Frenzied Finance, Vol. 1: The Crime of Amalgamated

by Thomas William Lawson

Therefore I will leave the question of this million-dollar policy and other forms of importuning until the insurance companies offer something in rebuttal.

THE WAY OUT

The overhauling of the Equitable Life exposed conditions far worse than I had indicated to the public, and it seemed probable that the usual whitewashing process would be utilized to conceal the guilt of the rapacious criminals who had been untrue to the most sacred trust that can be imposed on man. Since that time, however, the Governor of the State of New York has appointed a committee to investigate the affairs of the Big Three corporations, and the resulting disclosures are the sensation of the hour as this book goes to press. In order to protect the interests of policy-holders, in case the authorities declined to act, I issued the following address in the July, 1905, number of Everybody's:

TO THE POLICY-HOLDERS OF THE NEW YORK LIFE, MUTUAL, AND EQUITABLE INSURANCE COMPANIES

The time has come for you to act. When, less than a year ago, I began my story, "Frenzied Finance," I exposed the function of the three great life-insurance companies in the structure of the "System." I explained that they were controlled in the interests of great financiers and that their funds were juggled with to compass the huge plundering operations of Wall Street. At that time the New York Life, the Equitable, and the Mutual Life loomed before the American people as the greatest, most respected, and most venerable institutions in our broad land. To-day they stand for all that is tricky, fraudulent, and oppressive.

A great change to have been accomplished in less than twelve months!

My readers are by this time familiar with the condition of affairs in the Equitable. The greed, juggling, and grafting practised by its officers and controllers have been fully exposed through the press. I hope none of those who have followed the terrific arraignment of rottenness and rascality made through the Frick report are so foolish as to imagine that the evils described are confined to the Equitable. In my own opinion the Equitable is much less reprehensible than the New York Life, and when that institution and the Mutual are thoroughly shaken up, as they will be in the future, indubitable evidence of the same fashion of extravagance, trickery, and fraud will be found in plenty. Conditions in the three institutions are the same; though of late the New York Life has altered the character of most of its securities. Each has piled up an immense surplus which has been used through allied trust companies for stock juggling; each has paid extravagant commissions to agents; the funds of each have been managed to afford to high officials plentiful opportunities of graft; each has its real estate, fire insurance, low rent and loan favor graft; in each will be found the same type of syndicates as President Alexander and Vice-President Hyde used for their personal enrichment in the Equitable. To-day President John A. McCall of the New York Life is credited with possessing a fortune of between ten and fifteen millions—a few brief years ago he was State Superintendent of Insurance in Albany. The chief associate in the management of the same corporation, George W. Perkins, J. Pierpont Morgan's partner, is another very rich man, whose wealth has been accumulated in a few short years. Do you imagine for a moment that such transactions as I set forth last year in connection with the New York Security and Trust Company, in which the interest of the New York Life was sold to a syndicate of its own directors for a sum far below the market value of the shares, were put through without the connivance of President McCall and Vice-President Perkins? Even if the New York Life, as its president explains, did make a large profit on the sale of the trust company's stock, he cannot deny that the syndicate paid far less than the then market value of the shares for the insurance company's holdings.

There is something particularly vile about the crimes of these high officials and distinguished gentlemen who have been waxing fat and luxurious on life-insurance graft. In a recent number of this magazine I drew a parallel between the confidence operator and the burglar to show that the latter despises the former for a sneak thief who takes no chances in his thieving operations. Infinitely more depraved than the sneak thief is the high-placed functionary, presiding over a great institution built up out of the savings of millions of people, paid an immense salary for his important services, trusted with vast funds because of his reputation for integrity and business sagacity—who yet uses his splendid place to line his own pocket. Of all fiduciary institutions, life insurance should be the most sacred. Its chief function is to care for the widow, the orphan, and the helpless. The millions of revenue paid annually into the life-insurance companies of this country represent the blood and tears and sweat of millions of Americans who thus provide for the care of their dear ones for the time when death shall have put an end to their own income-earning abilities. The administrator of a trust so solemn and exalted should devote himself to its safeguarding as a priest dedicates himself to the service of his Maker. The responsibility conferred on him is the highest and holiest man can repose in his fellow-man. Remembering all this, consider again the revelations of greed and plunder in the Equitable; consider that millions upon millions of dollars have been filched and wasted; analyze the Frick report and the letter of President Alexander to the directors of the society, calling for Vice-President Hyde's removal from office. Think, ye farmers and laborers, of personal traveling expenses of $75,000 in a brief period, of salaries of $100,000 annually paid for a few hours of work per day; think of vast sums of your money used to provide expensive safe-deposit institutions with low-priced quarters so that the personal income of men already multimillionaires may wax still greater. Think of the great institution to whose hundreds of millions' income you contribute your hard-earned dollars, being farmed, milked, and squeezed by a pack of dissolute and greedy schemers and robbers more conscienceless and oppressive than any band of thugs in the country.

When I began to discuss in Everybody's Magazine the subject of the three great life-insurance companies, I stated that there is actually nothing between the two million-odd policy-holders and the possibility of their being robbed of the billions of dollars of their accumulated savings but the devotion and the honesty of the men who are in control of these institutions.

You know what happened when I said this to you the first time—less than a year ago. The officers, trustees, and hirelings of these great companies laughed to scorn my statements and called me a liar and a scoundrel. They drew the attention of the whole world to the standing and wealth and honesty of the men who managed these great corporations, and proved by the most positive asseverations that nothing could be more preposterous than that any one of them could do wrong. But the great God, who seldom allows His children to remain long deceived to their undoing, heard these loud-mouthed protestations, and to-day the world is listening to exposures of low, mean thefts and contemptible crimes far worse than any to which I had pointed.