, shape or manner, past, present or contingent, been any other advantage given to stockholders other than the seven per cent.
Q. Of how many directors does the company consist? A. Fifty two. .
Q. Are they all chosen by the stockholders? A. Yes, sir.

Q. Assuming that all the stockholders should act in unison, what is the smallest number that could control the concern in the management ofdirectors — assuming the large shareholders combined, how few of them could control it? A. It would take quite a large number; no one person controls it.

Q. Would it take half a dozen? A. I should think more than that.

Q. Would it take a dozen? A. Whatever it might be; it would be somewhere in that neighborhood.

Q. Well, how much do you own? A. I own of stock in that company about $28,000 worth.

Q. Do you own a little over a quarter yourself, then? A. Yes, Bir.

Q. Are yon the largest shareholder? A. Yes, sir.

Q. Who is the next largest? A. 1 think Mr. J. W. Alexander holds about $12,000 worth.

Q. Who is the next largest? A. I think, Mr. Henry Day.

Q. How much does he hold? A. I should think about $3,000 or $4,000 worth.

Q. You think he is the next largest shareholder to Mr. Alexander? A. I think he owns about the third largest number; he owns about $3,000 or $4,000 worth.

Q. Do you think he is the next largest to Mr. Alexander J A. I think he is; I am not positive; all these sums are estimates; I am not positively certain.

Q. Are there several stockholders owning from $3,000 to $4,000 each? A. Yes; 1 think — my impression is — that after that it is held in very small amounts; it is held in amounts of from $500 to $1,000; small amounts chiefly.

Q. Is there any stock held by any member of your family, except the amounts you hold? A. No, sir.

Q. Is Mr. Alexander's stock held by himself, or is there any of it held by any member of his family? A. I think he has some held by his uncle.

Q. About how much? A. I really cannot say.

Q. Among the directors, is there any person, after you leave out Mr. Day, and, I think, you named him as owning $3,000 or $4,000, who owns $2,000 worth of stock? A. I think there was.'

Q. Who are they? A. I think Mr. R. S. Kennedy owns as much as $2,000 worth.

Q. Does he own more than that? A. It is possible he owns $2,500 worth; I am not certain.

Q. Is there any other person who owns as much as $2,000 worth? A. I don't now recall.

Q. Do you recall any that own as much as $1,000 worth? A. Yes, sir; many of the directors own as much as $1,000 worth and $500 each; it is largely distributed among the directors of the company in sums of from $500 to $1,000 each.

Q. You with twenty-eight shares, Mr. Alexander with twelve, would make forty, Mr. Day with three would make forty-three, and this gentleman with two would control $45,000 worth of the stock of the company? A. Yes, sir.

Q. You say the directors are controlled by the stockholders of the concern? A. Yes, flir.

Q. The insured have no voice in the selection? A. No, sir.

Q. About how much is the value of the entire assets of the company, exclusive of the real estate; I mean to include in that what is secured by mortgage on real estate, but to exclude that of which the company has the title I A. You don't mean to include the mortgages?

Q. I mean to include all the assets of the company except the real estate of which the company has the absolute title? A. Well, the real estate isabout five and a-half millions; our bonds and mortgages are about seventeen or eighteen millions.

Q. Have you any other assets; give me the assets of the company, exclusive of the real estate of which you have the absolute title? A. Then the assets of the company, figured in that way, would be, in round numbers, about twenty-five millions, taking five and a-half from thirty-one and a-half.

Q. Your entire assets, including real estate, is about thirty-one aud a-half millions? A. Yes.

Q. And you value your real estate, including the Equitable building, and the real estate that yon have the title to in consequence of foreclosures ofmortgages, at five and a-half millions? A. Yes, sir.

Q. Then that would leave your assets at about twenty-six millions? A. Yes, sir.

Q. How is that invested? A. We have invested about eighteen millions in bonds and mortgages, six millions invested in State and city stocks, deferred premiums and amounts due from agents; but these estimates will very shortly be in your hands.

Q. How much have you in State and United States bonds? A. I really could not give you the precise figures.

Q. I do not ask you for the precise figures; approximate it? A. I could not give you the precise figures.

Q. How much of these $18,000,000, secured by bond and mortgage, is secured upon real estate in the city of New York, or what proportion of it?A. Well, in New York and Brooklyn, I should say, at a rough estimate, about three-quarters of it.

Q. The balance of it is spread throughout the State or in New Jersey, within a radius of fifty miles from the City Hall of New York? A. Yes.

Q. And the annual income of the company, as I understood you to say, last year was about nine millions? A. Yes, sir.

Q. Have you any other assets other than the thirty-one and a-half millions that you have spoken of? A. That is the total assets of the company.

Q. Do you take premium notes? A. No, sir.

Q. Then how does it come, Mr. Hyde, that your entire assets are less than four times the income? A. It- is because we are a very young company, and it is an anomaly that a company s0 young as ours should accumulate so much money; we were organized eighteen years ago, and it is on account of the short number of years this has been accrued in; it would take another company a much larger time to accumulate that amount.

Q. Has this large amount of assets been accumulated in the brief time by ordinary business management of the company? A. Yes, sir.

Q. To what do you attribute the extraordinary success? A. I attribute it to well directed, skillful efforts that have been made during the time, andthat have been used with extraordinary vigor, by which we were enabled during that period (ending, I think, with 1874) to transact more business within five years than any company in the world; it is owing to the extraordinary exertions made and skillfully directed that that result has been obtained.

Q. About what was the amount of insurance which became due from loss of policies last year? A. Koughly, about $2,000,000.

Q. And you say that with reference to what it was the year before, 1875? A. I think it was about the same, sir.

Q. For how many years will it average about the same? A. It would average, of course, on a declining scale, according to the youth of the company; I don't think in life insurance companies the mortality can be gauged year by year; one year is a short time.

Q. Taking it for the year 1875 you think it would be about the same? A. Yes, sir.

Q. And for 1874? A. Approximately less.

Q. How much less? . A. I can't tell you; some years we might have misfortune; there might be a serious epidemic raging; in 1875 pneumonia existedto a remarkable extent; it is probably a most deadly disease, so far as life insurance is concerned, we ever had; we are not afraid of cholera.

Q. About what is the loss, in reference to 1875, for the year 1874? A. It was on a declining scale, according to the youth ot the company; I cannot give the exact figures.

Q. Give as near as you can? A. Well, suppose you call it a million and three-quarters.

Q. Of those $2,000,000, do you think it would cover the aggregate of the losses last year? A. I cannot tell without the papers before me.

Q. I ask you what yon think? A. It is a rough estimate of the loss, sir.

Q. Do yon think it would cover it? A. I think it is a fair estimate of the loss.

Q. About what proportion of them was paid without litigation? A. Our litigation was exceedingly fractional; at a rough estimate, I don't believe we have had, for years past, more than three or four cases each year; it is a very rare thing for us to have litigation about death losses.

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Q. You don't think it exceeded three or four cases each year? A. I should think not.

Q. And that upon policies not exceeding $5,000 or $6,000 each? A. Yes; I don't think we have contested as many as we should.

Q. Yon say you had, last year, invested about $18,000,000 in bond and mortgage; upon what proportion of that was the interest paid, or on substantially what proportion was the interest paid promptly, or at the time it became due? A. There was only a fractional portion of it on which the interest Whs not paid; I could not give you the precise figures.

Q. Give it as near as you can? A. I don't think the interest back in the company would exceed $100.

Q. And about what proportion of that was paid, when it became due, without legal proceedings? A. The greater portion of it.

Q. I understood you to say the policies of the company would be $175,000,000? A. The aggregate amount of policies issued and now standing out.

Q. About how many policies, in your judgment, were lapsed last year i A. I really would be unable to answer that without a very close examination; all these facts we are making up at New York.

Q. Can't you give us some idea? A. I really would be unable.

Q. Can't you come somewhere within $300,000,000. A. I think an estimate as loose as that would not be of much value.

Q. It seems to me, as president of the company, yon would be able to give an approximate idea? A. I had no idea, when I came here, that I should be able to give as many correct estimates that I have.

Q. In other words, there seems to be an idea, whether they are well founded or not, that insurance companies have been in the business of lapsing policies as much as possible? A. No, sir; I will , s^ate this, I will give the effect whatever the result may be; the effect is, we approach men and ask them to pay up their premiums; if a man has a premium six months past due and should write to us we should give him every opportunity to pay it.

Q. You would not do it without another examination, would you? A. No, sir; we take the intention of a man to pay his premium; I once had a man telegraph our agent from Philadelphia that a man's premium was past due a day, and his relatives wanted to pay it; I telegraphed back take it ; theytelegraphed me he was dying, and I telegraphed back " take it;" he died, and we referred to his check-book and fonnd that he had drawn a check topay it; we afterward found that ho had been suffering from heart disease for about two weeks, and had been unable to send his check around.

Q. That is an exceptional case? A. That was an exceptional case; this man had paid his premium for four years, and intended to do so regularly; if we are satisfied that a man intends to pay his premium, and his not doing so was an oversight, we allowed him to do it; we cannot give a man the option to say, I will not pay the premium when it is due, and six months after say, I will pay it; but we do take it with interest upon re-examination.

Q. Has your company paid any thing to any one, directly or indirectly, for the purpose of procuring the lapsing of policies? A. No, sir; we sometimes send two notes to the people without they refuse to pay the premium, drawing their attention to the fact that the premiums have not beenpaid up, and where we have charged; we consider the city of New York our own agency ; we have repeatedly notified persons who have allowed their premiums to run past.

By the Chairman:
Q. Some of the companies give the option to policyholders of taking a paid-up policy in case of their policies lapsing; is your company one ofthose companies? A. As I stated this morning nearly all our policies have a protective clause of the severest character for the protection of the insured.

Q. Have you a blank policy with you? A. No, sir.

Q. Will you send one when you return? A. Yes, sir.

Q. A copy of all your policies? A. Yes, sir.

By Mr. Moak:
Q. Has your company, at any time, borrowed any money of any other company, association or person? A. Yes, sir; we have.

Q. To what extent? A. We have borrowed money sometimes from the banks, at the end of the year, for the purpose of making our investments very close; the premiums come in after the first of January and we very much dislike reporting a large amount in the bank; sometimes, when we can get our money well out in bond and mortgage, we borrow from the bank and put it back when we have an opportunity, and repay it afterward.

Q. Say for the last year how much was done that way? A. I don't think it was done at all last year.

Q. Well, in the last two years? A. We might possibly have done it a year or two ago; there was a time when there was a great demand for moneyon bond and mortgage, but the last eighteen months there has not been ; in the city of New York, perhaps twice in a year there will be a great demand for money on bond and mortgage and then again times when there is no demand; we have acted wisely in getting all our money out when opportunity presented itself.

Q. Has your company loaned any other company money during the last five,years? A. No, sir.

Q. Has any one loaned the assets of the company to any other company or association? A. No, sir.

Q. And has any been loaned by either the officers of the company, or by anyone, except in the usual way, upon bonds and mortgages or on bonds? A. No, sir; none at all.

By Mr. Weiant:
Q. Have any of the officers borrowed on behalf of the company? A. No, sir.

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

Q. Has the company used the individual bonds or assets of the directors? A. No, sir.

Q. In making up its reports or accounts? *A. No, sir.

Q. At no time? A. No, sir.

By Mr. Moak:
Q. Are auy of the officers indebted to the association now at this time? A. No, sir.

Q. Say for the past six months, what has been the value of the cash items of the company; I don't mean bonds, but what is usually regarded ascash items? A. I don't know what you mean by that.

Q. I mean money in the bank that would be readily available, independent of bonds and'mortgages? A. Well, sir, we have a large amount in bank, sometimes a million or a million and a half of dollars; we have no cash items; during the construction of the building we hav« had accounts that have been in the banks, that have been in an unsettled condition and that may possibly been considered as cash items.

Q. I confined it to the past six months, so as to get rid of the construction of the building? A. We have no cash items.

Q. How much have you had in the bank for the past six months? A. We have variable amounts, from half a million to a million and a-half; sometimes we despair of getting the money out on bond and mortgage, and we think we will make more money by keeping the money in bank at three per cent than we can make by governments, and possibly we can make more money by governments than if we wait.

Q. Your bank account then, you think, has varied from a million to a million and a-halt? A. That is a rough estimate.

Q. Have you had any available funds that could be readily realized by the officers in case of an emergeucy? A. Yes, sir.

Q. Independent of the bonds and mortgages? A. Yes, sir; we have registered bonds, and some coupon bonds, which we dislike to buy; we endeavor to have all our securities registered.

Q. When money is paid out by the company, what is the method ot paying it out? A. It always goes to the finauce committee first, and secondlyto the two officers.

Q. Suppose you presented a check to the bank, by whom would it be signed; or, in other words, if your association was drawing a draft on the bank for $10,000, by whom would it be signed? A. By two officers.

Q. What officers? A. Any two officers; by officers, I mean the president, vice president, secretary or actuary, or the chairman of the finance committee.

Q. Two of either of those could draw any amount? A. Yes, sir; they are competent to draw money out of the bank.

Q. Any amount you choose to draw? A. Yes, sir.

Q. You say it requires the action of the finance committee; is there any thing to indicate to the bank upon which you draw that that action has been taken, except the signature of the two officers? A. No, sir.

Q. Nothing whatever? A. No, sir.

Q. So, that if to-morrow your assets were a million and a-half, and a check should be presented, signed by yourself and either of the other officersof the association, that amount would be paid upon the check? A. Yes, sir.

Q. Is there any direction to the bank, or any instructions which forbid there being an unlimited amount upon the check of the two officers of the company? A. No, sir.

Q. Do you keep your bank account in one bank or more than one? A. We keep our bank account, I think, in four or five banks.

Q. What is the largest amount you have on deposit in either one of them, say when your current cash on hand is a million and a-half dollars inbank? A. Well, we rarely exceed $200,000 in any bank; we keep out money in the trust company; and if we have a large amount on hand we endeavorto put it into government, if it is better so to put it.

Q. Won't you specify the banks? A. The Park Bank; the German-American Bank; the Metropolitan Bank; and the Bank of Commerce.

Q. Now let me ask you a question as a matter of pretense for legislation: suppose to-morrow, yon should happen to drop away and they should get a dishonest president, and a secretary who should act with him, and he could draw $1,000,000 out of the bank, and go where he pleased, would you not regard it as a
matter bt prudence to provide, but not above a certain amount to be drawn out, except on the signature of all the officers? A. I see no objection to it.

By Mr. Husted:
Q. Does not the president of the Bank of Commerce do that? A. Yes, sir.

Q. It has been the established rule for years, has it not? A. Yes, sir.

By Mr. Lang:
Q. What has been the established rule! A. The one I suggest. Q. But the bank does not see the action of the finance committee, does it? A. No, sir; I have more responsibility than I like.

By Mr. Moody:
Q. Do you keep an account of the policies that lapsed by nonpayment of premiums? A. No, sir.

Q. There is no account kept of the amount of the policies? A. No, sir.

By Mr. Husted:
Q. Yon know the amount of those that have lapsed? A. Yes, sir.

By the Chairman:
Q. Do you have a larger number lapsed by good lives thinking a continuance of the policy unnecessary, or by the reason ofimpaired means? A. I think there are a variety of causes which induce persons to lapse their policies; the excitement which exists at the present moment is the most exciting cause.

Q. That is not the result to either of the causes that I alluded; I asked you whether you thought the greater number lapsed by reason of the healthy persons finding it unnecessary or inconvenient, having more nses for their money, or by reason of people failing to continue by reason ofscanty resources? A. Well, sir, you may, perhaps, divide that up into two sections; the improvident man may be improvident in his money and in his house; a man who is careless of his health is careless of his money, and the class of men that give up their policies are made very largely by the classthat are careless of their health, and give very little attention to it; some of them that are in bad health give up their policies as well as those in good health; there is no general rule about it, but* you will find, by a thorough investigation, that in the class of policies given up the best lives predominate; this argument was brought forward in favor of protection to the company, because a company in which the good lives step out, leaving the bad lives in the company, will be ruined.

Q. Pecuniary misfortunes arc not the cause of such result? A. There are two classes that lapse their policies: one in good health goes out, and the other thinks the company is in bad odor and bad repute, and they will sell out their policies and get rid of them in some way, and insure in anothercompany; it works both ways.

Q. Do you think the larger number that withdraw are men in good health? A. Yes, sir.

Q. Rather than from pecuniary weakness or inability to pay? A. Yes, there is no question about that; the lapses that take place in a company are the best lives, and for that reason we need very careful legislation for the protection of the company in that respect.

By Mr. Husted:
Q. Don't a great many men get insured for a large amount for the purpose of using their policy to borrow money with, and when the tide goes over and they don't need to borrow money, they lapse their policy? A. Yes, sir, a great deal of that is done.

By the Chairman:
Q. What is the maximum for which you take an insurance? A. The largest amount we take is $50,000 on a single life.

Q. With many companies the maximum is less, is it not? A. Yes, sir.

Q. Do you think it good policy to take such large risks? A. Well, sir, if I may use the figure, the riok of a company is like a pyramid, the base of itrests upon the small policies; it gradually rises to the apex at the risk of $50,000; it is supported all the way along by risks of $20,000, $25,000, $30,000, $35,000, $40,000, $45,000, and the highest sum is $50,000; so it is, on the doctrine of chances, perfectly safe for a large company to do it; for a large company like the Equitable to take a $50,000 to-day is a great deal less than when we took a $10,000 policy with a capital of $100,000; in

68-72

$50,000 policies we use the greatest care, and they are examined by three physicians; the circumstances of the man are looked into, and we don't take it unless we have a personal knowledge of the man.

Q. Do any other companies take as large a risk as that? A.I could not tell you; our experience in large policies has been for the last years very favorable to the company.

By Mr. Moody:
Q. You say you only make dividends of seven per cent in gold? A. Yes, sir.

Q. What becomes of the other profits? A. They belong to the policyholders.

By Mr. Husted:
Q. They are paid in dividends on policies? A. Yes, sir.

Q. Or in cash surrender values? A. Yes, sir.

By Mr. Weiant:
Q. With reference to the manner of making loans on real estate, won't you give the history of the manner in which you make the loans? A. Aperson applies to the office of the company—

Q. Who are the officers of the company he applies to? A. He applies to the superintendent of the bond and mortgage department, and says, I wantto borrow so much money on a piece of property; he makes out a description on the blank and gives the names of the bondsman, and then signs it; generally the officer of the company look at it to see if it is within the rules of the company.

Q. Who are the officers? A. The president, vice-president or any of the officers; they view it to see if it is within the rules of the company that we should make the loans; if it is a factory or a planiugmill, or a dozen different kinds of property that we don't loan on, we dismiss the thing; if it is not,then it is sent to the appraiser in the locality where the property is located, to value.

Q. Outside the county the appraisers are appointed by whom? A. Outside the city by the finance committee.

Q. Of the company? A. Yes, sir; when the appraiser comes in if it is favorable, the loan is made from thirty to fifty per cent, the extreme of our own valuation.

Q. Have your officers any knowledge of what takes place between the appraisers and attorneys of the persons who want to make the loan? A. I don't see how they could ; they never meet; they never come together.

Q. Do you know that of your own knowledge? A. Well, there is no necessity for it; the person who borrows the money meets the attorneys of the company, but the broker who interferes in the first instance does not; the person who borrowed the money goes to the attorney under our attorney and there makes the proper arrangements to have the title searched; the appraiser has no logical connection with the officers of the company; thereis no reason why they should meet; they may meet possibly, but taking a business view of it there is no need tor them to meet.

Q. You employed the attorneys to make the search? A. Yes, sir.

Q. But that you don't pay for? A. No, sir.

Q. You don't know that they do not meet? A. No, sir.

Q- Or what negotiations might take place between them? A. No, sir.

Q. Does yonr company make it its business to know what takes place between the borrower and the person who makes the search? A. Yes, sir.

Q. Do yon permit the attorneys to make their own charges for the search? A. Yes, sir, we do; in that respect we are different from the Mutual Life ; persons borrowing money from us pay the attorneys for their trouble; they pay them the usual market price that lawyers usually charge.

Q. Do you know what it is? A. It is from a-half to three-quarters per cent on whatever the amount may be.

Q. Of that matter you have knowledge? A. Of that we are confident; we would not allow the attorneys to charge an unjust price.

Q. You only know what you are informed by the attorneys? A. If there is any thing going wrong in that department, I think, owing to the peculiarity of the American people, we should know it; we should be sure to hear of it.

Q. Do you go about the country, among the people who make loans, to hear? A. We have a book of complaints, and people are ready enough tocomplain; sometimes they complain if they are charged any thing.

By Mr. Hale:
Q. You have a committee on grievances? A. Yes, sir.

By Mr. Weiant:
Q. Do you give notice that they are only permitted to charge a certain amount, or give them any notice whatever? A. We give notice to the attorneys that they should not charge over and above certain rates.

Q. Do yon give notice to the borrowers? A. We do, when asked with regard to it; I cannot say we spread out all the rules for the

fovernment of the lawyers and ourselves on the notice that the loan as been passed. Q. Are you prepared to say the attorneys do not charge more than a-half per cent? A. I am prepared to say, from knowledge, that our attorneys do not charge more than the usual rates that are charged by most respectable law firms for the examination of titles.

By Mr. Moak:
Q. It seems to me, on the statement of facts you have presented, you are running a great risk; suppose he charges a-half per cent, don't you run the risk of usury? A. No, sir.

Q. The attorney acts for yon? A. He acts for the company so far us the loan is concerned.

Q. And so far as taking the money? A. Well, it has been customary from time immemorial.

Q. Are not borrowers, in this way, compelled to pay more than seven per cent? A. We are loaning at six per cent now.

Q. But the borrower, by reason of these additional charges of the attorney, is compelled to pay more than seven per cent, and may be as high asfifteen, may he not? A. No, sir; I guess not.

Q. You know it is not so i A.I know they do not.

Q. You know they do not pay to the attorneys 2 A. Yes, sir; I am willing to swear, to the best of my knowledge and belief, that this business is conducted in the way that I have stated; of course, I am not present at these times, but I really think there is no trouble in that direction; they only charge the usual rate.

John R. Hegeman sworn.

Hon. Stewart L. Woodford — On behalf of the Metropolitan Life Insurance Company, and as its counsel, I desire to present the following letter, which I will put on the record, explaining any apparent discourtesy in not sending the papers here before. The letter is as follows:

Metropolitan Life Insurance Company,
Corner Park Place And Church Street,
New York, March 19, 1877.

Hon. James Graham, Chairman of the Insurance Committee of the Assembly, Albany, N. Y.:

Dear Sir. — In obedience to your summons of March thirteenth, and pursuant to a resolution of the Assembly, March twelfth, calling upon the officers of certain life insurance companies — including the Metropolitan — for a "statement, under oath, of the amounts paid in salaries, fees, compensations or donations to their respective presidents, vice-presidents, secretaries, medical examiners, attorneys, counselors, and other employes for the year 1876," we beg to submit, after disavowing other than motives of the highest respect for your honorable body, that by the recent transfer of Mr. Robert A. Granniss from the secretaryship of the Metropolitan to the second vice-presidency of the Mutual Life, we are at this time without a secretary; further, that the duties of our actuary, Mr. Stewart, are quite exclusively among the agents in the field and not at the homeoffice, and that "these facts impose the official administration of the company, at this juncture, upon its president and vice-president.

The absence of the two, at the same time, would be prejudicial to the company's interests.

We have, therefore, taken the liberty of respectfully presuming that a substantial, rather than a literal, compliance with the mandate of the Assembly would be acceptable to your honorable body, and, in this spirit, we beg to hand yon herewith, at the hands of the company's vice-president, a sworn statement covering the facts called for by the resolution, which, we trust, will be entirely satisfactory.

If it shall not, however, be deemed to be in accord with the sentiments of your committee, we shall take pleasure in responding to the farther expression of their views.

Believe me, gentlemen,

Very respectfully yours.
JOSEPH F. KNAPP,
President.

Governor Woodford — Our company has filled in the blanks sent by Mr. Smyth, then Acting Superintendent of the Insurance Department, which will answer the question asked, the detailed statement of which I will read. It is as follows:

Detailed Statement of Salaries and all other Fees, Compensation or Donation paid to Officers, Medical Examiners, Attorneys, Counselors and allother Employes of the Metropolitan Life insurance Company, during the year 1876.

Amount of salary paid to president during the year... $6,000 00 Amount of all other fees, compensation or donation, if any, paid president during the year (com. account).. 8,338 50

Amount of salary paid to each vice-president during the year, being one in number $6,000 00

Amount of all other fees, compensation or donation, if any, paid vice-president or vice-presidents during the year (com. account) ,. 3, 429 37

Amount of salary paid to each secretary during the year, being one in number $5,000 00

Amount of all other fees, compensation or donation, if any, paid actuary or actuaries during the year (in com. account in company's annual report to Insurance Department $4,000 00

Amount of salary paid to medical examiners during the year, being one in number, to wit, chief medical examiner at home office $2, 250 00

Amount of all other fees, compensation or donation, if any, paid medical examiners during the year, to wit, medical examinations at the various agencies of the company on 4,116 policies issued in 1876 (in medical fee account in company's annual report to Insurance Department) 11,493 00

Disbursements connected with the legal business of company for 1876 (in legal fee account in company's annual report to Insurance Department) $4,113 91

Average amount of salary paid to all other clerks and employes of the company during the year, $943, being nineteen in number $17,916 99

Salaries proper 34,916 99

Average salary, etc., of president during his connection with the company, 1871 to 1876 inclusive $9,245 00

Average salary of vice-president during his connection with the company, 1870 to 1876 inclusive $6, 300 00

Aggregate $68,541 77

State Of New York,
County of New York,

John R. liegeman, vice-president, and A. H. Creagh, acting secretary of the Metropolitan Life Insurance Company, being duly sworn, depose and say, and each for himself says, that they are the above described officers of said company, and that the detailed statement is a correct exhibit of theamount paid in salaries, fees or compensation or donation to the president, vice-president, secretaries, actuaries, medical examiuers, attorneys, counselors, clerks and other employes of this company during the year ending on the 81st day of December, 1876.

JOHN R. HEGEMAN.
A. H. CREAGH,
Acting Secretary.

Subscribed and affirmed to before me,)
this 19th day of March, 1877. |

H. S. Driscoll,
Notary Public, New York and Kings Co.

John R. Hegeman:

Examined by Mr. Moak:
Q. Were any of the officers stated in this list, the salaries of which are here given, paid any commission on the basis of a per centage in .iny way, in addition to the salary? A. They were.

Q. State to what extent; take the president for example; did the president receive a regular salary? A. He received a regular salary of $6,000, and he received, I believe, of the company in 1875 one per cent of the net income.

Q. Which amounted to $8,338.50? A. Yes, sir.

Q. Was he receiving at the same rate for 1876? A. No, sir; the contract terminated at the end of 1875.

Q. What was the arrangement as to the year 1876? A. Simply $6,000 a year salary."

Q. Without any other compensation? A. Without any other compensation.

73-77

Q. Is he to receive any other compensation, either directly or indirectly? A. Nothing.

Q. And he did not receive any thing, either directly or indirectly, for any alleged services, over and above his salary you have mentioned, duringthe year 1876? A. Nothing.

Q. During that year did the president have any connection with any other insurance companies? A. Not any.

Q. Either directly or indirectly? A. Not any.

Q. Either as director or agent or officer? A. In no capacity.

Q. Did any director in your company, to yonr knowledge, have any connection with any other insurance company? A. Not to my knowledge.

Q. Did the president receive, either directly or indirectly, from any source any money connected with insurance during the year 1876, to your knowledge, except what is stated in the terms produced? A. Not a dollar.

Q. Now take the vice-president; he received a salary of $6,000? A. He did.

Q. And received also a per ccntage at what rate upon the gross assets? A. He had the same arrangement with the company the president had, which terminated at the end of 1875, and on account of that he received $3,429.

Q. Has the balance been paid? A. There is a balance of between one and two thousand dollars due; that is the extent of it.

Q. You are the vice-president? A. I am.

Q. How long have you been connected with the company'{ A. Since 1870.

Q. What has been the interest you have received in any year? A. Six thousand dollars.

Q. Including the per centage? A. Yes; it has averaged, during that time $6,300 for sixteen hours' work.

Q. This statement as to the average is correct? A. Absolutely.

Q. During all the time that you have been connected with the company, have you received, either directly or indirectly, from any insurance company, any money except what is stated here? A. Not a dollar.

Q. From any source? A. No, sir.

Q. Have you been in any way connected with any other insurance company, either life or fire? A. Not any, either directly or indirectly.

Q. Your secretary received $5,000? A. Yes, sir.

Q. He received no per centage? A. Nothing whatever.

Q. Has he received any money from any other insurance company, in any way, to your knowledge 1 A. Not a dollar; he left the office of secretaryto our company this year to take the position of second vice-president in the Mutual Life company.

Q. The salary of the actuary, is it a per centage or a given sum 1 A. It is a per centage, based upon the business he brings to the company through his agents.

Q. Does he bring business to the company? A. He does, in this way: his functions being entirely different from those of the actnaries in othercompanies; in the first place his preference is for field work, and nine-tenths of the time he is with the agents; the reason we took him, in the first place, was because he controlled sight of ten skillful agents, and he spent his time with them and proposed to aid them; he has never taken one dollar, except his commission on the business he brought to us.

Q. Does that amount stated here, $4,000, cover the amount he was entitled to claim for services rendered during the year? A. That is the amount paid him.

Q. Does that cover the amount he was entitled to claim for services? A. We cannot make up a statement of the year's business until some timeafter December; the statement of 1875 paid him $4,200, and his business for 1876 came to the same ratio; we paid him $4,000, agreeing to make up the balance, if any were due him, or take it off, as the case might be, when the business was made up.

Q. How much has he taken since he has been with you? A. He has never taken, to my knowledge, more than $4,500.

Q. Now take the medical examiners; was that amount, $2,250, all that he was entitled to receive from the company for his year's services? A. Every dollar.

Q. And the $11,493, stated here as paid to medical examiners all over the country, was that for medical examiners other than the chief medical examiner at home? A. That is paid to sixty or seventy medical examiners, scattered all over the United States and Canada.

Q. Is your company a capital or mutual company? A. It is what is called a mixed company; it has capital.

Q. How much is the capital of the company? A. Two hundred thousand dollars.

Q. When was it organized? A. It began its business in 1867, in June.

Q. And when did your connection with it commence? A. In June, 1870.

Q. Since you have been there, has the company paid dividends to its stockholders? A. Once.

Q. When was that? A. In 1875.

Q. And what dividend did it pay its stockholders fhen? A. It paid, in October, 1875, three and a-half per cent, and in May, 1876, three and a-halfper cent, making, in all, seven per cent for the year.

Q. Is that the only dividend the company has paid since you have been with it, in 1870? A. Yes; in any way, shape or manner.

Q. Do you take premium notes? A. No, sir; not in our business.

Q. Independent of premium notes, how much are the assets of the company? A. About $2,000,000.

Q. Aud of what does that consist; perhaps you will state it more briefly in your own way than by any question I can put? A. It consists of United States bonds, and bonds of the city and of the State of New York, both aggregating three hundred and rifty-fiveor sixty thousand dollars; bonds and mortgages, $706,250; real estate, being its home building in New York, of $276,000, which brings us a rental of over $30,000; it also consists of$96,000 in call loans, all demand loans and bonds of the city; $365,000 in premium loan on its own bnsiness, on policies in course; cash on hand, $20,000; accrued interest on the company's investments, and accrued rates thereof, $30,000; deferred premiums, $180,000; premiums in the hands ofagents, in course of collection, $129,000; then there were other items, which brought it up to $2,300,000.

Q. As to these mortgages and bonds, or take the bonds spoken of first, can you separate them? A. Well, the five-twenties have been called in; I think there is about $150,000 in United States governments and $200,000 in New York city, Peekskill and State bonds.

Q. Peekskill bonds are village bonds, are they not? A. If that is a village they are.

Q. Have you any funds invested in corporate bonds? A. No, sir.

Q. Don't yon consider them good security? A. No, sir, and never tonch them.

Q. As to the mortgages? A. I was about to observe that these bonds are all government bonds, or of a class of bonds recognized by law as valid securities, every one of them.

Q. Are they quoted by you at their market value, say this fall? A. At their market value at the end of 1876.

Q. As to the mortgages; how much was invested within, say, the last year? A. Say $100,000; about that.

Q. Describe the method and custom pnrsned in your company in regard to mortgages? A. The applicant comes to the company and says he wantsmoney; he makes the usual written application to the company, setting forth all the facts of his property, and furnishing a diagram, and it is thenturned over to three officers of the company, besides the official appraiser, and they make three or four different appraisements of the property, and get together and make the loan according to the combined wisdom, and then it is turned over to the attorney.

Q. Suppose it is .out of the city? A. We don't entertain it; we have not a dollar outside the two cities.

Q. Then your loans are very compact? A. Yes; we can stand on the roof and see most of them.

Q. What per centage of the value of the property as estimated or appraised do you loan? A.. Not to exceed fifty per cent; they usually run about forty or forty-five per cent.

Q. Not to exceed fifty per cent? A. Not to exceed fifty in any case.

Q. Who pays the expense of the search? A. To the best of my knowledge the applicant — the borrower.

By Mr. Weiant:
Q. Don't you know? A. I know we never paid a dollar on the mortgage.

By Mr. Moak:
Q. Yon loaned at seven per cent? A. We have not a loan except at seven per cent; nothing lower or higher than that.
Q. Are all your loans on real estate owned by individuals? A. Except in one case, if a church can be called a corporation in the eye of the law.

Q. Yes, it is? A. Then we have a mortgage on a church; in every other case it is on individual property to the best of my knowledge and belief.

Q. How much is that loan? A. Jnst $30,000.

Q. How much is the largest loan you have on one piece of property? A. We never advanced over $40,000.

Q. And what was the value of the property on which that amount was loaned, as estimated? A. It was estimated as worth from $90,000 to $100,000.

Q. Where is it? A. In Brooklyn.

Q. You have got a fire insurance policy as collateral, I suppose? A. Full; ample,

Q. All these mortgages are secured by collateral fire insurance? A. In every instance.

Q. You spoke of a class of loans called demand loans; those are loans to individuals, secured by public bonds, I suppose? A. Yes, by either governments or by bonds of the city or the State of New York.

Q. They are either governments or those bonds on which you are authorized to advance? A. Yes; such as we are authorized to put our money in.

Q. On those bonds what do you advance? A. We generally reserve about thirty per cent.

By Mr. Weiant:
Q. Are you authorized to loan money on that class of security? A. I believe so.

By Mr. Moak:
Q. The home office you estimate as worth $276,000; what was the cost of it? A. That was the cost of it; it is worth over $300,000.

Q. Where is it? A. On the corner of Park place and Church street; it is seven stories in hight, fifty by 100 feet, containing seventy-one offices, and rents for $30,0000 now; if the balance of the building was rented as well as that which is rented, it would bring over $40,000.

Q. Is that all? A. That is every dollar; we never owned a dollar's worth outside that since the company was started; we have nothing under foreclosure.

Q. Have you foreclosed any thing during the past year? A. Yes, two pieces that are being foreclosed.

Q. How much are they in amount? A. It is about $14,000; up to last year we only foreclosed two pieces of property since the company started; we never lost a dollar on a mortgage.

Q. Has your interest been promptly paid? A. There is $13,000 unpaid ou mortgages.

Q. You spoke of premium loans, amounting to $365,000; describe them; I suppose they are notes taken as part of the premium, are they? A. Theyare not absolutely notes signed by the policyholders, but they are charged against the policies; if the gross premium is $100 a year, and he takes aoote policy, we agreed to take $66 in cash, and let $33 stand against the policy, upon which he pays his interest; the company started on that plan, and went on with it until I was connected with it, and one of the first official acts I did was to stop it, and start it into the new business; as it had been going on, we had to respect that arrangement with those policies in force; these notes are enforced on those policies which •were issued prior to that time.

Q. In case of a loss, that would be taken out of the policy? A. Yes; and if a paid-up policy was granted the loans would stand against it, and bear interest to the company.

Q. You would not issue a paid-up policy, under those circumstances, would you? A. Yes.

Q. Then, how would those loans operate in that regard? A. They would stand against it, just the same as a bond and mortgage; if it were not paidwe should foreclose it.

Q. If you issue a paid-up policy, does it state that it is subject to a certain amount for notes? A. Oh, clearly.

By the Chairman:
Q. Do yon have any thing in your policies providing for the issue of the paid-up policy on forfeiture? A. Some of our policies provide tor that;some do not; it is according to the way they take it out; if a man is willing to pay for it, we give it to him.

Q. You leave it to the option, then, of the insured, whether he will take a non-forfeitable policy or not, and if so, you charge him something extra?A. On premiums, yes, sir.

Q. Then you leave it to his option? A. We issue a life policy, upon which we give only dividends, and upon which, after three years, we give a paid-up policy, if desired; we issue endowments, for which, after three years, we give a paid-up policy; we issue reserved endowments,npon which there is no paid up policy given until after ten yeaVs; in consideration that the dividends are foregone for that time, we hold out a liberal degree ofgrace, providing that the man shall have a month for which the policy shall run, and np to six months on which the policy is in full force and effect.

Q. Suppose it runs a year; you give him a mouth? A.. Yes, sir; and the next year two months, and the next year three, up to six months, duringwhich time the policy is iu full force and effect; if he dies in the meantime, we deduct it from the amount of the policy.

Q. You spoke of the interest being $30,000; what is that interest? A. That is the interest accrued upon government bonds belonging to the company, of city bonds, bonds and mortgages and rents accrued.

Q. You speak of the deferred premiums ; what are they? A. Well, deferred preminms are parts of an annual premium due the year after our report ismade up; for instance, a man's premium is $100, and he takes his policy up iu December, the company receives $50 in

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December and $50 in the next June; the State department charges the company with the full liability, just as if we received the full $100, and thengives us the credit next year for the expense of getting it.

By Mr. Moak:
Q. By deferred premiums you mean premiums where the insurer has six months' credit? A. Yes; or three months.

Q. By that, you mean premiums for the current year which have not been paid? A. Yes, on policies in force.

Q. The $129,000 for agents is for premiums in course of collection? A. Yes; and to pay the expenses of transmitting them through.

By the Chairman:
Q. What do you pay your agents?. A. We pay them a maximum of thirty per cent on the first premium, and seven and a half per cent, not to exceed ten years, on renewals; in some cases — extraordinary cases — we have paid thirty per cent, and ten percent on four renewals; but the usual practice is thirty per cent on the first, and nine renewals on seven and a-half per cent; then the interest reverts to the company without any commission except what is paid for collection.

Q. Where the commissions are high, don't you think there is danger of a company taking bad risks, and so increasing the liability of the company?A. Well, there is a strong temptation in that direction.

Q. Don't you know that fifteen years ago an established agency iu a place had no charge and got no more than fifteen percent? A. Yes; and large fortunes have been made out of it at that.

By Mr. Lang:
Q. I wish to ask you a general question, and I ask it as an insurance man : do not companies in the abstract of their books credit themselves with lapsed policies, and also with premiums unpaid on the same policy? A. No decent company does that.

Q. I understand, from a question I asked another gentleman on the stand here, that policies are lapsed on fact, and yet, for the purpose of doing the business of the company, they are not treated as lapsed; does not that distinctive feature appear on the record made by the company to the Insurance Department? A. No; the fault, I take it, has been the other way; but some of the scallawag companies have canceled policies in force, and thus relieved themselves of the debt on those policies, which should appear on the returns made.

By Mr. Weiant: 

Q. Are there any such companies now in force? A. Not to my knowledge; if so, I hope you will root it out.

By Mr. Moody:
Q. When did you build? A. It is a building we bought in 1865.

By Mr. Lang:
Q. Do not those companies credit themselves with premiums on those policies which have lapsed? A. I don't know whether they do or not; but if you ask me whether we do, I would say never on one policy.
Q. "What do you understand by the principle of commutation of salary, or computation of commissions? A. That is a legitimate item; it depends upon what the circumstance are; if I am hiring a house, and paying $5,000 a year for it, the landlord comes to me and says I am very hard up, and ifyou will give me $50,000 I will give you a ten year's lease of it; that will be esteemed a good business transaction; the practice will be not to charge itall up to that particular year, but over the years which it extends; it depends upon the price paid, of course, and you may pay too dear for your whistle.

By Mr. Weiant:
Q. Won't you illustrate how that is done? A. If an agent has a contract with the company, by which he is to receive seven nnd a-half per cent on renewals, extending over a series of years; he comes to us and says, 1 am tired of life insurance business, and I am going to get out of it; you will owe me for a certain time seven and a-half per cent on the policies I have given you, what will you give me and take it off my hands; the company will give him three times the renewal; that is, three times seven and a-half, less three times two and a-half, or, in other words, that is three times what he is entitled to, less three times what we have to pay to get it in; it is not fair to charge it all in any one year, but it ought to be spread • over the years it comes in; it is a very good principle, and works well.

By Mr. Moak:
Q. For the past year how many litigated claims have you had? A. I don't know of but one.

Q. And how much was that in amount? A. I think it was $1,000; it was a small policy.

Q. What was the entire amount of policies that fell due? A. Two hundred and thirty-five thousand dollars during the year.

Q. Was any portion of that unpaid after the time when it became due by the terms of the policy? A. No.

Q. Has your company ever paid any person any thing for the purpose of securing or procuring the surrender of policies? A. Not a dollar.

By Mr. Moody:
Q. Do you keep an account of the policies that lapsed? A. No; not by themselves.

Q. I see by your report you give the number of policies that lapsed during 1875, by reason of non-payment, at 2,888; is this the number in 1875? A.I think it is, to the best of my knowledge.

Q. That number of policies lapsed during the year? A. During the year 1875, do you mean?

Q. Yes? A. Yes.

Q. How came they to lapse? A. By reason of non-payment of premiums.

By Mr. Weiant:
Q. How many were there that lapsed this year f A. I don't know, sir.

Q. Can't you give us about some idea? A. I suppose, on general principles, about the same; I suppose on some of them the cash value was given, and some had paid-up policies, and some lapsed.

Q. Can you give the amount of the policies? A. Perhaps two millions of insurance.

Q. There was also a reserve on the policy, w as there not? A. Yes; certainly.

Q. How much was that? A. I don't know.

Q. Give a general estimate? A. Well, it might be a matter of— I don't know — it is too much of a guess.

Q. Well, give us a guess? A. It might be from $75,000 to $100,000.

Q..Can you tell us how much you were paid on lapsed policies? A. The report shows it.

Q. This year, can you give us an idea? A. We have paid over $100,000.

Q. Do you think it will reach $150,000? A. I think, between the two sums; I could have brought the figures with me if I had • known they werewanted.

By Mr. Moak:
Q. I think you stated you hold stock in the company? A. No, sir.

Q. Will you state whether you do or not? A. I said I did not.

Q. There are other officers that do, I suppose? A. The president is the only holder of stock, to my knowledge.

Q. What is his name? A. Joseph F. Kjiapp.

Q. Can you give the amount of stock he owns? A. I don't know, sir.

Q. Can you, approximately? A. Well, I think he owns somewhere about $50,000 worth of it.

Q. There are other officers that hold stock? A. Not any.

Q. None, with the exception of Mr. Knapp. A. He is the only one.

Q. The remainder is held by outside persons•? A. Between fifty and sixty persons.

Q. Your capital is $200,000? A. Yes, sir.

Q. Can you state who holds the next largest amount? A. I do not know.

Q. Can you state approximately the amount held by any other person? A. I cannot; I think it is held in shares of twenty, thirty and fifty, and, so forth.

Q. My idea is to get at who holds the majority? A. Well, the majority of the stock, I think, to the best of my knowledge and belief, is held by about twenty men.

Q. Less than that, do yon believe? A. I don't believe it.

Q. Have you stated whether any of your directors are officers or directors or agents or in any way connected with any other company? A. I stated none of them were.

Q. You stated you had made loans on government bonds and securities, where they were pledged? A. Yes.

Q. Do you know whether those loans were to either the officers or stockholders? A. It has been done in some cases with some of the directors.

Q. To what amount? A. Well, to an amount of within twenty or thirty per cent of the face of the bond, or the market value of them.

Q. Give the aggregate amount? A. That I don't know.

Q. Can't you give approximately the amount of loans that were made that way? A. Perhaps $10,000 or $15,000 to one man; they are quite small loans.

Q. And that has been done in more .than one instance? A. It has been done variously for the last five or six years to my knowledge, but not to any great extent.

Q. Have loans been made to any of the officers of the company in any other way? A, Not a dollar, to my knowledge.

Q. Has your company borrowed money from other corporations or individuals? A. It has borrowed money very rarely from the bank, temporarily.

Q. What bank, sir? A. Generally from our most active bank, the National Shoe and Leather Bank; that is where we have a chance of putting moneyout on mortgage to a certain amount, and did not want to lose it, so we got the money and made the loans; it was purely a matter of convenience; and when the money came in we took it up again.

Q. When was that done? A. It was done last May, I think ; it is very rarely done; it is our general rule to keep the amounts of our loans equal with our income; but rather than lose a good mortgage we go and borrow the money.

Q. Has your company borrowed money from individuals? A. No; never.

Q. Has any of the officers of the company borrowed on behalf of the company? A. Not to my knowledge.

Q. Have you been in the habit of making up the reports for the insurance department? A. I helped to do it.

Q. Acting in connection with the other officers? A. Yes, sir; I am happy to say I have that pleasure.

Q. Then yon have personal knowledge of the facts contained in the reports? A. Most of them; most of the facts are taken from. the books.

By Mr. Lang:
Q. You say you have borrowed from the bank? A. Yes.

Q. What relation, with reference to the time of the'examination made by the department or the company, if any, was made; did the borrowing from the bank bear? A. We never had an examination but once, and that was in the year 1871, and up to that time we never had borrowed a dollar that I know of.

Q. And no examination of the company has been made by the superintendent of the insurance since? A. No, sir; we have been anxiously waiting for the past six months for him to come and visit us, but they seem to think there that we are pure, and that there is no need of their coming.

Q. In your report of cash on hand — I mean to ask you with reference to your company, and also if you have knowledge of its existence in any other company — is there included tickets or memoranda of money taken by the officers and represented as cash on hand; I mean slips thrown into the drawer? A. I will answer with reference to ourselves, no; I will answer with reference to others that I have heard so; that I have no knowledge.

Q. I want to ask you squarely what you know about it, either as to your own company or to others; it is claimed that parties, for the purpose ofmaking a show when the officers go down there, get money from the bank and report so much on hand, and as soon as he has gone out they send itout of the back door to the company which is to be examined next; do you know any thing about it, or have you any information of any such transactions by any company? A. I do not of my own knowledge.

Q. Have you any information i A. 1 have heard that the Continental and New Jersey played that game, but when the company borrows any thing from the bank they have to put up something for it, and it is very easy for the commissioner to go to the tin box and say, where are your bonds. ,

By Mr. Weiant:
Q. Could an individual stockholder or officer borrow on his own account? A. I presume he could.

Q. And put it back in a day or two? A. Yes, sir.

Q. Have you any knowledge of that being done? A. I have not, but when men undertake to beat the devil around the stump, there is no legislationthat can stop them; that thing can be done.

Q. Then the fault is in the want of thoroughness in the department? A. I would not like to be known in Albany by saying there is a want ofthoroughness in the Insurance Department.

Q. Do you do business, at all, by what is known by the loan plan; you understand what I mean by that plan? A. I understand that perfectly; when the company commenced its business in 1867, it did what most of the companies doing business did; it took part of its premium either by note of the insured, which operated as a debt to the policy, and so reserved a part of the premium, that is to say, that where a man's premium is a $100, the company agreed to take sixtysix dollars and give him credit for thirty-three dollars; if there is any dividend it is charged, to that first.

83-87

Q. That is to say the charges upon the policies have been reduced by dividends and the earnings of the company? A. Yes.

Q. To what extent in your company? A. Well, whenever any dividends have applied to the reduction of the debt they virtually wiped out those notes; I cannot tell you to what extent, but it has beeu done; you understand me-to say that it is some years since that has stopped; that was one ofmy first official acts to stop the note system.

Q. When you stopped the loan system those that have been continued under the loan system, they were continued in force? A. Yes.

Q. Now, take a policy of $3,000, which has been in force say three years, was it not true that the thirty-three and a half per cent that remained as acharge to the policy, had been materially reduced by the application of the dividend to the reduction of the loan? A. Well, if the dividend did not exceed more than enough to pay the interest on the loan, the principal would not be reduced; if the divividend would take care of the interest and leave a balance, it would then apply to the reduction of the loan.

Q. Has the dividend taken care of the interest all that time? A. Yes.

Q. Are you aware that your actuary, at that time, so stated to policyholders, that it did not reduce or had not reduced their principle interest? A. I am not.

Q. And that large numbers of those policies were lapsed at that time in consequence of that information? A. I am not aware of it.

Q. I refer to the time you discontinued doing business.on the loan plan? A. If you have a particular policy in your mind I will hunt all about it up and give it to you; the representation of most companies have been the other way, the agent generally says if you take a loan policy, we will see the interest will wipe it out.

Q. Do you think it safe and prudent, taking men as they are, and insurance men as they are, that the vice-president, president or other officers ofthe company should be officers of any other company or have any thing to do with them? A. As a general thing, I should say no; there may be exceptional cases, but I don't think they should.

Q. Now, with reference to your loans on property in the city of New York, some abuses are claimed to have grown out of this state of things by reason of officers of life insurance companies being also officers of fire insurance companies, and they play naturally into each other's hands thatway; that life insurance companies in making a loan on a piece of property say, you must get it insured, and we have great confidence in this company next door, and insist that you must insure in that company; do you know how that thing works; have you any knowledge of the abuse growing out of that state of things; you do make that kind of loans? A. les.

Q. Have you any knowledge that will enable you to speak as to the propriety of men being connected with fire insurance and life insurance making loans, and insisting on the policy being taken out in certain fire insurance companies, and so playing into each other's hands? A. You ask me if it ispossible that abuses may get in; I say yes, but I never heard of such a case as that.

Q. The complaint has been made? A. Yes, it has been made.

Q. Do you think, in your experience as an insurance man, does that experience lead you to believe that assuming the companies would not lose,that safe legislation could be had to the effect that policies should not lapse in the sense that the amount of interest the insured has in it is not realized by him in some form? A. There is something in that direction which it is in the province of legislation to do, and could be done with good grace to the policyholder, and without prejudicing the interests of the company.

Q. Do you favor the Massachusetts plan, or would you favor the paid-up policy system? A. I should favor the paid-up policy, as being more convenient for the business ; the other is a ragged thing, extending over months; they don't give him the policy at all, but provide that if he dies within a number of days agreed upon, they will pay his wife or widow the face of the policy less the amount of premium he should have paid up; as a general thing I don't believe in opening doors for men to get out of companies whenever they please.

Q. Who was the actuary of the company at the time you nsed to do business on the loan plan? A. We had none.

By the Chairman:
Q. Didn't you always have one? A. No, some companies don't; generally at the end of the year if any thing turns up we call in a consulting actuary.

Q. Who performed the duties of actuary? A. I think Mr. D. P. Fackler of New York.

By Mr. Moody:
Q. You have a capital stock of $200,000? A. We have.

Q. Yon have a large surplus; will you please state what the com pany pays State taxes upon? A. We pay upon the premium in States in which such tax is paid, from a-quarter to three per cent.

By Mr. Lang:
Q. Do you think it will be better to have the time fixed in which the companies can plead fraud in the execution of a policy; a great many insurance companies take men's money and put a very great many things in the questions, and then put a clause in the policy that if any thing is wrong in the answer, a policy shall be void; for example, if any of his ancestors died of cancer, and he died of a railroad accident, and he didn't happen to knowthat his ancestor died of a cancer, they would claim that his policy was void; do you think it would be better to fix a time in which that company would be prohibited setting up that defense? A. No; I would leave it as it is now; if a lie is told to-day, it isn't any less a lie two years hence, and the fact that the lie has existed two years, makes it no better.

Q. On what amount did your company pay taxes? A. I cannot answer that; we pay in various States a tax upon our income.

Q. In this State? A. I cannot tell; it is in the official records of the Insurance Department.

By Mr. Moody:
Q. In the city of New York, what are you assessed upon? A. That portion of our capital which is not in government bonds or real estate, and it isall in that; we pay no tax in this State except the fees of the department.

Q. If your surplus is in bonds and mortgage, are they not assessed? A. Yes, it would be if it were.

Q. Your surplus is invested in bonds and mortgages, is it not? A. No; in governments.

Q. You have no investments in bonds and mortgages? A. Yes; but we set them off against our debts.

By Mr. Lang:
Q. Why should yon not pay taxes upon your two millions surplus? A. I will refer you to the counsel of the company for an answer to thai; the gross accumulations must not be confounded with the surplus.

Q. On gross accumulations you pay no taxes? A. No, sir; real estate is assessed as real estate, and we pay on real estate the same as upon any thing else.

Q. Yon treat the reserve the same as what you do the policy holder? A. It is treated as an amount due; it is liabilities.

Q. And your liabilities you have to take in consideration as reinsurance, I suppose? A. Yes, sir.

By Mr. Moak:
Q. Has your company, during the last five years, made any reinsurance upon the risks of other companies? A. Never.

Q. Or has it reinsured any of its own risks with any other company? A. No, sir; strictly minds its own business.

James M. Freeman, sworn:
Examined by Mr. Moak:

Q. Your president is-not here, is he? A. No, sir; he is sick, and in Florida.

Q. How long has he been there? A. About a month or two; he went in January.

Q. Have you a statement with you of the salary paid to the officers i A. Yes, sir; the apology I want to make to the committee is this: after I got acopy of the resolution, this statement was made out by the book-keeper, and handed to me, and I laid it in my drawer, awaiting the return of the president, who, I understood, was required to sign it with the secretary; the president not being in the city, I held it back, and would have held itback three weeks more, when he will return, had not the second resolution arrived; when the second resolution came, I signed it myself and broughtit along; the statement is as follows: .

Detailed Statement of Salaries and all other Fees, Compensation, or Donation paid to Officers, Medical Examiners, Attorneys, Counselors and allother Employes 'of the Globe Mutual Life Insurance Company, during the year 1876.

Amount of salary paid to president during the year... $2,500 00 Amount of all other fees, compensation or donation, if any, paid president during the year 10,000 00

Total $12,500 00

Amount of salary paid to managing director of agencies during the year $6,333 33

Amount of all other fees, compensation or. donation, if any, paid vice-president or vice-presidents during the year, nothing.

Total $6,333 33

Amount of salary paid to each secretary during the year, being one in number $2,500 00

Amount of all other fees, compensation or donation, if any, paid secretary or secretaries during the year... 5,000 00

Total $7,500 00

Amount of salary paid each actuary during the year, being one in number $3,918 66

Amount of all other fees, compensation or donation, if any, paid actuary or actuaries during the year, nothing.

Total $3,918 66

Amount of salary paid to medical examiners during the year, being two in number $5, 500 00

Amount of all other fees, compensation or donation, if any, paid medical examiners during the year, nothing.

Total $5,500 00 Amount of salary paid to attorneys and counselors during the year, being two in number $6,520 02

Amount of all other fees, compensation or donation, if any, paid attorneys and counselors during the year, nothing.

Total $6,520 02

Average amount of salary paid to all other clerks and employes of the company during the year, $1,825,
being fourteen in number $25,550 20

Amount of all other fees, compensation or donation, if any, paid to all other clerks and employes of the
company during the year, nothing.

Total $25,550 20

Aggregate $67,822 21

State Of New York, County of New York,

, president, and James M. Freeman, secretary of the Globe Mutual Life Insurance Company, being duly sworn, depose and say, and each for himself says that they are the above described officers of said company, and that the foregoing detailed statement is a full and correct exhibit of theamount paid in salaries, fees or compensation, or donation to the president and vice-presidents, secretaries, actuaries, medical examiners, attorneys, counselors, clerks and other employes of this company during the year ending on the 31st day of December, 1876.

JAS. M. FREEMAN,
Secretary.
Subscribed and sworn before me,)
this 14th day of March, 1877. j

James Taylor,
Notary Public, New York, No. 345 Broadway.

Q. This statement is correct? A. Yes, sir.

Q. It is sworn to by you? A. Yes, sir; by me.

Q. The amount of salary paid to the president during the year was $2,500? A. Yes, sir.

Q. That was the regular salary of the president, was it? A. Yes, sir.

Q. In addition to that you state the amount of all other fees and compensations and additions be $10,000? A. Yes, sir.

Q. That is $12,500? A. Yes, sir.

Q. How was the $10,000 arrived at; in what way? A. That is two per cent on the net premium, net income.

Q. During the year? A. During the year 1876.

Q. How long has that been the arrangement' between the president and the company? A. For a number of years.

88-92
Q. How long to your knowledge? A. Seven years to my knowledge.

Q. And has that been changed? A. No, sir.

Q. What has been the average salary of the president for the last five years, including the extra compensation he has received? A. I should say it was about $1,000 more than that.

Q. Why was it less last year than the previous year? A. Because the income has fallen off.

Q. The income is less? A. Yes, sir.

Q. In consequence of a falling off of the insurance? A. Yes, and in consequence of an increase in the death, rate; as the company gets older the death increases.

Q. When was it organized? A. In 1864.

Q. How long have you been with it? A. Since 1871, I think.

Q. All the while iu the capacity of secretary? A. Yes, sir.

Q. Do yon have a vice-president? A. We had a vitee-president, sir, but he is dead.

Q. When did he die? A. The year before last.

Q. You have none since then? A. No, sir.

Q. Up to the time of his death what was his salary per annum? A. Nothing.

Q. Did he receive nothing from the company, either directly or indirectly? A. No, sir; let me make an addition; I am not very pat with my answers because I brought that statement up with me and thought that would be sufficient; we had another vice-president called the second vice-president, who joined us in 1869; he received a salary, or rather a commission.

Q. Of how much? A.I can tell you the amount but I don't know how it is fixed; it was about $12,000.

Q. Per annum? A. Yes, sir.

Q. That ceased in 1869? A. That ceased when he resigned; since that there has been no second vice-president.

Q. Has the president, within the last five years, received any thing except the salary of which you have spoken? A. No, sir.

Q. Directly'or indirectly, from the company or any of its assets? A. Not a penny.

Q. Has the president or any other officer in your company had any connection with any other company, either life or fire? A. No, sir.

Q. Either directly or indirectly? A. No, sir.

Q. Has he received any money from your company, either directly or indirectly? A. No, sir; not in addition to his salary that I have spoken of.

Q. Has any officer had loans from the company? A. Yes, sir.

Q. State whom? A. I have a loan now of $6,000 upon a piece of property on bond and mortgage.

Q. You have that? A. I have that.

Q. He has none? A. No ; there are only two officers.

By Mr. Weiant:
Q. Will you describe how it was made to you? A. The same as any other loan; we have a blank application.

Q. Did you sign one? A. Yes, sir; and submitted it to the president and asked him if he would allow it.
Q. Is that the manner of doing business? A. No, sir; I asked him whether it would be proper to make me the loan, and he said yes, if the propertywas right; he took the application and passed it over to the examiner (all our examiners have to be directors of the company); he reported on it to the finance committee; the finance committee approved it, and the loan was regularly made.

Q. Secured by bond and mortgage? A. Yes, sir.

Q. Who was the examiner in this instance ; can yon give his name? A. No, sir; the member of the finance committee that approved it was Mr. Smith, of Brooklyn.

Q. You don't know the man that examined your property when the loan was made? A. I was trying to think; it was either John "Van Nest, Cyrus P. Smith or John G. Freeman; it was one of the three, but I don't remember which.

Q. Who constitute the finance committee? A. Dr. George Lorrillard, John Van Nest, Cyrus P. Smith and the president ex-officio.

Q. The loan was made after an action on it by the board of directors? A. It was made like all other loans.

Q. You mean like all your loans; that was after an action on it by the board of directors? Yes, sir.

By Mr. Moak:

Q. When did yon purchase this property upon which the security was given? A. About three years ago.

Q. How much did you ppy for it? A. Eleven thousand five hundred dollars.

Q. Had you made any improvements on it after purchasing, and before the mortgage \vas put on it? A. Yes, sir.

Q. How much did they cost? A. I suppose I laid out seven or eight hundred dollars on it.

Q. At the time you gave the mortgage was there any incumbrance on it? A. None, sir.

Q. They loaned you on that property $6,000? A. Yes, sir.

Q. Was there a house on it? A. Yes, sir; there are two houses; two large houses.

Q. Were these houses insured? A. Yes, sir.

Q. For how much? A. For $6,500. •

Q. And these policies were assigned to' the company as collateral for the bond and mortgage? A. Yes, sir.

Q. What was a fair cash value of the entire property, at the time you got the mortgage upon it, in your judgment? A. Well, if you would offer me $13,000 I should decline it.

Q. What was its fair cash value, according to your opinion? A. I would sell it for $14,000.

Q. That does not answer my question? A. Well, $14,000.

By Mr. Moody:
Q. You say that was its fair marketable value? A. Yes, sir.

Q. Suppose it was put into market, what would it sell for; not what you would take for it? A. I should say $10,500 or $11,000.

By Mr. Weiant:
Q. Was the loan given at the time you purchased the property? A. No, sir. Q. It was since? A. Yes, sir.

By Mr. Moak:
Q. Has your company made any other loans to any of its officers, other than yourself? A. No, sir.

Q. Any loans to any of its directors? A. Yes; I will answer that question, yes; there was a loan to Mr. Cyrus P. Smith, of Brooklyn, for $19,000, on his house.

Q. On a single house? A. Yes.

Q. When was that loan made, or about when? A. That loan, I think, was made in 1873; in the year of the panic.

Q. How was that loan made; describe that; made the same as the other? A. Substantially so; he came in and made an application for the loan; itwent before the finance committee, and they ordered it to be examined ; he was our examiner in Brooklyn, and could not examine his own property, and Mr. John Van Nest, also on the finance committee, went and examined it.

Q. Where is the house situated? A. It is on the Brooklyn Heights.

Q. How much land is there connected with it? A.I think it is four lots; we had a policy on Mr. Smith's life, and all I know is, his son wanted to know whether we would allow him to set off' the loss, that is, to allow the loss on the mortgage, $10,000 on it; I said yes; I asked him what he would value the property at, and he said he would give $40,000 cash for it.

Q. Have you, yourself, any knowledge of the value of this property? A. No. sir.

By Mr. Moody:
Q. There is a house on one of the lots, and three of the lots are vacant, I understand you to say? A. I have not seen the property; I have very littleto do with the real estate; if I had not seen his son could not tell you what I do now; he said there was one house and three lots.

Q. You have no knowledge, yourself, of the value of the property? A. No, sir; it might be worth $1,000 and it might be worth $100,000 for all I know.

Q. This Van Nest, who is he? A. He is one of the finance committee, and a director.

By Mr. Moak:
Q. Has your company made any other loan, to any other of the directors? A. Not to my knowledge. Q. Have you heard of any? A. No, sir.

Q. Yon spoke of a $10,000 policy on Mr. Smith's life; has he recently died? A. About three weeks ago.

Q. When was that insurance made? A. About eight or nine years ago.

Q. You were not connected with the company at that time? A. No, sir.

Q. Has your company any other insurance on the lives of its officers or directors? A. It has an insurance on my life as secretary.

Q. How much? A. Ten thousand dollars.

Q. When was that made? A. When I went in; in 1870 or 1871, I think.

Q. They have an insurance on your life of $10,000? A. Yes, sir.

Q. At what premium? A. I don't remember the premium.

Q. Don't you know how much you pay per annum on your own premium? A. No, sir.

Q. Have you not some idea? A. Yes; if I was twenty-five years old the premium would be twenty dollars a thousand; I think it is about $250 premium; I could tell by referring to my papers.

Q. Can't you tell within twenty-five dolllars? A. I will tell you that $250 is within twenty-five dollars.

Q. What was the usual rate at the time you took the policy? A That was the usual rate, twenty-five dollars a thousand.

Q. Were you examined by a physician in the usual way? A. Yes, sir.

Q. By whom? A. By Dr. Parker, our medical examiner.

Q. What is his first name? A. Theodore.

Q. Did you sign an application in the usual manner? A. Yes, sir. Q. Did your company take all money or a note for a part? A. It was all cash.

Q. Have you paid your premium regularly? A. Yes, sir; I did as I recommended every one else to do; make it annual instead of quarterly.

Q. Pay it once a year? A. Yes, sir, in advance.

Q- Has there been a time when the premium was not paid promptly? A. No, sir; I am very careful; I will tell you, my premium falls due the fifteenthof July, and I always make it a rule to pay before the fourth of July.

By Mr. Weiant:
Q. How was it paid, and to whom? A. It was paid in money to the cashier.

Q. Who is the cashier you paid it to? A. Henry J. Stull.

Q. That is the cashier of the insurance company? A. That was the cashier then.

Q. Who have you paid it to since? A. To Mr. E. L. Thompson; and I paid it to J. H. Hopkins, the present cashier.

Q. You say you have paid it in cash; I understand you paid money right to him? A. Yes, sir.

By Mr. Moak: Q. In each instance? A. Yes, sir; I paid it the same as you would come in and hand it to the cashier, and he gave me a receipt.

Q. Has your company other insurance on the life of its officers or directors? A. Yes, sir.

Q. Whom? A. John Van Nest has $10,000 on his life.

Q. When was that obtained? A. Before I came into the company. /

Q. Is he still alive? A. Yes, sir.

Q. Do you know any thing about the manner in which it was obtained? A. I know he pays it.

Q. The manner in which it was obtained, I asked you? A. No, sir.'

Q. As to the premium being paid promptly, how is that? A. I know that is paid, and has been in the past. • Q. Every year? A. Yes, sir.

Q. As soon as it became due? A. Before.

Q. About what is his age? A. I could not tell; I should say he was sixty-five.

Q. And what is the premium he pays every year? A. Well, it is a large amount; I think it is $700 a year.

Q. Is it an ordinary life policy? A. Yes; he is quite an old man.

Q. Has he paid that sum ever since you were connected with it? A. Yes, sir.

Q. It is the same every year? A. Yes, sir.

Q. Has your company any insurance on the life of any other of its members? A. Yes, sir; we had an insurance on the life of Mr. Loring Andrews; we had about $10,000 on his life.

Q. When was that obtained? A. I guess in the year 1864.

Q. When did he die? A. I should say he died about three years ago.

Q. How old a man was he when he died? A. About seventyseven or seventy-eight; he is said to have died worth about six or seven million dollars.

Q. Do you know when his insurance was obtained? A. Yes, sir; the first year the company was organized.

Q. That was in 1864? A. Yes, sir.

Q. He was one of the directors of the company? A. He was the vice-president.

Q. Do you know what premium he paid up to the time of his death? A. I think he paid about $1,200 a year.

By Mr. Moody. Q. How much was his insurance? A. Ten thousand dollars. Q. And what age did he die? A. He died very near eighty; he was avery old man.

By Mr. Moak:

Q. Has your company any insurance on the life of any other director or officer? A. I don't remember.

Q. Don't yon know whether it has or not? A. I do not.

Q. As secretary of the company, don't you know each person's insurance; don't that come within your knowledge? A. There was one that had about $11,000, but I don't know who.

93-97

Q. Do you know who the directors are? A. Yes, sir.

Q. Yon know their names? A. Yes, sir.

Q. Don't you know whether any other directors are insured besides those you have named? A. Yes, there is another one insured.

Q. Who is that? A. Union Adams; I remember him.

Q. When was he insured? A. He was insured before he became a director of the company, a great many years before I became attached to the company; before 1870.

Q. When did he become a director of the company? A. About four years ago.

Q. How much is he insured for? A. For $10,000.

Q. What is his age? A. I should say fifty-five.

Q. What premium does he pay? A. I think his premium is $500 or $600 dollars.

Q. How long ago was his policy obtained? A. I should say it was obtained before I went into the company. v

Q. Have you any idea when it was obtained? A. No, sir.

Q. Has your company any policy on the life of any other director or officer? A. It has one on the president's life.

Q. What is his name? A. Pliny Freeman.

Q. How much is it? A. Ten thousand dollars.

Q. When was he insured? A. His policy is No. 1.

Q. It was issued at the early formation of the company? A. Yes, sir.

Q. When was that? A. In about 1864.

Q. What office was he then holding? A. That of president.

Q. What premium does he pay? A. About $1,000 a year; heis quite an old man now; about eighty years old.

Q. Has his premium been promply paid? A. Yes, sir; he was sixty years old when the policy was taken.

Q. Has your company any insurance upon any other of its officers or directors? A. I think not sir.

Q. How many directors have you in all? A. We have thirteen.

Q. Name them, if you please, and we may then be able to get at it? A. I will answer that question; I am pretty sure not, sir; I am endeavoring to beas exact as I can, and, as I say, I did not expect to be catechised at all.

Q. Is your company a stock company? A. Yes, sir.

Q. How much is the capital stock? A. One hundred thousand dollars.

Q. Have there been any dividends paid on the capital? A. Yes, sir.

Q. How much has there been paid since you were connected with it? A. It now amounts about fourteen per cent on the $100,000.

Q. There bus been paid to the stockholders about fourteen pei cent, on the capital you say? A. Yes, sir; I will give you the provisions of the charter; there are $100,000 of capital, and it is a mixed company; the company declares a dividend, and twenty per cent is set aside, not paid to the policyholders, that is called the guarantee capital, until it should come up to the sum of $500,000; the interost on that at seven per cent was paid tothe stockholders ; at the present time that guarantee capital amounts to $100,000.

Q. Making a total of $200,000? A. Yes, sir.

Q. For how long has the stockholders received fourteen per cent? A. For two years.

Q. How much was it before that? A. About twelve.

Q. How long have they received that? A. For about a year or two.

Q. How much did they receive before that? A. About eleven.

Q, Your capital is $100,000; how much are the assets of the company? A. About four millions and a half.

Q. Of what do the assets consist? A. There is about $2,000,000 in bonds and mortgages.

By the Chairman:
Q. Located where? A. Almost entirely in New York city ; then we have $600,000 in real estate, $700,000 worth of government securities, $850,000 in Brooklyn and New York city and New York State bonds, $70,000 or $80,000 of temporary or demand loans.

By Mr. Moak:
Q. What are those? A. Loans on government bonds, or Brooklyn city bonds, or any security that we would buy if we wanted to buy.

Q. Well? A. Then there are deferred premiums, $125,000; premiums in course of transmission, $70,000 ; accrued interest, $20,000; I shall have toinclude cash, about $30,000; and that is all.

Q. Now, the $2,000,000 in bond and mortgage, where is that real estate located? A. About nineteen-twentieths in the cities of New York and Brooklyn.

Adjourned until 9 o'clock Tuesday morning.

Wednesday, March 21.

The examination was resumed on Wednesday morning, March 21, at nine o'clock.

Present, Mr. Cowdin in the chair.

Examination of James M. Freeman resumed.

By Mr. Moak:
Q. Now, Mr. Freeman, you were speaking, at the time of the adjournment, of the $2,000,000 in bonds and mortgages; I understood you to say thatnineteenth-twentieths was either in New York or Brooklyn; am I right? A. Yes, sir.

Q. Will you state to the committee the method of loaning money on bond and mortgage by your company? A. Yes, sir; we have a form called the blank form of application for loans on bond and mortgage; a party comes in and desires a loan, and we give him this form; he fills it up, and sends itinto the company, and I examine it to see if it is in the district we can loan in; say in the State of New York or in New Jersey, in a radias of fifty miles;that being the case, it is referred to the finance committee of the company.

Q. Of whom does that consist? A. The finance committee did consist of a chairman, Cyras P. Smith, who died about three weeks ago; John Van Nest, George Lorrillard, Union Adams, and the president, ex-officio.

Q. Well, go on? A. Those are the five members.

By Mr.Weiant:
Q. Do not those same gentlemen act as appraisers in making loans? A. Yes, sir; Mr. Smith used to examine in Brooklyn.

By Mr. Moak:
Q. As appraisers? A. Yes, sir.

Q. And who else? A. Mr. John Van Nest.

Q. They examined and determined whether it was a proper loan? A. Yes, sir.

Q. And the loan was made? A. Yes, sir.

Q. As to the method of loaning, who pays the expense of the search and drawing the papers for making a loan? A. The applicant.

Q. The company pays nothing? A. No.

Q. Now, by whom are the papers drawn? A. They are drawn by the lawyers of the company.

Q. Well, who pays them? A. The applicant pays them if they get paid at all.

Q. The company pays nothing? A. No, sir.

By Mr. Weiant:
Q. Who are the attorneys of the company? A. We have two sets; Taylor & Andrews, in Brooklyn, and Lowry & Marcellus, of Brooklyn.

Q. Have you any agencies in New York? A. Yes; one attends exclusively to the New York business, the other exclusively to the Brooklyn business; Mr. Lowry died the day after Mr. Smith, and he made me feel very bad, because he had a policy with us for $10,000.

Q. Do those attorneys have a rule laid down relating to bonds, and the charges they shall make a person? A. No, sir.

Q. None whatever? A. No, sir.

By Mr. Moak:

Q. Do you know what charges are paid by persons seeking loans, either for searches or drawing papers? A. No, sir; I think it is the regular rates; on small loans it is one per cent, on larger amounts they get three-quarters per cent.

Q. Can you give me the maximum? A. One per cent is the maximum, then it runs down as the loans increase in amount; I never knew this only upon general information ; we adopt the plan instituted by the Mutual Life company a good many years ago, or rather the lawyers did.

Q. What per cent of the value of the real estate as appraised is loaned upon it? A. Fifty per cent.

Q. Not to exceed that f A. No, sir.

Q. Have you foreclosed any mortgages during the past year? A. Yes, sir.

Q. How have they run, so far as collecting the amount of the mortgages upon them; has the company bought in the titles to real estate sold under foreclosure of mortgage? A. Yes, sir; about two or three pieces.

Q. How much in value? A. They were small loans; we bought in the year before a good many pieces ; but last year it fell off, and we only bought those we have named.

Q. Take the year before, how many pieces did you buy in? A. I guess about $70,000 or $80,000.

Q. Have you sold any of that since? A. No, sir.

Q. Not any of it? A. No, sir.

Q. So you are carrying all the real estate now? A. Yes, sir.

Q. At what price did you buy it? A. The amount the company loaned on it, about that.

Q. About the amoun,t of the loan? A. Yes, sir. .

Q. In each case? A. That was the instruction to the lawyers.

Q. Did they buy in at the amount of the mortgage? A. I presume so; that is what we instructed Taylor & Andrews and others to do.

Q. Don't you know? A. I do not; in BrooklynJI remember one case, because it was a remarkable one.

Q. Did you buy in at less of the face of the mortgage and the cost? A. Yes, sir; the loan in Brooklyn was $6,000 on the house, and Mr. Loring told me he paid $4,500 and got the property.

By Mr. Moody:
Q. Where the property will not bring the face of the mortgage existing on it, is judgment obtained on the bond? A. Yes, sir.

Q. And is that collected? A. No, sir J I beg pardon, I should say, a suit was brought to recover the balance, and it is so in this case I have mentioned.

Q. It was not foreclosed by action, then? A. Yes, sir.

Q. Then judgment was for the amount of the mortgage and costs? A. I am not enough of a lawyer to understand you; the lawyers go to work and foreclose, the property is sold, and they have instructions to buy in to the amount of the loan and costs; they do so; if it comes to less, they have instructions to go en and sue for the deficiency.

By Mr. Moak: Q. Is that the only case that you know of where property was bought in for less than the incumbrance? A. I don't think of any other case of property bought in by our lawyers.

Q. Where it was sold in for less than the amount—if somebody else bought it in for less than the amount — it would be immaterial, for you get themoney? A. I don't thiuk they did.

Q. You don't think they did what? A. I think our lawyers bought it in on behalf of the company.

Q. In all cases for the amount of the mortgage? A. Yes, sir.

Q. Except this one that you know of1? A. Yes, sir.

By Mr. Weiant:
Q. Are you confident that you are correct about this being the only case? A. No, sir; I think we bought in another piece of property that day, too.

Q. Bnt this is the only case where it was bought in for less than the mortgage? A- No, sir; I don't think we have bought in a piece during the last three years where it has not been for less than the mortgage.

By Mr. Moak:
Q. Then you have, in all cases where you have foreclosed, bought in for less than the face of the mortgage and expenses? A. Yes, sir.

Q. Take the case of the six thousand; how long had it been standing? A. Six years.

Q. How many thousand dollars did you foreclose in 1875? A. Altogether we foreclosed about $600,000 worth.

Q. Altogether you have foreclosed $600,000 worth in mortgages? A. Yes, sir.

Q. How much of it has the company purchased? A. It has bought in all of it.

Q. And now owns it? A. Yes, sir.

Q. Has not sold any of it? A. No, sir.

By Mr. Weiant:
Q. Are you not bound to dispose of it within five years under the law 2 A. Yes, sir; but I think up to three yearB ago we did not have a single piece of real estate on our hands.

By Mr. Moody:
Q. And now you have about $600,000 worth? A. Yes, sir.

By Mr. Moak:
Q. Where is it situated? A. The bulk of it is in Brooklyn ; some is in New York city and some in New Jersey.

Q. How much is in New Jersey? A. I should say $40,000.

Q. Is this all' the real estate the company owns? A. Yes, sir.

Q. Is it rented? A. Yes, sir.

Q. About what rent does it bring in, taking the whole $600,000; how much does it bring in deducting taxes? A. I think it brings us about six per cent.

Q. Have you made any estimate? A. No, sir; I think it brings [Assembly, No. 93.] 7

98-102

us six per cent without deducting taxes; I think it is about five and a-half or five per cent after deducting taxes.

Q. Are you willing to say that the entire $600,000 brought in during the year 1876 $30,000 in rent, exclusive of taxes? A. Yes, sir; I should think itdid.

Q. Have you any memorandum, and have you ever figured it up to see? A. Yes, sir; I have figured it up; I have talked with the book-keeper about two months ago, and he estimated it to about six per cent.

Q. Estimating is one thing, figuring up is another? A. He figured it up to six per cent.

Q. Yon have not figured it up yourself to know? A. No, sir; they are most of them dwelling-houses that bring from five to seven per cent; if I am not sufficiently accurate, I am trying to be as careful as I can.

Q. Has the company made any effort to sell any of its real estate? A. No, sir.

Q. Why not? A. Because we think the times are bad; if we were offered a price it would stand us in to-day, we would not sell.

Q. Why not? A. Because we think in one or two years it would increase in value; that is the sense of the finance committee.

Q. If that were so, why did you not give the owners the benefit of it and allow their mortgages to run? A. Well, they have received everyconsideration from our company.

Q. It is a pretty hard thing to foreclose a mortgage these hard times, and sell a poor man's house, where there is a chance of its coming out right inthe end? A. We have used every consideration that we can, and where there is a chance of our getting our pay we have not foreclosed.

Q. Are you acquainted with the value of real estate in New York or Brooklyn? A. Very little.

By Mr. Weiant:
Q. I have understood yon to state, if I am correct, that the face of the mortgage and the accumulated interest you bought was about $600,000? A.Yes, sir.

Q. That was the face of the mortgage and accumulated interest? A. Yes, sir.

Q. How much did you buy it for on the aggregate? A. I cannot tell.

Q. Can you give us a general idea? A. I cannot.

Q. Not of the aggregate amounts you paid? A. No, sir; our attorneys come in and notify us that they have bought a piece of property, and we notify the board, but I very rarely know how much they bought it in for.

Q. Do you mean to tell me you don't know? A. They come and ask me, shall we proceed on the bonds?

Q. Ho you mean to say you don't know what the property is bought in for? A: Yes; they tell me every time.

Q. Then you do know? A. Yes; I do every time.

Q. Can't you give us an idea of what it was, or about wbat? A. I think about seventy-five per cent.

Q. Now, yon don't mean to say yon have no recollection whatever on the subject? A. No.

Q. Yon have some general recolleetion? A. Yes, sir.

Q. Well, that is alii ask you; the best you can give? A. Sometimes it sells up very close.

Q. Can yon give us in round numbers; you say yon bought it at seventy-five per cent? A. Well, I know of a house in Brooklyn where it wasvalued at $6,000, and sold f>r $1,000; that struck my mind, and when the attorneys asked me if they should sue on the bond, I said yes.

Q. I want to get the aggregate amount? A. I should say about seventy-five per cent; between $400,000 and $450,000.

By Mr. Moak:
Q. Did you state yon had $700,000 in government securities alone? A. United States?

Q. Yes? A. Between $600,000 and $700,000.

By the Chairman:
Q. Have you any written statement with you? A. No, sir.

By Mr. Moak:
Q. Yon said last night you had $700,000 in government securities? A. Yes, sir.

Q. You have that amount in United States securities? A. Yes, sir.
Q. And about $850,000 in Brooklyn and New York city bonds? A. Allow me to make a statement; we have in United States securities, and in New York city, State and Brooklyn bonds, altogether, a little over $1,600,000; and Brooklyn bonds are a little heavier than the government.

Q. You say you have about $850,000 in Brooklyn and New York State bonds? A. Yes, sir.

Q. What do you mean, the bonds of the State? A. Yes, bonds of the State.

Q. And the balance of that amount is in New York or Brooklyn city bonds? A. Yes, sir.

Q. And yon had $70,000 in demand loans? A. Yes, sir.

Q. What do you call demand loans? A. Well, if you have a government bond, and you want to get a small amount loaned on it, you bring it to us, and that is what is called a demand loan.

Q. It is an amount of money to an individual secured on some kind of stock? A. Yes, sir.

Q. What kind of stock do you take? A. Only such as we would buy.

Q. You state here that you have $125,000 in deferred premium; what do you mean? A. They are premiums where they are not annual — either quarterly or semi-annual—and where the company is charged with the full premium, and they have to credit themselves with the amount they have not received; let me give an illustration: suppose you had a policy on which you paid $100 a year, $25 quarterly, your deferred premium would represent $75, less ten per cent for collection, or less $7.50.

Q. You spoke of $70,000 in premiums in costs of transmission? A. Those are premiums in the hands of the agents, or in the course of collection, o rin hand.

Q. At what rate does your company allow agents a commission for first insurance? A. That is the hardest question you have asked me; our rate isthirty per cent, and seven and a-half per cent for five years on renewal; suppose you are an agent and insure me; my premium is $100; our regular way will be to allow you thirty per cent the first year, and seven and a-half per cent for five years, and after that his interest will cease; we allow our general agents five per cent on that the first year, making thirty-five per cent.
Q. You allow the two thirty-five dollars? A. 1 es, sir.

Q. Has the general agent any thing after that? A. That depends; sometimes it is one per cent and sometimes two and a-half per cent.

Q. Why does it vary? A. It depends upon the caliber of the agent.

Q. It is a sliding scale, at the pleasure of the company? A. Yes, it is a sliding scale; I supposed you were going to ask this, and was unwilling toanswer it.

Q. Why? A. Because we have a number of agents, and if they know any one is getting more than they are, they want the extra.

Q. Well, now, in regard to the expense of foreclosure on the various mortgages; do you keep an account of the expenses met by the company for foreclosure? A. The company does; I do not.

Q. Can you give us an approximate statement of what it is? A. No, sir; I never looked at it at all.

Q. Why not? A. I can't say why not, but I have not.

Q. Is it a subject that you don't consider of the slightest consequence, what the charges are? A. They are reputable men, and they always tell me what their expenses are.

Q. Taxable costs, you mean? A. Yes, sir.

Q. Well, suppose the taxable costs are $600, while the real costs are not $300; do you allow the taxable costs? A. Yes, sir.

By Mr. Moak: Q. Do you allow the taxable costs? A. Yes, sir. Q. Do you allow them any fees beyond the taxable costs? A. No, sir; they could swindle us most tremendously if they desired.

By Mr. Skinner:
Q. How could they swindle you? A. Why, they could say the taxable costs were far in excess of what they were.

Q. Do they send in the vouchers? A. Yes, sir.

Q. And how could they swindle you, unless the vouchers were fraudulent? A. We assume they are honorable men, and pay the taxable costs; we don't pay any more to them than that.

By Mr. Weiant:
Q. Well, as to salary? A. We don't pay them any salary.

Q. Nothing but the fees they receive? A. That is all.

Q. Have you legal counsel? A. Yes; Fulton, Knox & Crosby are our counsel.

Q. How much were they paid in 1874? A. About $3,000.

Q. In all? A. Yes, sir.

Q. Well, how much in 1875! A. It was reduced to $2,000.
Q. And in 1876? A. It was $2,000.

By Mr. Moody:
Q. In the statements you have given us here you say you paid two attorneys and counsel $6,520; state how you pay it, why you pay it, and to whom you pay it? A. We have two firms, Sewell & Pierce and Fulton, Knox & Crosby; to both together we have paid that amount.

Q. To both firms? A. Yes, sir.

Q. Well, what is this paid for, if you have other attorneys to do the foreclosing? A. We never consult them; they simply do the real estate.

Q. In what respect? A. Well, that is in the foreclosure of mortgages and the examination of the titles for loans.

Q. What did you pay these men $6,520 for? A. I will tell you; suppose you come to me and had a policy in the company and desired a loan on the policy, I would send that down to the lawyers to know whether we could legally loan on it and take their advice; if we could loan you on it, I would loan you on it.

Q. Then you are not governed by the finance committee. A. Not on policies; the finance committee allowed us to loan over $500 on policies; up tofour years ago they allowed us to loan any sum from the reserve, but four years ago they instructed us not to lend under $500; our finance committee make an examination once in three months, and they use to find it very difficult to examine the policy loan, and then they instructed us notto lend less then $500; prior to that we would lend any sum.

Q. You asked them whether you can lend? A. Whether it is legal or not; it is an unsettled point whether we can lend on a wife's policy.

By Mr. Moak:
Q. Is not lending on policies entirely illegal? A. No, sir; say you have a policy on your life payable to your executors, and you say to me, Mr. Freeman, I cannot pay the premium, will you pay it for me; I go down to the actuary first and find out what your reserve is; finding that out, I would send down to the counsel to know whether yours is a policy that we can lend on; that being the case, we would lend you enough to pay the premium, in order to keep it in force for three mouths.

Q. How much have you loaned on policies? A. It is a small amount; about $30,000.

Q. You said you could not lend less than $500 ; how do you mean when you say you lend them enough to pay the premium? A. I was telling you what was the usual practice of the company up to five years ago; since then we only loan $500 and upwards; I would say, up to five years ago everycompany used to lend on their policies; there were several decisions in regard to loaning on a wife's policy, and our attorneys called our attention to it, and we notified the parties to pay up their loans, and they did so.

By Mr. Weiant:
Q. Do you consider, under the law, you are authorized to loan money on policies? A. Yes, sir; on any thing but a wife's policy.

Q. Do you consider it was a safe investment? A. Just as safe as the company is; if the company is good, an investment based on the strength ofthe company is gooa.

By Mr. Moak:
Q. To what extent would you loan on policies? A. From forty to seventy per cent, according to the nature of the policy.

Q. From forty to seventy per cent of what? A. Of the reserve.

Q. You said you paid those two attorneys ; yon have not answered the question what you paid them $6,520 for; you said that was an expense; I want to know what the attorneys do? A. Well, any time we want information in regard to the law, we send right down to one or other of the counsel.

Q. Why don't you have only one firm; why divide it up between two? A. I will tell you; we did have but one firm up to three years ago, and we hada case where the other counsel was engaged, and we liked them very much indeed, and our finance committee suggested that they should be employed.

Q. You had a case where they were engaged against you or for you? A. I think for us; our finance committee suggested that we should engage those gentlemen; we did so; since that time it has been divided; three or four years ago we paid more than that, but for the last three years we have been cutting down all expenses.

Q. Four years ago how much were the counsel fees? A. I should say from $7,000 to $9,000.

Q. Does this $6,520 include all you paid for counsel fees last year? A. Yes, sir.

Q. For every thing? A. Yes, sir.

Q. And every purpose? A. Yes, sir.

By Mr. Moody:
Q. Over and above the taxable costs? A. Yes, sir.

Q. Did you pay their charges for services or a salary? A. A salary, so much a year; and the salaries of both were reduced last year.

Q. How much do you pay Fullerton, Knox and Crosby? A. $500 a year.



103-107

Q. And how much do you pay the other firm? A. Three thousand dollars.

Q. Well then how do you get this $6,520? A. They were cut down by the finance committee.

Q. You say it is $6,520; I want to get at how yon make it; you say yon paid Fullerton, Knox and Crosby how much, in 1870? A. Their tees were$3,000.

Q. Was that their salary? A. Yes, their salary per annum.

Q. That is what you paid them in 1876, and the others were generally $5,000; then they were both cut down during 1876 in the latter part of the year and the aggregate came up to that sum; the aggregate amounted to that sum? A. Yes, sir; next year our counsel fees will be exactly $3,500.

Q. It is a little amusing to me to see that yon can figure that amount down to $6,520.02; I was trying to see which of the two counsels got the two cents? A. I don't know.

Q. I don't see upon the basis you give you figure up that amount or any thing like it; one firm you say got a salary of $5,000, and the other firm got a salary pf $3,000; that would make $8,000, if both were paid? A. They were both reduced in 1876.

Q. To what were they reduced, say the one that had $5,000? A. To $3,000.

Q. How much was the one that had $3,000 reduced to? A. Reduced to $500; so that yon see in the vear 1877 we will pay them just $3,500.

Q. What did you pay them for the year 1876? A. It is down there $6,520.

Q. Now, you have got here, among your items, and I will get back to the salaries, a salary of $2,500 to your president? A. Yes, sir.

Q. That is the regular salary paid him for how many years? A. Ever since he has been in the company.

Q. And how long has he been in the company? A. Since the company started.

Q. Then they gave him $10,000 upon a per centage? A. Yes, sir.

Q. What is that per centage upon? A. That is two per cent net.

Q. Upon what? A. On the income.

Q. On the income of the company? A. Yes, sir.

Q. Then your income was $500,000, as you make it; how much was it in 1876? A. It is for our income, two per cent on the income, less losses, dividends and indebtedness.

Q. How much was your income, less those three items? A. Half a million of dollars.

Q. Does your president receive any other sum than those two sums from the company, either directly or indirectly? A. He does not.

Q. Or any member of his family? A. No, sir.

Q. Who is the president? A. Pliny Freeman.

Q. Is he related to you in any way? A. Yes, sir; he is my father.

Q. Is your father connected in any way with any other insurance company, either fire, marine or life? A. No, sir; with none.

Q. In any shape, either as manager, agent, director or any thing else? A. No, sir, he is not.

Q. Has he been, since your company has been in existence, to your knowledge? A. No, sir.

Q. What is your salary? A. It is $2,500 salary, and one per cent.

Q. Now, have you received, or any member of your family, either directly or indirectly, any money from the assets of your company, in addition toyour salary? A. Not a penny.

Q. Never? A. No, sir.

Q. Are you connected in any way with any other company? A. No, sir.

Q. Either as officer, director or agent? A. No, sir; neither as agent or officer, directly or indirectly.

Q. You spoke of $6,333.33 paid to the managing director — who do you call the managing director? A. William Sturgiss.

Q. Where does he reside? A. New York city.

Q. How would you define his powers and duties? A. Letters coming in, in relation to agencies, are referred to him.

Q. Any thing else? A. He has exclusive charge in relation to the agencies.

Q. Any thing else? A. Yes; when applications are received he examines them; we have a doctor examine them, and Mr. Sturgiss examines them.

Q. Does he have his office in the office of the company? A. Yes, sir.

Q. Does he devote his entire time to the company? A. Yes, sir.

Q. Have you transacted any other business out of the company? A. No, sir.

Q. Do you have an actuary; is he paid a regular salary? A. Yes, sir.

Q. Who is your actuary? A. Mr. Robert Sewell.

Q. Does he devote his entire time to the business? A. Yes, sir.

Q. Is he in the office daily? A. He is supposed to be there from nine in the morning until four o'clock in the afternoon.

Q. My question was not what he is supposed to do, but is he there? A. If he is not there he ought to be.

Q. That does not quite answer my question; my question is, is he there as a rule each day? A. That is his only-business.

Q. Is he any way connected with the firm of lawyers, the Sewells? A. No, sir; no relation; Mr. Sewell, the lawyer, is an American, and our actuary is an Englishman.

Q. You spoke of two medical examiners; does the company have two in their employ that are paid a salary? A. Yes, sir.

Q. What do you pay them? A. We pay one $3,500, and I think the other gets $2,500.

Q. That makes $6,000; you said $5,500 last night? A. Then one has $3,000; allow me to correct that statement; I was in doubt whether our regular doctor, Doctor Parker, gets $3,500 a year; the other doctor, Doctor Trei, I call him the policy clerk, but we put him in the line of the doctors; a policy comes in and it is sent to the doctor, and he knows the man who made the examination; is on his book, and he knows his standing; it is then sent tothe policy department, and he examines it, not Knowing what doctor does; he approves or disapproves of it; after that it is passed over to Mr. Stnrgiss, the managing director of agencies; sometimes he don't know whether he likes the risk or not, and he will come and consult with me or other parties; the application goes through three hands, and if one out of the three decline it, the risk is not accepted; that is, the categorical statement ofthe examination which the application undergoes.

Q. Have you given every dollar of the expense paid out by your company in any way during 1876? A. No, sir.

Q. You include in that not only the expenses which it has paid, hut also those which you had to pay? A. Yes, sir.

By Mr. Weiant:

Q. In your experience, have you ever known of a case of collusion between a medical examiner and a person desiring a policy? A. I have not with our own doctors.

Q. With any doctors? A. Yes, I have.

Q. In what way did that come about; how did another doctor come in? A. Well, take a case; supposing a doctor in Albany examined a risk, our doctor knowing the doctor in Albany to be on his book would suppose it was all right; if the man died we might subsequently have reason tobelieve that the doctor in Albany knew that the man was a bad risk.

Q. That never occurred at the home office? A. No, sir.

By Mr. Moody:
Q. Is there not a dividend of five per cent paid to the officers of the company? A. No, sir.

Q. Only three per cent? A. Yes, sir.

Q. That is all? A. Yes, sir.

By Mr. Weiant:
Q. Do you hold yourselves responsible for any collusion on the part of the local examiner of the policyholders? A. No, sir; if we think we can defend a risk we consult the lawyers.

Q. Do you hold yourselves responsible for any collusion on the part of the local physician, as you stated; say if a case arose in the city ofAlbany, do you hold yourselves responsible for any representation he might make in taking the risk? A. I think the company would be bound.

By Mr. Moak:
Q. I understood you to say you never had a case in your company? A. I was trying to think; there was a case, about a year ago, iu the neighborhood of Syracuse, where we found the doctor was in collusion.

Q. Is it not true that yon' set that up as a defense, that you were not responsible for misrepresentations or fraudulent acts of the local physician?A. No, sir; we have never set it up; if our doctor passes a risk, and we write to him and he says that risk is all right, and the man dies, we pay the claim then, if we think the doctor is wrong.

Q. Then you hold yourselves responsible for his acts? A. Yes, sir, we do; and I guess it is the universal practice ; if we have reason to believe the doctor has deceived us we remove him at once.

By the Chairman:

Q. That is their general practice? A. Yes, sir; if we can prove conclusively that the doctor connived at the fraud, we not only do not pay the riskbut we bring him before the medical association and have him removed.

By Mr. Moody:
Q. Is that all you would do? A. That is all we could do; we would not pay the policy.

By Mr. Moax:
Q. You speak here of fourteen clerks receiving $25,550; have yon that number of clerks in your employ? A. Yes, sir.

Q. What salaries do you, in fact, pay them? A. I could not mention each salary in detail.

Q. Do yon, in fact, pay these fourteen clerks $25,550, or is part of it used for something else? A. No; it is not.

Q. The whole amount is paid to the clerks? A. Yes, sir.

Q. And in good faith? A. Yes, sir.

Q. Does this $67,822.21, which you gave as the aggregate expense of the officers in 1876, cover the entire expense of the company? A. Yes, sir.

Q. Every thing? A. Yes, sir.

Q. No other money is paid to any other person for any other purpose? A. No, sir.

Q. Except those you have given here? A. No, sir.

Q. Now, how many policies had your company in existence at the commencement of the year 1875? A. About 11,000.

Q. Covering an insurance to about how much of an amount? A. About twenty millions.

Q. How many policies did you issue during the year 1876? A. I should say about 2,500.

Q. Covering an insurance of about how much? A. About $5,000,000.

Q. How many policies in number lapsed or were lapsed? A. About the same number.

Q. The same number that you insured. A. Yes, sir.

Q. In other words, as many lapsed as you issued? A. In other words, at the end of the year there were about the same number as at the commencement.

Q. Of the five millions that lapsed, how man v have been restored? A. This year?

Q. During 1876? A. That lapsed in 1876, you mean?

Q. That began in 1875, early in the year, and went right along? A. Any time a man wants to revive his policy he can do so; I don't know thenumber.

Q. Have you no idea of the number of policies restored? A. Our actuary can tell you a great deal better than I can?

Mr. Sewell— In 1876 there was about forty; since 1877 commenced, we restored about twenty-five.

Q. Well, on the average you restored from fifty to sixty-five, did yon not? A. Yes, sir.

Q. How much would they represent in amount? A. Two thousand dollars each, I should say.

Q. That would be about $100,000 or $120,000? A. Yes.

Q. Then the balance of the $5,000,000 that lapsed is, so far as any thing at present appears, lapsed, gone? A. Well, no part of them we paid as aloss; part of them we paid for surrendering their policies.

Q. Now, how many died, or, in other words, how much an amount did the loss from death amount to in 1876? A. We paid about $320,000.

Q. In losses? A. Yes, sir.

Q. Of these losses, how many of them that were claimed as losses has payment been refused by the company on them? A. A very small amount.

Q. Give us the number? A. I should say three.

Q. Have you had any litigation? A. Yes, sir.

Q. How many? A. I should say three cases.

Q. Can you recall a case? A. Yes, sir; we had a large policy in St. Louis of $20,000 on the life of the proprietor of the Lindel House.

Q. He died? A. Yes, sir; he died about two months after he was insured.

Q. What was the claim of the defense? A. That was the defense claimed; they set up a claim, and we set up a defense that the man was not ingood health when he was insured.

Q. Has that been determined yet? A. Yes, sir; it was compromised.

Q. How compromised? A. We paid $16,000.

Q. You paid $16,000? A. Yes, sir.

Q. As to the facts, what were the facts according to the best' information you had? A. The facts were our doctor, Doctor Holman, did not examine the man; the agent came down and said the man was out of town ; I think Doctor Jordan examined the man; the risk came down and Dr. Jordan's examination was approved, the premium was paid, and about two months after the man died.

Q. Of what disease? A. I don't know; the man died two months after; we thought it was strange, and sent up to the regular examiner, Doctor Holman, and we found he was not out of town as the agent represented; that he was in town; we wrote to him, and

108-112

he wrote ns that this gentleman had been brought to him to be examined, and he knew he was a bad risk; that he had disease of the liver; that he washis consulting physician, and that he had notified him that he could not live six months.

Q. Why did you not take the precaution of telegraphing to St. Louis rather than appoint a special surgeon to made the examination— it strikes methat was the thinnest swindle I ever heard? A. Well, we lost $16,000.

Q. Did you simply take the agent's word that he was out of the city? A. No; the other doctor was a reputable physician and was, doubtless, deceived.

Q. Well, you took the agent's word? A. No; we took the doctor's certificate.

Q. You say the agent took the trouble of coming to New York, and say Doctor Holman was not there? A. Yes; we took his word, so far as that wasconcerned, and we looked at the paper and saw he was examined by a reputable physician.

Q. He had the papers with nim? A. Yes, sir.

Q. And you never took the trouble to look into it until the loss occurred? A. No, sir.

By Mr. Skinner:
Q. Did you retain that agent? A. No, sir.

By Mr. Moaz:
Q. Is that the mode you conduct your insurance company? A. The man who examined the risk was a reputable man, but did not happen to be the physician of the company.

Q. Do not your policies require him to state who the family physician was? A. That question is not answered one time in ten.

Q. Do yon issue policies without that? A. Yes, we pay no regard to that; because we find if we wrote to the family physician, and the man is a bad risk, he will cover it up.

Q. There are cases where doctors are honest, are they not? A. I don't say that; of course there are cases where doctors are honest.

Q. I don't believe they are all dishonest, do you? A. No; I don't either.

Q. Then why don't you require the question to be answered, and get what information you could from that source? A. Because we don't find it ofany avail; I think in the new forms we don't have that now.

Q. You know of any other company that does not require the applicant to state who the family physician is? A. Yes, sir; the majority of them.

By Mr. Weiant:

Q. You stated that you set up a defense when they sued you? A. Yes, sir.

Q. Who were your attorneys in that case? A. Parties in St. Louis.

Q. What were their names? A. I don't remember their names.

Q. Yon don't know the names of the parties who defended you? A. No.

Q. What was the amoant of the policy, did you say? A. Twenty thousand dollars.

Q. What was the defense? A. Our defense was, the man was in bad health when he was insured.

Q. Did you simply set up that he was in bad health, and was that the defense? A. Misrepresentation in the application was the defense.

Q. Do you not hold yourself responsible for the act of the agent in that matter? A. No.'

Q. You do not? A. No ; I don't think our agent knew any thing about the man.

Q. But didn't he bring down the application? A. Yes, sir; he brought down the application.

Q. From the medical examiner? A. Yes, sir.

Q. Employed by yon? A. No; he did not employ our medical examiner.

Q. But you accepted him? A. Yes, sir.

Q. And you set up a defense that you were imposed upon? A. Yes, sir.

Q. After knowing all the facts? A. Yes, sir.

By the Chairman:

Q. On whatground did y0u compromise it; why did you compromise it? A. We compromised it at the suggestion of our attorney.

Q. What defense did they give yon? A. They said the probabilities were we would lose the case before a jury, and they recommended us tocompromise on $16,000.

Q. Was there any other reason that you had? A. No, sir.

Q. I didn't know but if you contested cases of that sort, it advertises it through the country, and gave the public to understand that you wererepudiating your contract? A. They might bring that out, but we don't pay any attention to it.

By Mr. Weiant:
Q. Did you not interpose the defense for the purpose of getting a compromise? A. No, sir; we did not do it for that purpose; because L honestly believe it was a clear case of fraud.

Q. It was perpetrated by your agent? A. No, sir; by the man.

By Mr. Coulter:
Q. Who was it that said the doctor was out of town? A. Our agent.

By Mr. Moak:
Q. You spoke of two cases you defended, state those? A. There was a case in Syracuse called the Reil case, where we insured a man on a small policy; our agent tendered the man the policy and the man declined to take it; about two months after that the man sent word to the agent that he would take the policy if he would deliver it to him; the agent jumped into his buggy and rode to this man's house and found he was sick in bed; he delivered the policy to him and took his money; two months after the man had been insured, the man died and we contested that case.

Q. What defense did you set up in that case? A. That the agent delivered the policy two months after it had been issued, and after the man had declined to take it; it was clear fraud as I regarded it.

Q. The man had never accepted the policy before? A. No, sir.

Q. Well, go on? A. The agent delivered the policy and the man took it, and two days after he took it he died; he never got off his bed; we got ready to pay that case because we did not know any thing about it; but some one who was acquainted with the office was riding in the car and heard about the ca.,e; he sent word to us and we sent a detective out there and learned the facts, and we decliued to pay it and have not paid it yet.

Q. What was the defense? A. Our defense was, the man was sick when he took the policy and the agent had no right to deliver it.

Q. What did you do with that agent? A. He is no longer connected with us.

Q. You removed him immediately? A. Yes, sir.

By Mr. Weiant:
Q. You placed the policy in the agent's hands? A. Yes, sir.

Q. And he delivered it? A. Yes, sir; but he had no right to do so.

Q. And then you set up that you were not liable because he had no right to deliver it? A. Well, was it right; the man was insured two months before, and when the agent went to deliver the policy he declined to take it; after the man was taken sick he sent to the agent and said, I will take the policy, and the agent delivered it; two days after that he died.

Q. He was the agent for your company, and you were responsible, were you not? A. Well, that is not settled yet; there is a clause in the policythat if the party is not in good health when the policy is delivered the policy is null and void; in other words, we assume the party is in the samestate of health when he received the policy that he was when the application was made out.

By Mr. Moody:
Q. Suppose a man makes his application, the application is approved, the policy forwarded to the agent, and it is in the hands of the agent to be delivered ; he notifies the party that he is ready to deliver it, and the party says in a day or two I will call in and receive it, and the next day he isinjured, or is taken dangerouslysick, and he sends for the policy, would you then claim that you had the defense that the agent ought not to deliverit? A. Yes, sir.

Q. Yoif think he ought not? A. Yes, sir; do you think if a party comes in and says, I will take this in two or three days, and is taken sick in the meantime, that he would be entitled to it? I honestly don't think that if the man was taken sick in those days he would have a right to it.

By the Chairman:
Q. What is the custom of your company; what is the custom with you in regard to the policies; does the policy insure a man when the application was taken out or when the money was paid? A. When the money is paid.

By Mr. Moak:
Q. Don't it date back, as to the date of the policy; suppose a policy is dated the first day of April, and issued from your office that date, and suppose he don't take it and pay until the first of May, you say you don't regard him as insured until he pays, the next year do you date his renewal from the first of April? A. Yes, sir.

Q. Then you get a month's insurance out of a man without insuring him? A. Yes, sir; there is a clause in the policy stating that a man must be ingood health when the policy is delivered to him; we try to deliver it to him in two or three days.

By the Chairman:
Q. A great many young people of small means, or .young married men, may want to take out a policy, and make application, and when the time comes around they have not the money, as two or three hundred dollars is a good deal to raise — the question arises, supposing they don't take the policy, are they insured?

Mr. Moak—Oh no, of course not.

By Mr. Moody:
Q. Is that the custom in other companies? A. Yes, sir.

Q. Well, take this case: say a man in San Francisco desires to take out a policy: he makes application to your agent, has a medical examination andit is sent to you and you have to communicate to him that he is accepted? A. We don't do that.

Q. Well, you write to him and that policy may be two or three weeks in getting there? A. As a general rule, in long distances, they request us todate the policy ahead; we do so, from ten days to two weeks.

By Mr. Moak:
Q. You spoke of still another case; what was the other case? A. I could not give it you.

Q. How many suits, on average, has your company defended during the five years past? A. I guess an average of three a year would cover all ofthem.

By Mr. Moody:
Q. How many defenses do you sustain on the average? A. We defend very few claims on the average.

Q. How many of these three cases do you sustain in the course of the year? A. I guess we win about one out of three.

Q. How many do you compromise? A. About half, I should say.

Q. How many of the death claims do you compromise in the course of a year that are not defended? A. Very few; we will either pay the whole claim or we will not pay it at all; we notify our lawyers, and if they advise us to compromise we compromise, no matter what we think about it.

By Mr. Weiant:
Q. What attorney did you send your Syracuse case to? A. Sewell &. Pierce; they brought an action for an injunction commencing a suit against the company.

By Mr. Lang:
Q. That is one of the objections made, that as soon as there is a loss all sorts of objections are raised, and sooner than fight the case the parties compromise; is that so with your company? A. I think that is as mean and as contemptible thing as can be got up.

By Mr. Moak:
Q. You said during the year 1876 there was lapsed in various ways, and by loss in death, about $5,000,000, you thought? A. Yes, sir.

Q. And you paid $320 in losses? A. Yes, sir, thereabouts.

Q. Does that include all their losses during the year, or only such as you paid? A. It was all the losses we paid.

Q. That leaves about $4,680,000; of what was that composed? A. Well, we paid $200,000 for surrenders.

Q. You paid surrenders; do you mean the surrender value? A. Parties apply for cash value.

Q. Do you have any one engaged in procuring them? A. No; we don't want them.

Q. Was any application made to those parties requesting them to do so? A. No, sir.

Q. It was a voluntary application on their part? A. Yes, sir; and we have spent a good deal of money in sending persons to them to induce them togive up their policies, because the strength of a company depends upon the premiums coming in, and as long as a company is reasonably strong itcan stand surrenders; but I think every policy surrender, no matter for what reason, it is a loss to the company.

By Mr. Weiant:

Q. Do these policies provide that the parties holding them shall absolutely have the right to a surrender value? A. No, sir.

Q. It is discretionary with the company? A. Yes, sir.

Q. The surrender value is not fixed by any absolute computation? A. Yes, sir.

Q. But it is discretionary with you? A. Yes, sir. .

113-117

By Mr. Moak:
Q. You paid that $200,000 for surrender value; how much did it represent in insurance? A. I should say it represented about $1,500,000.

Q. What was the balance of the five millions; what did that represent in surrender value? A. That was nothing.

Q. Those were policies that lapsed, with no attempt to revive them, and were absolutely gone J A. Yet, sir.

Q. That would leave about three millions absolutelyjlapsed during the year? A. About.

Q. What would be about the annual premium, say upon the $3,000,000? A. I should say the policies would average thirty dollars apiece; abont $120,000,1 should think.

Q. About $120,000? A. Yes.

Q. What would be the cash surrender value of the $3,000,000? A. The cash surrender of that would be about $50,000 or $60,000, without the reserve.

Q. How much, including the reserve? A. Well, I made a mistake; that includes the reserve; that would be about what we would pay for the policies.

By Mr. Weiant:
Q. You said it was discretionary with you to pay that? A. Yes, sir.

Q. I want to know by actual computation what they are worth? A. Will you allow me to ask the actuary? A. Yes.

Mr. Sewell [actuary]— I could not tell; it would be a rough computation, indeed.

Q. You have some knowledge of the policies lapsed? A. Yes; but I don't keep an account of the reserve.

Q. Well, what would be the value ot tho policies lapsed? A. That is the reserve; their value.

By Mr. Moody:
Q. Is that the reinsurance reserve? A. Yes, sir.

By Mr. Weiant:
Q. There is the actuarial computation, and then there is an addition, is there not? A. No; the reserve is the actual value of the policy; the reserve is a mere technical expression used to represent the value of the policy.

By Mr. Moak:
Q. That is what you could reinsure them for? A. Yes, sir.

By Mr. Weiant:
Q. Including the reserve, give us the actual value on that $3,000,000? A. Well. 1 should say it would be about $50,000; that is theamount on the three millions lapsed; that would be the reserve we charge ourselves with on paid-up policies.

By Mr. Moak:
Q. Do you issue any paid-up policies on those? A. Yes, sir.

Q. Did'you, in 1876? A. Yes, sir.

Q. To what amount? A. About 500 in number.

Q. How much in amount? A. I should think about $300.

Q. Each? A. Yes, on the average.

Q. And 500 in number? A. Yes, sir. *

Q. Do you call that 500 among the number you call surrendered policies? A. No, sir.

Q. Those are not included in what you call surrendered policies? A. No, sir; they are what we buy for cash.

Q. You don't include that in the number? A. No, sir.

Q. How much insurance did those policies, where you issued paid-up policies, represent in amount? A. Just what the reserve on the running policies would be.

Q. Well, here are 500 policies yon issued paid-up policies on? A. Well, say $300 each.

Q. How much was the aggregate of the amount paid for it? A. One hundred and fifty thousand dollars.

Q. T don't quite get your idea? A. Why, there are 500 policies at $300 each.

Q. That is. what you gave them? A. Yes, sir.

Q. How much did they represent on their face before? A. T cannot tell; the policy may be ten, twelve, or three years old, but they came in for a paid-up policy; I guess they will estimate $300 each.

Q. And that is what yon gave them? A. Yes.

Q. Can't you give me some idea how much they would have represented if they all had died during the year; how much would they represent? A. I cannot tell; it is purely an actuarial question; it is purely a matter of guess, I should say five times the amount.

Q. Then these policies would represent from $750,000 to $900,000? A. Say about $800,000.

By Mr. Weiant:
Q. I understood you to state there was $1,500,000 of surrendered policies? A. Yes, sir; mind you, this is not accurate.

Q. And that the value of these surrendered polices is about $200,000? A. Yes.

Q. Now, here is $3,000,000 worth of lapsed policies? A. Yes, sir.

Q. And you state the value of them is about $56,000? A. I will deduct something else; we pay $356,000 for loss; that amount was to be taken from the policies.

Q. What policies? A. Well, those are lapsed policies; every policy that ceases we called lapsed; if you have a policy, and don't pay the premium itlapses; those that die, their policies lapse.

Q. We are after policies that are forfeited? A. We call every thing lapsed where the premium is not paid.

Q. What was the number forfeited? A. If you will deduct the deaths, the value of the surrendered policies, then yon get the forfeited policies.

Q. Well, give us an estimate by those terms? A. There were surrendered 581, for each of which either the cash value was paid, or a paid-up policywas giveu; there were thirty-eight matured endowments; 360 were never taken by the policyholder, but returned without the first premium beingpaid, and we call those canceled; and 1,254 lapsed.

Q. Now, divide that up, and give us those that were forfeited? A. Why, 1,254 were forfeited, because they got nothing for them.

Q. Now, what was the amount of insurance on the 1,254? A. I cannot tell you, exactly; our actuary says he should estimate it at $2,800,000 or $3,000,000.

Q. Well, give us your best-recollection? A. Well, say $2,800,000 or $3,000,000.

Q. According to computation, what would be their value? A. I don't think it would be more than $50,000 or $60,000.

By Mr. Moody:
Q. Do you pay any rents? A. Yes, sir.

Q. For what? A. For our office.

Q. You don't own the building you occupy? A. No, sir.

Q. What rent do yon pay? A. Twelve thousand five hundred dollars.

Q. What other rents do you pay? A. I guess we have got four, five or six office?, for which we pay an average of $600 each, scattered through theState.

Q. You pay your agents for their office rent? A. In a few cases we do.

Q. And give them thirty per cent besides? A. Give them thirtyfive per cent.

Q. And you pay them for office rent? A. In some instances; we don't where we can help it.

Q. Do you pay for their office furniture besides that? A. That is a diplomatic question; we never mean to do it if we can help it.

Q. Do you, or not? A. In some, instances we buy furniture.

Q. In what place is it done? A. Last year we bought furniture in Syracuse; we paid $500 or $600 there.

Q. Paid their office rent as well? A. Yes, sir.

Q. Did yon do so in Buffalo? A. I think not.

Q. Have you an office in Chicago? A. Yes, sir.

Q. Did you pay office rent there? A. Yes, sir.

Q. And for office furniture? A. Yes, sir.

Q. Have you an office in St. Louis? A. Yes, sir.

Q. Have you an office in Brooklyn? A. No, sir.

Q. In Boston? A. Yes, sir.

Q. Do you furnish office rent and office furniture there? A. Yes, sir; our furniture there is worth $150.

Q. In Philadelphia? A. We pay office rent there.

Q. And you don't know whether you furnish furniture there or not? A. We have not for five or six years; I think it is an old matter, but the company did own the furniture.

Q. Well, how is it in Washington? A. I don't think we have any office there.

Q. How is it in Cincinnati? A. I don't think we have an office there.

Q. Have you an office in New Orleans? A. Yes, sir.

Q. Do you furnish an office and office furniture there? A. I don't know; I think we have both there.

Q. Have you in this city? A. No, sir.

Q. Can you tell what your office rents, or the rents you pay, in the aggregate amount to? A. No, I cannot; I never figured them up.

Q. Do you know what your liabilities in the aggregate amount to, including reinsurance? A. Yes, sir.

Q. Well, state? A. About $4,000,000, that includes every thing.

Q. What is the amount of your net reinsurance fund? A. Do you mean the amount of gross assets?

Q. I mean what I ask; what is the amount of the net reinsurance fund? A. Three millions eight hundred and fifty-two thousand nine hundred and twenty dollars; do you mean the reserve?

Q. I mean the net reinsurance amount? A. Well, about $3,800,000.

Q. How is that invested; have you it invested in bonds and mortgages?

Mr. Moak— He has given all that.

Q. In arriving at this, have you given it from memory or did you take it from the books so that you know? A. I gave it from memory; I did not havea statement.

Q. Do you take the statement as to the amount yon had paid out to agents, attorneys, and for salaries as given here from the books yourself,personally? A. No, sir.

Q. Of your personal knowledge you don't know any thing in relation to that, only as it is handed to yon by other persons in the office? A. By our book-keeper; I asked him to make it out.

Q. You asked him to make it up, and you gave it as he made it up? A. Yes, sir.

By Mr. Moak:

Q. Have yon reinsured any risks during the past five years? A. Yes, sir.

Q. To what extent? A. Well the company, some years ago, decided to take risks to the amount of $20,000; in order to encourage the agents we would write $20,000, but in very few instances would we carry it; we would reinsure one-half.

Q. How much is the aggregate of the reinsurance? A. It is very small; we wrote very few $20,000 insurances ; about five out of six we reinsured.

Q. How much in amount have you got reinsured, as near as you can get it? A. About $150,000,

Q. In what company? A. Scattered all around New York.

Q. In different companies? A. Yes, sir.

Q. What rate did you pay, as compared with the rates yon received? A. A little less; the rule calls us to pay fifteen per cent, and five per cent on renewals.

Q. In other words, if the premium was a $100, you would pay from eighty to eighty-five? A. Eighty-five.

Q. Then you would lose money because you pay your agents thirty-five per cent? A. We lose money; yes.

Q. By that policy you would lose twenty per cent the first year? A. Yes; that is the estimate among companies to allow from fifteen to twenty per cent.

Q. Then if you have $150,000 that yon have taken and reinsured, you have lost $30,000 in the operation? A. One hundred and fifty thousand dollars in insurance, not in cash value.

Q. How much would be the premium on $150,000? A. I should say about five per cent; six or seven thousand dollars.

Q. Is that all the reinsurance you have? A. Yes.

Q. Have you reinsured any other companies? A. Yes, sir.

Q. To what extent? A. The Merchant's Life of New York State.

Q. To what amount? A. About $100,000.

Q. At one time? A. The whole company.

Q. Is that all the policies they had? A. Yes; that is the whole amount.

Q. What amount did you have? A. They paid our four and a half per cent reserve.

Q. I understood yon to say that you had paid no person any thing, directly or indirectly, any sum of money for procuring, or as an inducement toprocure, the surrender or cancellation of any policy? A. !Not a penny; we have written a good many letters to induce parties not to surrender their policies; it is prejudicial to the company.

Q. In those cases of reinsurance, where you reinsure a company, did any of your officers receive any thing for that? A. No, sir; not a penny.

By Mr. Moody:
Q. You simply took the examination if the other company had taken it? A. Yes, sir.

Q. You did not re-examine yourselves? A. No, sir.

By Mr. Moak:
Q. Suppose you state your method of reinsuring — take this company you have mentioned — and give us a history of that transaction? A. The Merchants' Life Insurance Company was the name for it, of New York city; that company went into the hands of a receiver.

Q. About when? A. In 1874; we understood that the receiver desired to reinsure that company.

Q. How did you understand it? A. General gossip on the street.

Q. Your company understood it from general gossip on the street? A. Every one knew it in New York.

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Q. That they wanted to reinsure? A. That the receiver wanted to reinsure it.

Q. Was the announcement brought officially home to your company? A. No, sir; our company heard that the Merchants' had gone into the handsof a receiver, and that they desired to reinsure the risk; I went down to see Mr. Alexander, the receiver; says I, "are you the receiver of the Merchants'?" he said he was; I said, "do you desire to reinsure this company with the Globe?" says he, "yes;" says I, "on what terms, how much will you pay us?" says he, " I will pay four and a-half per cent;" says I, "I will have to bring the thing before the finance committee, and we shall have toknow the character of the risk; he gave 'em a memorandum of the risk; I had the doctor look around; we looked into the mortality of the company, found it was fair, submitted it to the finance committee, and accepted the proposition at four and a-half per cent.

Q. Has your company, on any occasion, loaned any money or securities to any other insurance company? A.- No, sir.

Q. Not a dollar? A. No, sir.

Q. Has your company, on any occasion, borrowed any money or securities from any other company? A. No, sir.

By Mr. Weiant:
Q. You submitted that to your finance committee alone? A. Yes, sir; and when they approved of it they called the full board.

Q. Full board of directors? A. Yes, sir.

Q. Action was taken in the board of directors? A. Yes, sir.

Q. Was there any written contract for the arrangement? A. Yes, sir.

Q. Made directly with the receiver? A. Yes, sir; and we sent it up to the superintendent of the insuranco company, and it was filed.

Q. Were the policyholders consulted in the arrangement? A. No. sir.

Q. It was done without their consent? A. Yes, they had nothing to be consulted about.

Q. Have you the contract with you? A. No, sir; it is published in the superintendent's report; there was no hardship brought on the parties; the company had gone into the hands of a receiver by order of the court, in the first place; in the second place, the receiver reinsured those risks with us and submitted it to the court, which approved of it; in the third place, we will say you were in the Merchants' which went into our hands; 1 am the secretary of the Globe, and we send you a notice to this effect: Dear sir, you have a policy in the Merchants', the policy has been reinsured in the Globe; do you desire to transfer yourself to the Globe or remain in the Merchants'; you have your choice; if yon come into the Globe you fare exactlyas the Globe policyholders do; if you do not you pay your premium and fare exactly as the Globe policies do, only you get no dividend; therefore the large majority of them came into the Globe.

By the Chairman: Q. Then the understanding in taking this business in hand is, it is in the nature of a new bminess you desire which yon consider profitable to the company? A. Yes, sir; yon know in reinsurance matters there has been a great deal of talk about it, and it has been supposed thatreinsurance has been abused; I don't think we ever heard a complaint from a single member of the Merchants' Insurance Company, either by complaints to the department or from any one, as to how they have been treated by us; this state of things I consider very flattering to the company.

Q. Is it generally profitable to the insurance company? A. We come out just about even.

Q. Do you approve of it, as an insurance man? A. Yes, sir; I do approve of reinsurance where the risks are a fair average.

By Mr. Lang:
Q. Why; wherein is the gain to the insured or to the company? A. It increases the volume of the business of the company, that is all.

Q. Well, what does it benefit the company; if it adds to the accumulated wealth of either company it comes out of some one; where does it come from? A. The more wealth a company has the stronger it is; it is better for a company to have ten millions than five, and five than two and a half.

Q. When you assume a $20,000 risk, and you reinsure a part of that in another company, do yon mean that company aids you in carrying the risk?A. In the case of the Merchants' they did not have any risk above $5,000; the large bulk of them was $2,000; it was a small company with a low risk.

Q. The principle is the same, whether it is $5,000 or $10,000; you take a $20,000 risk and go to another company and ask them to help yon carry halfof it? A. Yes.

Q. Then you say to the insured you may do as you please, you let us transfer some of that ten thousand? A. We don't consult the assured at all.

Q. The reinsurance runs to yon in case of death? A. No; we will suppose you are insured with us for $20,000, and we reinsure yon in the Mutual Life for $10,000, and you die —

Q. When you reinsure me it is before I die? A. Yes.

Q. What kind of a contract is that between you and the Mutual Life; what kind of a bargain is it? A. We put you in the Mutual Life for $10,000 and pay the premium.

Q. In other words, you take a policy on my life running to your company, and payable at my death to your company? A. Yes, sir.

Q. That is the contract between you aud the Mutual Life? A. Yes, sir.

Q. Upon my life? A. Yes, sir.

Q. There is a contract between you and me for $20,000? A. Yes, sir.

Q. You make yourself secure in the means to pay the $20,000 by taking a $10,000 policy in the Mutual Life? A. Yes, we divide the risk; now suppose you die —

Q. Well if 1 die, what do you mean by transferring the risk; you propose to transfer the risk and say I may be carried by the Mutual Life, and the contract shall be canceled in regard to half of it?

Mr. Moak — That is in cases where companies expire?
Q. Where your company is going to reinsure me you would not say any thing to me about it? A. No; where does it concern you? it is a matter for the company.

Q. Well it would concern me a good deal; you might swap off a large amount of your policies, and the company you swap off to would be good for nothing, and you and I would be good for nothing.

By the Chairman:
Q. It is the same as fire companies; a fire company would take a risk of $20,000; it is more than they want to carry; they pass over $10,000 and keep $10,000; in return the neighboring company is bound to give them a policy; so they help each other, is that it? A. Yes, sir.

By Mr. Moody:
Q. When did yon reinsure the Merchants'? A. I think in 1874.

Q. How much did you receive from the company for reinsuring them? A. Four and a-half per cent reserve.

Q. You take the basis of the American experience table? A. Yes; four and a-half per cent.

Q. They paid you simply that? A. Yes, sir.

Q. Did you employ any one to secure it for you? A. No.

Q. Did you pay any attorney? A. No.

Q. You paid no person? A. No.

Q. Or company any thing? A. Not a cent; the contract is all down here in the department; I sent it to the department, and it is in the 1875 reports.

Q. Did the receiver give the money in his hands over to you to pay it? A. He did not have any; all the money was here in Albany.

Q. And you did not get it? A. No; it is there yet, to the credit of the Merchants' Life.

Q. It is there yet? A. Yes, sir.

Q. You did not take any thing of the Merchants'? A. No, sir.

Q. How much was it? A. I think it was $100,000; it is the reserve.

Q. What was the amount of the policies? A.'I think it was $2,000,000 or $1,800,000.

By Mr. Lang:
Q. Do you think that provision can safely be made by legislation to provide against the lapsing of policies, that is, to the end that if the company was disposed to be dishonorable to the insurer the law could interpose and prevent the forfeiture of a policy; do you think a provisionof law could be made which shall prevent a company taking advantage of the mere technical lapse of time by which the insurer is deprived of all benefits of what he has paid? A. I don't think any honest company would take advantage of it.

Q. You don't answer what I ask you; it is insisted by some no law can be passed that is practicable; that it mnst be left to the company; your predecessors has testified that there is no legal liability on the part of the company, even if a man has paid his premium twenty times; if he lets it run over by the terms of the policy it lapses, and there is no legal liability on the part of the company, but as a matter of keeping their reputation up theywill revive it and do a large number of good things; they base it on the idea that they are good men, and will do good for the insured; yet the insured find fault; what I want to know is, can we legislate against the lapsing of a policy in such a way as to prevent the forfeiture of the money paid, and compel the company to give back to the man a paid-up policy for such an amount that he has paid? A. A policy is written in favor of a man, and thatman don't pay his premium; the company has got to know some time or other when that policy has fully lapsed in order to determine its own liabilities or debts, in order to know how much surplus it has got, and in order to know how much dividend it can pay.

Q. Why not have it never lapse in the sense of its being entirely worthless; why not, for the time he has paid, give him a paid-up policy for his reserve, what his reserve is worth; for he has paid more in proportion during the first three or four years? A. The difficulty would be in that case the company would be charging against themselves year after year money, four-fifths of which would never be called for ; yes, nine-tenths would never be called for.

Q. Then there is no objection for having the law step in and say they shall not forfeit a policy? A. I think it would be better, instead of having adead fund there to allow the company to distribute it.

Q. How do yon do with it now ; hold it at a dead fund? A. No, sir.

Q. Do you distribute it? A. After a time we treat it as actually lapsed, and it belongs to the balance of the insured; then we strike a balance, take all our reserve, liabilities and assets, and find out how much we own more than we owe, and divide that in dividends.

Q. To stockholders? A. No, to policyholders.

Q. Bnt the stockholders get dividends? A. Yes; seven per cent a year.

Q. It has been said the vice-president of one company was nominally the general agent of another company, but the actual general agent wasanother man, who was actual agent of his company; one was in New York and the other in Boston, and this vice-president who was the nominal general agent, drew an annual commission of $10,000 or $12,000, and paid another man $2,000 to do the work, who is the acting agent, but whose name is not known; that state of affairs has presented itself; can you conceive that great frauds might be perpetrated by officers of one company helping another? A. Yes, sir; but 1 don't think there is any fraud perpetrated in that case.

Q. Do you loan any money on real estate? A. Yes, sir.

Q. It is claimed that there is a great opportunity of frand and connivance between companies growing out of this state of facts; a party wants toprocnrea loan; the life company to whom he applies says ours is a city company; we will let you have the money but shall insist, before we do, thatyou shall insure the buildings in a certain fire company, as we have great confidence in that company; as a result the risks are put in the fire company designated by the lender, which is the life insurance company; can you see any chance for fraud growing out of that? A. We do that.

Q. You do it? A. Yes.

Q. Can you see that any wrong can grow out of it? A. Ask me how we do it, and I will give you in twenty or twenty-five sentences my idea and perhaps you can get what yon want.

Q. I am asking what your judgment is? A. For a great many years, and for one or two years after I was secretary, before a bond and mortgage waseffected we sent the party to a fire insurance company; sometimes he will assent to it and sometimes not; sometimes he would pay the premium and sometimes not; we had a great deal of trouble because we were very anxious to own as much fire insurance as the face of a loan; finally, in order toprotect ourselves, we made a rule that we would elect ourselves, where we carried the risk, to place the fire insurance, agreeing beforehand, ofcourse, that we would see it is carried at as low rate as possible; we have one man now in the employ of the company who places all the fire insurance of the company.

By the Chairman:
Q. Is that customary with life companies generally? A. I think it is; if you had asked me that five or six years ago I should say no.

By Mr. Wriant:
Q. Is this officer paid by your company? A. Yes, he gets a regular salary from us.

Q. And gets a per centage besides? A. He gets ten per cent from the fire insurance company.

Q. In addition to his salary? A. Yes.

Q. Don't any of the rest of the officers get any part of it? A. Not a penny.

Q. Don't you? A. No, sir.

Q. Nor any of the officers? A. No, sir; I should think it was contemptible to do so.

Q. What is his salary in your company? A. I think he gets $1,000 a year, and this commission brings it up to $1,200 or $1,300.

By Mr. Moak:
Q. Who is he? A. A clerk named Wright.

Q. Is he related to any of the officers? A. No, sir.

Q. Can you see that frauds can be perpetrated on either life or fire insurance companies by that state of things? A. Yes; Mr. W right might charge 'em or the borrower twice too much money;

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the fire insurance company might charge him the regular rate and he might pocket the difference; it can be done every time.

Q. Does it take place? A. I don't know that it does, and I should say not; according to the general tendency of American people, if they werecharged too high they would complain to ue; I think, as a matter of fact, we get lower rates.

Q. Have yon any particular fire insurance companies in which you insure? A. In the Continental Company and the Home Company of New York, the Liverpool, London and Globe of England, and the Lancashire of England; these four companies the bulk of the business is in.

By Mr. Lang:
Q. If an officer of a life company were an officer of a fire company, or interested in it, and knew its financial standing, would they not have the power to swap the liability from one to the other, and help one company ruin the other? A. No.

Q. Suppose, then, fire company was irresponsible in fact? A. Well, suppose it was, how could it be done?

Q. The premium for the loss is paid into the hands of the company about the bankrupt? A. Well, there is no loss in case of a fire.

Q. But in case of carrying the insurance along the company would get the premium? A. Yes; they would get the yearly premium.

Q. In case of loss, they would not pay any thing? A. Well, it would be a mere bagatelle; they could not jeopard a fire company or a life company.

Q. How is that? A. The property would be secure enough with the building down; but we will assume it will be a dead loss, and they take the land.

Q. Then, how is the company going to get a bond and mortgage paid? A. We have got the land..

Q. Assume it is not worth it? A. Well, assume it is not worth a penny; they lose nothing; take any company, the loans dou't average any more than $15,000 on a house and lot; take our company, and take an extreme case —

Q. But suppose they are all insured in one fire insurance company? A. Yes, and suppose it fails to-morrow; we take these loans and place them inanother company; the property is not going to burn up to-morrow, all of it; as a matter of fact, in taking sixty-four we have only had three fire losses.

Thursday, March 22. The committee met at 3.30 P. M.; present, Mr. Cowdin in the chair, Messrs. Weiant, Floyd-Jones, Moody, Husted, Lang and Coulter.

John A. Nichols, president of the Knickerbocker Life Insurance Company, sworn.

Mr. Johnson—As counsel for the Knickerbocker Life Insurance Company I would say to the committee that I appeared here the other day with aletter from Mr. Nichols, stating why he did not comply with the resolution, and send a statement of the affairs of the company. He had sent astatement to the Superintendent of the Insurance, which contained all the information desired. I would further say, that since the president arrived here, he has received a dispatch from the secretary of the company, stating that he has been called home by sickness in his family, thus leaving the office without a secretary, and render it necessary for Mr. Nichols to return home as quick as possible.

Examined by Mr. Moak:

Q. Are you president of the Knickerbocker Life Insurance Company? A. I am.

Q. Have you a verified or written statement of the various questions put by the Superintendent of the Insurance Department, or have you not prepared any? A. I have filed a statement with the Insurance Department.

Q. That does not quite answer the question; this .resolution requires certain statements to be made as to the way the company conducts its business, also as to the salaries paid to its officers? A. I will make that statement under oath.

Q. 5Tou are president of the company, you say? A. Yes, sir.

Q. How long have you been? A. Since the latter part of October, 1874.

Q. And previous to that time had you any connection with the company? A. I was vice-president for eighteen months.

Q. And before that what, if any thing? A. I was an agent for the company.

Q. Then you have been connected with the company as vicepresident and president since 1872 some time? A. Since the fall of 1872.

Q. How many officers of the company were there that received salaries last year? A. The president, secretary and actuary; those are the officers ofthe company who received salaries; then I will answer further, and say in addition to that, that the counsel and the medical examiner received salaries.

Q. Now, we will take the president first: what was the salary received by the president of the company, including per centages, and every thing during the last year, 1876? A. $15,000.

Q. Was that arrived at as the regular salary, or was part of it a regular salary and part of it a per centage? A. All of it was a regular salary.

Q. For how long had the salary been fixed at the same rate? A. I think the salary of the president has been $15,000;— well, ever since I have been president; it has been $15,000 ever since I have been in the office.

Q. Has the president of the company received, directly or indirectly, in any way, shape or manner, from any source, any money from the funds or any of the avails, in any shape, from the company? A. I desire to answer that as broadly as the question is put, that I have never received a dollar, directly or indirectly, from the company, for any purpose or under any circumstances whatever, except the salary, as I have before stated.

Q. Or from the assets of the company? A. Or from the assets of the company, or from any person for or on behalf of the company, save and except only the salary of $15,000.

Q. Has there ever been any gratuity or addition to the salary voted to the president? A. No, sir.

By Mr. Weiant:

Q. Have you received any valuable thing whatever as a favor? A. No, sir.

Q. Have yon ever received any favor from the company whatever? A. No, sir; I mean to make that statement as broad as possible; I have never received any thing but the $15,000 a year.

By Mr. Moak:
Q. Now, as to the vice-president? A. There is none.

Q. How long is it since you have had one? A. Not since I have been president.

Q. Now, as to the secretary? A. His salary is $6,000 a year.

Q. Has he received, since you have been connected with the company as vice-president or president, any addition or sum, either directly or indirectly, for any purpose, or for any services, from the assets of the company, other than his regular salary? A. While I was vice-president, I can only answer to the best of my belief; I would not answer positively, yon know, in regard to that, but I don't think he did during that time; since I have been president, I know he never has.

Q. Not from any source, either directly or indirectly? A. No.

Q. Or money that was in any way connected with the business of the company? A. Not a cent.

Q. Then as to the actuary? A. He gets $5,000 a year.

Q Has that been his regular salary since he was connected with the company? A. Yes, sir; I think it has; I think his salary was raised tlis year before I went into the presidency; his salary was $4,000, and then was raised to $5,000.

Q. Who has been the secretary of the company? A. Mr. George S. Sniffin has been secretary for fifteen years.

Q. Do you have an assistant secretary? A. Not anv.

Q. Your actuary receives a salary of $5,000? A. 1 es, sir.

Q. How long has that been his salary? A. It has been his salary since I have been president.

Q. Who is the actuary? A. Charles M. Hibbard his name is.

Q Has he received, either directly or indirectly, from the assets or property connected with the business of the company, any thing since you have been connected with the company as president? A. No, sir; he has not.

Q. You spoke of a counsel, do you have a counsel paid by the year for services rendered to the company? A. Yes, sir.

Q. How much has he received? A. Seven thousand five hundred dollars.

Q. Who is the counsel? A. Mr. Johnson.

Q. And what services has he rendered for the company; what is the character of the services he rendered? A. He has an office in the building, such office, to a certain extent, being a department of the company, the law department; we go to him for advice and counsel on every thing thatpertains to legal questions.

Q. On legal questions pertaining to business of the company? A. Any thing pertaining to legal questions.

Q. Suppose there is litigation, does he act as attorney or counsel? A. He acts as attorney.

Q. Without additional compensation? A. No, sir.

Q. He has no additional compensation? A. No; I want to be understood in that answer; I did not get the drift of your question at first; he gets $7,500 a year, as counsel lor the company; for that salary he draws all the papers that are usually connected with the business of the company, contracts and every thing of that sort; he gives us advice when we go to him for advice on every thing relating to litigations of the company, and for this service he receives $7,500; that does not include his fees in case of litigation.

Q. In a litigation you pay him what his services are regarded by you as worth, independent of the $7,500? A. Yes.

Q. While upon that subject, how many litigated cases has the company had within the past year, or two years? A. I couldn't tell you, sir.

Q. Give us some idea; it is a source of complaint here that companies have litigated too much? A. We treat all alike; I can only guess at it.

Q. How many have you had, say for the past two years? A. I should think there was litigated some fifteen or twenty.

Q. How many have been litigated in the courts, and have proceeded so far with the litigation as to have been decided by trials in the courts? A.Well, I should think half a dozen; I am only speaking at random.

Q. What became of the balance of them ; were they compromised? A. Some of them were compromised and some of them are still in the courts.

Q. Still pending? A. Yes, sir.

Q. How much have your counsel fees been, say for the year 1876, other than the $7,500 paid your counsel regularly as counsel? A. It is between $6,000 and $7,000.

Q. For 1876? A. Yes, sir.

Q. How much in 1875, more or less? A. I do not remember how much it was, but I should think it was about the same; 1 do not mean to say that was all paid to Mr. Johnson.

Q. I say counsel's fees generally? A. Yes, sir; we have cases pending at different points.

Q. You employ, in cases pending in the courts, counsel other than the regular counsel? A. Yes, sir; we do.

Q. And yon have included in this amount the amounts paid to those counsel? A. Yes, sir; precisely the case as it stands; cases iu other States, ofcourse, included.

Q. Do yon include in the $6,000 cases all over the United States? A. Yes, sir.

Q. You spoke of the medical examiner; who is he? A. Dr. E. W. Derby.

Q. Does he draw a regular salary, or is he paid by per centage? A. He has $2,500 a year.

Q. Regular salary? A. Yes, sir.

Q. Does he receive any other compensation other than the $2,500? A. When he goes out of the office to make an examination, he receives three dollars.

Q. Then he has an office in the building? A. Yes; he is there all the time.

Q. And when he goes out to make an examination, I understand yon to say he receives three dollars for each examination? A. Yes, sir.

Q. How much would that additional compensation reach? A. $750 was the amount last year.

Q. Would that be a fair average? A. It would under the present depressed condition of things.

Q. Before that how much would it be? A. Double that amount.

By Mr. Weiant:

Q. Did he make all the examinations in tiie city where you issued policies? A. No, not all of them; but those that were made from the office directly.

By Mr. Moak:

Q. That would show the number to be 250 accepted? A. Yes, sir; outside.

Q. What is the usual price paid examiners outside the city? A. It depends somewhat upon the medical organization in the locality.

Q. You can give us a general idea? A. Medical societies make their own fees at some points; our regular rates are two dollars, and three where he goes to the house to make an examination; but, as I said before, in some points medical organizations compel us to pay five dollars.

Q. Take the whole that passed in the year 1876, how much was the entire aggregate for medical examinations throughout the United States tor all policies issued? A. Oh, well, I do not know; I should think $3,000; I do not know that I can tell you how much; of course, I mean by that outside ofthe $2,500.

Q. You mean outside of the $2,500 you paid the regular examiner? A. Yes, sir.

By Mr. Weiant:
Q. Do you mean to say you cannot give the figures? A. I cannot.

Q. Well, who can? A. Mr. Hibbard can give it; he is the actuary.

128-132

By Mr. Moak:
Q. Don't your annual report to the Insurance Department show it in full? A. I suppose it does.

Q. Or does it show it in the aggregate? A. Yes, sir, in the aggregate.

Q. In addition to that, you have no persons who receive a regular salary except the clerks? A. That is all.

Q. How many clerks did you have during 1876? A. Well, we had a manager of agencies during 1876, who received $5,000.

Q. Salary? A. Yes, sir.

Q. Who is he? A. John F. Collins.

Q. Where did he reside? A. In Brooklyn; he has his office there.

Q. What was his business; describe it generally? A. It was looking after the agents and appointing new ones; looking after the old ones and taking the general outside supervision of agencies.

Q. His duties were mostly away from the office, then? A. Yes, sir.

Q. In addition to the $5,000, you paid his expenses, I suppose? A. Yes.

Q. How much was allowed for expenses, all told, during 1876? A. That is a difficult question to answer.

Q. Well, give us your best judgment? A. I should think about $800.

Q. Not to exceed $1,000? A. No, between $800 and $900; I should think about that.

Q. Was there any sum allowed him for any purpose, or any pretended purpose, outside the $5,000 salary and the $800 for expenses? A. No. sir.

Q. Not any sum allowed to any one for pretended services or expenses? A. No, sir.

Q. Either directly or indirectly? A. No, sir.

Q. What other persons have you, besides the office clerks, connected with the company? A. Only the clerks.

Q. How many clerks have you? A. Nineteen.

Q. How much is the highest salary paid? A. The chief clerk receives $3,500.

Q. How much is the lowest salary you paid any person, properly designated a clerk, as you understand? A. He is paid twenty dollars a month.

Q. By the term clerk, do you include all persons such as sweep out the building or clean the building? A. No, sir.

Q. Only those properly designated clerks? A. The clerical officers.

Q. How much was the aggregate, paid to the nineteen clerks? A. Between nineteen and twenty thousand dollars.

Q. Do any of the clerks or their families, receive any other or further sum for any alleged services, or for any services whatever, from the assets ofthe company? A. With the exception of one or two or three of them, who might have obtained a new policy for some friend and were paid acommission on it, no one received any thing.

Q. In such a case, do you pay him any more than the regular agent's commission? A. We do not pay him the regular agent's commission ; we pay him ten or fifteen per cent, perhaps.

Q. Well, how much would that amount to for all the clerical officers together? A. I should say $400 or $500.

Q. Does that include the entire expense, so far as the actual expenses and payment of persons connected with the office is concerned? A. I think itdoes, with the exception of $250.

Q. What was that for? A. For special services that were rendered by the clerks in working at night during the latter part of the year when we wereclosing it up.

Q. Has the Insurance Department ever made an examination of the company? A. Yes.

Q. When I A. In 1870, I think, the fall of 1870 or the fall and winter of 1870 and 1871.

Q. That is the time they had a general circus down there, isn't it? A. Yes.'

Q. The time of the Miller examination? A. Yes, sir.

Q. Had the company ever previously been examined? A. Not that I know of.

Q. Has it.since? A. No, sir; I only know that from information.

Q. You were not connected with the company at that time? A. No, sir.

Q. Has any person, on behalf of the Insurance Department, made an examination since that time? A. No, never.

Q. Or asked any information, except such as was received from the annual report? A. Yes, sir.

Q. They have,you say? A. Yes, sir.

Q. When was that? A. Well, I think it was in the summer of 1873.

Q. What information was then asked for, other than the usual return? A. They asked for a detailed schedule of the premium notes, with referenceto the policies that we were connected with; the whole details and particulars with regard to it.

Q. Now, there has been a good deal of talk here about the reserve of the insurance company; will you explain to us what the insurance men mean by that; let us see if we understand it alike? A. I understand the reserve to be the amount of assets that are required by law to be kept by companiesas against their liabilities.

Q. Let us take a supposed case, and see if we can illustrate it: suppose I am thirty-five or forty-five years old and you should insure me, you would estimate the average of the life of a thousand persons of that age in good health? A. That is the actuarial computation.

Q. From that you would determine the average period of life of persons of that age? A. Yes, sir.

Q. About what would be the premium at forty-five years of age on $5,000? A. It would be about, say $190, in round figures, payable at death.

Q. One hundred and ninety dollars a year? A. Yes, sir.

Q. That would be the entire premium? A. Yes, sir the entire annual premium.

Q. Well, now, how much of the $190 would be loaded) to start with for expenses; what per cent? A. Well, it depends some on the loading of the premiums; that would vary.

Q. How much of that would be loaded, as you would term it, for expenses independent of any thing else? A. As I remarked before, the loading isdifferent in different companies.

Q. What do you mean by loading; just explain that? A. Well, that actual cost of the insurance, etc., and then the actuarial estimate ofcontingencies is what is called loading.

Q. Well, contingencies include expenses and every thing else? A. Yes, sir.

Q. 1 want to get at how much yon load the thing; to start with, you would estimate the actual expenses of the insurance? A. Yes, sir.

Q. And then von add so much for contingencies, including the expenses? A. Yes, sir.

Q. According to your system of insurance, about how much would be the load of the $190 you have spoken of? A. The average is from five to forty-five per cent.

Q. Of the gross premium? A. Not on the gross premium but of the gross premium.

Q. Then, to illustrate the matter, you would suppose to be the actual value of the insurance, independent of the contingencies and expenses to be the $190, less thirty-five or forty-five per cent of the same? A. Yes.

Q. Well, when you come to make up your reserve, how do you make that up? A. It is thirty-five per cent; excuse me, that is hardly the way to putit; there is tiiat allowance made, and then the theory is, that whatever is saved out of that is returned to the company.

Q. I know it is the theory, but I have never heard any thing about the practice? A. I want to be very particular about the words I use; I am under oath now.

Q. About what would be the average of human life at forty-five years of age, according to the American experience table? A. About eighteen totwenty years.

Q. Then, in order to form your reserve, in case of an item, I will suppose it of a person forty-five years old, where the annual premium was about $190; how much would you make of that; we would suppose you want to form a reserve against the $5,000 you had insured; about how much would you set aside from his premium, or, in other words, you would calculate, during the eighteen years, to set aside enough premium which, at the interest of four and one-half per cent, would make the $5,000, would you not? A. We make the legal reservation here in New York.

Q. Then you would set aside each year so much of the premium which, at an annual interest of four and a-half percent, wonld make the $5,000? A.Which, at improved four and a-half, would make it.

Q. Well, that is what I mean, compound interest? A.^Yes.

Q. Well, abont what would that be per annum? A. Well, I should say we ought to pay pretty near $100.

Q. It wouldn't pay $100? A. It ought to be somewhere about that, I should think; to start in, you know; it keeps aggregating, you know.

Q. Well, but you have got forty per cent of the $190, and that would be seventy-six, which would leave 114; now, if you did set aside $100 a yearto meet that, what would become of the balance of fourteen or fifteen dollars? A. I am only approximating, of course; I do not know.

Q. There would be a balance beyond that, that would be used for some other purpose? A. Yes, sir; ordinarily.

Q. Well, what would you do with that? A. That would go into the assets of the company to be used for the purpose of the company, whatever itmight be.

Q. I am only getting at the theory of where the money generally goes to? A. Yes, sir.

Q. In other words, an amount then in the case we have supposed, yon would set aside per annum, would be about fifty per cent on the man'spremium? A. Yes; about that.

Q. It would be a very small fraction over that, would it not? A. Well, say fifty or sixty per cent.

Q. Is your company stock or mutual? A. Mixed.

Q. Do you mean to say that you have stock and the mutual plan also? A. Yes.

Q. Are both combined or separate? A. It is what I call a stock and mutual company; it is a company formed under the laws of the State of New York, which requires a deposit of $100,000; it is therefore called a mixed company.

Q. It is a stock company doing business on the mutual plan? A. That is it.

Q. What dividend has been paid to the stockholders for the last five years? A. Well, from seven to ten per cent.

Q. Not to exceed that? A. Not since I have been there.

Q. Your capital has been what? A. One hundred thousand doll.ars.

Q. Not to exceed that? A. No, sir.

Q. How often has the dividend been paid, about? A. Semiannual.

Q. We have heard a good deal about the Massachusetts plan; does your company do business there? A. Yes, sir.

Q. Do you comply with the laws of that State? A. Yes.

Q. When a man ceases to pay his premium you are obliged to carry him tor a period beyond that, are you not? A. According to the late decision ofthe Supreme Court of Massachusetts, we are.

Q. How do you understand the law to be in Massachusetts; take the man at forty-five, that I have been supposing, who has paid $190 for five years, and ceases to pay, and suppose his reserve has accumulated to near $500— A. We'll; suppose he has got $500.

Q. Yes; how would that reserve be applied to carrying on the insurance? A. It would be employed to carry it as long as it would.

Q. Then the result is, a man would run his policy there longer by some months than here? A. Well, eighty per cent of his reserve would be appliedto carrying it.

Q. Then you would carry him a little over two years additional on that? A. Yes, sir.

Q. And the result is, that a Massachusetts man who deals with your company, gets his policy carried for two years longer than a New York man?A. Yes, sir; in that sense it does.

Q. Thus, every man that does business with your company in Massachusetts has that advantageover every man who does business with you inNew York? A. There is that preferment about it; under the recent decision of the Massachusetts Supreme Court, policyholders of all companies are,to that extent, preferred policyholders.

Q. So that the poor devil who insures here in New York gets cut off at once if he ceases to pay his premium, while a Massachusetts man runs two years? A. That depends entirely upon the provisions in the policy.

Q. Have you had any provisions in the policies here whereby he gets any benefit from it? A. Well, there may be some other provision.

Q. What other provision have you for the protection of the New York man other than you have in the Massachusetts policies? A. Well, we haveto some extent in what we call the limited term policies.

Q. What are they? A. Well, take limited pay policies, a man who pays ten or fifteen or twenty years.

Q. You mean he pays his annual premium in that time? A. Yes, sir; it is commuted to that amount.

Q. He pays an increased premium? A. Yes, sir; but he would have the advantage of being able to get a paid-up policy for an equitable amount.

Q. Suppose a man at forty-five years pays'a premium on an ordinary life-policy, his rate would be, you said, $190 a year; if he paid it in ten premiums, it would be how much? A. At forty-five it would be $335.

Q. Per annum? A. Yes, sir.

Q. Suppose he paid that amount, about how much reserve would you set aside for that man's policy per annum? A. We should have to set asidean amount that would, in ten years, carry the sum for which he paid.

Q. How much would it be in dollars and cents? A. Well, it would be in that time about — well, it is a pretty difficult question to answer.

By Mr. Moody:

Q. The premium paid for ten years would give him $5,000 at death? A. Yes, sir.

Q. About how much would have to be set aside of the amount to reach that sum? A. I guess we should have to set aside an amount in ten yearsthat would reach fully half the face of the policy.

133-137

Q. Well, how much would you make it 1 A. Well, say $200 or $210, or something like that, per annum.

By Mr. Moak:
Q. Suppose this man, on the limited plan you have spoken of, should pay his $335 for live years, and stop, would he get any thing? A. Yes, sir.

Q. Would he be'entitled to any thing under the terms of the policy? A. Yes, sir.

Q. What? A. He would be entitled to a policy calling for substantially a-half of the amount paid.

Q. Then, for substantially $2,500, payable at his death? A. Yes, sir.

Q. How many years does he have to pay to be'entitled to a paid-up policy? A. Two years.

Q. Then he gets a policy of a fraction of the amount he has paid? A. Yes, sir.

By Mr. Weiant:
Q. Do your policies so provide? A. The limited policies provide for that protection in them; although it does not provide for a tenth of the amounthe has paid for, the provision is such that he substantially gets the amount that he has paid for after two years.

Q. A proportionate amount? A. A proportionate amount of the amount he has paid for; it is substantially that.

Q. Do any of your policies, other than the limited policies, contain such a clause? A. All the policies we issue have, with one exception; the ordinary life policies do not contain the same clause, only it is applied in exactly the same way.

Q. What is the clause; can you explain it to us? A. I will read it: "And the said company further agree, that if, after premiums on this policy for not less than three complete years shall have been duly received by them, said policies shall cease in consequence of the non-payment of premium thereon, they will, on the surrender of this policy, duly receipted, and the payment in cash of any loans, credits or indebtedness then ontstanding against this policy, or due from the assured to the company, issue another policy on the life of the person whose life is hereby insured, payable asabove provided, on which no further premium shall be required, for an amount which shall be determined on the principles of life insurance equitably applied, that is to say, the amount insured by the new policy shall be such a sum as the net reserve (less per cent of the insurance value lost to the company by the change); will purchase in reversionary insurance, provided application for such new policy shall be made within sixty days after the lapse of this policy for the cause aforesaid."

Q. What is the blank per centage? A. Eight per cent.

Q. Do all the policies contain that clause? A. The ordinary life, the limited and the endowment policies.

Q. What policies do you issue that do not contain it? A. We issue a policy, as we call it, the savings bank policy; that has a different clause.

Q. Supposing I am insuring in your company, and have paid more than three premiums, and I fail to pay the fourth before I am entitled to the benefit of the provision just read, I must pay yon that fourth premium and all other indebtedness to the company? A. Yes; but that is all you will pay.

Q. So, unless I pay the premium in default befere, I cannot avail myself of the advantage of that clause; they have not less than three completeyears in which they must have paid their premiums, and then you go on to say that if such policies shall cease by non-payment of the premium the company will, on surrender of the policy, duly receipted, and the payment in cash of the loans and indebtedness then outstanding, issue a paid-uppolicy? A. I do not understand the way you read that.

Q. Well, that will include the premium outstanding, will it not? A. No, sir.

Q. Well, what do you mean by it; perhaps if you read it you can put a different construction on it? A. Supposing you had come in there and said you wanted credit of $40, say for sixty days, and then you had run over that time, we should require you to pay that $40 of indebtedness.

Q. I understand you to say that if I came in and applied to borrow? A. Yes; you have got a quarterly payment due and come in and say you cannot meet it; you say "I have about thirty dollars and I shall have to owe you seventy dollars; if you will give me four months, or two months, I will pay it;" we do so, and that becomes an indebtedness against the policies.

By Mr. Lang:
Q. Well, let us see how that thing is effected; suppose I want just that thing? A. We issue the ordinary quarterly receipt when a man wants to pay quarterly, and sometimes that man comes in and wants to extend the payment, and we take a note from him on our form applied as a liability against the policy.

Q. I).o not the notes always provide that, unless they are promptly met at their maturity, the policy shall be absolutely void? A. Yes, and the policy provides for that also.

By Mr. Weiant:
Q. Do you mean to say that where a policyholder is in default of premiums that he would not fall within this clause that I now read: "the paymentin cash of any loans, credits or indebtedness then outstanding against this policy, or due from the assured to the company ;" do you mean to saythat would not include the indebtedness to the company of the premium? A. I mean to say that if application is made within sixty days after the lapseof the policy that the premium will not have to be paid.

Q. Well, suppose it is not made until after sixty days? A. But the contract itself expressly stipulates that it must be made within sixty days.

Q. You mean an application for a paid-up policy? A. Yes, sir; provided application shall be made within sixty days after the policy is forfeited.

Q. Do you mean to say he is not bound to pay the premium on the paid-up? A. No, he is not; becauses he comes within the sixty days.

By Mr. Moak:
Q. That is-the way yon construe it, is it? A. Yes, sir.

Q. Has not your company claimed that it must be paid? A. No, sir.

Q. Have you not stated distinctly that that is the determination of the company that it must be paid? A. No, sir.

Q. Have you not set that up as a defense to a suit? A. No, not that I know of.

Q. Well, you would know, would you not? A. I should; I do not know of any such case; I never set it up myself to my knowledge, and I never knew that it had been set up; we never have looked at the clause in any other way than the way I have slated.

Q. Suppose a man forty-five years of age had paid five premiums; his reserve would be about how much? A. In round figures it would be from $2,200 to $2,500; I am a little out of my depth in this thing as it is no portion of my business.

Q. I am asking you to give general ideas? A. Well, I was talking about the ten year policy a little while ago.

Q. I am talking about an ordinary life policy; suppose a man of forty-five years has paid his $190 a year for five years and then stops, about how much would be his reserve? A. It would be about $500; $400 or $500.

Q. Well, it would be something along from $400 to $600, wouldn't it? A. Yes.

Q. Suppose that policy is allowed to lapse, or is forfeited and never renewed, what becomes of that reserve? A. Well, if the application is made fora paid-up policy —

Q. Assuming no application is made and it is forfeited? A. Well, it remains in the assets of the company.

Q. I see you make annual returns to the department; in what particular item of the assets of the company does this forfeited reserve appear in thatreturn; let me suppose your income there is $100,000 of reserve that has lapsed or been forfeited and never called for by the owner, nor any call made for a paid-up policy, in what item of the assets would that reserve appear, in the returns to the department? A. It would appear in the reduced amount of liability; it would be merged into the liability column.

Q. Yes, but you have got $500 of the man's money? A. Yes, and it would appear in the assets of the company.

Q. Suppose you take the returns of 1875, and there was $100,000 worth of forfeited policies that year, where would that appear? A. It would appearin the surplus, the gross surplus on the policyholder's account.

Q. How would that be gross surplus on the policyholder's account if the policyholder had gone out? A. Well, it would be for the benefit of thosethat remained in.

Q. You declare dividends, don't yon, in the company? A. Yes, sir.

Q. To policyholders? A. Yes, sir.

Q. How frequently? A. Annually.

Q. About what, for the last two years, have been the dividends, say on a $5,000 policy; such a one as I have supposed at forty-five years of age?A. Well, the dividends have been from ten to twenty per cent.

Q. Ten to twenty per cent on the reserve, or on the premium? A. On the gross premium.

Q. That would make from nineteen to thirty-eight dollars a year? A. Yes.

Q. Well, now, suppose a man don't call for his dividend at the end of the year, what becomes of that? A. Well, that is an instance that don't occur very often.

Q. Yes, it does, because our savings banks build elegant institutions from money that is never called for; I suppose the insurance companies are not any better than our savings banks? A. Well, whatever is there is left in there the same way.

Q. To the credit of that individual? A. No, for if his policy goes out, it goes out with it.

Q. Well, suppose his policy remains? A. Then he can come and get it at any time.

Q. Does it remain credited to him? A. It is not credited to him; he has so much theoretically set aside the dividends, but it is charged

UP

Q. It remains in a gross sum? A. Yes, sir; it remains in a gross sum.

Q. Well, where would that be in the returns, so that you could not touch it? A. If it remains, it would appear in the gross surplus to policyholders.

By Mr. Floyd-Jones:
Q. When he comes to pay his premium, he calls for his dividend, don't he? A. That is the case in 999 cases out of 1,000; every one that comes up says "I want my dividend," or takes a certificate of additional insurance, and it is added to the policy.

By Mr. Weiant:
Q. Will you give us your construction of this clause which I shall read from the policy: "We will issue another policy on the life of the person whose life is hereby insured, payable as above provided, on which no further premium shall be required, an amount which shall be determined on the principles of life insurance equitably applied?" A. Yes, sir ; but it goes on further with " that is to say."

Q. Well, read that? A. "That is to say, the amount insured by the policy shall be such a sum as the net reserve, say less eight per cent of the insurance value loss to the company by the change, will purchase a reversionary insurance, that is an insurance payable at death."

Q. Is there any exact method by which you arrive at the value of that policy in all cases? A. I can give it to you.

Q. Is there au exact method or rule? A. There is an actuarial rule.

Q. Is there any thing left to the discretion of the officers of the company? A. No; I think not; I would rather you would ask our actuary about that;that is my belief about it, that there is nothing left to discretion.

By Mr. Moak:
Q. Suppose he does not call for the dividend, what becomes of his dividend ?. A. It is left in the company.

Q. It is not left so that all the balance of the shareholder's share in it; is it not set apart so that it belongs to him? A. No; I know of no rule of thatsort in the company at all.

Q. Can you designate in what item that would appear; does your company, in making its annual report to the Superintendent of the Insurance Department, separately state the aggregate of the dividends declared any where? A. It states the aggregate of the dividends named.

Q. Does it state the aggregate of the dividends declared? A. No, sir; it does not.

Q. Is there any way from any return or from any other way that the Insurance Department can determine from the return made to them how muchof the dividends are unclaimed? A. I think not.

Q. That can only be determined by a careful examination of your books? A. Yes, sir.

Q. Let us take another case: suppose the man of forty-five has paid his premium for the five years, and he does not take a paid-up policy; there is,say four or five hundred dollars of the reserve that stands to the credit of his policy, or did before it was forfeited? A. Yes, sir.

Q. Well, what becomes of that reserve? A. If he forfeits his policy?

Q. Yes; forfeits it absolutely? A. Why, it stands right in the assets of the company.

Q. Is there any item in the annual return to the Insurance Department in which it would appear? A. Not that I am aware of.

Q. Or in other words, is there any thing in the annual return you make from which the department or any one else can tell how much reserve has been forfeited? A. I know of nothing.

Q. Can you tell, say for instance — I see here a return for the year 1875 — cau you tell how much there was of the reserve forfeited in the year 1875 by that return? A. I cannot.

Q. Can you approximate it in any way? A. I cannot; because my attention has not been called to it.

Q. Your policy seems to contain a clause which no other policy that I have discovered does give to the insurer, that is the right to a paid-uppolicy? A. Yes, sir.

138-142

Q. About what proportion of the persons who forfeit their policies take up their policies? A. Well, guessing at it, I should say from seventy-five toeighty per cent.

Q. And then there is from twenty-five to twenty per cent absolutely forfeited? A. Yes, sir.

Q. Is there any way or system by which, when a man comes into the office and desires to continue his policy and cannot, by which you pay him acertain sum out of the reserve for the surrender of it? A. That is so where the contract expresses it; but our contract provides for a paid-up policy,but no surrender of values.

Q. I want to get at the actual practice, because .a great many claim they have something to learn in those contracts; supposing an insurer at torty-five, for $5,000, had paid for five years and cannot continue; suppose, if you please, that I am the party, and come to you and say, "I cannot continue this policy; how much will yon give me for its surrender; will you purchase it?" A. I do not know whether I would or not; I would not bind myself to; we have no rule on the subject.

Q. It is simply a matter of doing as you please, then, is that it? A. The contract expresses that we shall give a paid-up policy, and I should say toyou, if you come to me and said any thing about it, I should say our contract provides for a paid-up policy, and I will give you that.

Q. You would not give me any cash value? A. I wouldn't say I would not do so.

Q. But you wouldn't render yourself under any obligation to do it? A. No, sir.

Q. Has your company done it? A. Yes, sir.

Q. To what extent? A. To a pretty large extent heretofore.

Q. Can you give any thing like the amount for last year? A. We report $1,500,000 paid to policyholders, and that includes everything.

Q. I mean for this particular item? A. No, sir; I cannot; I can give the aggregate; those figures will come better from the actuary.

By Mr. Floyd Jones:
Q. You spoke of a policy having a clause in it; have you, in other policies? A. We have the same clause in several of our other policies.

By Mr. Moak:
Q. They all contained the same clause, I understand you to say? A. Yes, sir.

Q. Other companies' policies do not contain that clause that you have in yours? A. Well, I have an impression that the Mutual Lite policies contain it.

By Mr. Lang: Q. If I understand you right, if a man has paid for five years in your company, he is so married to it that there is no way of getting adivorce and getting any thing out of it? A. Except by a paid-up policy, he cannot.

Q. Well, even then, he would not be divorced; there is still a contract between you and him? A. Yes.

By the Chairman:
Q. Is the payment of money for lawyers' fees dependent upon the financial condition of the company? A. Yes, sir; certainly.

By Mr. Moak:
Q. Let us illustrate this matter further: a man insures in the com

Eany at the age of forty-five and pays you $190 for five years; then e comes and asks you to pay him what is called its present value; that is what you term it, is it? A. Yes, sir.

Q. About what would be the present value of his insurance policy under those circumstances? A. That is a remarkably broad question, Mr. Moak.

Q. Well, I don't know? A. Well, it is; there are so many things that come in as part and collateral to the question.

Q. Suppose it to be an ordinary case of a man at the age of fortyfive who had insured and paid his premium, amounting to $190, for five years, about what would be the present value of his policy? A. It is an actuarial question which I will not venture to answer.

Q. Well, can't you answer approximately? A. Yes, sir.

Q. Or, in other words, you said the value of that policy would be from $400 to $600? A. Yes, sir.

Q. Now, about what would be the present value of the reserve? A. Well, I think the rule of the various companies varies.

Q. I mean in your company? A. Well, I don't know; I should say that the actuarial rule would be seventy or seventy-five per cent, or somewhere along there.

Q. Of the reserve estimated to the aggregate of the policy? A. Something of that sort; I do not know exactly what it is.

By the Chairman:
Q. Independent of the interest? A. Oh, no; the interest would be the reserve.

By Mr. Moak:
Q. In the case I have, suppose, where the reserve is from four to six hundred, and yon pay the party who holds the premium its present value ofseventy-fave per cent, what would become of the balance of that reserve? A. Well, if you will allow me, I will make a little explanation in regard to that matter; when a live insurance policy, that is to say, when a man who has a running policy goes out of the company, there is a certain loss ofvitality, providing he is a live risk.

Q. Well, I can see, with very good reason, why you take out twenty or twenty-five per cent, but I want to know what becomps of it? A. It is left inthe general assets of the company, the same as other claims.

Q. That wonld appear in the return of the assets as so much cash in hand? A. Yes, sir.

Q. To the benefit of the policyholder or the stockholder? A. The general policyholders.

Q. Well, now, let me see; your company, you say, has a capital stock of $100,000 2 A. Yes, sir.

Q. Who vote for the directors; only the stockholders? A. No, sir; the charter provides that the stockholders shall vote, and every person who holds $500 of additional insurance, or at least certificates of the dividends payable at the termination of the policy.

Q. Well, they shall vote also? A. Yes, sir.

Q. In other words, your directors are elected by the stockholders, and other persons who hold $500 of additional insurance? A. I said the charter permitted them to vote.

Q. How many persons are there, or about how many of your entire policyholders who had that qualification for voting, say on the 1st of January, 1877? A. There were several hundred; I do not know how many.

Q. Well, several hundred may mean two or fifteen? A. Well, no; I think there were 200, probably; I should say 200, probably; there may be more than that.

Q. What is the amount of your shares? A. Twenty-five dollars.

Q. Then each twenty-five dollars has a vote? A. Yes.

Q. Well, supposing a man has $2,500 additional insurance, does he have one vote or twenty-five votes? A. He has one vote; it is a vote for every $1,000 additional, not $500; I was mistaken.

Q. Well, then there must be a good many more than 200 have the right to vote? A. Yes, there are.

Q. Well, each stockholder that holds twenty-five dollars of stock has a right to vote? A. Yes.

Q. And each person who has $1,000 additional insurance also has a vote? A. Yes, sir; I should think there must be from twelve to fifteen hundred;that is the additional policy.

Q. When was the last election? A. Last April.

Q. How many directors did you have? A. We elected a class for that year; I think there were four or five.

Q. How many do you have in all? A. Thirteen.

Q. How many are elected each year? A. Four are elected each year for two years and five are elected one year.

Q. Then every year you elect four for two years and on one year you elect five? A. Yes, sir.

Q. So that at least a portion of them go out each year? A. Yes, sir.

Q. How many votes were cast for the directors in 1876; to your recollection say about how many? A. Well, I should think there were 3,000.

Q. There would be 4,000 stockholders entitled to vote? A. Yes, sir.

Q. And say 1,200 policyholders? A. Yes, sir.

Q. Which would make 5,200? A. Yes, sir.

Q. And you say there were 3,000 of the aggregate votes cast? A. Yes, sir.

Q. What proportion was cast by the stockholders and what proportion by additional insurance? A. I do not know; I do not know that any policyholders voted.

Q. Do you know whether any policyholders ever did vote? A. I don't think they do as a rule.

Q. Are they allowed to vote by proxy in your company? A. Yes, sir.

Q. The policyholders? A. Yes, sir.

Q. The stockholders also? A. Yes, sir.

By Mr. Weiant:

Q. Did any of the policyholders vote by proxy at the last election? A. No, sir, I think not.

By Mr. Moak:
Q. The officers, so far as*your knowledge is concerned, have been, since you have been connected with the company, elected by the stockholders? A. I think so, substantially.

Q. Who owns the largest amount of stock in the company? A. I do.

Q. How much? A. I think about $54,000 worth; I forget just what it is.

Q. Any less than that? A. No, sir.

Q. Did you cast your votes upon the amount of stock held by you last year? A. Yes, sir.

Q. Then your own votes would elect the directors? A. Yes, sir.

Q. Well, who holds the next highest number? A. Mr. Johnson.

Q. Well, how much does he hold? A. I think about $12,000.

Q. Well, who has the next highest number? A. Well, I think it is John Henderson, the tobacconist.

Q. Well, how much does he hold? A. No, I think I am wixrng; I think it is Isaac Kipp, of Peekskill.

Q. How much does he hold? A. I should say $10,000.

Q. How much does Mr. Henderson hold? A. Well, I think it is about $6,000 or $7,000.

Q. Well, have you several others that hold from four to five thousand? A. No, the rest of the stock is pretty well scattered.

Q. Among how many different persons? A. Oh, I could not tell you ; there are quite a number of persons hold small amounts, four shares, six shares, and some more; as low as two shares; I never saw them.

Q. Have you ever applied to the policyholders for proxies? A. Not since I have been president.

Q. Has any one else applied for proxies to those parties? A. Not since I have been president.

By Mr. Weiant:
Q. Have you any policy of insurance in the company on your life? A. Yes, sir.

Q. How much? A. Twenty-two thousand five hundred dollars. By Mr. Moak:

Q. I want to get at those proxies; I do not think that matter applies to your company particularly? A. No, sir; it does not; I have never seen a proxy since I have been there.

Q. I want to ask whether, to your knowledge, the proxies have ever been obtained by any persons from the policyholders that would be entitled tovote on their extra insurance! A. Never, to my knowledge, since I have been president.

Q. You say you have never seen any? A. No, sir; I never heard there was any.

Q. You have how much insurance on your life? A. Twenty-two thousand five hundred dollars.

Q. In your own company? A. Yes, sir.

Q. When was the application made out; how long ago? A.I had one of the policies since 1863 or 1862; I forget which.

Q. How much was that? A. That is $2,000.

Q. Has that been'increased any by an additional insurance, or have you taken your dividends instead of additional msurance? A. I think I took my dividends; I do not know how it was in regard to that policy.

Q. In 1863 were you connected with the company? A. Yes, sir.

Q. In what capacity? A. I was an agent for them.

Q. Well, where did you get the balance? A. Well, I have had that strewn along for the last ten or twelve years.

Q. Well, give us as near as you can about when, and how much each time? A. Well, I guess I got a $5,000 policy; that must be ten or twelve years old, and then a $10,000 policy that I took out three or four years ago.

Q. At that time you were connected with the company in what capacity? A. I think when I took that I was vice-president.

Q. Well? A. Well, I have not taken out any policy within the last two or three years.

Q. Still you lack about $5,000 of the twenty-two; when was that taken out? A. I should say about five years ago.; some time within the last five years; I have not taken out any within the last two or three years.

Q. Did you make an application in the usual way for a policy? A. Yes, sir.

Q. And paid the full amount of premium exacted from all persons in such cases? A. Yes, sir.

Q. You paid the usual amount of premium, you say? A. Yes, sir.

Q. In what way? A. I think it was by check; 1 paid it in cash, any way.

Q. Either by cash or in bills? A. Yes, sir.

Q. Every dollar of it? A. Yes, sir.

Q. Did you pay for the one you took out when agent? A. Yes, sir; I think I took that out three or six months before I became connected with thecompany: I was not an agent, but I was a solicitor for the company at that time; I used the technical word agent, but I was only solicitor for the company, and I think I took that policy

143-147

out three or six months before I became a solicitor; I paid for it, same as any one else wonld.

Q. About what insurance has your secretary? A. He has about $10,000.

Q. About when was that taken? A. About two years ago.

Q. When he became connected with the company? A. No; he has been connected for about seventeen years with the company.

Q. What is his age? A. When he took out his policy he was about fifty-two, or something like that; he is about fifty-four now.

Q. About what would be the premium at that age? A. I think he paid something like $700.

Q. A year? A. Yes, sir.

Q. Did he make application in the usual way? A. He did.

Q. And paid the usual amount of premium in cash? A. Yes, sir; he was passed upon by the doctor, the same as any other application.

Q. By what doctor was he examined? A. By Dr. Derby.

Q. You do not know whether he was submitted to the same rigid examination that other people are, do you? A. I shall answer that in this way: I know I was.

Q. In each instance? A. Yes, sir.

Q. The question whether the doctor would find a thing or not depends upon his diligence? A. Yes, sir.

Q. Is that all the insurance the secretary has? A. Yes, sir, in our company.

Q. Has your counsel any in your company? A. Not any; he applied for some and we rejected him.

Q. How many of your directors are insured in the company besides yourself; your secretary is not a director, I take it? A. Yes, he is.

Q. How many of the other directors are insured, then? A. I should think all, except one or two.

Q. About what is the average of the insurance? A. Well, there is one of them has, I think, about $25,000; $20,000 or $25,000; I guess the smallestamount is $5,000.

Q. Did each of them apply for the insurance in the usual way? A. Yes, sir.

Q. And were they examined by the physician in the usual way? A. Yes, sir.

Q. Did they pay the usual premium promptly? A. Yes, exactly the same as anybody else.

Q. Can you give the aggregate of policies that the directors hold? A. No, I cannot.

Q. You cannot? A. No, sir, my attention has not been called to it; I could tell very easily if I were in New York.

Q. Now, to go to the question of loans; in 1876 what were the aggregate assets of your company, say at the 1st of January, 1877? A." Well, somewhere about $7,000,000.

Q. Of what did that consist? A. Well, it consists of mortgages and real estate.

Q. How much in mortgages? A. Well, I have not got the figures -here.

Q. Yon have not got them here at all? A. They are in the statements that the company made to the department.

Q. Have you made an annual report to the Superintendent of the Insurance Department? A. Yes, sir, that contains the exact figures; I can give youan approximate idea, if that will do.

Q. I will examine you a little on the returns of 1875; but before I go on with that I will ask you the question as to the method of doing business, so far as agents are concerned; how many general agents had you at the commencement of 1877? A. We abandoned the use of the term " general agents" several years ago and all our agents are now called simply agents.

Q. Well, how many agents have you; don't you have any persons who are agents for the State of New York? A. No, sir.

Q. Well, how many have you for the State of New York? A. Well, we had, I suppose about six at that time; five or six agents located at different points who had a certain amount of territory each; they used to be called general agencies, but we dropped the term "general" because there wassome legal application in it.

Q. Where are they? A. We had one at Rochester, a man named Brewster, and we have Mr. Bridgeman at Buffalo, and we have two in New York,but I really cannot give you their names.

Q. One in Brooklyn? A. Yes; we had one in Brooklyn at that time; we have not any there now ; we have one at— I cannot think where they are now; there are two or three more besides those I have named.

Q. Each of them have territory farmed out to them which they appoint sub-agents for, I presume? A. Yes, sir.

Q. And those agents are responsible to you for their sub-agents, and the sub-agents are responsible to them? A. That is the theory.

Q. What was your usual allowance to agents on the first premium? A. Well, our commissions were, from any of the ordinary application, from twenty five to thirty per cent on the first premium.

Q. How much on subsequent premiums? A. Well, we made a contract with them; we gave them four renewals at seven and a-half per cent.

Q. Do you know of any case exceeding that? A. I do not know of any instance in which we have exceeded that.

Q. How much was the largest sum received by any agent of your compauy in the year 1876? A. It is so small I do not like to tell you; it is a very small sum.

Q. Well, the largest sum received by your agent for 1875, say? A. I do not think any of them received on the application of premiums, during 1876, over $1,000; that was the excess to any of the persons.

Q. Well, say for 1875? A. Well, I should think $2,000 would be a fair average in 1875.

Q. How much was the total amount paid by your company to agents in 1875? A. That includes all commissions on renewals, and every thing of that sort; you will see it in the return; it is for commissions to agents, $67,109.83.

By Mr. Weiant:
Q. Do you pay any commission on renewals after four renewals? A. No, sir.

Q. The per centage on renewals ends after the fourth renewal? A. Yes, sir.

By Mr. Moak:
Q. How much were the entire assets of your company on the first day of January, 1877? A. Tl.ey were about $7,000,000.

Q. How were they divided, mortgages how much? A. Mortgages, well, say $2,200,000.

Q. Well, what else? A. I am very sorry I did not know you wanted this or I would have brought it along; well, premium notes, I may be $200,000 outof the way, but I will guess at it; say $2,600,000 I should think in premium notes; I may be considerably out of the way, but I will give you the best I can; there is real estate.in round figures, say between $900,000 and $1,000,000; cash, $106,000 I should think it was; government bond about, well, I do not know, about $400,000 or $500,000; I think $500,000 in government bonds.

Q. Well, what else? A. Well, say loans on call $65,000; that is on call stock; the aggregate of the other stocks and bonds I cannot remember just what it is.

Q. There has been a report made and filed? A. Yes, sir.

Q. And you are willing to testily that that report is true? A. Yes, sir.

Q. And contains a full statement of your bonds? A. Yes, sir.

Q. Does your company own any real estate? A. Yes, sir; we have from $900,000 to $1,000,000 worth.

Q. Have you a building in New York that you occupy for the purpose of business? A.. Yes, sir.

Q. Where is it located? A. On the corner of Park place and Broadway.

Q. About what is the value of that? A. Two hundred and twentyfive thousand dollars.

Q. How much did it cost you? A. Well, it cost, I think, originally about $215,000.

Q. And when did it cost that? A. It was built by the Security Fire Insurance Company, and in the winter of 1871 or'72, after the Chicago fire areceiver sold it at auction and we bought it.

Q. For how much? A. I think we paid at that time $162,500; it is my recollection, although I was not there.

Q. What time did you say you bought? A. I think it was in the winter of 1871 or beginning of 1872.

Q. And you paid $162,000 for it? A. Yes, sir.

Q. Have you put any improvements in it since? A. Yes; we have done some.

Q. To what extent — what amount? A. I don't know; I can't tell you.

Q. You can give us some idea, I suppose? A. I don't know; I never examined them.

Q. You have no idea whether it was $10,000 or $500,000? A. Oh, I knew approximately; I should think there had been $20,000 spent' on it.

Q. Do yon own any other real estate in the city of New York? A. Yes, sir; we own some property on Fifty-second street that we bought under a mortgage foreclosure.

Q. What is that worth? A. There are nine full lots on Fiftysecond street and nine gores running through to Fifty-third street; not fronting on Firty-tnird street, but running through there to a lane called Spiker's lane, and they would front on that.

Q. Is there a building on each of those lots? A. No, sir; there are three buildings.

Q. On nine lots? A. Yes.

Q. How much was the mortgage on that, or about how much? A. I can't tell yon; I can't do so because the mortgage was given long before I came into the company.

Q. It has been foreclosed since? A. No, sir; long before I came into the company; it was ten or twelve years ago; we are holding it by permission ofthe department.

Q. Have you a right to hold it? A. We have had permission of the department.

Q. Well, how much do you value that at? A. 1 think the value of that is forty or forty-five thousand dollars.

Q. What was the character of the buildings on it? A. They are frame dwelling-houses.

Q. What is the size of the lots? A. The nine lots on Fifty-second street are twenty-five by 100, and the other lots are twenty-five feet front and run fifty or sixty feet deep.

Q. Have you any other real estate in New York? A. We have, I think, either one or two houses that were bought in last year, at Delmonico's place,they call it; it is not far from Morrisania.

Q. Is it within the city limits? A. Yes, sir; it is at One Hundred and Sixty-third street.

Q. How many lots do you own there? A. I think two houses there.

Q. Brick or wood? A. Brick houses.

Q. How mnch were the mortgages upon those two houses? A. Well,I think, they must have been about four or five thousand dollars.

Q. Upon the two? A. Yes; on the two houses.

Q. And how much was the property bought in for? A. It was bought up for the amount of the mortgage and expenses.

Q. Are you acquainted with the value of real estate in that locality? A. Yes, sir.

Q. About what is its fair value in the market now? A. I think it is worth now what it stands us in.

Q. That is your opinion? A. Yes, sir.

Q. Well, how much is that? A. I forget how much it is; there are two mortgages of about $3,500 each, and there were other mortgages of about $5,000, and which ones these particular houses represent I don't know; my impression is, the house and lot stand us in at $5,000 each.

Q. And in your opinion they are worth that? A. Yes, sir.

Q. They are brick? A. Three story brick houses.

Q. Do you own any other real estate in the city of New York, probably? A. I don't think of any other.

Q. In the city of Brooklyn? A. Yes, sir; we own some; quite a number of brown stone houses; we are healthy in brown stone houses.

Q. Well, how much is the aggregate real estate you own? A. Well, it is between $900,000 and $1,000,000.

Q. In Brooklyn J A. No; it must be $100,000 I should think, at a rough estimate, in Brooklyn.

Q. That was purchased under foreclosure of mortgages? A. All of it.

Q. Within what length of time have they all been foreclosed, probably? A. Well, I think the foreclosure on some of them were commenced —

Q. Give the first time? A. I should say that they all came to the company since I became president.

Q. Within the past two years? A. Yes, sir.

Q. About what was the face of the amount of the mortgages foreclosed for the purchase of this real estate? A. Well, I don't know; I can't remember.

Q. You say you have got about $400,000 worth of i;eal estate in Brooklyn; were the mortgages more or less? A. That represents the actual expense.

Q. Well, what was the face of the mortgages? A. Well, I don't know; I should think it was about $375,000; I dou't know; I am going it perfectly wild on these matters, Mr. Moak.

Q. Well, each insurance company have done the same thing; you give us the best you can, and that is all we have got from the others? A. I am trying to answer your questions the best I know how.

Q. Are you familiar with the value of real estate in Brooklyn? A. I have been all over it.

Q. Well, what would you say was its fair market value to-day? A. Well, I believe the entire property is worth what it cost us; yon understand I am not pretending to say it would sell for cash at that price; but I think that a fair valuation of it would bring it to the amount to-day that it cost us.

Q. How much, in your opinion, would it sell for today? A. That is not a question I can answer; it is impossible to tell; Mr. Augustus Stoma boughta house in State street yesterday for $12,000, and I don't think that any fair minded man would value it at over that to-day, at its present market value, yet I suppose it cost at least $16,000 for the house, independent of the lot; these cases might come in just such a way.

Q. Well, perhaps, that is hardly a fair question to ask; about what per cent does your real estate in New York, exclusive of the building you own for offices, bring in, exclusive of taxes? A. I should not think it paid over three and one-half or two and one-half per cent.

Q. Well, take the real estate in Brooklyn? A. I put it all in together.

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Q. Yon mean the real estate in Brooklyn in the same manner? A. Yes, sir.

Q. The balance of real estate you have; where is it, except in New York and Brooklyn; in the State? A. No, sir; I don't know that we have any in theState ; I don't remember that we have any.

Q. Well, where is the balance of it situated, then? A. Well, I I think, probably, I have not stated the amount of real estate in Brooklyn large enough.

Q. Have you real estate anywhere else? A. I think I have stated it a little too low in Brooklyn; we have some real estate in New Jersey, and we have some in Jersey City and some real estate in Newark.

Q. What is the aggregate of real estate in New Jersey? A. Well, I should say from $125,000 to $150,000; somewhere about there.

Q. That was procured on foreclosure of mortgage? A. Yes, sir.

Q. Mortgages were made in the usual way? A. Yes, sir.

Q. The property appraised by whom? A. Wellj these mortgages were all made before I went there; one of them was appraised, I think, by the appraiser of the Mutual Life Insurance Company in New Jersey, W. Y. Chedester.

Q. The others were appraised by appraisers in the regular way? A. Yes, sir.

Q. What per centage of the appraised value do you loan? A. I should think from fifty to sixty per cent; forty per cent in some cases; I should think fifty per cent would be a fair average.

Q. Were the mortgages secured by the buildings on the real estate in case they had any on them? A. Yes, sir.

Q. As collateral in all cases? A. Yes, sir.

Q. And, as compared with the amount of the mortgages, what was the cost of the land to the company; say the land cost you $150,000 in New Jersey, what was the face of the mortgages on which the land was sold! A. Well, I think it approximated pretty close to that.

Q. You think it was bought for substantially the face of the mortgages and cost? A. Yes, sir, I should think so.

Q. Do you own any real estate any where else than in New York, Brooklyn and New Jersey? A. I don't know of any.

Q. You have no offices in any other place? A. No, sir.

Q. Well, in regard to insurance upon the buildings ; in how many companies was that obtained? A.I should think we had about fifty.

Q. In about fifty different ones? A. Yes, sir.

Q. Can you mention the one in which you had the largest insurance? A. It is the Commercial Union, of London.

Q. What proportion of the policies in that company have you? A. Well, I don't know ; 1 should there must have been about a third; well, no, that is too much, but I can say generally that they have a policy on almost any thing they will take or that they would take; we do not require that the mortgagee shall insure there or any where else; we uever indicate in what company he shall insure; we never ^ade any such rule as that, providing it was a good company.

Q. You had never any rule by which you indicated which you prefer, so long as it is solvent? A. No; we only want a good company; then, inaddition, we have a Fireman's association, the Brewers and Maltsters' company, and we have a considerable line in the Continental fire, and thenscattered policies, as I said, in probably forty or fifty different companies.

Q. Have you ever, in any case, made it a condition to making a loan that you should even indicate the company in which insurance should be obtained? A. No, sir; never.

Q. Have you or any of the officers of the company, to your knowledge or information that you have have got, or any one in the employ of the company, ever received any thing in consequence of the indication of the company from which policies should be procured? A. Never, to my knowledge.

Q. Or to your information? A. No, sir; there is a commission on every one of the companies where we pay it.

Q. The insurer pays that? A. Yes, sir; but we pay very frequently for him; it very often occurs that we pay the renewal, and when we do that we get a commission.

Q. How much? A. Fifteen per cent on the premium.

Q. To whom is the premium paid ?. A. It goes right into the company the same as any other assets.

Q. That goes into the assets of the company? A. Yes, sir.

Q. It is not paid to or received by any individual? A. No, sir; it goes right into the company.

Q. Does any one receive any thing from that? A. No, sir; not to my knowledge or information; no one receives a cent of benefit from it.

Q. Now, say a man makes an application in the usual form for a loan, and after being proved by the president and finance committee or whatever method you have, you send him to the attorney indicating the amount you will loan on the property, is there any per centage paid by any one to the attorney? A. That I would not know.

Q. Who pays the attorney for his services? A. The borrower.

Q. Well, what is the usual per centage paid by the borrower? A. I don't know that there is any per cent; I should say that I have had very little experience in making loans; I have made very few loans since I have been president; I don't know what the rule is.

By Mr. Weiant:
Q. Did you make any while vice-president? A. No, sir.

Q. Well, how many have you made since you were president? A. Well, probably not six or eight, or ten.

Q. Do you loan outside of the city of New York in this State? A. Very little.

Q. In what counties? A. Jefferson.

By Mr. Moak:
Q. You know nothing about what the rule is in such cases? A. No, sir.
By Mr. Skinner:
Q. Have you an attorney in Jefferson county? A. No, sir.

Q. Who makes your searches in the counties outside of the city? A. I don't know; I suppose the clerk does; our counsel can tell; I don't know any thing about the working of that department.

Q. Who appraises the property? A. They are the appraisers approved by the Insurance Department; we have appraisers in every county almost, and I suppose they do it.

Q. And yon base your loan on the valuation they fix? A. Exactly.

Q. Well, are you not liable to be deceived in making loans that way; are you not afraid you will loan a larger sum than yon would if yon were to go and examine the property yourself? A. Well, we have personal knowledge beside; we take other precautions, and I believe it is the opinion of most ofthe insurance people that the appraisers of the insurance department are, as a rule, very reliable appraisers.

Q. Well, but aren't companies liable to be deceived in making loans in that manner far beyond the value of the property on which they loan? A.Well, I don't know that any company can appoint such men as those appraisers; if you want to use that mortgage as security at the insurance department you could do so, if you have complied with the terms of flie law in all its other provisions.

Q. Is there not an opening for collusion between the appraiser and the borrowers? A. Yes; but it is the same in every case.

Q. Well, have you ever known an instance of that kind? A. I have not; as I have stated, my experience has been very small.

Q. In connections with loans in New Jersey; do you consider your loans in that State as good and.secure as the loans that you make in this State? A. I think they could be made so.

Q. Well, are they such loans as you have got there? A. Well, I don't know but the average is as good as those in this State; yet I don't know that it is; I think I should be inclined to say that the average was as good; I should think that I should be inclined to say that the depreciation of property there is greater than it is in this State, from my limited knowledge of it.

Q. Do you think it would be advisable for the Legislature to limit life insurance companies to investments within the State? A. It is my impression, sir.

Q. You think it would? A. Yes, sir.

Q. Will you assign the reasons why you think it would be the best for the safety of the companies? A. Well, I think the companies could keep acloser knowledge of it if it is at home, and the circumstances that surround this property that they loan upon, and the influences which surround itare known to them and there arn't so many opportunities for any operations that would tend to loss.

Q. Fraudulent operations, you mean, I suppose? A. Yes, sir.

Q. Can't you supervise loans in States fifty miles from New York as well as you can in the remote parts of this State? A. It could be done.

Q. Well, don't they do it? A. I don't think it is done.

By the Chairman:
Q. Are yon aware that there arc a large number of people doing business in New York that reside in New Jersey? A. Oh, yes; a great many of them.

Q. And people having mortgages in New Jersey, don't you consider that the interest is paid as promptly on New Jersey mortgages as it is on New York mortgages? A. I think it is about the same thing; there is an average amount of life insurance money in New Jersey, I think, but it is an opinionof my own only; I think it would have been just as well if it had been confined to this State, and if the companies did not have that amount there.

Q. I want to ask you this question in regard to policies in New Jersey, because, to my actual knowledge, there are a great many young clerksreceiving salaries who live in New Jersey because they can live cheaper then in New York; those are the men who would be likely to have small policies on their lives, are they not? A. Yes, that is the case.

By Mr. Moak:
Q. It has been here intimated that, although the officers of these companies do not receive in so manjr words any thing for the use of the money, that money that belongs to these companies is sometimes used in stock speculation and the profit divided between them if its use should be fortunate; I want to ask you whether you have, within five years, received directly or indirectly from any person or corporation whatever, any sum of money, as an inducement, directly or indirectly, for a loan deposit or the nse of any money of any person, bank, trust company or corporation? A. I never received one cent.

Q. Has any member of your family? A. Never; not one cent.

Q. Have any of the officers or directors of your company, to your knowledge, or from any information you have? A. Neither to my knowledge or toany information I have.

Q. Here is another thing that I want to ask you a question about; where, in your returns for 1875 — how much cash did you say you had on hand?A. One hundred and six thousand dollars.

Q. For how long a time did you have that in the bank? A. We keep that balance all the time; we have it all the time.

Q. In what company do you deposit it? A. In the Shoe and Leather; and we did have, up to the first of January, an account in the Park, but I do not think we have had any of late.

Q. It is said these companies resort to this expedient when about to make a return on the first of January ; they draw on their agents for $100,000 or $200,000 one day, and get it credited to the company, and a few days afterward take up their drafts; would that show as cash? A. Why, such an item would show in their cash-books; you cannot make such a transaction as that without showii.g it in the cash.

Q. Well, it would show if yon got at the truth of the matter, but it would not show to the State officers, would it? A. Well, if you want to show abalance it would have to be more than you conld get from a bank on any such security as that.

Q. Well, has your company ever resorted to any such thing as that? A. Never to my knowledge.

Q. Or information? A. I never had any information about it.

Q. It has never been done? A. Not to my knowledge.

Q. But has it been done in any other company? A. I don't know any thing about any other company.

Q. There never has been an instance in your own company in which it was done? A. Never.

Q. When yon came to make returns did your returns show the amount on hand bona fide? A. Every cent.

Q. And there never has been a dollar made up by any ret of that kind? A. Never, sir.

Q. Has your company ever loaned its securities to any other company? A. Not a dollar that I have any knowledge or information of.

Q. Not a dollar of its stocks or securities? A. No, sir; not a dollar.

Q. Has your company ever borrowed from any other company any stocks or securities? A. Not a dollar.

Q. Have you ever borrowed them from any individuals? A. Not a dollar.

Q. Have any individuals borrowed from you? A. Yes, sir; oh call loans.

Q. Well, to what extent? A. We have about $65,000 worth of call loans.

Q. Are those loans made to any member of your company? A. Well, yes; I think there is $20,000 or $30,000 of it; probably half of it is to people connected with the company.

Q. On what sort of collateral? A. On stock collaterals.

Q. What stocks? A. Bank stock principally; some insurance stock perhaps.

Q. What insurance stock? A. Well, the Home and Continental Fire Insurance stocks, the Brooklyn, the Montauk, the Clinton, the Jefferson, the Pacific, and there are several more of them.

Q. What amount of margin do you generally require? A. Well, I think the line of margin probably is forty per cent above the loan; there must be $100,000 collateral.

By the Chairman:
Q. Are those securities approved by the board of brokers? A. Yes, sir.

Q. And can be sold every day? A. Yes, sir every one of them.

By Mr. Floyd-Jones:
Q. Who draws the checks? A. The checks are signed by the president and secretary.

Q. A president and secretary there; those two alone could draw money out of the bank any day? A. Yes, sir.

153-157

Q. Well, do any of your officers give any security for the manner in which they perform their duties? A. Our by-laws requires that our presidents should give $10,000 security; I gave that security when I became president.

Q. Was that given for the period in which you remained president, or was it given from year to year? A. Yes, sir.

Q. Well, which was it; was it renewed from year to year? A. Yes, sir, it was renewed from year to year.

Q. Does any other officers of it give any security? A.. No other officer.

Q. Then $10,000 is all the security the company holds for the good faith of all its officers? A. Yes, sir; there is no one who has the handling of anymoney except the secretary; that is, to any considerable amount; of course the cashier has some, and has to have some, but he hands it over to the secretary two or three times a day.

Q. Then why don't you require the secretary to give security? A. He would have given security, but on account of his long and faithful service the board excused him from it.

Q. Have any of the officers or directors of your company been connected in any way with any other life insurance company? A. I don't know that they have been.

Q. Directly or indirectly? A. Not to my knowledge.

Q. Either as director, officer, agent or otherwise? A. Not to my knowledge; I know I am not, and the secretary I know is not to my knowledge; so far as I am aware, none of my directors are.

Q. None of them are, so far you know? A. No, sir.

Q. As to fire msurance companies? A. I am a director in the Brewers and Maltsters', and Mr. Suiffin, the secretary, is a director in the New York and Boston company.

Q. Well, are there any other of your directors connected in any way with any other fire insurance company to your knowledge? A. Yes, sir; Mr. Alexander Stubble is a director in the Montauk and Brooklyn; he is a director, also, of the Brooklyn horse railroad.

Q. Can you name any others? A. I don't remember any others; I want to say that I presume that some of our directors are in some of the fire companies.

Q. Well, you are a director in what company? A. In the Brewers and Maltsters'.

Q. Well, how much insurance of these collateral policies is there in that company that has been held by your company within the past two years?A. Well, I should think from one to two hundred thousand dollars. .

Q. Which company is Mr. Suiffin a member of? A. The New York and Boston.

Q. Well, how much in policies has your company had in collaterals of that company? A. About fifteen or twenty thousand dollars.

Q. You spoke of the Montauk, how much has your company in that? A. Twenty-five, thirty or forty thousand dollars, perhaps; I think we may have four or five policies in that.

By Mr. Weiant:
Q. I would like to ask whether any of the directors or officers are interested in banks? A. I can answer the question by saying that neither any ofthe officers or directors are interested in either of the banks in which we keep an account; does that answer your question; they are not interested inany of the banks in which we keep our accounts.

By Mr. Moak:

Q. I want to ask you a general question, because you have answered us very frankly; I want to ask you whether you would not deem it better tolimit the officers of life insurance companies so that they could not be officers in any other insurance company? A. I should say yes; to limit them totheir own company, as far as life insurance is concerned.

Q. Well, how as to its being a matter of good judgment as regards fire insurance? A. I should think they might all do it.

Q. It would just as well to limit them? A. Yes.

Q. It might go on for years and be managed just as well, and still something might come up? A. Yes; and it seems proper that I should make some explanation in regard to the answer I gave in this case; in the first place an officer in a life insurance company has just as much as he can do toattend to his own business; he has no time to attend to any other business whatever, and for a man occupying the position of an officer in a life company to take the directorship of any other corporation, that is simply one in name, is an act that I deprecate; I have done it in the Brewers and Maltsters', and I deprecate it; I don't think it should be done.

Q. You mean to say it leaves a man more free and untrammeled to act solely for the company with which he is connected? A. Yes, sir; life insurance is a matter that absorbs a man's whole nature, if he devotes himself to it.

By Mr. Floyd-Jones:
Q. Do you think it possible or advisable that the Legislature should pass a law making it rather obligatory for insurance companies to put a clausein their policies, in reference to lapsed policies, or, in other words, to change the law from what it is now; as the matter stands now I understand it isdiscretionary with the insurance companies, and they very seldom, if ever, when a policy is lapsed, call it wiped out; they generally let it run on for alength of time, do they not? A. Yes.

Q. Do you think it is a good plan to pass a law saying it shall run for a certain length of time? A. Do you mean something after the Massachusetts law.

Q. Not exactly like that, but one for our State; for instance: I have paid for three years and I cease to pay, my policy lapses and that is the end of it; now should there be a law saying that it should be extended for any length of time, and before that time expired I should be allowed to pay up, or is itbetter to leave it discretionary with the company? A. I think there could be a law, but I am not prepared to suggest its terms, which would be judicious in its operation both to the company and the insured; I think it could be framed.

Q. Have you seen our law on the subject? A. No, sir.

Q. Which is the best, a paid-up or a continued policy in force on the Massachusetts plan? A. I think a paid-up policy is the best; I consider thatbetter than the Massachusetts plan.

By Mr. Moak:

Q. Take this case: when do you declare your dividends? A. At the commencement of the year.

Q. Suppose the 1st day of January, 1877, a dividend is declared upon a policy, the premium on which is not payable until the first day of the following July; suppose the dividend is not called for until that time, and on the first day of July the policy is forfeited, what becomes of the dividend? A. I don't know as any thing becomes of it; it has not been paid out, and it is not charged up.

Q. Well, supposing the case that we have had of the man fortyfive years ot age, who has paid his premium for five years of $190? A. Well, you must understand that a dividend is payable on the next annual premium; that is the way the dividend is applied.

Q. Well, that is what I am trying to get at; suppose that dividend is not payable until the next premium becomes due — suppose you declare him adividend in the case I have suggested, and on the first day of January you declare him a dividend of, say forty dollars, his premium comes due on the first day of July; on the first day of July he forfeits his policy absolutely and does not take out a paid-up policy or its present value, what becomes of that dividend? A. Nothing becomes of it.

Q. Does it remain in the assets of the company? A. Yes, of course it does; for it was never taken out.

Q. Suppose that day, before paying his premium, he had come and asked for his dividend, would you give it to him? A. No, sir; he would not be entitled to it, except on the payment of the premium.

Q. Then you don't give him the dividend until the policy is paid? A. No, sir.

Q. And if the policy lapses, the dividend lapses? A. Yes, sir.

Q. Then I understand you to say distinctly that the dividend is only payable in case the next premium is paid? A. That is it; suppose a party brings in a policy, with a clause in it that I have read — he wants a paid-up policy — he moves into a different class of policyholders, from acontributing member he becomes a noncontributing member — his dividend is reduced in that Gase.

Q. How? A. The insurance value of a policy is that amount which will contribute to the death loss of the company; if he has a $5,000 policy, and it is a continuing policy, we have, of course, the future value of the premiums to go upon; that is part of the scheme of life insurance; when he ceasesto pay we fail to have that to go upon, and he becomes a ijon-contributing member, except so far as his reserve is good.

Q. Let us suppose another case — supposing the case I have supposed all the way through — the first of July has come, and he comes to your office and he says "I want to take up a paid-up policy, and don't want to contribute," what becomes of the dividend, do you pay it to him or does itlapse? A. That is precisely the case I have stated; I say he goes from the class of contributing members to the class of non-contributing members, verbally and theoretically; the dividend is reduced in this way; if he was going to take twentyeight dollars on a continuing policy he would get about nineteen on a paid-up policy.

Q. And the difference would go into the general fund? A. Yes, sir.

Q. In your company are the dividends counted in the premium income until paid out? A. No, sir.

Q. They do not go into the premium income at all? A. Is'o, sir.

Q. About what is the annual expense of advertising in your company? A. Well, I don't know; it is down there in 1875, and it is very much reducedin 1876; in 1875 it was $16,832.30.

Q. Let me ask you if that includes advertising in newspapers, circulars, pamphlets, and every thing? A. It includes all manner of advertising.

Q. Do you know if in your company there has been any thing paid or received by any. officer of the company that was charged ostensibly for advertising? A. No, sir.

Q. For instance, say a bill was rendered for $10,000, and $7,000 was for services and $3,000 would be paid somebody else; have you ever known aninstance of that sort? A. No, sir, not a cent.

Q. In no case of which you have knowledge or information? A. No, sir, none whatever.

Q. Is there such an institution in the city of New York known as the Chamber of Life Insurance? A. Yes, sir.

Q. Are you a member of it? A. I am, or the company is.

Q. You are? A. Yes, sir.

Q. About when was it organized? A. Well, it was organized in 1873.

Q. Just about the time of its being organized, was there a pretty active fight, or that is scarcely the proper word to use — was there a pretty active difficulty between the Equitable and the Mutual? A. There was a pretty lively disagreement.

Q. Was that organized in consequence or partly in consequence of the disagreement? A. I don't know, I was not a member of it.

Q. Was it organized before or after the trouble? A. About the time of the trouble.

Q. About how soon after it was organized, did you or your company become a member of it? A. I guess it is about two years since we joined it.

Q. What officers has it? A. It has a president.

Q. Who is its president? A. I think Mr. S. C. Hewey—he is the president of the Penn Mutual Life Insurance Company of Philadelphia.

Q. What other officers besides a president has it? A. I think it has a vice-president, but I don't remember who he is — it has a secretary.

Q. Who is he? A. Charlton T. Lewis.

Q. Is he connected with any life insurance company?' A. No, sir.

Q. Has it any managers or directors? A. Not that I know of — it has trustees.

Q. It has trustees? A. Yes, sir.

Q. Do you know how many? A. Seven or eight, I think, I don't know.

Q. Are you one of them? A. No, sir.

Q. What is the object of that institution, as far as yon know? A. Well, the object is to promote the growth of sound insurance, I think, as I understand it.

Q. How many insurance companies in New York are members of it; or I will ask you this first: are its members considered as iudividuals orrepresentatives of insurance companies? A. It is the companies that are the members.

Q. And they are represented by the officers of the companies? A. Yes, sir.

By the Chairman: Q. Just the same as the clearing-house of a bank? A. Yes, sir.

By Mr. Moak:
Q. How many of the companies are members? A. They are all members except the Manhattan and the Washington. I think.

Q. Are the officers paid a salary? A. That I don't know; I have no knowledge of the working of the institution.

Q. Does your company pay any thing toward the expenses of the working of the institution? A. Yes, sir.

Q. How much a year? A. I can't tell you how much it is exactly.

Q. Well, about how much? A. Well, I should think about $1,000.

Q. Do you know for what purpose it is used, or have you any information? A. I have not.

Q. Have yon any information as to the purpose for which the fund is contributed? A. I have not, except in a general way.

Q. Well, give us your general information? A. Well, my general information is that there is some sort of an arrangement there by which they watch legislation that is obnoxious.

Q. Whose business do you understand it to be to watch obnoxious legislation? A. You have got me there; I don't know any thing about it.

Q. You don't know any thing about it? A. No, sir; I never go there.

Q. You understand this fund is contributed for the purpose of watching what is called obnoxious legislation? A. That is one of the objects of it.

158-162

Q. Have you not been present when the question of obnoxious legislation in Massachusetts was under discussion? A. No, sir; I think there is avariety of things it is for.

Q. Well, take, for instance, this case — do you know whether one of its objects is to obtain control to a certaiu extent of the press? A. That I know nothing about.

Q. Have you heard it is? A. No, sir; I don't believe it is.

Q. Is the Chamber of Life Insurance represented by any journal? A. No, sir.

Q. Does it publish one? A. No, sir.

Q. Obnoxious legislation that you speak of; do they attempt to control it in one State or in all States? A. All over.

Q. Do you go there as a member or as an officer of your company; are you regarded as a member, entitled to act, to vote, to speak in its deliberations? A. Yes, sir.

Q. Are its meetings private or public? A. Private.

Q. Secret exclusively? A. I suppose so; I always thought so.

Q. They have always been secret, so far as yon know? A. Yes, sir.

Q. Are not their proceedings regarded as strictly secret? A. I never knew of any one being there but. a member.

Q. Are not its members under an obligation to keep its proceedings secret except from a member of the chamber? A. I think not, except when we are specially requested to do so; something might be talked abont that we might want to be secret, but there is no general rule.

Q. Does each company contribute its support? A. Yes, sir.

Q. Does each company contribute to the fund a lump sum, or how is the contribution arrived at? A. The contribution is in the ratio of the assets.

Q. And in the ratio of assets, about where does your company stand in the ratio of companies in the city of New York? A. Well, the Mutual Life has about $80,000,000; we stand about fifth.

Q. Was companies outside of the State of New York allowed to be members? A. Yes, sir.

Q. Any where in the Union? A. Yes, sir; or in Canada.

Q. About how many companies are members of the association, as you understand it? A. I think about eighteen or twenty; I should think so; somewhere from fifteen to twenty.

Q. Does the secretary have any other business except acting as secretary? A. Not that I know of; I don't know of any.

Q. Do you know of his attending at various places in regard to obnoxious legislation? A. I only know of his being in one place.

Q. Where was that? A. In Canada.

Q. When was that? A. Last year.

Q. What obnoxious legislation was going on there that it was necessary to attend to it i A. We do not do business in Canada, and, therefore, Iwas not interested in it particularly, but I heard it was burdened with heavy taxation on business ; when I speak about obnoxious legislation I meanto be understood as to alluding to the principle of excessive taxation.

By Mr. Weiant:
Q. Have you any knowledge or information as to whether this Chamber of Life Insurance has taken any action in regard to obnoxious legislation inthis State? A. I have not any.

Q. No information on that subject at all? A. No information on that subject at all.

Q. Do you know whether this association employs any attorneys or lawyers? A. I only know from information.

Q. Well, state from information? A. Yes, they do.

Q. Well, who are they? A. Foster & Thompson are the counsel.

Q. Of New York city? A. Yes sir.

Q. Any one else? A. I don't know of any one else.

Q. When did you last attend a meeting of the Chamber of Life Insurance? A. I attended, one several months ago; it was at the annual election.

Q. Not since the first of January? A. Oh, no; it was several months ago.

Adjourned until Tuesday, March 27, 1877, at 9 o'clock A. M.


Tuesday, March 27, 1877. The committee met at their rooms at 9 A. M. The examination was resumed. Isaac Lloyd sworn:

Examination by Mr. Moak:

Q. It has been stated here that Mr. William M. Evarts was under a standing retainer by your company; do you know any thing of it? A. No, sir; I do not.

Q. Have you ever heard any thing of it? A. No, sir; never.

Q. You are the secretary of the company? A. Yes.

Q. How long have you been the secretary? A. One year.

Q. Who was secretary previous to your taking it? A. John H. Seward.

Q. Where is he now? A. He was made second vice-president a year ago, but died this year.

Q. How long was he secretary? A. About nine years.

Q. Do yon sign all the checks or drafts of the company upon the banks? A. Yes, sir.

Q. All of them? A. In my absence the assistant secretary signs.

Q. When present do you sign them? A. Yes, sir.

Q. Have you signed any payable to William M. Evarts? A. 1 have never signed any check payable to Mr. Evart's order.

Q. Or that ypu understood was to go to Mr. Evarts? A. Never at any time; I never heard his name mentioned in the company as retained by the company.

Q. Now, when did Mr. Winston, the president, leave the State? A. I cannot give you the exact date, but I think about a month ago.

Q. Give us as nearly as you can? A. I don't know, but it is on the paper you have

Q. He has sworn to this paper, I see, on the twenty-first of February; do you know the day this paper was sworn to? Q. I cannot remember the time.

Q. Do you know any thing of it; who drew it; whose handwriting is it in i A. In the handwriting of one of the copyists of the office.

Q. Do you know who drew the paper? A. I do not.

Q. Where is Mr. Winston? A. When last heard from, about ten days ago, he was in the city of San Francisco.

Q. Did he go from New York directly to San Francisco? A. He went from New York directly to Chicago, where he remained one day, and from there directly to San Francisco.

Q. Has he remained there ever since? A. I think when last heard from, a week or ten days ago, he stated he was going to some point, but did notstate where. • Q. At what place? A. I did not see the letter, sir.

Q. You cannot state where he was going? A. I cannot state.

Q. And who is the first vice-president of the company? A. Richard A. McOnrdy.

Q. Who is the second? A. Richard A. Grannis.

Q. How long has Mr. McCurdy been first vice-president? A. I should say about ten years.

Q. How long has Mr. Grannis been second vice-president? A. About two months.

Q. He took the place of Mr. Stewart, who died? A. Yes.

Q. How long had Mr. Stewart been secretary? A. About nine or ten years.

Q. Is Mr. McCurdy present regularly, or absent from the office of the company at any regular season of the year; if so, give the time? A. He generally goes away in the summer season for a month or more.

Q. About what time? A. About July or Auguct.

Q. Does Mr. Winston go away from the office any time of the year? A. It has been customary with Mr. Winston for about five years to spend two months away from the city ot New York.

Q. Where does he go usually? A. He has been to California twice; he has been to Europe once, and once he made a tour through the South.

Q. He was absent during the Miller examination; where was he then? A. I think he was in New York at the time of the examination of the company.

Q. During the legislative examination, was he not absent at that time? A. I have no recollection about it.

Q. You have no recollection where he was? A. I have not.

Q. How long after this paper was sworn to was it-that he left tor San Francisco? A. I do not know sir; I did not see the paper until -^ Professor Bartlett had it yesterday.

Q. Well, yon should say he had been gonehowlong? A. I should say about a month, or it may be only three weeks.

Q. When is he expected to return? A. In May; that was his intention when he left.

Q. And he will not return to the State until that time? A. That was his expectation.

Q. Do you know whether Mr. Winston holds any other office in any other company of any kind in New York? A. I know he does not.

Q. I am not speaking of insurance companies in particular, but of any character? A. He holds no office of any kind to my knowledge.

Q. In any banking institution? A. In no banking institution.

Q. How is it with Mr. McCurdy; is Mr. McCnrdy the same T A. Mr. McCnrdy is vice-president of the American Bible Society, but is officer in no moneyed corporation.

Q. As to your second vice-president; does he hold any office of any kind in any moneyed corporation or business corporation of any description? A. No, sir.

Q. Or business association, whether incorporated or not? A. No, sir.

Q. And you are the secretary; do you hold any other office? A. I do not.

Q. Or the assistant secretary? A. No, sir.

Q. Who is your regular solicitor in New York? A. Oliver H. Palmer.

Q. Do you know how much he is paid a year, his regular salary? A. His regular salary, I think, is $14,400.

Q. Don't you employ counsel beside him? A. Yes, sir; there is counsel employed at times.

Q. Well, who is that; who is usually employed ; who is the stated counsel of the company? A. Judge Davies is one of the counsel of the company. .

Q. There don't seem to be any thing allowed as paid to him daring the year; is this $14,400 the amount of the salary paid to the solicitor 1 A. Judge Palmer is a paid officer of the company, is employed in the company, and is the head of the law bureau.

Q. His salary is about $14,000? A. He is paid a stated sum the same as any other officer.

Q. I don't understand why there is no statement of any money paid to Judge Davies or any other counsel, except Mr. Palmer.

By the Chairman:
Q. I would ask if the payment to Judge Davies and Mr. Betts is not for the examination of titles, and that they are paid by parties getting loans? A. It was so formerly, but for the past two years all the work is done in the office; there is a bureau of law in the office, and Judge Palmer is the head of it; the searches are made by clerks in the bureau of law, and without expense to the borrower; the expense is entirely paid by the company.

Q. The expense of searches? A. Yes, sir.

By Mr. Weiant:
Q. That is the general way in the Mutual Life Company? A. It is strictly so in the Mutual Life Company.

Q. On city property, I suppose? A. Of course, on New York city property.

By Mr. Moak:
Q. Well, that does not answer the question I put; how is Judge Davies paid? A. Well, Judge Davies renders a bill whenever he performs any service for the company, and it is acted on by the committee on expenditures, who meet once a week, which committee is composed of three trustees; they approve or disapprove of the bill, and if approved it goes to the cashier and he draws a check.

Q. Where does that appear on the statement here? A. It comes in under the head of general expenditures; this resolution simply called for the salaries; Judge Davies has no salary; if you had required the other we would have given it.

Mr. Moak — The resolution calls for the amounts paid in salaries, fees, compensation or donation to the respective presidents, vicepresidents, secretaries, attorneys, counsel, and all other employes; that seems like a mere dodge to evade giving the information.

Q. You have seen this statement? A. I saw it yesterday.

Q. Does the amount paid to Judge Davies, as counsel for the com

{,any, appear anywhere in the statement? A. Will you allow me to ook over it?

Q. Certainly, and then state if you can find it? A. Yes, sir, it appears here in the last clause; the amounts paid to attorneys and counsel residing indifferent parts of the country was $17,715.

Q. I understood the actuary to say that included the amounts paid to attorneys outside the city of New York, and the words " residing in differentparts of the State," would seem to imply that; I don't understand that to include any amount paid any attorney or counsel in the city of New York, doyou? A. I suppose it includes all, with the exception of the salary of the solicitor.

Q. Do you know? A. I do not.

Q. Have you ever made an investigation for the purpose of determining? A. I have not.

Q. What other counsel has the company had, except Judge Davies, for the year 1876; I am speaking of counsel as distinguished from Mr. Palmer, the solicitor? A. I do not remember any in the city of New York.

Q. You do not remember any? A. No, sir.

Q. Have you any means of ascertaining here whether there was or not? A. No, sir.

Q. Was Judge Davies paid any money during the past year? A.* I think he was paid some, but what the time or amount was I have no means ofdetermining here.

Q. Will you make a memorandum of that and ascertain whether the amounts paid to counsel in New York is included in this $17,715, and, if not, ascertain what was paid them? A. Yes, sir.

163-167

By the Chairman:
Q. Who, in your company, would know all these general points affecting all the business? A. I think the vice-president would know best about the genera] management of the business, but possibly those facts he could not give unless they were taken from the books of the company.

By Mr. Weiant:

Q. Who has personal knowledge of the items? A. The auditor or book-keeper who keeps the books.

Q. What are their names? A. William J. Easton is the auditor's name; the book-keeper is Mr. J. C. Perrin.

By Mr. Lang:
Q. Would they know the items that the finance committee would know? A. Well, their duties are so large that they might not know.

By Mr. Weiant:

Q. Do you know whether any other attorneys or counsel in New York city have been employed by the company during the past year? A. No, sir; I do not.

Q. Have you information that other persons have been employed? A. No, sir; I have not.

Q. None whatever? A. No, sir.

Q. What officer of the company could afford that information? A. Well, the executive officers could afford the information.

Q. Who are they? A. The vice-president, I suppose.

Q. Mr. McCurdy? A. Yes; the president being away, he is the proper person.

Q. Who employs them? A. They are generally employed by the executive officers and the finance committee.

Q. Who are they; give their names? A. Frederick S. Winston, Richard A. McCurdy.

Q. Are those the only two? A. The president and vice-president.

Q. Who is the second vice-presedent? A. He is not an executive officer; he is assistant to the executive officers.

Q. I want to know the names of the officers who can afford the information? A. Those are the only two.

Q. Give the names of the finance committee, if you please? A. The finance committee is Richard H. McCurdy, Samuel D. Babcock, Seymour L. Husted, H. W. Smith, John H. Sherwood, F. H. Cossett.

Q. Who is H. W. Smith? A. He is a produce merchant in South street.

Q. Can you give the names of the attorneys employed outside of New York? A. I could not.

Q. Have you no information? A. I have not.

Q. Who is Seymour L. Husted? A. He is a resident of Brooklyn.

By the Chairman:
Q. I understand a company like this, in view of the magnitude of its business, has to have special departments? A. Yes, sir.

By Mr. Weiant:
Q. What are the duties pertaining to your office? A. I have the general supervision of the lower office of the company, also the correspondence, the payment and signing of all checks after the bills properly audited by the committee on expenditures, the supervision of all demands and claims by death, alter they have been passed upon by the committee on mortuary claims, also three trustees, and the general supervision of the correspondence of the company.

Q. You say you sign checks; have you signed checks for any attorney except Mr. Davies during the past year? A. Yes; I think I might have dpne so, but I have no recollection.

Q. Yon have no recollection of signing a check for a single attorney except Mr. Davies, or firm of attorneys? A. Judge Palmer's salary.

Q. I mean outside of that? A. I have no recollection, but I .think, undoubtedly, I have.

Q. Don't you recollect that you have signed checks? A. I think I have.

Q. Will you give the names? A. I cannot recollect them, but will furnish the information.

Q. Can't you gSve the name of a single firm? A. I cannot* I will give you the information from the books of the company when I return.

Q. Have you not had correspondence with the attorneys on behalf of the company? A. No, sir; it is carried on in the law bureau; correspondence with reference to law matters is carried on by the solicitor.

Q. Did you ever hear of such an organization as the Chamber of Life Insurance? A. Yes, sir; I have.

Q. Where is it located? A. It is located at the city of New York.

Q. Are any of the officers of your company members of the organization? A. I think that the vice-president is a member of the organization.

Q. Mr. McCurdy? A. Yes, sir.

Q. Are any of the other officers members of the organization? A. Not that I know of.

Q. How is it made up, do you know? A. I do not.

Q. In other words, you don't know any thing about the management of the concern? A. I do not.

Q. Nor any thing about what its objects are? A. I do not.

Q. Have you ever had any correspondence with that association? A. None whatever.

Q. Do you know who is at the head of the organization? A. I think it has a board of officers like other corporations.

Q. Has it a president? A. I am not positive; I have not seen a list of the officers in some time.

Q. Can you give the names of any members of the organization, except Mr. McCurdy? A. I know Charlton T. Lewis is the secretary.

Q. Is he connected with any life insurance company, and if so, what one? A. Not any to my knowledge.

Q. Can yon mention any other person connected with it? A. The Chamber of Lite Insurance?

Q. Yes? A. There are half a dozen of the companies that belong to it.

Q. Any of the officers that you can mention, persons connected with it? A. No, sir.

Q. Yon cannot mention any other? A. No, sir.

By the Chairman:
Q. Does it bear the same relation to the insurance companies that the clearing-house does to the banks? A. I could not state that.

Q. Have you drawn any checks for any action of that organization, to your knowledge? A. Not to my knowledge.

Q. Payable to the order of any of the officers of that organization? A. Not to my knowledge.

By Mr. Moody:
Q. You have only been secretary one year? A. I have been secretary one year.

Q. What was your connection with the company previous? A. Previous to that I was auditor for five years; six years, I think, and previous to that Iwas book-keeper; I have been in the company about twelve years.

Q. During what years were you auditor? A. I think from 1870 to 1875.

By Mr. Weiant:
Q. What are the duties pertaining to that position? A. The auditor is the head of the bureau of accounts; he is supposed to have the oversight ofevery thing that pertains to the book-keeping of the organization.

Q. You pass all the accounts? A. Yes, sir; the auditor passes all the. accounts.

Q. You examine them to see whether they are correct? A. Yes, sir.

Q. Are they adjusted by the auditor alone? A. By the bookkeeper first and then afterwards by the auditor.

Q. Don't they go before any other part of the company for adjustment? A. The agents' accounts do you mean?

Q. What accounts did you audit, as auditor? A. Well, the auditor audits the accounts from the different agents of the company.

Q. To see that their commissions and accounts are kept accurately? A. Yes, sir.

Q. You don't have the adjusting of bills presented to the company for services? A. Not at all.

Q. You don't adjust those bills, such as attorneys' fees? A. Oh, no; that is not the province of the auditor at all.

Q. How are those fees adjusted? A. By a board composed of members of the company; what fees do you mean?

Q. Take attorneys' fees? A. No, bills of that sort would go before the committee on expenditures for their approval.

Q. Who compose the present committee on expenditures? A. William M. Vermilyea, J. C. Holder and Seymour L. Husted.

Q. Does that book you have in your hand contain all the officers of the company? A. It contains all the names of the trustees; the report we had here yesterday contains all the officers of the company; that was the only copy that was brought up, and I was anxious to have it here for my own assistance.

By Mr. Moody:
Q. Professor Bartlett is the actuary of the company? A. Yes, sir.

Q. And has been connected with the company how long? A. I think about six years.

Q. He has an assistant with him? A. There are two assistant actuaries.

By Mr. Lang:
Q. Does this board of trustees draw salaries? A. No, no salaries. Q. I don't mean as such; your president has a salary? A. Yes, there is the president, to be sure; he draws a salary.

By Mr. Moody:
Q. How are the officers elected? A. By the board of trustees.

Q. How are the board of trustees elected? A. There are nine elected each year; on the first of June each year.

Q. By whom? A. The trustees are elected by the policyholders; it is a mutual company.

Q. Are the policyholders generally represented at that election? A. The polls are open sir, and a good many who reside in the city of New York attend each year and vote.

Q. Do persons hold proxies that vote at these elections? A. I have no knowledge of that.

By Mr. Lang:
Q. Are they permitted to vote that way, by proxy? A. I believe they are; I think there are two or three hundred who come to the office of the company and vote.

By Mr. Wriant:
Q. How many policyholders have you in the city? A. I could not state.

Q. How many have you altogether? A. I think 91,000.

Q. How many attend to vote? A. Personally, not to exceed 200 in the many years I have been there.

Q. The others who vote do it by proxy? A. Yes, unless they choose to attend.

Q. How many trustees have you? A. There are thirty-six; four groups of nine each.

By Mr. Lang:
Q. What notice is given of the annual meeting? A. It is published in two or three of the New York papers for two or three weeks.

Q. No notice by mail? A. Oh, no.

By Mr. Weiant:
Q. Do yonr officers hold policies on their own lives? A. The president is insured, the vice-president and myself are also insured to my personal knowledge.

Q. How much has the president? A. I don't know; I think the president holds $20,000 on his own life.

Q. And the vice-president? A. I don't know how much.

Q. You hold a policy? A. I have a policy of $6,000.

Q. Are the other officers insured, any of them? A. I really could not state; I think likely they have so, every one of them.

By Mr. Moak:
Q. Does this company loan to policyholders? A. Not at all; no, sir.

By Mr. Lang:
Q. What are the fnnctions of the board of trustees; what do they do beside elect the officers? A. There is a monthly meeting of the trustees — one occurs to-day —and, in addition to that, the trustees are divided up into different committees; there is a committee on finance, on insurance, on mortuary claims and on expenditures.

Q. I understood you to say that none of the trustees receive any salary? A. No, sir; but when they meet in committee they receive five dollars ingold for each meeting in session; the finance committee meets once a week, the mortuary claims committee once a week, and the committee on expenditures once a week.

Q. Do you know whether they draw pay for meetings'when they are actually present, or for each committee? A. Only when they are present.

Q. There is such a thing as "constructive" sitting, and I did not know whether it applied to them? A. No, they only receive for those committees when present.

By the Chairman: Q. In most of the banks the trustees receive five dollars when they attend a meeting; if they are present at the roll call the secretary passes round and gives each member his five dollars in gold, and if they are not present at that time they don't get it, no matter if they onlycame in a few minntes afterward; I suppose the same course, in a measure, is adopted with your trustees? A. Yes, sir.
By Mr. Lang:
Q. I see the Governor is a member of the board of trustees; he ought not to draw pay, and I don't know whether he does or not?

168-172

A. No, sir; Governor Robinson has been for a good many years one of our trustees.

By Mr. Moak:
Q. I see you have the market value of bonds over cost as $844,801; how does that compare with this year? A. I could not tell you that; the par value of onr stocks last year was $12,063,550; the market value is $12,673,569.33; that would not give it exactly, because some of our stocks cost alittle more than par; the par value and market value are not identical, although there is not much difference between them.

Q. There seems to be a premium, and I want to know if there has been a general decrease? A. It is about $530,000.

Q. Less than the cost? A. More than cost, but it is less than it was the previous year.

Q. There has been that depreciation? A. Yes, sir.

Q. You say the market value of the real estate over cost is $250,000? A. I think that was the report of 1875.

Q. Yes, and I ask how that compares with this year? A. The real estate was placed at its exact cost this year, and there was no market value inexcess of cost in the report to the department.

Q. How did you arrive at the market value of the real estate in 1875? A. That was arrived at by the finance committee.

Q. Did they make an appraisal of the real estate? A. I don't know that, sir.

Q. You don't know how they did arrive at it? A. No, I don't know how they arrived at it.

By Mr. Lang:
Q. Do any of the board of trustees act in any official capacity except as trustees, except the president and vice-president? A. No, sir.

Q. They receive no per centage sitting as a board? A. No, excepting the five dollars they receive when attending on committees.

By Mr. Weiant:
Q. Can't you give us some idea of who prepared the report Mr. Bartlett presented? A. I suppoee it was prepared under the direction of the vice-president.

Q. And by whom? A. There is a great deal of matter there that had to be obtained from the different departments of the office, also from the actuary's department' and the book-keeper's; the vice-president had not all the figures, but they had to begot from the different books of the company.

Q. Now, who has charge of that part which relates to attorneys and counsel; where would you go to get that information? A. The auditor couldstate that; all this information is from the general books of the company in regard to salaries.

By the Chairman:
Q. You stated the vice-president would know about that? A. Well, not about the actual figures, because those come from the books of the company.

Q. I mean the general condition of affairs? A. I understood Mr. Weiant to ask me who would know about the special items which he pointed out.

Q. If attorneys' fees have been paid to any other than the counsel here or solicitor, in what account would that appear? A. In the expense account.

By Mr. Moody.
Q. Can you tell what the amount of the gross eurplus on the policyholders' account is this year? A. The surplus was $3,568,161.57, that is surplus for division.

Q. Did you make a division last year? A. Yes, sir; each year the surplus is divided among the policyholders.

Q. Then the surplus that appeared by your account in 1875, of $9,452,701, was divided among the policyholders? A. Let me explain; the New York standard in four and one-half per cent; by the same value the surplus is $10,262,879.44, at four and one-half per cent, and at four per cent those figures I gave yon first are correct, $3,568,161.57. ,

By Mr. Moak:
Q. At four per cent it is $3,568,161.57, while at four and one-half per cent it is $10,262,879.44; I don't understand that; suppose you explain that tome? A. I could not; it is an actuarial matter which I don't feel able to explain.

Mr. Lang — It is an insurance arithmetic that we can't get at.

Mr. Moak— It must be, for I don't understand it.

Witness — Those are the exact figures from the company's statement and Mr. Smyth's examination.

By Mr. Moody:
Q. Do you hire offices outside of New York for agents? A. No, sir; the company has an office in Philadelphia, and one in Boston; the one in Philadelphia is occupied by agents, a portion of it; the one in Boston is not yet finished; with the exception of those the company don't pay any thing for offices.

Q. You pay no rents? A. No, sir; nor for office furniture.

Q. The agent simply receives his per centage? A. Yes, sir.

Q. Do you furnish offices? A. No, sir; the general agent is appointed by the company, and he is allowed to select his own office; he hires it, and furnishes it, and pays for it.

Q. From his commission? A. Yes; the company allows nothing for it.

By Mr. Moak:
Q. What are the commissions? A. The commission paid to the agent is thirty per cent the first year.

Q. How much does it amount to last year? A. It depends upon the magnitude of their business.

Q. Well, take it for last year, to the general agent? A. I cannot tell that because I cannot tell exactly what business was done; he receives thirty per cent, and pays five per cent to the local agents.

Q. Well, how much does he receive? A. The total amount paid by the company last year was $676,967.49 ; we have thirteen or tourteen generalagents and they appoint their local agents.

Q. They have each the same power? A. Yes, sir.

Q. Well, take Merrill, for instance; how much did he receive? A. I can't tell you; this is simply the total.

Q. That was paid to fourteen general agents i A. Yes.

Q. And they received how much? A. Six hundred and seventysix thousand, nine hundred and sixty-seven (676,967) dollars and forty-nine (49) cents.

Q. What proportion of that was paid to the general agent for the city of New York, Long Island and Staten Island? A. That would be impossible for me to tell without reference to his books and accounts with the company.

Q. Will you make a memorandum, and ask the vice-president to state how much each of those received during 1876? A. Yes, sir.

By Mr. Lang:
Q. That amount includes all that was paid to the sub-agents? A. Certainly; the general agent gets thirty per cent and six renewals at seven and one-half per cent; he pays them five per cent and six renewals at five per cent; that is the custom with the general agents.

By Mr. Moak:
Q. Suppose a man wished to insure and should go to your office; he could not be insured unless he went to the general agent? A. Oh, yes, he could, but he would not receive the commission ; a person could go there and make his application and be examined, and we could receive it.

Q. Who receives the commission then? A. No one; the company pays no commission to any one for being insured in the office of the company.

Q. Can he get it any cheaper by going to the home office? A. That depends upon the arrangement he might make with the agent; if he chose todivide his commission with him the company would not object.

Q. Would you charge him as much if he went to the home office? A. The rates are fixed and there is no deviation from them.

Q. So that the company would get what would ordinarily be paid to the agent? A. Yes, sir, the company would save it.

By Mr. Weiant:
Q. There is less liability of fraud being perpetrated either upon the company or the applicant for the policy, is there not, if the business istransacted at the main office of the company than if transacted through the agents or general agents? A. Well, it would be impossible, with the magnitude of the business of the Mutual Life Company to do it.

Q. I ask whether there would not be less liability of fraud if the business was transacted at the home office instead of through agents? A. It is very possible.

Q. Is it not your opinion, as an insurance man? A. Well, no, I can't state that sir; I know all these gentlemen.

Q. You are aware your company interposes defenses on policies are you not 1 A. In some cases.

Q. Yon interpose the defense of fraud on the part of the policyholder in procuring the policy? A. I think there have been cases of the kind; I only know the Mutual Life regards the payment of claims as important to their interests.

Q. Your company has a great many litigated cases? A. Not a great many; no, sir.

Q. Can you give us an idea of how many there are? A. I could not; no, sir.

Q. Then how do you know there are not? A. Well, I say but few; I am not competent to testify as to that; the bureau of law would be the properpersons; that don't come under my knowledge.

Q. Fou don't know any thing about litigation and defenses interposed? A. I do not; I only know of them where checks are drawn for compromised claims; to have the business done at the main office would require an immense clerical force, and we can only transact the business the way we do through general agents.

Q. Are you able to answer if very many of the litigated cases arise from misrepresentation on the part of the local agents, and misrepresentation on the part of persons applying for policies? A. I cannot answer that.