The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1895-09-23

TORS and shareholders shall nave prefer
ence and priority upon all the property OF OF
said fund.- This brings up the real
fundamental question of the whole re-
port. Ii all the things that
Mr.. WRITTEN CLAIMS
were liabilities, are llabllltles,
and if the losses charged OIL
must be charged off in the manner
stated by Mr.. Whitten, and if his estimate
of assets and liabilities is correct, then,
in such case, instead of there being
deficitsof S13, 900, there would be shrink
age in the Permanent Guaranty Share
holders Fund ofz.$13, 600; and if Mr.. Whit
tens view of the assets and liabilities is
correct, then his view as to the liability
of the Permanent Guaranty Sharehold-
ers' Fund is wrong because Mr.. .Whitten
claims that the liabilities of the Assoc1-
alton exceed it's assets by S13, 600; then
he claims that the Permanent Guaranty
Shareholders Fund was created in order
to establish fund of little, If any. value
or protection to any member. It can
understand the English language, and
I think 1 can, this fund guarantees all
the liabilities of the Association, and
therefore there cannot be deficit so
long as any part of the $100, 600 is loft.
Mr.. Whitten further states that there
is a provision by which losses shall be
charged, pro rata and states that This
is not in harmony with my views and
is repugnant to the universal practice OF
financial corporations, and is not accept
ed by competent authority as the proper
legal construction of the membership
contract and for that reason,
IGNORING THE s1oO. 900 GUARANTY
FUND,
he shows a deficit. In this he states he
dissents from the opinion of the Honora-
BILE, the Attorney General Of the State of
New Hampshire, AS a matter of fact,
this question was submitted, first, to
Philip Carpenter, the general counsel of
the Association, one of the best lawyers OF
New York city; second, to the firm of
Streeter, Walker & Chase. one of the
leading law firms of the state of New
Hampshire; third. to the Attorney 6 enc
raj of the State of New Hampshire, and
fourth, to the Hon. Isaac W. Smith, judge
of the supreme court OF the State or New
Hampshire for about 20 years, but who
retired month or two before the question
was submitted to him. In each and every
case these gentlemen gave the same opln.
ion, viz: that losses should be charged oil
against the capital dues. All OF these
opinions were known to Mr.. Whitten and
copies of the same were filed with him,
for the purpose of eventually being SUD-
mitted to the Governor and Council in
case his views were different.
Mr.. Whitten states that "the method
Of charging losses against the sharehold-
ers is not in harmony with my views, and
is 1epugnant to the universal practice OF
financial corporations. He has been
repeatedly referred to the laws OF the
state of Maine, some OF which read TO
him. Among other things read to him
a part of Chapter AZ of the Revised Stat
utes, Section 1877, governing
EVERY LOAN AND BUILDING AS
SOCIATION:
con such withdrawal the sharehold-
ers' accounts shall be settled as follows:
From the amount then standing to the
credit of the shares to be withdrawn
there shall be deducted all fines, a proper
tionate part of every sunadjusted loss,
with such proportion--o --of. the profits pre-
viously credited to the shares as the by
laws may provide, and such shareholders
shall be paid the balance" +" Which very
plainly means that. under the law OF the
State of Maine an associations liability
to a withdrawing shareholder is the
amount paid in, less fines, and losses.
and such part of the profits as the By
laws may provide. I also read to Mr..
Whitten, in his office in Augusta, on
the day that he agreed to attach the Asso-
ciation's statement to his report. II he
differed in his views from mine, part
of Section 148 of the same Chapter, which
reads as follows: s'Profts and losses
shall be distributed to the various shares
existing at the time of said dis
tribution in proportion to thoir
value at that time y *# Losses
shall be apportioned Immediately after
their occurrence ''a Is not.the intent and
construction of this section plain that
under the
LAWS OF THE STATE OF MAINE
it is not contemplated that an associa-
tion can have liabilities in excess OF. it's
assetso Because this section most ex-
plicitly states that losses shall be appor-
toned Immediately after their occurrence,
and the previous section quoted states
that withdrawing shareholders must pay
their part of any unadj jlsted loss. The
officers of tho Granite State Provident
Association claim that its contracts
mean precisely the same thing, and that
if MIR. Whitten has found the Association
has sustained loss, that loss must be
Immediately charged off: 1t cannot re-
main as liability. And Immediately up
on the commissioners and officers OF the
Association agreeing as to the amounts
to be charged off, such amounts were
promptly charged off and the assets Of
Of which Mr.. Whitten knew, and the
opinions of the best legal authorities
were placed before him.
nrofts, Hon. Carroll D. Wright, in his
ninth report TO the Department. Of Labor,
states that there were s5 plans, in use by
the building and loan. associations of
the United States for the apportionmenu
of profits. Not only the contracts made
by the Association, but equity requires
it to apportion it's profits in such way
that the
RTTRDEN OF THE LARGE DEPOSITS
made BY it and held in trust by state
I'LL x,ot foil too heavily Y1yov,