Q- What kind of bills did you interest yourself in? A. None
^ I>^rticular.
C^. Well, can you recall, take this year for example, "what he has
^"^i^ed you in relation to? A. Really I cannot say offhand.
C^^ Anything? Did he really advise you as to an)^hing? A. I
^^vime he gave us information.
^^- Do you know that he did? A. Quite sure of it, sir.
/I* ^^^ * Can you recall any matter as to which he gave you informa-
^? A. No, I think not.
%s^. Was he not under retainer so you could have his services in
C?kse you required them ? A. In case we required them, yes.
Q. What was the real object of this five hundred dollar pay-
ment, to have him under retainer? A. Yes.
Q. He did not render any special services ? A. No, not that I
recollect.
Q. You do not recall anything that he did ? A. Not in detail.
Q. Or any bills to which he gave attention before any commit-
tee? A. No.
Q. When did you first become acquainted with Mr. Buckley?
A. I have known Mr. Buckley six or seven years.
Q. Was he at one time connected with the Insurance Depart-
ment? A. I think he was, yes, sir.
Q. Was he at one time the private secretary of James F. Pierce
when he was Superintendent of Insurance? A. That I do not
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Q. Was he subsequently one of the assistants in the Insurance
Department? A. He was employed in the Insurance Department.
Q. Was he employed under Superintendent Payn? A. I think
he was back as far as that.
Q. Has he a brother in the department now ? A. No, sir, not
that I know of.
Q. When did he leave the department? A. I do not think he
has been there since 1892, perhaps 1891.
Q. Have you retained him in connection with matters with the
Department? A. No, I never retained him when he was con-
nected with the department.
Q. I mean in relation to matters that came up with the de-
partment? A. Not specially.
Q. Has he represented you at any time with regard to matters
which came up with the department ? A. I think not.
Q. Was he recommended to you by the New York Life? A.
No, sir, I do not recall that he was.
Q. Did you know that he was employed by the New York Life ?
A. I did.
Q. Did you know in what capacity? A. No, sir.
Q. Does Mr. Buckley attend to regular legal business, such as
matters of litigation, giving them legal opinion and advice as to
ordinary questions? A. Well, I presume that he does in due
course of business.
Q. Has he ever dealt with you in regard to such matters ? A.
Not that I recollect.
THE CHAIRMAN : The Committee will appreciate it if the
representatives of the press will wait a moment after we take our
recess. The Committee will stand in recess until 2.30 o'clock this
afternoon.
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AFTER RECESS.
THE CHAIRMAN : The Committee is waiting for Mr. Scott
If there is any one in the room who will communicate with him.
EDWARD W. SCOTT resumed.
BY MR HUGHES:
Q. Did you first become acquainted with Mr. Buckley at the
time when it appears that he received his first payment of five hun-
dred dollars? A. No, I think not — prior.
Q. Had you known him for some time? A. For some time,
yes, sir.
Q. Was there any payment made to him of twenty-five thou-
sand dollars in the summer of 1897, which went to make up the
^fference between the amount of money borrowed from the New
wk Security and Trust Company and the purchase price of the
«fock bought by you at the auction sale? A. W. H. Buckley?
Q- Yes. A. No, sir.
Q- Or any part of it ? A. No, sir.
y* Was there a payment made to Boswell for that purpose?
^- There was a payment to Boswell in the summer of 1897.
2- What was that payment? A. They "were agents of the
^ompany^ Boswell and Buckley, and they desired to have an inter-
est in the capital stock to the extent of 100 shares, and the loan
^^ made at that time.
Q* Was it a loan? A. It was a loan, yes,, sir.
Q- On collateral A. Charged to their account.
Q- On collateral? A. Well, their account was perfectly good
fot the loan. Not on collateral, no, sir.
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Q. It was a loan to Boswell ? A. It was an advance to Boswell
alone? A. Boswell and Buckley.
Q. What Buckley was that? A. That was a Buckley of Cin-
cinnati.
Q. What was his first name? A. He was a partner of Mr.
Boswell.
Q. When was that advance made? A. I think in July, 1897.
Q. And the $25,000 which was paid in cash by you on the
purchase of the stock was from the proceeds of that loan? A.
Not altogether.
Q. How much of it? A. Well, possibly twenty thousand dol-
lars.
Q. And what interest in the stock did Boswell and Buckley
take? A. They were to have one hundred shares, I believe.
Q. Did they get the one hundred shares ? A. They did not.
Q. Why not? A. They surrendered their claim to it.
Q. To whom ? A. To me, and I assumed the obligation.
Q. And in what form did you assume the obligation ? A. They
were to have the stock when it was released.
Q. How did you make good the twenty-five thousand dollars?
A. I gave the comptroller qf the company a statement, who was
familiar with the circumstances, when the stock was released that
it should be turned into the treasury.
Q. Has it ever been released ? A. It has not.
Q. Has the twenty-five thousand dollars ever been paid back to
the company? A. No, sir, but the interest on it has.
Q. Who has paid the interest ? A. The interest on the stock
Q. You mean the dividends? A. The dividends and the dif-
ference between the dividends, no, the dividends paid the interest.
Q. What has the company received? A. It received the full
interest.
Q. At what rate ? A. Five per cent.
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* * Testimony of Edward W. Scott
Q. At twenty-five thousand dollars? A. Whatever the amount
was, I think
Q. Or twenty thousand dollars? A. Twenty thousand dollars.
Q. From whom has it received that interest? A. I have paid
that.
Q. You paid it yourself? A. Yes, sir.
Q. And the stock has not been released because it is all still held
by the New York Security and Trust Company ? A. Yes, sir.
Q. But the diflference between the $180,000 loans by the New
York Security and Trust Company upon the stock in the summer
of 1897 and the amount you paid for the stock at the auction sale
was raised by an advance by the Provident Savings Company?
A. To Boswell and Buckley.
Q. Yes, but the company paid the money, paid that difference.
A. They paid the $25,000.
Q. That is what I mean. A. To Boswell and Buckley.
Q. And made good this money to Boswell and Buckley to put
up on the purchase price? A. They turned it over to me, yes, sir.
Q. And what agreement has the company that the company wifl
be entitled to one hundred shares of stock? A. They have an
agreement to that eflFect. i
Q. Is that a written agreement ? A. Yes, sir.
Q. Is that on your files ? A. Yes, sir.
Q. I would like to have it produced. Can you send for that ?
MR. GILBERT: We will send for it.
Q. So that in eifect operated as a purchase by the company of
one hundred shares of its own stock? A. No, it operated as a
purchase by Boswell and Buckley.
Q. But Boswell and Buckley surrendered their interest to you ?
A. Some time subsequent.
Q. So it should be stated it operated in eifect as a purchase by
jou of the entire amount and a loan by the company of the
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Testimony of Edward W, Scott
$2S,ocx>? A. Well, I would like to state that Boswell and Buck-
ley were large agents of the company, had a very large field,
several States, and they were very anxious of obtaining an interest
and we thought that it might be desirable to give them an interest,
but subsequent events satisfied us that it was not desirable to have
them interested in any way in the company, and later on Mr.
Buckley retired, and later on severed all connection with his part-
ner, Mr. Boswell.
Q. How long was it after the purchase by you at the auction
sale that their interest in the purchase was turned over to you?
A. I should think a year and a half or two years.
Q. Is that the subject of any written agreement? A. Between
them and myself?
Q. Yes, have you any written paper showing the transfer?
A. I do not recollect that I have.
Q. Did they have any document or instrument showing that
they were entitled to any part of the stock by reason of their
turning over to you the twenty-five thousand dollars obtained from
the company? A. I think it is quite likely, but I do not recall
definitely.
Q. Did you give it to the company ? A. No, sir.
Q. You executed an agreement? A. Yes, sir.
Q. And just what was the purport of that? A. That on the
stock being released the one hundred shares should be turned into
the treasury of the company.
Q. Then in effect did it operate as a purchase by the comi>any
of one hundred shares ? A. Subsequently, it did.
Q. Yes, that is the status of it now. A. That view might be
taken of it.
Q. In other words, you were paying interest on the twenty-five
thousand dollars pursuant to an agreement that whon the stock is
released from the pledge with the New York Security and Trust
Company the one hundred shares of that stock shall become the
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Testimony of Edward W. Scott
f'^opcrty of the company and be held in its treasury. Who is re-
^^iving- the dividends on the stock ? A. I have.
Q. And dividends at ten per cent? A. No, sir.
Q. What per cent ? A. Seven per cent.
Q. -A.nci what became of the difference between the five per cent,
interest you pay on the twenty-five thousand dollars and the seven
percent-, or is there any difference? A. No, I think the interest
is correctly calculated.
Q- ^^Arhat is the amount of the dividends that you received on
the one Irundred shares? A. Seven per cent.
Q- "^oxa mentioned the other day that E. A. Dunham was con-
nected A^^ith the transaction which led to the purchase of the stock
by rladl^y. Did he become connected with your ctompany? A.
He did not.
y- -Dicj your company pay him any money? A. I think they
did.
Vc- ^V'tiat amount? A. During the control of Mr. Hadley.
^" -A.ri<l that was for how long? A. But not subsequent.
^* -^^riO that was for how long that he received that amount?
^^1, some three or four months.
^' -A.x^<j what was the amount that he received? A. I could not
say, Mr. Hughes.
^* ^^Tae thousand dollars a month? A. Really, I do not recall.
^* ^^liat was the total amount received by Mr. Dunham. A.
"*- ^ould not say.
^* ^^liat was the consideration for paying him anything? A.
He Wa.s in the employ of Mr. Hadley.
^- ^Vell, what was the consideration for the payment to Mr.
l-^^^^U\a.m by the company, by the Provident Savings? A. Well,
l\e dnj^ ^^^ ij^^j^ work, if anything, for the company.
^' So that it was in effect a gift by the company of whatever
^^^^Ht he received? A. Well, it was on Mr. Hadley's orders
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Testimony of Edward W. Scott
that he received it ; whether it was charged to Mr. Hadley or not,
I cannot now say.
Q. But the company has never had the money back? A. It
never has, no, sir.
Q. Did you vote for the payment of the money? A. No, sir.
Q. Who did? A. I do not think it was a matter by the Finance
Committee.
Q. Who signed the checks ? A. That I cannot recollect. Pos-
sibly I did.
Q. Was Mr. Hadley an officer of the company at the time?
A. No, sir, he was the director and owner of the majority stock.
Q. Was subsequently an amount paid by Mr. Dunham in set-
tlement ? A. • Subsequently ?
Q. Yes. A. Yes.
Q. What amount? A. I do not recall just now.
Q. Approximately?
MR. GILBERT: Paid by whom, Mr. Hughes?
MR. HUGHES : By the company.
THE WITNESS: I do not think anything was paid by the
company. I know I paid him some money.
Q. Individually? A. Yes, sir.
Q. What was that for? A. Well, that was for an alleged claim
that he had.
Q. Against you individually ? A. I think so, yes.
Q. I thought you had nothing to do with this matter by which
the stock was obtained or purchased ? A. Originally ?
Q. Yes. A. Well, I did not, as I testified the other day.
Q. How could Mr, Dunham have a claim against you? A.
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Testimony of Edward W. Scott
Well, there are a great many claims, you know, that are insti-
tuted
Q. I understood A. I did not settle with Mr. Dunham.
I think our counsel can explain that to you more fully than I can,
^e nature of his claim. In fact, I did not see him.
Q. Did his claim grow out of the transaction of the purchase
tyHadley? A. As he claimed, yes, sir.
0- Was it a commission ? A. No.
Q. What was it for? A. Well, I do not recall now the na-
^re of it.
Q. Did you obtain the moneys that were paid in settlement from
the company either directly or indirectly? A. No, sir.
Q- The company did not advance or loan any money to enable
that claim to be settled? A. No, sir, not to me or anybody else
that I know of.
Q« So that you individually settled it ? A. Yes, sir.
Q- Has the company made any demand upon Mr. Dunham for
the amount of moneys which were paid him upon Mr. Hadley's
order? a. No, sir.
Q- Why not ? A. Well, I suppose it was considered as a use-
less undertaking to do so.
Q- Did one William Miller bring suit against the company or
yourself in connection with this transaction of Mr. Hadley's
purchase ? A. One William Miller brought suit against myself,
^i^nst me.
y- What became of that? A. It is still pending.
^' Has any money been paid to Mr. Miller ? A. Not a dollar,
y* Was any money paid in connection with this purchase to
atiy one other than to Mr. Dunham? A. No, sir.
^- Who has paid interest upon the loan in the New York
SttUrity & Trust Company? A. I have.
Q. Have you obtained any of the moneys for that purpose
^^Qtd the company ? A. No, sir.
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Testimony of Edward W, Scott
Q. Who paid the interest on the original loan to Hadley that
was in the Continental Trust Company ? A. That was calculated
in the clainj of the trust company and was included in the
amount — ^whatever the amount was, I cannot say just the
amount now — $205,000, 1 think.
Q. The purchase price on their sale ? A. The purchase price.
Q. In other words the stock was bid in at the auction sale for
the amount of their debts and interest? A. Yes, sir, plus ex-
penses.
Q. Did you put up any cash yourself on that purchase? A.
Yes, sir, I did.
Q. What amount ? A. I think about $10,000.
Q. Well, the difference between $205,000 and $180,000 is only
$25,000, and I understand you had obtained $25,000 from Bos-
well & Butler, who obtained it from the company? A. No, I
think it was $20,000.
Q. And that would leave $5,000? A. I can say here I could
have had $250,000 from the trust company if I had desired it.
Q. So it was not necessary to put up any cash ? A. No, sir, it
was not necessary.
Q. Had you prior to the time of that sale entered into an
agreement with any one to buy that stock ? A. No, sir.
Q. Do you know whether Mr. Hadley transferred his interest
in the stock to Mr. Charles E. Brownell? A. He did, by as-
signment.
Q. To whom did Mr. Brownell transfer it? A. To Mr.
Dunham.
Q. To whom did Mr. Dunham transfer it ? A. He transferred
it subsequently to me.
Q. What did you agree to pay for it ? A» Not a dollar.
Q. Did you agree to take up the loans Mr. Hadley had made?
A. No, the assignment was subject to the loan.
Q. Subject to the loan? A. Yes, sir.
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Testimony of Edward W. Scott
Q. Was it coupled with an assumption of the loan? A. No,
subject to the loan.
Q. Was that a matter of litigation between you and Mr. Had-
Vs estate? A. I think not.
Q. Did Mr. Hadley's estate claim any equity in the stock ? A.
They did claim to have, yes, sir ; but there was no action taken by
them.
Q. I infer from what you have said that no suit was brought
by them ? A. No suit was brought that I recall.
Q. They had an attorney who presented a demand ? A. Yes,
sir.
Q. And you met that by showing the papers under which you
claimed ? A. I met that by an absolute refusal to acknowledge
any claim on the part of Hadley or anybody else.
Q. The claim was that you had agreed to hold Hadley harm-
less from the loans? A. Subsequent to the purchase or prior?
Q- Subsequent to his purchase, prior to yours. A. No, sir ;
there was no agreement
Q- I say that was the claim that Hadley's estate made? A.
NOi sir ; their claim was, I think, to an interest in the equity.
Q- Was the agreement on your part to take the stock from
l^nham in writing? A. Only by the assignment that he gave
me.
2- And that was a mere bill of sale? A. No, I think it was a
regular assignment.
y • Have you that assignment ? A. I have not ; no, sir.
y* Who has it ? A.I think my counsel has it.
^* t should like to have it produced. At the time that you
were connected with the Equitable were you the manager in
"a? A. I had charge of the Australian business for a
tim^.
^- What was the state of your account with the Equitable
w^«^ you left that company? A. It was settled, sir.
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Testimony of Edward W. Scott
Q. In what way was it settled? A. I do not recall the ad-
justment of it, but it was settled.
Q. Was there a debit balance against you ? A. Not a dolla
Q. What was there to settle? A. The account, whatever ii
was.
Q. Then there is no truth in the statement that at the time
you left the Equitable there was a balance against you A.
Not one cent.
Q. Which you did not pay? A. Not one dollar, sir.
Q. You have said that you have reduced the amount of the
loan to the New York Security & Trust Company from $180,000
to fifty thousand dollars? A. Yes, sir.
Q. Have you received from the Provident Savings directly
or indirectly any portion of the moneys which have been used
to reduce that loan? A. No, sir.
Q. How has it been reduced? A. I have reduced it from
my own funds.
Q. Through your connection with the company?? A. Not
altogether, sir.
Q. In any part? A. Possibly I have used a considerable por-
tion of my salary.
Q. Have you a statement of the salaries paid by your com-
pany for a series of years. I think I did not have that the other
day. A. I have it here, sir. (Producing paper).
MR. HUGHES: I offer it in evidence.
(Paper marked Exhibit No. 698).
Q. I am informed that in the minutes there are some state-
ments with regard to salary that are not in entire accord with
this table. If you desire to correct your testimony to make
it conform to this statement now oflfered? Mr. Gilbert sug-
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Testimony of Edward W. Scott
gests you might have fallen into some inaccuracy. A. Either
in that or in the transcript of the notes there are two or three
inaccuracies.
THE WITNESS: What I gave you the other day was en-
tirely from memory.
Q. And you intend that this table, Exhibit No. 698 should
be regarded as a complete and accurate statement? A. Ac-
curate statement.
Statement read in evidence by Mr. Hughes.
Q. I have now received the paper to which you referred with
''egard to the one hundred shares transferred to you by Bos-
"^ell and Buckley — that is the original? A. Yes.
MR. HUGHES: I offer that in evidence.
Paper marked Exhibit No. 699, and read in evidence by Mr.
*^\ighes.
Q. That is the only agreement that you have with regard
to those shares? A. The only agreement.
Q. Now, I am informed that at or shortly before you left
the Equitable there was a debit balance against you of about
a hundred thousand dollars— isn't that so? A. No, sir.
Q. Wasn't there at any time such a debit against you? A.
No, sir.
Q. Did you have some arrangement with Mr. Henry B. Hyde
for disposing of that? A. No, sir.
Q. Did you make any payment to the Equitable? A. No, sir;
the Equitable has no claim upon me whatever.
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Testimony of Edward W. Scott
Q. I don't want to press the matter unduly, but if there is
anything at all in the suggestion that there was some claim
against you, which in some way was settled or disposed of, I
would like to know the facts? A. Well, there was no claim
against me, whatsoever. My account was entirely adjusted,
and I am perfectly responsible to-day for any claim the Equi-
table Society has against me. I will make a statement on that
point a little later on, if you will permit me.
Q. You can make it now. A. I would rather reserve for a
few moments when I have covered more ground.
Q. What is that ? A. I will reserve it if you will permit me.
Q. When you please. I think you have testified as to the
interest upon the loan carried at the New York Security &
Trust Company? A. Yes, sir.
Q. And that was five per cent. ? A. Originally, and reduced
to four and a half, and I believe it now stands at four.
Q. What was the date of the first payment you made to the
New York Security & Trust Company? A. I cannot say ex-
cept from recollection.
Q. Approximately? A. I should say in December.
Q. Of what year? A. 1897.
Q. Of what amount. A. That I cannot tell you.
Q. Approximately? A. I don't recollect.
Q. I should like to have a statement of that account. I no-
tice in your collateral loans, a loan of sixteen thousand dollars,
made on December 6, 1899, to Stewart Brown. Who was Stew-
art Brown? A. Stewart Brown was connected with the — was
a broker at that time, I think.
Q. Was he connected with the New York Life at that time?
A. No, I think not.
Q. Do you know when he severed his connection with it?
A. I do not recall, but I think it was prior to that.
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Testimony of Edward W, Scott
Q. Was the loan made to Stewart Brown made for the benefit
of any other person? A. No, sir, not that I know of.
Q. Well, I understand your testimony to be that you have
paid since you became connected with the Provident Savings, out
of your own means, a hundred and thirty thousand dollars, to
the New York Security & Trust Company, in addition to what-
ever interest was payable upon that loan? A. Yes, sir.
Q. And that you have not obtained anything from the Provi-
dent Savings, save as you have received your salary? A. Pre-
cisely.
Q. Was your salary originally thirty-six thousand dollars?
A. No, sir, originally eighteen thousand dollars. I think I testi-
fied to that the other day.
Q. I have asked you for a statement of all contributions made
to political campaign funds for ten years last past by the Provi-
dent Savings. Is this statement you have handed the Com-
mittee a complete statement? A. That is a complete statement.
I see here an item of $2,000 and $1,000, which is entered as a
fee for some attorney. There were two contributions that
I can recall so far as contributions was concerned.
Q. That is what I mean. A. That is correct.
Q. This statement happens to include also certain items in
connection with legislation? A. Yes, sir.
Q. And is the statement complete, with reference to all con-
tributions for political purposes, either in connection with State,
national or local campaigns, and also with reference to all pay-
ments in connection with legislation in any State ? A. Yes. sir.
MR. HUGHES : I offer it in evidence.
Paper marked Exhibit No. 700 and read in evidence by Mr.
Hughes.
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Testimony of Edward W. Scott
Q. When was your company first examined by the Insurance
Department? A. July, 1897.
Q.And this is a copy of their report? (showing witness pa4)er).
A. Since I became president.
Q. This is a copy of the report? A. I presume so, I never saw
it in just that form before.
Q. This comes from the files of the department. This was
an examination, which was brought about because of the public
attention that was attracted to the matter after Mr. Hadley's
death? A. Yes, sir.
Q. Is it not a fact, according to your information, that that
was the first examination that had ever been made by the de-
partment of New York of the Provident Savings? A. I think
that is so, yes, sir.
Q. I notice in this statement in the department report: "The
corporation holds certain securities that were hypothecated to it
as collateral to loans amounting to $162,500. The par value of
those securities is $202,900. At the time the loans were made by
the former administration the collaterals referred to were quoted
at values sufficient to amply secure the loan. I am unable at the
present time to ascertain the value of these securities, except in two