| Show NS INS AND OUTS OF INSURANCE DEALS Syndicates Prove rove Profitable to th the Mutual Company Comp ny NEW JEW YORK LIFE AFFAIRS INSIDE FACTS NOW COMING TC TO ru EW d Y NEW I fens te fr of and an their ber opera epa operation or tion Un in edo with the insurance ance nce business awl an Da a frank statement of or profits gained through their thIr ther op operations made lw Frederick Cromwell j treasure of oC the th Mutual Life Lie Insurance was wu the th feature or 01 toay ses session se e 4 ion sion on of oC the th special 1 executive committee I appointed to 10 probe methods of ot life lit Iner I nur u t companies in this thin state The defense ilet ff It the syndicate was wa wa made mede by Mr Crom Cromwell Cromwell i well wel soon In oo after ater he ws as IUS callea e Ue to the stand standia ia in lI the meeting Before he was warn asked al e a a question he begged IZeI leave to say s a few feed words word said uld and nd upon up being directed to pro I Law of Combination The he law laW of ot combination which affects finance as everything else has hi al made ayn syn 1 I became beeme tire the licate necessary near When hen treasurer 1 of ot the the Mutual Life Lite Insurance the total assets u of u our ur company were t The le transactions in my de department department nt now are ar over or per pr pr an en annum annUl num nUl When our receipts were leas twenty ty yea ears ago it was al quite quie possible for tOr us to buy from froni bond dealers and pay Ia the proms but now it U i is 18 absolute absolutely 1 ly impossible to buy advantageously large lare locks Ioa of securities except as aa they are lowed by the combinations of capital called syndicates and to have aie 1 i so o into them to iet et t our investments ad iu l I get pt them in sufficient sIze and aM id at I as f A cd flor prices We e could not make ur investments without syndicates and an v we e are ar partners in every wery syndicate into which we go go I want ant to say y further that Ille we went into these thea syndicates syndicate we w would oud not be b able to Invest our funds wept bv by b buying buh in small lma 1 quantities and V paying men the successive profits of middle middlemen I j 1 Half a Million M llon of Assets I I t ask aa you you Mr Ir Hughes Hu 8 and the com corn committee to consider that we have now Over oer oe of ot assets ut and while we wehl hive hl invested in bond and nd mortgages we e are ar constantly under uner the of finding find In additional invest investments ments for lor our out larse lare accumulations of ot funds This is the condition It I ja Is s no theory It I is a condition which we meet met and ald the exhibits are ar here her which show chew how hiu ww w we re have Ia to employ em it I Our invest investments ments are Ir s such uch that when Mr Tappan I l suppose about abut the most moat m widely known kown and ind honored honor bank president predent in his day in tw York died he left lett it as I a condition that t at his hi trustees should have one and that was al to invest in the same sames set s U as 88 those of at the Mutual Life In I That ia is the way we our money but bt we could not n t I make the th transactions of ot a year y r rIn in the securities bought by this company without wi out using ual syndicates Personal Profits The acknowledgment ac of ot per pro profits profits fits fUl was w mad m In a tabulated statement which w lieh wa w waa I nt to the th committee after at r showed ond that Mr Crom well MM h nuMe nad a personal NIJ profit of t m Jn syndicate ne operations operation during the last lastu huH i u h years vear far in which he ht individually urn and fi th Mutual Jt Insurance had hadi hd i H t it Pi t l Mr Ir Hughes Hu hN chief hiet c counsel for fr the oem com committee t immediately took to tra alp aa an estimate o of r in is an f f fi i rt to tM Mn In WhIt Jr tife profits were wert 1 san u 1 interesting point was brought out probing a transaction of the Pee railroad n d S convertibles Mr t mm well 1 made no personal profit the v wit it ness I Of I o course coures cur we are greatly aUy interested in Til tw Pennsylvania railroad rl d I might say sy w are ar the heaviest hel lest stockholders i Mr r Hushes Hughes Mr Cromwell aid the holdings of ot the Mutual Life in f par pur tu Pennsylvania railroad was 0 Trust Company Connections monK these th transactions the th connection I f trust companies with wih the fbi Mutual Life Lite nas Cs as brought out when it i was sUited stated that tl U une iian ne million pounds sterling sterlina subscription tion II i to a Japanese Ta nee loan lon was HUB shared by byI b bt t I i T States Mortgage k Trust oem oom o r ati and anti the Guarantee Trust company in Tn explaining this relation Mr r Cromwell a ai id I We gave ve these opportunities to the Ue t tru trust t companies In which we e held large interests for tor very vety good 10 reasons reason As I explained this morning we we as an au In Insurance I urane company need very ery er large bank banking I ing lug facilities for very Urge large interests It K es without saying that it is better for tor forus forus us lIS to use our own companies rather than I to give to institutions with wih which we e have io ItO connection the handling of ot our ou large m vestments investments For this reason we e put ut I men into the directorate of ot these subr sub subsidiary r companies com to look lok after the In ha Interests I of ot the Mutual They Tey are not there for the profit of the interest on the the paltry W shares share they have to hold but to pro pr ut the Mutual It I is Ii natural we should 1 wish to put in as directors of the th 1 com cona companies cn ants the tit same me men me as a are ar on the board of ot the Mutual Mutual I have IO 10 shares share in lit these thee t rom as al a director but I have never Beyer I made any secret rt of It I Cleared The uThe result rul of our connection connet n with these them th companies tom is that in fourteen years yer we e enan I nave nan made through them a a profit pf of ot oto 14 o O for tor the policyholders If U we had hd not nt no these thesE institutions we should have to turn tura tur the Mutual Life Lift Insurance company into Int a banking institution as aa well wel as aa a life Ite insurance do company This Ti we could uld not n This being the state SLate te of the case cue it i is I natural we should heln hem these the subsidiary institutions to make money moey and an should ald throw opportunities in I their ny wl nymen The Themen Tb men mf we put In them thena Un are ar not there for tor their own profit They Te never got get a dol dot dollar dollar lar out of the Mutual unfairly unfair an and every overy i cent rent they make through thoe tho trust t corn com companies cm panics and banks for tr the th Mutual is II for tor forthe forthe glens alone the th policy holders and an the policy holders Holder alne Just before closing cloi eio in the inquiry for to the Ute day dav da Mr Hughes said I Ve We had some le talk this thi morning moning in connection with another insurance corn cam campt Cf pt pJ ti of ot Joint nt accounts Have you YO any of or these them the No sir 11 we have hv not ot and an never Dver nave had replied rele Mr Cromwell ye We V have live liverio ro rio partners ia In our investments that te is teany I any 10 Investments investment we make are ar made by byi bye i I e Mutual Life and what is I done don by byth byI holders holder th I 7 hi h Mutual Life te Is J done doe for to the th policy policyholders pU Made an Exception Questioned further in this line U Mr r t excepted the syndicate traps trans transactions actions Have you yo any uy assets asb queried Mr Hushes We have havo two tw one oe for 10 end and an the theother th theother other ot her for fo We Ye have a memorandum memorandum dum of ot them with wih the finance commit committee tee tc but they are not counted as sets assets Ut They are same seme shares that have no face rc value alue at present prent and a we have been ben hold holding holding holding ing them for tor any result that may ae so soI crue I Mr Cromwell said sid the Mutual Matata had never before these th two questionable as assets assets assets sets had any an securities crite with within in ii the past veers ears en The Tho session pst closed clo with Mr r Cromwell Cromwel plo still on the stand |
