ed or controlled by the
insurance company. One of the "System's" dummies or an officer or
director of the corporation agrees to take the other at the same price.
This is a perfectly legitimate transaction, and the insurance company
shows a half-million profit on its investment. The next step is this. On
its piece the trust company erects a two-million-dollar building,
procuring the money from the insurance company at a low rate of
interest. Thereupon the value of the adjoining piece bought by the
"System's" votary jumps fifty per cent., so he has made $250,000
without risking a dollar. At the same time there have been several other
profitable transactions between institutions and individuals. The agent
who disposed of the two pieces of real estate and who is "in" the
transaction receives a generous commission for making the sales; the
trust company's representative has his own "draw-down," and there are
further commissions to the agents who borrow and loan the money and
control the erection of the building.

My readers may well ask, Are these merely illustrations, or do such
things really take place? I unqualifiedly reply that deals similar to
these have occurred repeatedly and that the principle and procedure set
forth are the rule and not exceptional. Here is a minor episode of which
I have personal knowledge. A well-known man made direct application to
the Mutual Life Insurance Company for a loan of $400,000 on a valuable
city business block which he owned. He was told that the corporation had
no funds available for that purpose. The refusal was authoritative and
definite. A few days later a lawyer and real-estate agent came to his
office and said to him: "I'm informed that you want $400,000 on your
property. I can let you have it, or $500,000 if you need that much."

"Good," said the would-be borrower, "I will take it. Whose money is it?"

"The Mutual's."

"My dear fellow," said the would-be borrower, "how can that be? I was
there at the office a few days ago and was assured I could not have the
money."

"That's all right," was the answer. "Of course you could not get the
money. The right party did not see the right party. D'ye understand?"

He understood.

A recent issue of the _Insurance Register_, of Philadelphia, in
criticizing my comments on President McCall and life insurance, makes
the following significant admissions in regard to the conduct of these
great corporations:

While riding on the tr