The Morris County chronicle. [volume] (Morristown, N.J.) 1877-1915, 1902-11-21
PRuDENTlAL-FlDELlTY MERGER.

We call attention to an article
which appears in another column
entitled, "The Greatest Question in
Life Insurance is Provision for
Future Administra ton. -
This article takes up the recently
attempted merger of the Prudential
Insurance Co., and the Fidelity
Trust Co., both of Newark, and is
apparently an attempt to disarm the
criticism of the policy holders of the
former company, by demonstrating
the alleged advantages of "com-
munity of interests, "as it has become
the fashion to call the practical alb
sorption of one company by another
through common stock holding
control.
It appears to us that the managers
OF the Prudential have taken needless
alarm at certain recent transactions
upon the New York stock ex-
change whereby the control
Of great systems of railroads has
been wrested from the party in pos
session to that of another party
seeking such possession and control.
We fail to see any parity of con-
dition between the control Of the
great life insurance companies Of
the day, and the. great railway
systems. Among the great life in
nF frv
no successful attempt to change the
management has ever been made. to
our knowledge. which was not dis
tinot benefit at the timey and proved
itself to be greater benefit as time
went on. In the Oldest mutual life
Insurance company of the country
q few years after it's organization
dissatisfaction was felt by its policy
holders with the existing manage.
ment. and change was effected,
but from that time. now for upwards
Of fifty years, it has remained prao-
tioally under the same control, with
no attempt in any gu srter to effect
O change. Another of the great life
insurance companies remained in the
practical control of its organizers
for some forty years after its organi-
nation, then dissatisfaction became
general among it's policy holders, and
sitter a certain amount of public dis
cussion change was quietly effect
ca, which has been continued to the
eminent advantage of the company
for the last fifteen years.
Other great companies such as the
North Western Mutual, the Con-
necticut Mutual. and the New Eng
lanu Mutual have continued from the
time of their organization practically
without change of management, and
have fulfilled their duty to the
public and to civilization without
cause for criticism or complaint.
Among the stock companies we re-
call but one which passed into the
hands of a hostile control, The Char
ter Oak Life Insurance Company of
Hartford, Conn. The condition of
the company at that time justified
the change, but unfortunately it
passed into the wrong hands. and
went to the bad. The greatest CT
all the stock life insurance companies
remained in the control of its foun-
der during his entire life time, and
is perpetuated in his successors. No
attempt has ever been made to change
the management, but it is commonly
understood that were such au at
tempt to be made, the majority of
the stock has been so trusteed as to
prevent the success of any such effort
OF the smaller life insurance COM
panies organized upon a stock basis
no transfer of control of any sig
nifiUance occurs to our memory,
perhaps for the very good reason
that the comparative lack of success
renders this control of their assets
of slight attraction to the speculative
investor. The fears of the managers
of the Prudential that the change in
the control of the corporation may be
wrested from them to it's injury,
seem hardly justifable. But in the
light of purely financial trans
action between the managers, prac-
tically the same, of two distinct COR
porations. there may be found reasons
which explain, and we hope may
justify, the proceedings. 1t is pre-
sumed that the stock of the Pru-
Dental Life Insurance Company was
subscribed for at par. 1t is also
presumed that the original stock of
the Fidelity Trust Company was
subscribed for ut par. For purposes
Of illustration take the case of
person who, let us say, originally
subscribed for hundred shares of
the Life Company's stock. At par
this would have cost him ten thou
sand dollars. II, in the course of
time, by natural increase in its
productive capacity or otherwise, this
stock was advanced to a qnotable
high market value Of, say, six hun
dred dollars. it is evident that the
lucky investor, has now an asset
of sixty thousand dollars, or a clear
profit Of fifty thousand dollars upon
his investment, in the stock company.