THOMAS W. LAWSON, ESQ., Boston, Ma.s.s.

_Dear Sir_: I have read and will continue to read your articles on "Frenzied Finance," published in _Everybody's Magazine_, with a great deal of interest. I have noted especially your statements in reference to the big life-insurance companies, as I am a policy-holder in both the New York Life and the Equitable.

Under the heading of "Lawson and His Critics," in _Everybody's_ for January, you give your side as to the a.s.sertion on the part of the insurance companies that you have been refused life insurance, among other things publishing a fac-simile of a contract of life insurance between yourself and the Equitable Life a.s.surance Society for $1,000,000. On my first reading of your article, I was certainly impressed with the fact that you had $1,000,000 of insurance with this company. On a second reading, I note that you do not say in so many words that this is a policy in force, but you say: "Well, look at this reproduction of the doc.u.ment that is now in my possession and always has been since the date when it was delivered to me by one of the great representatives of the 'System,' The Equitable Life a.s.surance Society." This statement taken in connection with others, conveys the idea that you are insured in the company named.

In conversation with a gentleman a few days since, who claims to know whereof he speaks, having gotten his information direct from New York, he stated that you had no policy in the Equitable Life a.s.surance Society for $1,000,000, or any other amount, and that the reproduction referred to above, was of a _sample copy_ of a policy, and not a real contract.

As your editor states that you will answer any pertinent question, I will ask the following, trusting that you may consider it pertinent: Have you a valid subsisting policy in the Equitable Life a.s.surance Society for $1,000,000, the fac-simile of which appears in _Everybody's Magazine_ for January, 1905?

Trusting you will favor me with a reply, I am,

Very truly, ----

I answered:

Since the chapter which contained the fac-simile of the million-dollar policy was published I have received many letters similar to the above, but have not answered any because I wished to see how far the insurance people would go in this matter. Finding I did not reply to the different attempts they made in their subsidized journals to draw me out, they grew bolder, until the use of this million-dollar policy has become the chief defence of the Big Three companies. I want my readers to think this point over and weigh its significance carefully. In a previous chapter I called attention to the fact that there is nothing to protect the policy-holder from being robbed of the amounts he has invested to insure his family from poverty after his death but the honesty of the men who really control the big insurance companies as absolutely as any of their policy-holders do their personal affairs. If these men are honest, policy-holders in their companies may rest easy for the time being; but if they are dishonest, the policy-holders should call them to account, for these men have it absolutely in their power to make way with the funds of the companies they manage until there will not be a dollar left for policy-holders.

Therefore the one thing for policy-holders to settle, the one vital thing is, Are these men honest, or are they tricksters and liars?

To settle this point they must be weighed in the same way that all other men and women in this world are weighed--by the simple, ordinary standards: Do they lie? Do they trick? Do they cheat?

When I made my charges in my first chapters against the votaries of the "System" who controlled the insurance companies, they met my specific charges as dishonest men would meet them, not as honest men would. They impugned my motives, and specifically charged that my reason for attacking them was that I had been blacklisted by all insurance companies and could not get insurance from any of them.

While it was immaterial so far as my specific charges went whether this was so or not, it had a most decided bearing upon the question whether the officers and controllers of the Big Three insurance companies were honest or dishonest men. Therefore I picked up their accusation and began a line of argument to prove they were tricksters and absolutely devoid of honor.

I showed, by reproducing the personal letters of President McCall, of the New York Life, to my office and to my house, reenforced by his special agent's letter, and these reenforced by his Boston agent's letter, that I had been continuously and urgently importuned to take insurance during the time he said I was blacklisted. The insurance people met this by the excuse that these were not personal letters, but mere advertis.e.m.e.nts.

I then reproduced the million-dollar policy, hoping to drag from the Big Three a specific charge that this, too, was an advertis.e.m.e.nt.

Of course, I did not pretend that the policy in question was in force, that is, that I was insured in the Equitable Life a.s.surance Society for one million dollars. This would have been too childish; first, because every insurance policy, particularly the very large ones, is as much a matter of record, to be got at by any one in the insurance business, as are real-estate records; and, next, because that which I printed had the signature punched out, which made it obvious that it was not in force.

My object was to lead the Equitable into the positive statement that it was an ordinary advertis.e.m.e.nt, when I would have reproduced the proposition that accompanied it and which the Equitable made in probably the most elaborate set of doc.u.ments ever a.s.sembled by an insurance company for the purpose of inducing one of the "best risks" in America to take out a "great big policy." These const.i.tute the complete argument which was made by the Equitable Life a.s.surance Society to persuade me to take a million dollars' worth of insurance. They are engrossed upon parchment and bound in a specially gotten-up morocco cover, and, I was told, cost the insurance company between four and five hundred dollars.

They were presented to me as the result of my demanding that all the inducements they offered to come into their company should be put down on paper, so that there could be no mistaking them. The doc.u.ments as engrossed and the terms of the contract were carefully copyrighted by the Equitable, and are now on my table before me as I write.

The question which the publication of the million-dollar policy was to settle was whether or not I had been importuned to take out great sums of insurance in the leading insurance company of America, and it proved exactly what I had contended--that I had been so importuned.

Up to and including my April, 1905, instalment I have made specific charges against the great insurance companies, the Mutual, the New York Life, and the Equitable:

1st. That the control of the officers of these great corporations over the billion dollars of their policy-holders' funds is as absolute and unrestricted for all practical purposes, as is their control of their own personal affairs, and is largely exercised for their personal enrichment.

2d. That the policy-holders have absolutely no voice in the management of these companies or the control of their funds, because of the manipulation of proxies in the New York Life and the Mutual and the control of the stock of the Equitable.

3d. That those who do control the big companies are votaries of the "System," and as such are subject to the "System's" orders as absolutely as is James Stillman, president of the "Standard Oil" National City Bank.

4th. That the insiders of these insurance companies, not one but several of them, have acc.u.mulated fortunes in the past few years, of from one to twenty millions, while at the same time premium-rates have advanced and dividends decreased.

5th. That under the present methods of conducting these great companies it is as inevitable as it was in the case of 520-per-cent. Miller or Mrs. Howe's Woman's Bank, that as soon as they can get no more insurance, the funds behind the old insurance will be dissipated and a crash take place such as the world has never known before.

6th. That the companies are "milked" in every direction, through the purchase and sale of real estate, through the loaning of their millions, and through the manipulation and investment of their funds.

7th. That they acquire new business at an expense and by methods which alone will in time wreck the companies.

8th. That in a single instance the New York Life sold securities for $5,839,087, but its statement under oath to the State Insurance Departments showed receipts of only $3,075,392.

9th. That the New York Life sold the stock of the New York Security & Trust Company, which it held, to its insiders for over $4,000,000 less then they could have secured for it from others.

I have specifically charged other things, and will, as my story proceeds, make many more specific charges of as serious a nature; but the above suffice for my present argument, which is, that up to and including the April number I have made these accusations and that the only way they have been met is by underhand mud-slinging and by alleging that the incentive for my attack was that I could not secure insurance from any of the American companies; and I have met this with absolute proof, which must stand until it is disproved, that I have been during the past ten years importuned and urged by the large insurance companies of America to take out insurance.

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

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 compa.s.s 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 inst.i.tutions 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 inst.i.tution 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 inst.i.tutions 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 a.s.sociate in the management of the same corporation, George W. Perkins, J. Pierpont Morgan's partner, is another very rich man, whose wealth has been acc.u.mulated 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 inst.i.tution 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 inst.i.tutions, 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; a.n.a.lyze 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 inst.i.tutions with low-priced quarters so that the personal income of men already multimillionaires may wax still greater. Think of the great inst.i.tution 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 acc.u.mulated savings but the devotion and the honesty of the men who are in control of these inst.i.tutions.

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 a.s.severations that nothing could be more preposterous than that any one of them could do wrong. But the great G.o.d, 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.

And from whom comes the proof of the treacheries and rascalities perpetrated within the Equitable? From the men who control and manage this great inst.i.tution and its hundreds of millions of acc.u.mulations.

When my accusations first appeared, these men saw the handwriting on the wall and some of them, bolder than others, determined to seize these vast h.o.a.rds of the public's money and at the same time get possession of all evidence of past crimes so that they might be immune forever after from punishment and the necessity of making rest.i.tution. In the act of grabbing, however, the robbers fell out with one another, and, presto!

they are in the public square where all men, women, and children, cats, dogs, and a.s.ses may see and hear as they gouge, bite, and accuse each other of the vilest crimes.

These are the men in whose custody even now are the acc.u.mulations on which you, Mr. Policy-holder, are depending to take care of your wife and little ones, should you die. On the honor and responsibility of men who in the past five years have "saved" out of salaries of $20,000 to $100,000, private fortunes of millions, you must absolutely rely for the safety of the billions of dollars of your savings. The future of the helpless beings whom your hard daily labors provide with a livelihood is in the hands of men who admit having expended $100,000 of your money to provide a lordly and regal entertainment for a set of extravagantly paid agents and solicitors who, spurred on by prodigal inducements, have piled up huge amounts of new business on the company's books. I have explained to you before what such business is worth, that the agent gets so large a commission that he is practically in a position to accept risks at far below their cost to the company, and that such business as this is seldom renewed. The same men have been paying personal secretaries, gardeners, and flunkies out of your earnings; they have been feasting and traveling in private cars with large parties of the New York flubstocracy at your expense; every possible extravagance they have been guilty of by means of the revenues some of you have worked fourteen to eighteen hours a day to gather in. Shame, I say, on such contemptible thievery.

I cannot resist the temptation to pull back the slide from one episode of the past. When my strictures on the three great life-insurance companies first appeared, one of the vice-presidents of the Equitable, Gage E. Tarbell, in writing to an inquiring policy-holder, said: "Pay no attention to Lawson; he is only a reckless stock gambler, and every sensible person knows that any man, no matter what his position might be, who would do anything to cause loss to the cla.s.s of people we insure, must be a rascal." And this is the same man Tarbell, it is now admitted by all the Equitable officers and investigating committees, who, as soon as he saw the crisis coming in the affairs of the Equitable, had his pal, President Alexander, pay to him $135,000, which he claimed was due him for commission renewals, even though he was then in receipt of a salary of $60,000 per annum for his services. It is through the operations of this same Tarbell that the vast system of rebates, one of the chief evils of the present system of life insurance, came into being, and through his prodigality that the immense sum of $2,000,000 stands on the books of the company, representing advance commissions to the pampered agents.

The time has come for all you policy-holders to act, and there is but one way to act.

A thousand and one schemes are afloat to confuse and trick you at this period. The cry is--anything to hush things, to confine the fire to the Equitable, at any cost, even though it totally consumes the $400,000,000 of the people's savings in that inst.i.tution. I told you at the beginning that the New York Life was worse, if anything, than the Equitable, and the Mutual Life just as bad. Therefore I unqualifiedly advise policy-holders to:

1. Pay up this year's premium--it will be the last to these plunderers.

2. Have nothing to do with any committee or scheme.

3. Write me, at once, your name, address, and the amount and character of your policy. I want nothing more from you, and under no consideration will I divulge your name without your further consent in writing.