The Portland daily press., 1895-09-20
Apparent deficit,

Outstandinff common stock
OF Permanent Share
holders Guaranty
Fund, 100000.
When it is considered, as stated above.
that the so-called surplus of the Associa-
tion for the maturity of it's shares, includ-
ing upwards of $45, 900 from fines, cover
its entire undistributed profits, and it is
seen that these deductions wipe out the
entire amount Of such profits, and leave
an Impairment it follows that The Asso-
iation, if the foregoing valuations OF Its
assets are approximately correct, has a
few thousand dollars less of assets than
its present members have contributed to
its loan fund,
WITHOUT THEIR HAVING THE
BENEFIT OF A SINGLE DOLLAR
of profit earnings.
There is a provision in the application
signed by the member, that on with
drawal he shall have certain amount,
set forth in the application, "less his pro
rata share of losses" and it is contended
blythe Association that any deduction
made from assets must be treated as
"losses, - and deducted from the capital
dues, leaving the surplus. or und1strlbut-
ed profit account as reported by the AS
sociation, intact; and in support of this
view, tine Commissioners of New Hamp-
shire obtained an opinion from the Hon
orable, the Attorney General of the State
Of New Hampshire to that effect. This
opinion, if followed, would make it possi-
bic for the Association to wipe out every
dollar of it's capital dues, thus reducing
it's Liabilities as fast as there was reduc-
ton in its assets and in this way leave
its profits or surplus entirely intact. I'm
der this construction, it would be posi-
BILE for such an association receiving but
S25, GOO in profits, and losing $50, 600 on
its loans, to charge the loses against the
capital dues, and thus show gain OF 20.
600, while the business taken as whole
would actually result in a net loss of
s25, 600. This is not in harmony with my
views, and is repugnant to the universal
practice of financial corporations, and is
not accepted by competent authority as
the proper legal construction OF the mem
bership contract I believe the deduction
from assets should be charged against the
undistributed profits until they are ab-
sorbed and the balance stands as an i'm
pairment. .
There is provision in the blank appli-
cation used by this Association which
ngree that in any distribution of the
profits or surplus, the principles and
methods which may be adopted by said
Association for such distribution, and its
determination of the amount belonging
to any certificate which may be issued
under this application, shall be and are
hereby ratified and accepted" Under
the authority of that provision. it has
been the custom of the Secretary. to ap-
portion all the profits twice year in his
estimated maturity table to the outstand-
ing shares more than thirty six months
old
The total number of shares outstanding
and in force are 66, co., and the number
three years old or more, to which divi-
dends are apportloned, is about 10, 600. By
this method, the entire surplus of the AS
sociation is
APPORTIONED TO LESS THAN ONE
SIXTH OF THE TOTAL SHARES
OUTSTANDING;
ar it is by this distribution of its profits
that the Association bases its claim to