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ager. Each office will have in it about three or four assistant managers, and then a staff of agents, according to the size of the particular locality and district.

For instance, we will have some 60 district offices in Greater New York. We have about 40 in Chicago. We have 20 or 30 in Philadelphia, and so on. Each of those has in it a staff of agents.

Now, you asked me about agents, and I am differentiating between managers and the assistant managers, the clerical staff, and the agents. Including the agents by themselves, I think it is around 18,000.

The CHAIRMAN. I have the record page 5848 of the TNEC hearings, where it states that in 1939 there were 19,800.

Mr. LINCOLN. That is right; and all of those have been reduced in the last few years, and we are carrying on a considerably larger business with a considerably decreased staff.

The CHAIRMAN. How many executives are there in the Metropolitan?

There are

Mr. LINCOLN. I do not know what the word means. officers. We have officers provided for in the bylaws, and then we have a group of not quite in the category of officers, called administrative personnel, and you can get down to, I do not know whereyou used the "echelons" a little while ago. I do not know where you want me to stop with the echelons.

The CHAIRMAN. You mentioned officers. I mean those who have authority over these agents and managers and assistant managers, either in New York or outside.

Mr. LINCOLN. On that score you mean our field management division only. If that is what you mean, we have four vice presidents and a corps of 13 superintendents of agencies. Each of these localities is in a territory, as we call it.

For instance, all New England, except Connecticut, is the New England territory. All the Pacific coast that we do business in is the Pacific territory, all of Canada is a territory. Each one of those has presiding over it a superintendent of agencies, who is an officer. The CHAIRMAN. How many employees have you all together? Mr. LINCOLN. There are 46,500.

The CHAIRMAN. That was all over the country and in Canada?

Mr. LINCOLN. That takes all over the country and Canada, and the home office and the field, the agents and the clerks in the district offices, the people who are representing us in California and Ottawa, and all over; yes, sir.

The CHAIRMAN. Mr. Lincoln, I presume it is the board of directors which determines and controls the disposition of the assets of your company; is that right?

Mr. LINCOLN. Under the law; yes, sir. The law requires it.
The CHAIRMAN. How is the board of your company elected?

Mr. LINCOLN. By the vote of the policyholders, prescribed in the statute of New York, very meticulously. That is the statute that was written by Judge Hughes whom you quoted a few minutes ago. The CHAIRMAN. How many policyholders have you got? Mr. LINCOLN. Roughly, 33,000,000.

The CHAIRMAN. If I understand the New York law correctlyperhaps, Mr. Keating, you can bear me out in this regard-I think that the requirement is that there must be one-tenth of 1 percent of all policyholders filing a petition for an independent slate.

Mr. LINCOLN. Well, it is more than that. I think it is one-tenth of 1 percent of all policyholders having a thousand-dollar policy a year in force.

The CHAIRMAN. I think that is right, Mr. Lincoln.

Mr. LINCOLN. I think that is right.

The CHAIRMAN. It must be. The qualifying policyholder must have a policy of a thousand dollars or more.

In order to have an independent slate under the New York State law how many policyholders would be required to sign a petition to vote for the independent slate?

Mr. LINCOLN. I was going to say that I will be darned if I know, but that is not parliamentary language, is it?

The CHAIRMAN. How many policyholders are there who are qualified to vote in the Metropolitan Life Insurance Co. ?

Mr. LINCOLN. Well, of course, none of the industrial policyholders of less than a thousand, and none of the group certificate holders. Those two classifications would be eliminated right away. Then, in addition, I think those thousand-dollar policyholders must have had their policy in force for a year, as I remember it.

The CHAIRMAN. Have you any idea how many there are who can qualify for voting?

Mr. LINCOLN. I wish the actuary could tell me.

Mr. DAVIS. I do not know.

The CHAIRMAN. Perhaps you could supply us that later.
Mr. LINCOLN. I will be glad to.

(The information referred to follows:)

Mr. LINCOLN. About 26,000,000; it is estimated that there were about 29,000,000 Metropolitan policyholders on April 12, 1949, whose policies had been in force for 1 year or more. The number who were eligible to vote for directors at the last election would be less than 29,000,000 by the number representing persons who were insured before age 15 nearest birthday and whose parent, who had applied for the insurance, was otherwise entitled to vote because of Metropolitan insurance on his own life. It is estimated that there are about 3,000,000 cases of this kind.

Each Metropolitan policyholder whose policy has been in force for 1 year at the date of election of directors is entitled to vote for the directors. The word "policyholder" is specifically defined in the New York insurance law, and in the case of group insurance or group annuities, the policyholder is the employer or person in whose name the group policy is issued rather than the certificate holders. In the case of insurance which has been applied for on the life of a minor under age 15 by the parent, such parent is considered to be the policyholder. The eligible policyholders include those insured under accident and health, as well as life-insurance policies.

The CHAIRMAN. In that connection, though, TNEC Monograph No. 28 at page 14 indicated that-speaking of the insurance companies in general and not necessarily of the Metropolitan-these companies are subject to control of a small group of self-perpetuating directors who guide the policies of the companies, both in capital markets and elsewhere, and holding responsibility neither to the Government nor policyholders. Four of the five largest mutual companies were said to be governed by the New York State law. Then it also says:

On the basis of the evidence adduced, it cannot be said that the policyholders have any control over the management of the mutual companies.

What is your comment on that?

Mr. LINCOLN. My comment is that in the original report of the Armstrong committee prepared by Justice Charles E. Hughes, whom

you have quoted, he made the point particularly that it would be most unfortunate and unnecessary to encourage controversies with respect to the election of directors, and so he put in that law that controls us and has controlled us ever since, a specific term called "the administration ticket," and that is in the original law, and it is in the law that has subsequently been codified by the New York State Legislature within the past 10 years.

I might say, in passing, that the Piper committee, as it was called, of the New York Legislature 10 years ago made a most exhaustive study of this subject in the light of what had been said in this TNEC and elsewhere, to see if they could devise a more satisfactory method of election of directors, and they came to the conclusion that they could not, and so reported it, and so they made no change of any consequence in that law, 10 years ago, when that legislative committee was studying that.

Now, the answer to that, Mr. Celler-and Mr. Hughes pointed it out in his report back there in 1906-if there is anything wrong with an insurance company, which is under the supervision of the insurance department, that will soon be brought out, and then the insurance department itself would be the one, of course, to be sponsoring a change in the election of the board of directors.

But assuming that there is no criticism, that the insurance department, with this meticulous examination, goes on year after year and finds the business is being well run, Mr. Hughes himself said that it should not be possible for a group of policyholders to come in and make a controversy over it, and I can quote the whole thing to you. Mr. KEATING. Has the administration ticket ever been defeated in any of the elections held in these large companies?

Mr. LINCOLN. There never has been anything else in our company. Mr. DENTON. You have never had filed any other ticket?


Mr. DENTON. You have an election just for the administration ticket?

Mr. LINCOLN. Yes, sir. The election is

Mr. DENTON. Just like Germany had, the same kind of election. Mr. LINCOLN. But this is Mr. Hughes, too. Mr. Hughes, in that same report, provided that if there was no contesting ticket filed 5 months before the election, in our case the election is always held the second Tuesday in April so that 5 months before that would be the second Tuesday in November, and this law that Mr. Hughes wrote and which is still on the books after the codification committee went over it, provides that unless there is a contesting ticket filed more than 5 months before that election, no vote shall be cast except for the administration ticket, and those words were Mr. Hughes' words, not


Mr. DENTON. As a practical matter it is a self-perpetuating direc


Mr. LINCOLN. It probably in a sense is self-perpetuating, subject to the very definite supervision and regulation and possible criticism of the New York Insurance Department. There is no other way open. Mr. DENTON. The directors select the new directors.

Mr. LINCOLN. As Mr. Hughes-I keep coming back to Mr. Hugheshe used the term "administration ticket." He envisioned an administration ticket, and then an opportunity to oppose it.

Mr. DENTON. But there is no democracy among the stockholders. Mr. LINCOLN. Would you think there ought to be a contest every year or every 2 years like we have in Congress?

Mr. DENTON. I am just trying to find out. The fact is that there is no democracy in that election.

Mr. LINCOLN. I do not know what democracy has to do with it. There is a definite statutory provision here for the selection of these directors every 2 years.

Mr. DENTON. The policyholders really have nothing to do with it. Mr. LINCOLN. They can have any time there is any occasion for it. The CHAIRMAN. Mr. Lincoln, in the TNEC investigation it developed and this was after the reforms inaugurated by Chief Justice Hughes-criticism was leveled at the Metropolitan Life Insurance Co. because it required at that time the names of 37,000 policyholders to put up an independent slate. That is the testimony before the TNEC. Mr. LINCOLN. I would doubt if that is the correct figure. I have no doubt it is the testimony.

The CHAIRMAN. I do not say it is the correct figure now; it was the testimony at that time.

Mr. LINCOLN. It was not correct then.

The CHAIRMAN. And that forced the TNEC to come to the conclusion that there could not be, for any practical purposes, an independent slate. Then, they went on to say the following with reference to the Metropolitan-if you will bear with me, and I will just read a brief paragraph from page 17 of Monograph No. 28:

The Metropolitan has adopted a unique procedure. Its effect is to stir up policyholder interest in the election after it is certain that the administration ticket will be reelected. No notice is given to the policyholder of his right to initiate an independent nomination. The administration ticket is nominated 7 months prior to the election and certified to the superintendent of insurance, according to law. No publicity is given to the composition of the slate, however, until much later, after the time for independent nominations has passed. At this juncture one affirmative vote will assure election of the entire ticket. For reasons which were not made clear it is precisely at this juncture that the Metropolitan undertakes to interest its policyholders in the election after the result cannot be changed.

Now, have there been changes in the method of procedure since then, Mr. Lincoln?

Mr. LINCOLN. Well, I think there have been changes, but I do not think they come to that particular point. I know that we are required, I think, by statute under this new codification to advertise, and we do advertise, and we do advertise in 20 or 30 metropolitan journals around the country the names and identification of each of the candidates.

The CHAIRMAN. I note there is a bell, Mr. Lincoln

Mr. LINCOLN. Is that for me?

The CHAIRMAN. No, for us. We will probably have to wind this session up in about 10 minutes.

Mr. Lincoln, you said if there were any irregularities the superintendents of insurance could check upon them and make appropriate criticism or invoke certain sanctions."

I asked the Library of Congress to give me a list of the superintendents of insurance of the States of New York and New Jersey, and what happened to them after their terms of office had expired. I shall put into the record their affiliations after they no longer were superintendents of insurance.

In general, almost all the State superintendents of insurance of the States of New York and New Jersey, with few exceptions, haveI have in mind one particular one, Albert Conway, who became a distinguished jurist-with few exceptions, they all became affiliated with insurance companies after their retirement.

Mr. LINCOLN. I do not know what you want to draw from that, but I think I would like to go back and review them in my own mind a little, and see if my figures are correct. The first one I knew was William Hotchkiss who, to this day

The CHAIRMAN. I have a list, but I cannot seem to locate it, but I will put it in the record.

Mr. LINCOLN. I can recite them without your list if you want me to. Mr. MICHENER. I cannot see where it is so material, because in Congress we have a great many Members of Congress who go on the bench, and Attorneys General who go on the Supreme Court bench. They get certain information; they are valuable men because they know what they are talking about, and they would be valuable as directors, just the same as an experienced man is valuable on the bench, rather than to pick up some lawyer out in the country who never was in the Supreme Court.

The CHAIRMAN. I do not agree with my distinguished colleague. Mr. LINCOLN. I am going to agree with him anyway. [Laughter.] I want that in the record.

The CHAIRMAN. I will say that they are fine, upstanding men. There is no imputation of moral turpitude attached to them with reference to what I say except this: It may be that the State superintendents of insurance always have the idea that after their term of office expires they may successfully apply to an insurance company for a job.

Mr. LINCOLN. If my friend would only call that innuendo, I would let him call it that.

The CHAIRMAN. That is innuendo.

Mr. MICHENER. That is the same thing, as charges made against people appointed to the Supreme Court bench. When they are in the Government, in Congress and in the President's Cabinet, they have to so conduct themselves, according to a certain policy so that in order to get the job they must have committed themselves to a policy for the future.

The CHAIRMAN. It is a little different because the State superintendent of insurance passes upon applications in matters appertaining to a potential employer. That is quite different from where a Member of Congress goes on the bench.

Mr. MICHENER. Of course, it is a potential appointing office.

Mr. LINCOLN. I want to ask you, would I be indiscreet if I said that what you said would be terribly far-fetched?

The CHAIRMAN. That is not terribly indiscreet.

Mr. LINCOLN. I am going to put that in the record.

(The information referred to is as follows :)

The implication and statement by the chairman is utterly unwarranted by the facts. Since 1306, no commissioner of banking and insurance in New Jersey left that office to become associated with an insurance company. During the past 43 years, there have been 12 superintendents of insurance (besides a few temporary appointees) in New York State. Investigation discloses that one became, for a few years, a vice president of a life-insurance company some time after retiring from the insurance superintendent's office, and two became associated

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