The Morris County chronicle., 1902-11-28

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nous dividends have been paid in
Dash upon this stock, and it is now
proposed to sell half of it for IS, 900, :
600 in cash to the Fidelity Trust
Company.
Again, your simile of the boys swap
ping jack knives is very much out OF
place. These boys might swell the
values of their knives at pleasure.
but had no fund within their reach
from which to draw the amounts rep
resented. II they had had the wealth
of the community in some concrete
form to draw upon, so that by calling
each knife worth q million they could
make it good in exchange foH that
amount of cash, the analogy would
have its point. The shareholders of
the Prudential testify that while they
have watered their stock by stock
dividends from SOL, 900 to 90, 900, 600,
they have been 80 moderate in the
process Of imitation that the actual
market value of their shares is eight
and one-half times its nominal
amount. 1t is actually sslable for
$3.50 upon each 500, or at the rate
of $17. .ooJ, 600 for the whole The
amount paid in has been repaid q
great many times over by cash divi-
dends, SO that the present stock,
worth 81. 900, 600, is all clear profit.
WHAT docs It represent? MT. Dry.
den makes this prefectly clear. It
euressnts, not the dividends which
It viii pay, but the power to control
and manipulate the funds Of the poll
cyhoIders, which he says will amount
this year to nearly $50, 600, 600, with
in four years to $40. 600, 600, and in
TIA years from the 1st of January
next to $500, 600, 900. After that be
ain Ks the increase will be much
more rapid. 1t is the power Of the
nan .gers TO WELD this prodigious
sum in the financing of great opera.
tions for their own profit which makes
the market value of the stock. aasa
:. It is . little amusingl TO observe
that Mr.. Dryden and his associates,
as they j. solemnly testify, are Actual
ed in these transactions solely by the
benevolent purpose Of protecting the
insurance company against the at
taoks of speculators. The candor and
s,lemnity with which every detail of
the arrangement is set forth forbid
any suspicion that this statement is
other than correct, but it is consplcu-
ously case in which charity begins
at home. Believing their stock in
the Insurance Company, which carries
the control of it's funds, to have a
market value of more than eight
times it's nominal value, they chart
tably propose to sell it for only six
times it's nominal value. But to
whom? To a trust company to be
gned and controlled by themselves.
They will retain the control and
manipulation of the life insurance
funds IN their own hands; they do
not part with it to any persons; they
10 not share it with others. The very
purpose of the entire transaction is to
perpetuate this control in their own
hands. Mr.. Dryden is earnest and
persistent in asserting that the value
he ascribes to the stock lies wholly in
the control of these finds, and that
its value for investment purposes is
but small fraction of that amount.
Yet the shareholders who sell the
stock for three fourths of this enor-
nous valuation retain in their own
hands this control which gives it it's
value. The stock they part with is
not the stock which they show to be
salable at higher value. They put
into their pockets $6, 600. 900 taken in
directly from the Insurance fund of
the Prudential, and in effooG give
nothing in exchange for it. If the
Insurance fund of the Prudential is
their private property, no fault can be
found with this exchange. 4 = Co.,; &C.,;
In the last analysis, the operation
amounts to an investment by the In
surance Company in the right to con
troll itself. Through an allied com
pany which it controls it buys a ma
jority of its own shares. The prac-
tioal effect of the ownership7of its
own Shares by stock company is to
constitute it tontine. tThatI is to
say, the shares bought by itYare ex-
tinguished insofar as they ,swould be
a claim against its assets. If the
Company were dissolved. fall stock
held by the Company itself would
vanish, and the entire assets would Be
divided among the remaining stock
holders. Thus by practically selling
to their own company majority Of
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