WHAT IS YOUR FINANCIAL LEGACY TODAY?
EQUATION #6: SOLOMON S. HUEBNER (1882–1964)
In the early years of the 20th century, the North American life insurance industry suffered from a reputation far worse than today's tobacco, oil and gun industries. Apparently, executives at the largest insurance companies in the United States were paying themselves exorbitant sums of money and hiding their shenanigans by issuing fraudulent financial statements. Executives were bribing judges and politicians to keep their affairs secret.
The New York state legislature heard rumors of these matters and decided to conduct a formal investigation into the allegations in 1905. The proceedings, which were a public relations disaster for the insurance industry, were led by New York Senator William Armstrong and Charles E. Hughes. The press loved the spectacle in which captains of industry were grilled about spending habits. Americans from all walks of life took a keen interest in the conspicuous consumption of insurance executives. Reading the media reports, I was reminded—100 years later—of the broad interest and disgust at the downfall of Enron and Lehman Brothers.
The Armstrong committee led to transformational reforms and eventually prohibited the sale of many (good) life insurance products, unfortunately a classic case of regulatory overreaction. The affair also made a celebrity out of the ...