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SEPTEMBER. 22, 1905
The Commoner.
9
OTHER INSURANCE SCANDALS COME TO LIGHT
As was expected when the methods of the
Equitable were exposed, the other large life in
surance companies have been having a carnival
of graft.' The officers admit the practice of de
ception, the use of -dummy note-makers and the
existence of inside syndicates of company officials,
and they admit these things with an indifference
which indicates an astonishing moral obtuseness.
A few years ago these men paraded the
streets and boasted a superior morality. They
posed as champions of national honor and de
nounced the democratic party as a dishonest or
ganization. It will shock many confiding souls to find
these loaders of finance, these guardians of sacred
trust funds, engaged in all kinds of duplicity
and dishonesty. But the investigations will not
only lead to remedial legislation but they will
show the necessity for independent thought and
independent opinion. It is not safe to let others
even though they be financiers do your think
ing for you. Confidence is likely to be abused as
it has been abused by the managers of the great
insurance companies. It was never intended that
a few men should do the thinking for the people.
"Deceiving the Government"
In a recent number of the Chicago Record
Herald, a republican paper, an editorial entitled
"Deceiving the Government" appeared, which ed
itorial was as follows:
"In all the revelations concerning the Equit
able Life Assurance Society it is doubtful whether
there was anything more shameful than the action
of the New York Life Insurance company in de
liberately falsifying its own books in order to de
ceive the Prussian government. The company
owned certain securities, including steel bonds
and railway stocks, which the Prussian govern
ment regarded as unsafe investments for an in
surance company. Unless these securities were
disposed of, the New York Life would be barred
out of Prussian territory. According to the ad
mission of Edmund D. Randolph, the treasurer
of the company, the books of the company were
made to show that these securities had been sold.
Actually, however, the securities were merely
put up as 'collateral for a loan to the New York
Trust company. And to cover the transaction the
notes were signed, not by the life insurance com
pany but by a bond, clerk and a messenger, the
latter of whom was on a salary of ?600 a year.
The amount involved was above $3,000,000. To
make the matter worse the trust company was
itself under the control, and ultimately the prop-
TWO FIGURES
Governor Black of New York in presenting the
name of Theodore Roosevelt before the Repub
lican National convention for 1904, used these
words:
"The fate of nations is still decided by their
wars. You may talk of orderly tribunals and
learned referees; you may sing in your schools
the gentle praises of the quiet life; you may
strike from your books the last note of every mar
tial anthem, and yet out in the smoke and thun
der will always be the tramp of horses and the
Bilent, rigid, upturned face. Men may prophesy
and women pray, but peace will come here to
abide forever on this earth only when the dreams
of childhood are the accepted charts to guide the
destinies of men. Events are. numberless and
mighty, and no man can tell which wire runs
around the world. The nation basking today in the
quiet of contentment and repose may still be on
the deadly circuit and tomorrow writhing in the
toils of war. This is the time when great figures
must be kept in front. If the pressure is great
the material to resist it must be granite and
iron."
Who will say that the Theodore Roosevelt
urging the Portsmouth conference to peace terms
Is not a more superb figure than the Theodore
Roosevelt described by Governor Black as "gran
ite and iron" and as one who represents not
the doctrine of peace and arbitration but the
doctrine that the destinies of nations must still
be settled by their wars?
JJJ
GOOD WORK
Taking advantage of the special offer, Com
moner readers have sent in subscriptions in num
bers as follows:
r iSn!J,ad F- 0sDOrn, New Canaan, Ct, 10; W.
&n m eIg.er' TiPton la., 5; J. C. Driscoll, Graf
wn in. d., 5; James Gregg, Earlville, 111., 5"; E. D.
erty, of the New York Life company, but in order
to hide the ownership the stock had been trans
ferred to trustees. Hero was double-dyed decep
tion. If the New York Life Insurance company
deceived the Prussian government in this man
nor, to what extent has it deceived our own state
governments and their inspectors? The impres
sion is abroad that if it has not found it necessary
to falsify its books for homo uses, it Is only be
cause it, like other companies, has been on such
friendly terms with the New York insurance de
partment that such methods were unnecessary.
Manifestly the officials of a company that have
thus betrayed their trust are utterly unfit to con
tinue in the management of policy-holders' mon
ey. The fact that the slime of syndicate opera
tions seems to cover them does not make their
position any the better."
"Life Insurance Scandals"
In a recent number of the Chicago Tribune,
a republican paper, an editorial entitled "Life
Insurance Scandals" appeared, which editorial
was as follows:
"When Mr. Thomas W. Lawson, in his maga
zine articles, incidentally referred to scandals
which were said to exist in many life insurance
companies people were disposed to discount his
statements. No one at that time was prepared
to believe that the life Insurance companies,
which were supposed to be in the hands of high
minded, honorable men, could be guilty of the
practices alleged by Mr. Lawson. It is now ap
parent that he did not tell half the truth. The
managers of these companies themselves admit
being engaged in operations worse than those
he charged against them. People will not ' know
how to reconcile the behavior of J. Plerpont Mor
gan, for instance, with his standing In the. com
munity as a gentleman and man of honor. Sure
ly it can not be held as appropriate that he should
take from the New York Life Insurance company
its principal vice president, occupying the posi
tion of chairman of its finance committee, and
make him a partner in the banking house of J.
P. Morgan & Co. If Mr. Perkins had retired from
the position of vice president of the insurance
company when he became a member of the bank
ing firm he would not have been open to criti
cism, but it was impossible for him to discharge
faithfully the duties of trustee and promoter at
the same time. The law does not hold such re
lations as equitable. There have been many in
stances in the courts of trustees who have taken
advantage of their positions being compelled to
turn over to their principals the profits of their
Tull, Windsor, 111., 9; W. J. Smith, Salinas, Cal.,
G; J. H. Turner, Warrensburg, Mo., 7; Victor Cup
pett, Glade Farms, W. Va., 10; Thomas J. Fagan,
Ellsworth, Minn., 8; F. J. Underwood, Spring
field, Mo., 5; George W. Allen, E. Bridge water,
Mass., 5; Axtle Johnson, New Rockford, N. D., 5;
A". M. Williams, South Solon, Ohio, 5; W. L.
Campbell, Sr., Mitchell, Ore., 5; C. C. Rowe, Or
rick, Mo., 5; W. H. Pelton, Canton, S. D. 5; J. A.
Hathaway, Alvin, 111., 5; B. Moore, Mechanics
ville, N. Y., 5; Val G. Savage, Central Lake, Mich.,
5; Jas. Lyle, Sr., Blocher, Ind., 5; R. Firth, Phil
lipsburg, N. J., 6; Dan Carpenter, Veedersburg,
Ind., 5; W. P. Chandler, Tahlequah, I. T., 5; J.
W. Cunningham, Hardin, Mo., 5; H. F. Pitts,
Sylvania, Pa., 5; Lewis S. Long, Midland, Md.f 5;
H. C. Crabill, Monroeville, Ind., 5; A. G. Porter,
Milan, Mo., 5; T. J. Watkins, Birch wood, Tenn.,
6; W. C. Henry, Seale, Ala., 5; Geo. Ruff, Shelby
ville, 111., G; W. R. Mathew, Reesville, Ohio, 5;
Andrew Z. Lafever, 11; R. L. Obenchain, Com
merce, Tex., 6; H. A. Sommers, Lahoma, Okla.,
14; B. A. Kirchner, Nichols, la., 9; M. A. Stewart,
Ft. Pierce, Fla. G; David Johnson, Wilcox, Ariz.,
5; W. A. Clough, Skowhegan, Me., 5; Geo. W.
Rodefer, Logansport, Ind., 7; Albert Welz, Mober
ly, Mo., 10; E. A. Chase, Paw Paw, Mich., 5; Ed
mund Hanby, St. Louis, Mo., 5; W. II. Musgrove,
Ft. Pierce, Fla., 5; W. H. Kidder, Jamestown, N.
Y., G; A. Adcock, Hiwasse, Ark., 5; John Watson,
Bellville, O., 5; Alonzo Williams, New York City,
G; W. E. Cavanaugh, Berlin, Wis., 7; A. G. Ray,
Butte, Mont., 10; F. J. Weeks, Wallet, Colo., 0;
Levi Rogers, Eaton Rapids, Mich., 5; Joseph Don
aldson, Northfield, Minn., 9; W. C. Crosby, St.
Paul, Ind., 5; J. E. Jackson, Des Moines, Iowa,
5; H. D. Murrill, Catherine Lake, N. C, 5; H. J.
Speck, Vici, Okla, 5; P. V. Murray, M. D., Warren,
Pa., 10; A. J. Beale, Cynthiana, Ky., 8; O. W. Phil
lips, Delaware, Ohio, 8; George W. Miller, Cory
don, Ind., 5; H. F. Pitts, Sylvania, Pa., 5.
Every one who approves of the work The
transaction. 'No man can serve two muBtorfl,
for either ho will hate tho one and lovo the
other, or else he will hold to tho one and despise
the other.' Mr. Perkins can not properly dis
charge h! duties as vice prosldcnt of the Insur
unco company and at the same time as a member
of the Morgan firm. J. P. Morgan ft Co. Ik not
an ordinary banking linn. It in a promoting firm,
a lloator of bonds and nlockii, and Its relation
to corporations like tho New York Life Insuranco
company could not, under tho clrcurnutnncoH, bo
entirely free from taint.
"When wo come to such transaction n thoio
by which the New York Life Insurance company
put out of its hands largo amounts of industrial
securities to deceive the Gorman government we
are perilously near tho region of plain fraud.
How can any one engaged In tho life Insurance
business reconcile transactions of that kind with
his conscience and sense of duty as a tnistoo?
The drift of legislation in all tho states Is plain
ly opposed to the use of public money for private
purposes. So far as legislators are able to effect
it treasurers arc forbidden to take interest on
public money or to speculate with it, under the
severest penalties, which often involve peniten
tiary sentences. We fail to sec in what particu
lar the abuse of a position as a private trustee dif
fers from abuse of a position as public trustee,
except that the penalties are lighter in one case
than in the other.
"Manifestly there Is need for the overhaul
ing of the entire life insurance system and for
its divorce from trust coin pan I en and Inside cor
porations, through which some managers appar
ently are seeking to enrich themselves. If there
are any profits from such transactions the policy
holders should be the beneficiaries. The tempta
tion to accept dubious securities offered by a mem
ber of a banking firm to himself as chairman
of a finance committee must bo well nigh irre
sistible. Such transactions can only be called by
ojie name 'graft even when practiced by 'hon
orable men' standing high in the community and
famous for acts of charity and public spirit.' The
word 'graft' in Its secondary sense has not yet
been fully adopted into the language, but people
know well enough what It means. Tho Century
dictionary defines 'grafting' as follows 'The act
of Inserting a shoot or scion taken from one troe
Into (ho stem or some other part of another,' etc.
This is precisely what was done with Mr. Perkins
when he was taken from the life insurance com
pany and inserted in the banking house; and he
produced fruits as a banker that did not properly
belong to the stem upon which he was grafted."
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