The Equitable's progress under Tontine caused general consternation among its most conspicuous rivals. They immediately pointed out its injustices, but found themselves unable to stem the popular enthusiasm. Hyde had now obtained what all his rivals desired, but had not had the ingenuity to devise—an unlimited expense fund. While they used all their energies detailing Equitable iniquities and the advantages of old line life-insurance, Hyde complacently bought off many of their most effective agents and attracted millions of new business that, under ordinary circumstances, his rivals would have secured.
The Mutual and the New York Life, after fighting the innovation for three years, quietly capitulated. In 1870 the Mutual announced a "new application of the old idea of Tontine"; in 1871 the New York Life advertised a "Tontine Investment Policy." The Mutual adopted the idea somewhat shamefacedly, in deference to what it declared a genuine public sentiment; the New York Life more cheerfully. Indeed, the latter company found it as convenient an escape from embarassment as did the Equitable itself. Organized in 1841 as a purely mutual company, the New York Life, from the first, had been unfortunate in its management. For many years Pliny Freeman, a thoroughly unscrupulous and dishonest man, had held the chief control. The New York Life, in Freeman's days, paid its dividends, not in cash, but in scrip which bore interest and was subject to redemption at some unspecified date. Freeman acquired the habit of purchasing these scrip dividends on the quiet, at a discount; and then causing the company to cash them in. By other reckless and dishonest methods, he finally, about 1863, brought the company to the verge of insolvency. The trustees, after investigating his management, forced him to resign. Freeman promptly started the Globe Mutual, soon built up, by expensive agency methods, a flourishing company, and then promptly wrecked it.
1 'Report of John A. McCall, examiner in New York Insurance Department, on the condition of the Globe Mutual Life-Insurance Company (1877): "The results of this investigation conclusively show that, vested with the entire charge of the affairs of this company, as its officers have been, their trust has been wilfully and shamefully abused to their own pecuniary benefit, and to the great injury of the policy-holders,"