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Show 90 END 10 THEIR - PECULIAR WAYS New York Life Official Substitutes Substi-tutes ( heck for Non-Taxable Non-Taxable Slock. PERKINS TELLS ABOUT THAT $40,000 PROFIT Belonged to "Nylic" Fund, but Can t Trace It in the Account. NEW YORK, Nov. 27 One of the most Interesting features of the life Insurance Investigation developed only a few mln-uts mln-uts before adjournment of the Armstrong Arm-strong committee today, when Theodore E I'.anta. cashier of the New York I,lfe Insurance company, testified that nt the beginning of Edmund T. Randolph treasurer of the company, opened the v.-, n!tn oi" the company, removed New York city stock valued at ?7;.ri and put ;: check Of the Central National hank f"r $700,000 in its place. Mr Banta said he helprd tn open the vaults at the order of Mr. Randolph, and that he s tppnsed Mr Randolph -d for the finance committee. com-mittee. Kpt fox a Few Days. Th- r.toek was kept out for a few day and was then returned and the check Withdrawn. The transaction waS not recorded re-corded on th books of the company, sn far as Mr Banta knew. The Dti Ct of the operation would he that any one having that stock would have STfKi.tHlO worth of untaxable property .t the end of the year. Mr. Banta did not know who received re-ceived the stock. Mr. Randolph Is expected ex-pected to he one of the witnesses tomorrow tomor-row Porkins Tells of Profits. fjeorge w Perkins vice-president of the New ork Life Insurance company and member of the Arm ef j p Morgan St Co. bankers, todaj described to tb" committee the transaction which resulted In his receipt of Sto.l'j:: from Kidder. Pea-bodj Pea-bodj & Co. Of Huston, as h.ilf the profits t the sale i f $2,000,000 worth of bonds Of the Mexican Central Railroad company. Mil tort M Mattl8on, n bookkeeper of the New York Life Insurance comnanv. had previously testHled that SSSO.tXO of the Ufa insurance company's money was used in the transaction mid that Mr Perkins got the iiroht Invested for "Nylic." Mr Pet kins said today that he went Into the transaction for the "NyllO" fund, which Is owned by the agents of the New York Life insurance company, and that he invested the profits for that fund. The life Insurance company, he said, profited i the extent of o per ent interest on the loan of 1830,000: He stated that tin com-p'any com-p'any had no right to the W0.193 profits. Took Up Hamilton Notes. Mr Perkins said also that J P. Morgan Mor-gan & Co. had taken up notes of Andrew Hamilton and E. )' McCall, formerly Justice of the New York St;ite Supreme i nut. aiuojntlr.g to y.11,( at the rccjuest of President John A McCall of the New York Life Insurant e company, and that the amount with Interest was paid to Andrew Hamilton by the New York Life Insurance company from the proceeds of a syndicate In t nltc.l States Steel corporation cor-poration stock. To Keep Expenses Down. President John A Me'. 'all told the committee com-mittee today that he had told the Central bank and B E. McCall that Hamilton was good for 150,090, and they had taken Hamilton a notes PresTdi nt McCall said the New York Life Insutance company owed Hamilton the S."j.31o and took the syndicate profits to pay him The result was that the payment did not appear on the books of the company. The reason was that he wanted to keep Hamilton s expenses dow n Steel Corporation Deal. Much evidence was given both by Mr. Pi rkins and President McCall about the Nt w York Security and Trust company's participation in the United states Bteel corporation to the extent of ta.IioO.tMO, having hav-ing the deposits of the New York Life Insurance company for about th.it amount. The New York Life Insurance company got 75 per ct nt of the profit and Mr Perkins contended that It was a safe and profitable venture President McCall said the life Insurance company should have participated dlrectlv instead of In-dire, In-dire, tfo. Mr. Perkins Explains. Mr. Perkins, in explaining why hQ received re-ceived a protlt of WO l"3, which was paid by Kidder. Peabody & Co. of Boston to the New Yoik I if.- Insurance ompan. for a loan of 1880,000 In 1904, said that Robert Winsor of Kidder Peabody & Co. of Boston called at the ofbee of J P Morgan V Co. In June. lCV'H. and asked them to take up a Joint account with his Hi in in connection with the Mexican Railroad company. Mr. Perkins told him that J P. Morgan & Co. could not do it, but he (Perkins) would take care of it Mr. Perkins said further that betook be-took up the business for the "Nylic fund, which is owmd bj the agents f the New York Life Insurance company, of which Mr Perkins Is trust Arranged With Randolph. Part of the proposition was that the Mexli an Central Railroad company should be supplied with 12,000,000 at once. The "Nyllc" fund did not have so much cash and Mr. Perkins did not wish to disturb its Investments, so he arranged with Edmund D Randolph treasurer of the New York Life Insurance company, to take $1,000 000 worth of Mexican Central Cen-tral bonds at 5 per cent Interest. The New York Life Insurance company -aid Mr Perkins paid Kidder. P.ahody & "o $V.fi and held the bonds until An- Kust 11. 1904, when the Boston firm repaid the loan. Interest on $1,H)O(i00 and JW.ls;: profit on lie' transaction to the hfe Insurance In-surance company. The profit of 140,198 Was P 'hl to Mr. Perkins as trustee of the 'Nyllc" fund Mr. Perkins said he paid the money Into the "Nyllc ' fund. Profit-. Sent to Company. The profits were sent to the New York Life insurance company, be said he- caust the company was the only party known to Kidder.- Peabody & Co.. in the transaction, and the cheek was cashed and tb" i a.-h paid to Mr. Perkins, because if it had been cashed and entered on the 1 iu of ths New Ymk 1 Ife Insurance compino It mlf.hl have been s.U,) that tin cdmpahy received the prpflt and then pas . It away. Ti.incaction Not Reported. Mr. Perkins said the profits of the Ml -I lean Central deal were derived by the ?ale of $2,000,000 of bonds by Kidder. Peabody & Co He said noihlnp to Mr Winsor about "Nyllc or sanding the bonds tq Che New York Life Insurance compnnv. He said he probably made the latter request direct to Kidder. Peabody K- '.. The Nyllc' fund paid nothing on the bonds. The transaction was not reported re-ported to the finance committee of the New York Life insurance company On Books as Purchase. Mr. Hughes brought out from Milton M Harrison, the bookkeeper, thut he had put the bond.i on the New York Life insurance in-surance company books as a purchase. Mr, Perkins said he did not think Kfd-d Kfd-d r, Peabodv & Co. gave an document to the New York Life to show that the transfer of thu bonds to the New York Life Insurance company was made as securll) for a loan and not a sab- Mr. Hughes asked if there was any other ciiii Ideratlon than the loan of $930,000, for which Kidder. Peabody .r Co paid the $40.U3 Gave Kis Word. He replied that was all With the exception excep-tion of the taking of the Joint account. In reply to questions Mr Perkins said the Nyllc"' fund was luld by him as responsible for any loss that might have f.suit. d from the deal, "on my word." "To whom did you give your word"" afked Mr Huches. 1 .lid not give to anybody," said Mr Perkins "1 didn't need to" He said the New York Life was not liable for an loss Handled as Kis Own. Mr Hughes then asked several questions ques-tions to locate the $40,133 In S statement ..r the assets of the "Nyllc. " The money, 1 ild, was never checked over to the Nyll'- tne-t' x, bit was Invested Mi. Hughes asked how it wits Invested Mr. Perkins said the funds of the Nyllc were handled asa part of his own individual in count; Asked how he discriminated, Mr Perkins said be never had any 1 rouble In discriminating. Mr Perkins said he did not wnni to sav how he Invested the lt3 before such an audience, but it was put into I" nlted Sl-it-s Steel common stuck at V.i' 1. 'Did you keep or sell If ' "1 m chairman of the finance committee commit-tee of the I'nlted Stales Steel corporation, corpora-tion, and If 1 sa what I did with it it mav be misconstrued Keeps No Record of Fund. Mr. Hughes did not press the question but wanted to know what became of the investment. Mr. Perkins said It was Impossible Im-possible to follow It. Mr Perkins said he kept no book account of the property of the Nyllc, but reports! the holdings of the fund to the other trustees. He kept no record of bis transactions for the HyliO, Invested Its funds alonK with his own. and from time to time pave the I best of the prodts to the Nylic fund. Is Sole Manager 1 have been sole executive manager of UliS fund, and I am responsible fur any ioos and appreclutc any thanks for suc-cesfl suc-cesfl He said he could nut trace thH check or any other he received from tin- Nyllc fund Before he went to Europe recentl) Mr Perkins made a memorandum memoran-dum Showing wlml the Nyllc fund owed so that It could be found in case of his death, and the memorandum was still m , xm At OHO time the Nyb. fund would be In ensh and again It would be In securities. Mr. Hughes read an article f the by-laws exempting the trustees from the necessit) ol accounting for the profits and losses f the Nylic fund, and Mr Perklnt 'aid if he made any substantial sub-stantial losses he would make them good, though not legally responsible for them, In a com !inling statement he said he had ubpoiute control of the Investments about which he had been .piestloiie I and that they had yielded a profit of neatly $7.".'i.- About Hamilton Notes. President John a McCall of the New York Life Insurance, company was next . ailed and ask d about the notes gl.n bj Andrew Hamilton and Why the ' York Life paid them Hs said Hamilton had S79.Uea or $SO,000 from the New York I f,. , a o-il In six e rs he had about $iiivi a year. In a talk with Hamilton as to the cost of the local bureau of the u Ycru Life. McC i'l estlm l d lh avoragc v. .rlv cost at $106,000. M t all sail bo wan I 1 to keep the expenses down to $:XXJ a State and Canada. At the end of the ve.ir Hamilton said Hbout $CS.-i-o was due' him on what h-- had paid out for the company. The New York Life bald the ei ibn Rendeiod No Account President McCall did not recognize any of the notes shown today. Ho said he re- qUlred no St nn nt of Mr Hamilton of what advances he had made. In 1 McCall Mc-Call made an arrangement thnt Hamilton should have .. oer cent ol his dlsburae-m dlsburae-m ntS Hamilton was limited to $100,000 In disbursements He retained $io.oco. Ham-in, Ham-in, never rendered an account of his dlsbun i men! Why diJ you not scttlo Uiiu clilm ui rectly instead of through J P. Morgan & Co.?" asked Mr Hughes "He was getting $1S0W," McCall replied. In 1SQ9 we could not have paid him dl-rectlj dl-rectlj and keep the expense of the legal department under $100 000 n year I preferred pre-ferred p. k ep Mr H mlltoti In c ontrol of Jils expenses. He got only $50 0 the next year." Guaranteed His Notes. Mr McCall said he is a trustee of the Central National bank and had told the bank Hamilton was good for 160.000. Mr. McCall sld li - had no Specific knowledge of Hamilton's note. Asked about the notes amounting to SI 3 -000 Indorsed bv John A McCall. Mr. McCall Mc-Call said Andrew Humllton got this monev. H ! told K L McCall he would guarantet Hamilton would pay any amount to E lv McCall up to 110,000. He did i ol know anything about the purpose for which Hamilton wanted the money. Mi Hughes asked why K. K. McCall signed tin f the not. s taken up by J P Morgan A Co Mr. McCall said hr COUld not explain It. Mr Hughes said tin anno k-' jii of tie- notes was $" ) In excess of the sum paid Mr. Hamilton, and Mr McCall said that was another matter which he ould not explain. Didn't Want to Be Bothered. Mr McCall said lie did not want to be bothered b Mr. Hamilton's notes, and so agreed with Mr. Perkins to allow the Steel syndicate profits to bo used to pay Hamilton Bv this plan also tho deal was kept out of the ledger of the New-York New-York Life Insurance company. It wan the fuull of the bookkeeper that the ?.'.-Pin ?.'.-Pin paid to Hamilton did not appear In tin company's ledger it was from this ledgei the report to the State Insurance department was made up. He paid that When he made to the committee a statement state-ment of m paid by the New York Ife Insurance companv to Andrew Hamilton Ham-ilton he did not Include the Ja0.31 because 11 was on the books of the Hanover bank OlDcs Of the New York Life Insurance comuai . . The renorl to the insurance depiirtr.il ill wns made from the home office of-fice book. He did not know whether the payment was recorded on the home offlct i ka |
