for this stock-watering operation. Its defense is mainly silence; perhaps it regards the figures as part of the news not "fit to print ;" the only editorial reference we find to it is in the following sentence: "It must be plain to every man's understanding that the capitalization of the new concern is based on an expectation of largely increased business-of carry ing more passengers."

It must also be plain Monopolistic or to every man's underMunicipal Control standing that if this expectation is not realized, it will not be the men who have issued the stock who will suffer from the "great expectations." It will be either the stockholders-many of them innocent purchasers-who will go without their dividends, or the employees whose wages will be reduced because the enterprise does not " pay." In any case, the public will pay for the service more than a fair interest on the actual cost of

constructing the new railways. It is because this is plain to men of understand ing that the Rapid Transit Commission are preparing to meet the merger with wise plans for preventing the city from being at the mercy of a monopoly. For this two methods are proposed. The first is an endeavor to secure a new combination of capitalists to bid against the monopoly and so enable the city to secure fair terms for the franchises it is

to grant. There seems to be good prospect that they will secure such independent bids. The other method is thus stated by Mr. Charles Stewart Smith, who we may well believe represents the views of the Rapid Transit Commission :

In the subway situation the city will not seek to enter the field of municipal construction and operation unless it is compelled to do so. However, if the Belmont-Ryan interests do not offer terms adequate for the valuable right they want, then it becomes the imperative duty of the city not only to own the new subways, but also to build them and run them when built. Should we be brought face to face with such a condition, the city will be found abundantly able and willing to construct, and to operate as well.

For this purpose an appeal will probably be made to the State Legislature to propose an amendment to the Constitution enabling the city to add to its borrowing

capacity by borrowing on its incomeproducing property, which now it cannot do. As Mr. Coler has explained in The Outlook, under present conditions the richer the city is the less it can borrow. Two years would be sufficient to secure such an amendment. With such an amendment it could borrow all the money that is needful, and meanwhile it could, if necessary, borrow enough to make a beginning in subway construction. It looks as though the merger, which was intended to put the city under the control of a monopoly, might give municipal ownership a new impulse.

The New York The End of the Insurance InvesInsurance Investigation tee finished its sessions for the taking of tigating Committestimony last week. There are before it, however, several weeks of hard work in preparing its final report and its recommendations for legislation. Mr. John C. McCall, the Secretary of the New York Life Insurance Company, presented the most interesting testimony of the last days. Mr. McCall had been sent to Paris by the trustees of the Company to obtain a statement from Mr. Andrew C. Hamilton, who had been its representative in matters relating to legislation and taxation, of the manner in which he had spent the large sums of money which the Company had paid him from time to time. Mr. Hamilton was found by Mr. McCall in a precarious condition of health, which made

He

it impossible for him to return to appear before the Committee in person. did, however, prepare a statement which was presented to the Committee. In it Mr. Hamilton presented a long explanation of the reasons which led the New York Life, in co-operation with the Equitable and the Mutual, to organize a secret legislative bureau to protect the companies from legislation which the officials regarded as inimical to the interests of the companies and to aid in securing favorable legislation. He asserted that secrecy was essential to the success of the work of the bureau, secrecy not only from the public but from the officials of the companies themselves. He had

gone into the work with the distinct understanding that he was not to be called upon to account to the companies by detailed statements as to who his representatives were and how much he paid them. He had, therefore, kept no books showing his expenditures, had demanded no vouchers from the men he employed, and had made his payments, not by his personal checks, but by cash, drafts, and certificates. He declined to give the names of any of his representatives. He submitted a statement of the amounts which he had expended on behalf of the New York Life alone since 1899, grouped under very general heads. The aggregate amounted to $720,550, of which $160,000 was his personal compensation, $34,000 was for rent and clerk hire, $74,000 was for traveling expenses for himself and his representatives, and $451,000 was for retainers and fees for his representatives and for newspaper articles. The largest yearly expenses were during 1904 and 1905, amounting to $142,000 and $147,000 respectively. The size of these amounts was explained as being due in the former case to large expenditures in an attempt to create a public sentiment throughout the country in favor of Federal supervision of life insurance, and in the latter to increased activity in legislation due to the troubles in the Equitable Life Assurance Society, and to the fact that the bureau in that year was practically carried on by the New York Life and the Mutual without material assistance from the Equitable. With regard to the sum of $235,000 charged against him on the books of the New York Life Insurance Company, concerning which inquiry had been especially made, Mr. Hamilton. stated that the discharge of obligations incurred during the past two years, not included in the payments shown in his statement, and his own unsettled accounts for retainers, commissions, and percentages, would account for a large portion of it. As an evidence of good faith, however, he offered to place in the custody of the company the sum of one hundred thousand dollars, to be held subject to a future audit and settlement of these accounts. Mr. McCall testified that he had not asked Mr. Hamilton for

an accounting of any particular sum, that he had accepted whatever Mr. Hamilton gave him, and that he was not aware that he had not received an accounting for "every dollar he had ever had from the New York Life Insurance Company." He could give no explanation of the discrepancy of $45,000 shown to exist between the money which Mr. Hamilton had received and the money for which he had accounted. Mr. John A. McCall, the President of the New York Life Insurance Company, is reported to have said that the statement was "very satisfactory," and that he regarded it as a "very good report." It is extremely doubtful if the policyholders of the New York Life will share Mr. McCall's opinion.

Life Insurance Without Agents

His

Mr. Richard Wightman, the President of the Life Insurance Club of New York, testified that several years ago he conceived the plan of writing life insurance by advertising followed by correspondence, without the intervention of agents. He made a contract with the New York Life Insurance Company, and by means of advertising he obtained in three months a larger number of policies than any other agent of the Company, although not a larger volume of business. contract was then terminated by the Company on the ground that its terms had been violated by him; but he testified that he had never been able to find out in what the violation consisted. His contract with the New York Life was on a commission basis, and during his connection with the Company he found that the cost to him of writing a policy was fifteen dollars, and that his commissions from the Company on such a policy amounted to about sixty-five dollars per thousand. If he wrote a policy of one thousand dollars, his profit amounted to fifty dollars, while if he wrote a policy of five thousand dollars his profit amounted to three hundred and ten dollars. the termination of his contract with the New York Life, Mr. Wightman formed a connection with the Reliance Life Insurance Company, of Pittsburg. At this time a combination was formed by

After

the Equitable, Mutual, and Prudential Life Insurance Companies to prevent Mr. Wightman's advertisements from appearing in the magazines. These companies informed certain publishers that if Mr. Wightman's advertising was carried theirs would be discontinued, and offered to other publishers large advertising contracts if his advertising should be refused. Their opposition was based on the ground that Mr. Wightman did not mention in his advertising the name of the company that would write the policy. Mr. Wightman testified that he was unwilling to do this for the reason that it would weaken the force of the club idea which he was carrying out in his advertising. As a result of this opposition he was led to form the Life Insurance Club of New York, which has been in existence for about a year. This Club writes life insurance entirely by advertising and correspondence, and employs no agents. Mr. Wightman testified that the premiums charged by his company at most ages and on most forms of insurance average ten per cent. lower than the premiums charged by other companies, and that the saving to a policy-holder on a twenty-payment policy would amount to about the sum of three annual premiums. He believed that this saving would be increased by the payment of larger dividends than is the custom in other companies, made possible by the economies resulting from a discontinuance of the agency system.

Affairs in

There has been no abatement of the reform move

Philadelphia ment in Philadelphia since the November election.. Mayor Weaver and his colleagues have gone steadily forward with their work, and although developments have been less sensational in their features, they have been none the less important and satisfactory for that reason. The officials elected in November have announced their appointments, which seem to give very general approval. Some old and tried officials have been retained, but the bulk are new ones, selected, according to the statement of the Chairman of the City Party

Committee, "from among the mass of excellent material," and the prospect is that "these offices will be administered with a simple view to the public service." At one time it looked as if the officials elect and the City party leaders would be overwhelmed with applicants for place; but the dangers of the situation have been successfully passed. The punishment of ballot frauds proceeds satisfactorily. The courts have directed in some cases the opening of the ballotboxes, and thus enabled the District Attorney to corroborate his other testimony. The members of the whole election board in a Fourteenth Ward division and the "boss of the division were convicted (or pleaded guilty) of stuffing the ballot-box to the extent of two hundred ballots. They received two years each, the maximum penalty. the maximum penalty. In sentencing the prisoners the judge declared:

I see no reason why mercy should be extended in this case to any of the defendants except Williams. The men have been convicted or have pleaded guilty to a gross offense against the laws of the Commonwealth -an offense which I regard as so grave as to call for punishment to the fullest extent. A few days later the election officers of a Seventh Ward division pleaded guilty to stuffing the ballot-box to the extent of scores of fraudulent votes. In a Fifteenth Ward case the opening of the ballot-box by the court commissioner disclosed that although forty-four straight City party votes had been cast, but thirteen had been returned, and that the box had been stuffed to the extent of two hundred fraudulent votes. These cases afford interesting evidence as to how the "organization" has been able to maintain its control of Philadelphia politics. Preparations for the special session of the Legislature which meets January 15 are nearly completed. The Personal Registration Bill, prepared by the Election Reforms Committee, has been gone oyer most carefully, and, when introduced by Representative Sheatz (who introduced it at the regular session, where it received such scant consideration), will represent the views of all the forces interested in its passage. It will be given the united support of all the reform forces. The "ripper repeals have been prepared by the Committee

of Seventy, and the apportionment bills by the Philadelphia City Club, and will, like the registration bill, represent the combined forces. Bills to carry out the other reforms made possible by Governor Pennypacker's call are being drafted, including treasury reform. No legislator will be given a chance to say that there was no disposition to accept the opportunity offered, as every point will be covered by a carefully prepared measIf the members of the Legislature are sincere, they will have no trouble in giving effect to the demands of the voters, and they will be able to adjourn within the two weeks which Governor Pennypacker has indicated as being necessary to carry out the recommendations of his message. He has not given any intimation of his intention to enlarge the call for the special session and include ballot reform and uniform primaries.

ure.

The city of Houston in A Municipal Texas has for the last halfExperiment year been carrying on an extremely interesting experiment in municipal government. Its chief feature is the concentration of power in the hands of the Mayor and four Commissioners who act as his assistants, and who combinedly have a certain degree of checking power on the Mayor's actions, but only in a few specified matters, mainly relating to expenditures. The new form of government was established by a charter granted by the Legislature, and the idea was in part inspired by the effective methods of the Commission under which the city of Galveston had spent millions for improvements and the re-establishing of all that had been destroyed by the great flood. The central aim of Houston's new charter is concentration of power in the hands of the Mayor, with direct responsibility from him co-extensive with this power. Only four city officers are chosen by popular votenamely, the Mayor and four Aldermen at large, who are at once appointed by the Mayor as Commissioners, respectively, of taxes and finance; police, fire, and electricity; streets and bridges; sewers, parks, water, and public health. The Mayor has absolute power of re

moval of all non-elective officials and employees, including the Tax Collector, the Chief of Police, the Judge of the Corporation Court, the City Attorney, and the City Comptroller. The Mayor and the four Aldermen constitute the City Council, and this Council may impeach and remove the Mayor or any other of its own members for any cause affecting his efficiency and honesty. A referendum upon the granting of a franchise may be had whenever five hundred qualified voters ask for it. It will be seen that this form of municipal government combines the advantages of home rule and of direct responsibility by the few elective officers. Theoretically, it will not please those who believe that minor officials should be chosen directly by the people and be removed only after tedious litigation before the courts. The belief is gaining ground, however, among advocates of municipal reform that, while all power must come from the people at large, it should be so applied as to bring about actual executive efficiency; the dissipation of the elective choice among a multitude of only slightly responsible officials is obviously without economy in power and extremely likely to make the punishment of incompetent or corrupt minor officials almost impossible. The actual working of the Houston experiment has been excellent. A special article in the Boston "Transcript" from its correspondent in Houston declares that "the public is well pleased with the experiment." He adds:

The period has been meteoric in respect to new policies which have taken the place of aged ones. The five commission officials have used their power freely, and they have brought about a new order of things. They have shaken loose many of the barnacles of maladministration, and plugged leak-holes of extravagance and graft. The new set of officials, while enjoying an unusual scope of power under the charter, are more than ever under the eye of the public, and their acts capable of being more openly viewed.