468 GILBERT E. ROE 



had, at least, the merit of great cleverness. From the exam- 

 ination I have made of the origin of this scheme, I am con- 

 vinced that it does not possess even that poor merit. At the 

 time of the legislative investigation of 1877, Henry B. Hyde, 

 the father of James Hazen Hyde, was president of the Equi- 

 table Life Assurance society. At page 35, volume I, report 

 of that investigation, I find an affidavit from Mr. Henry B. 

 Hyde in which he sets forth the extra compensation that he 

 received from the company in addition to his salary. That 

 extra compensation took the form of a certain percentage paid 

 him upon the surplus of the company. According to that af- 

 fidavit, this extra compensation for the years 1864 and previous 

 amounted to $16,199. 



In 1874, it amounted to $50,000. By the testimony of 

 William H. Beers, then vice president of the New York Life, 

 and afterwards its president, found in volume II, page 35, it 

 appears that substantially the same arrangement was made 

 effecting the compensation of the officers of the New York 

 Life. By the testimony of Mr. Richard A. McCurdy, then vice 

 president of the Mutual Life, afterwards its president, it seems 

 that the officers of the Mutual had the same habit of voting 

 bonuses to themselves based upon the surplus (see volume II, 

 pages 98-99). And that these bonuses or percentages of the 

 surplus which the officers of the company voted to themselves 

 were falsely stated in the reports of the company to the insur- 

 ance department to be dividends paid to policy holders. At 

 page 152, volume II, Mr. McCurdy testifies: 



Q. Where in the report is the payment of the bonuses 

 charged? 



A. At that time? (Referring to the year 1870.) 



Q. Yes. 



A. Well, the theory of the actuary we had at that time 

 was, that that was a proper charge to the dividends to the 

 policy holder because it was part of the earnings of the com- 

 pany, and should be participated in by them. 



Q. In what part of your account does it appear, then? 



A. It appeared at that time as dividends paid, I think; 

 I have such an understanding in my mind; at this date I have 

 an impression it should not be charged so, but the amount was 



