re pocketed by individuals
and are never shown on the books of the corporation.

The basis of life insurance is security. A policy-holder pays his
premium to enable the corporation accepting it to make good its contract
with him when death or time matures it. The vast sums in the possession
of the three great companies are accumulated to safeguard their
policy-holders, and should be invested only in securities of tried and
solid worth, which will bring in no more nor less than the going rate of
interest. There must be no experiments and, above all, no speculation.
But what do we find? The positions of managers and manipulators of these
huge hoards of the people's money have become the greatest financial
prizes of the day. New and ingenious methods of graft have been devised
in connection with them. The vast revenues of the insurance companies
have become the "System's" most potent instrument in working its will in
the stock world.

[Illustration]

[Illustration]

Their investments, largely in the securities of properties or
corporations in which the "System's" votaries have large interests, are
fertile sources of profit to the "insiders." The groups of banks and
trust companies affiliated with them are the medium through which access
to the coveted insurance funds is obtained, for these institutions are
allowed by law to use money for speculative purposes, which the
insurance concerns are prohibited from doing.

The immense opportunities for profit afforded by the control of these
great money hoards are taken advantage of in various ways. Let me
illustrate one or two of them. Rogers, Rockefeller, Stillman, and Morgan
buy the capital stock of three railways at a fair valuation, say,
$20,000,000 apiece, $60,000,000 for the three. Owning all, or nearly
all, the stock, they can put its price on the stock-exchanges to any
figure they desire, say, $60,000,000 for each railway, or $180,000,000
in all. They proceed to deposit the stocks of the three roads in a trust
company, issuing against them $180,000,000 of what they call "bonds." An
"underwriting" syndicate is then organized. This is composed of certain
individuals and corporations who agree that when these bonds are offered
to the public at $180,000,000, the portion the public does not buy, they
(the "underwriters") will purchase on the basis of $120,000,000; in
other words, they guarantee the sale of the bonds at $180,000,000. In
return they "make" on all the bonds