The Portland daily press., 1895-09-20


| of the agents rights to the commissions
and renewals amount to very large
| sum, estimated at more than one hundred
| thousand dollars and Is constantly in
creasing, and
Whereas. the agent has consented to
surrender said contract and all it's rights
there under ! together with all claims
against the Association. and accept
IN PAYMENT THEREFOR S1OO, 600
in the common shares of the Permanent
Guaranty Shareholders Fund, this day
established by the Bylaws:
Resolved that the Association will pur-
chase all the rights of the Guaranty
Agency Company under said contract
together with all it's claims against the
Associa tion and in full payment therefor
will Issue to such agent or its stockholders
comomn shares in the Permanent Guar
anty Shareholders Fund to the amount
of 500, 000 the certificates of such COM
mon shares to contain the following con-
ditions, among others, viz: u
l. This certificate of common shares
in the Permanent Guaranty Shareholders
Fund is issued under Section 20 of the
By Laws establishing said fund, adopted
May 18th, 1895, and is entitled to all the
rights and subject to all the liabilities
therein provided.
2. This certificate is issued on account
OF payment for all rights of the Guaranty
Agency Company to, and it's stockholders
under, contract with this Association,
dated October 3rd, 1891, and in accordance
with vote of the members of the Asso-
citation at general meeting held May Is,
1895. y
Subsequent to this meeting of the MEM
bers, the directors met and took action
70 ho hu-1avpc and In
dispose of the Guaranty Agency Com
pany pursuant to the resolution offered
by Mr.. Streeter. 1t should be noted that
the President of the Granite State Provi-
dent Association was also the President
of the Guaranty Agency Company
/ Of the dues contributed to this Associa-
tion by members, the first three months
and the third three months dues of the
first year and the first two months OF each
subsequent year, are taken for expenses,
and this was the amount allowed to be
deducted from the members payments
by the Guaranty Agency Company men
toned above, the present worth of which
seems to have been estimated by the Cen
eral Counsel of the Association at that
time at upwards of 500, QUO, and upon
his resolution, as shown, the Association
PURCHASED THE RIGHTS
Of such Guaranty Agency Company and
in full payment thereof issued 500, 600
common shares of the Permanent Share
holders Guaranty Fund.
The results of these transactions, as a
whole, are to establish the value of the
agency contract at $1O0, 900, to permit the
President to borrow large sum of money
from the Association and loan it back to
the Association at profit to himself,
andsa establish a fund of but little, ii
any, value or protection to! any members
who were induced to join the Association
after the creation of this fund because of
it,
1t is urged that the present worth of
this outstanding common stOck-that is,
whatever may be the present value of the
difference between the actual expenses of
the Association, and the amount allowed
to be taken from the expense fund, or, in
case of a breach of this contract by the
Association, or it's changing the amount
to be deducted from the loan fund, or
otherwise, the amount that could be
proven in Court as the damages because
of such breach of contract-shOuld be car
ried as liability But as it is claimed
to be liability against the expense fund
only, while carried in the liabilities items
it is not extended.
TheHHmanagement of the Association and
it's loan fund is practically entirely in the
hands of the persons who benefit from
the agency contract, as the greater part
OF the amount allowed to be deducted. for
the expense fund comes in the first year
of the share and as, under the sub-agency
contracts with the general and district
agents, they get the most of their pay
from the first installment payments; and
as, if share is withdrawn before it is
three years old it does not participate in
the profits, it follows that it would be for
the material advantage OF the manage
ment to get as much new business rs
possible, and not to its advantage to car
nv the business sbeyond the third year !.
and an inspection of the books and affairs
of the Association fshows that as fact,
fully.50 per cent of the shares issued by
the Association cease payment yolun
tarily or otherwise, before they reach the
participating period. My belief is that a
MAJORITY OF THE MEMBERS WHO
SEVER THEIR CONNECTION
with this Association find that their con-
neotion with it has resulted in loss to
themselves.
I am of the opinion that any change
tnat might be made that would have the
same efforts to retain members that it
puts forth to obtain new ones, would be
beneficial to the interests of the loan fund
creditors. AS it is now, with the losses
all charged against the capital dues. and
the main part of the expense fund coming
from the early payment of dues, the ex-
pected result would be- too little atten-
tion given to retaining members; too
little care to requiring adequate security
for loans made. The actual result Gas
shown by the very considerable amount i'll
real estate and foreclosure and in the very
large percentage of lapsed or discontinued
shares, is, apparently, what might have
been expected.
The annual cash statement of the re-
ceipts and disbursements Of the Associa-
tion for the past three years shows that
it has expended for expenses each Eyear
more than its,entire receipts from profit
items These results, considered with
the financial statement that is herewith
reported, confirms ME in the opinion that
the shares of this Association will not
mature until such time as the members
have contributed to the Association in
dues at least the full par valuo OF the
share.
find that in addition to the usual ex-
pense charged back against q members s
shares, namely, 80 per cent of 1.-THE hrst
woo 70 atc and %1,o f,,rf WI nOnGnE