THE INSURANCE INVESTIGATIONS
687
To continue this interesting inventory of ance Society was appointed to take such action as might be considered best to bring misdemeanors — large sums of money, in about a mutualization of the company. one case $100,000. were given by a director These efforts finally became merged in the to some person in the employ of the com pany, without a voucher passing, and with investigations that are still under way. It is not the purpose of this article to out the person who paid the money being review the evidence taken by the various able to explain where it went or for what committees, or reported by the State Exam purpose it was used; great sums were con iner, except so far as it may be necessary tributed by these companies to the cam to discuss the questions of recovery of paign expense funds of political parties, and moneys improperly disposed of, and the expensive establishments were maintained possible punishment of offending trustees at State Capitols for the purpose of housing for felonious breach of trust. Some of the and entertaining legislators, while other facts brought out by the investigation, or large sums, hundreds of thousands of dollars, were paid for "legal expenses" in no way known to exist, are as follows: explained or satisfactorily accounted for, The presidents of these companies, receiv but which it may be fairly inferred were ing as annual salaries, some of them three used to fill the greedy maws of the times as much as is paid the president of "black horsemen." Banking and trust the United States, have loaned to each other large sums of money belonging to corporations were formed by these great their respective companies, at much less insurance companies, in which their own than the prevailing rates of interest; direc trustees were installed as officers at high tors of these companies have engaged in salaries and with which the insurance com syndicate operations in the purchase of panies maintained constant relations, which stocks and bonds, in which their companies did not always inure to the benefit of the were interested — themselves taking profits poor policy-holder whose money furnished that should have gone to the companies. the capital for these subsidiary institutions, One of the directors of one of the compan but which did furnish channels through ies, not known to be a practising lawyer, which the trustees could and did conduct whose duty it was to contribute all that was profitable transactions for themselves. This valuable in his equipment, without reward, system of "profitable opportunities" grew makes a contract with his company by the so slowly and so insidiously, that it came to terms of which he was to receive the snug be regarded as legitimate and respectable, income of $20,000 per year, and did actu and the men who had been brought up in it ally receive such sum for many years. Of saw no possible harm in it, until they were what the services of this eminent statesman conscious of an outraged public sentiment consisted except "giving valuable advice on that has become universal and overwhelming. It is not necessary to further enumerate numerous occasions," has not yet appeared. If every director of a charitable, philan the offenses against good morals and the thropic or eleemosynary institution is to be fiduciary relations, as they are now matters permitted to withdraw from the funds of of record and are known to all. But when the society that he is supposed to serve the record is all in, what can be and what gratuitously, large annual retainers, such shall be done about it? institutions will have to be very wary about As to the civil end, there would seem to inviting members of the legal profession to be little doubt that all these vast sums that serve on such boards. Happily, however, were not used for the legitimate legal require this is the first conspicuous example of such ments of the companies, can be recovered miserable graft. from those who improvidently or improp
