New-York tribune., 1905-06-17
COMMENT ON TRUST DEED.
TRUSTEES' HANDS TIED.
Only Equitable Stockholders Can Be
Made Directors, Lascyers SAY.

i
n,re alike defective and farcical. without a
-.sicsi amendment of the Equitable's charter,
~os the description yesterday by lawyers rep
,eantins certain minority stockholders and
,oHcyholders OF the trust deed empowering ex-
resident Grover Cleveland, Justice Morgan J.
orrien and George Westinghouse 10 vote the
controlling interest of the Equitables stock,
bought by Thomas F. Ryan from James Hazen
Hyde.
These pointed out that the Equitable's
charter now stands no stockholder who has not
Qualifying shares, Gin the case of the Equita-
tle these amount at least to five) can be elect
Cd E director. Where they asked, could the
directors obtain their stock? They could not
touch the trustee shares.
The directors must obtain them they said,
answering their question from Mr.. Hyde.
Moreover, they said. in the trust agreement
,here was no provision for the trustees qualify
ing men whose names had been submitted as
directors; there was nothing to compel any
trustees 10 elect men chosen by the majority
of the poiicyholders, and the trustees We're not
hound by the poicyholders votes.
To compel the trustees to elect men chosen by
The majority Of the policyhoders, avowed ad-
herents OF the seller and buyer Of the stock con-
trol. would place the election virtually in the
hands Of two agents, to which Mr.. Ryan and
Nr Hyde would never consent. At the next
board meeting it is entirely possible that charter
amendments looking to the modification of the
qualifying clause will be considered and sub
mitted for approval to Superintendent Hendricks
AID Attorney General Meyer.
Here again attempts to amend the charter
along certain lines would be opposed by the de-
cision of Justice Maddox in the Lord suit. Even
lawyer representing OF the principals in
the negotiations saw az apparent anomaly in the
trust deed.
This is only a temporary expedient," said he.
1T is good for only five years. and the best thing
they can do is to go on and amend The charter.
The trustees cannot use their stock to qualify
any directors. and the stock for that purpose
must be obtained from outside
said another lawyer connected with the Equi-
table controversy:
This plan is a gold brick and can in way be
carried out under the charter, if it is to be in
accordance with the trust agreement In the first
place. the charter holds that every director must
be owners OF the stock have stock transferred
10 them. Ryans stock cannot be used for this
purpose because il must be held in entirety by the
OF which large proportion is held by & &Hyqe: 80 80
get dummy directors. ana the oG tLouble9 9; an
holders choosing the directors. it is clear they
for mutual and concerted action, and they cannot
get hold Of the list of the other p0cy o9 ,na
who holds stock, and any attempt to am anenq me me
right OF control is prevented by the recent injunc
tion granted by Justice Maddox
may be cast upon stock for purpose except 9,
with the unanimous approval or the trustees :" ma @
proval should be found impossible? The trustees
10 candidates for directorshps. but they must elect
persons holding at least {e SHARES Oh of Mr.
Ryan. who is policyholder, would receive more more
smith of some distinct village. Mr. Ryan has IN
duence and John Smith has not The directors rs
whom he and Mr.. Hyde have every confidence
one ne sPgestion viii be as good as another but
the fact remains that the directors will be Obliged
to qualify with stock owned by MI Hyde' ms
family and his friends
= said Alexander S Bacon, counsel for Roland
W. Dufort and other policyholders:
fde 1 saie Of the Hyde stock The fact Of the price
tina; is said 10 have been paid having been pup
eieT that the sfoekhoders win shortly find that
they have jumped from the frying pan into the
control OF he policyholders. If this is really a
Sg1rt directors The twenty-eight directors to
represent the policyholders will be really selected @
6Ee6s oE 3e 4err gy If they do not the
polieyholders TO select the right directors
A. Edward woodruff says that after the IS
sue Of the Hendricks report he proposed 10
bring an action against Mr. Ryan
Asked TO explain the apparent discrepancy DC
tween his latest announcement and the an
nounCement made TO the pupllc at IlO -. -
the sale of the stock that he had asSoci9e 91S eeu
with him in the purchase other poIlc! !IoIutiH
Mr.. Ryan said. through a representa- tatNe' 4 '-t1'
he had purposed TO convey In the llIst So, go
ment the fact that his associates were ileIelS
acting in an advisory capacity anu hau Ho
financial interest in the transaction
Mr.. Mortons connection with MI Ryan, ne
added. had ceased absolutely
The executive committee held a meeting yes
terday Mr. Morton presiding the new. chair-
man announced that the meeting had peeh ue
voted to routine business and that no internal
reforms had been discussed. Mr.. Morton wishes
il understood that until the HenoflckS report
shall have been issued the action OF the com
mitIae Will be entirely conservative. II - iioI
expected that the report will be maze pupic
before next Monday or Tuesday. - Ut,
The next meeting of the boaro VIII PioD'Dis pro-, ~,
be lied for next Wednesday week unless the
contents of the Hendricks report make dI edi-
Her meeting imperative. ., ,,..
Soon after o'clock Mr. Morton leil lhe t1qull- q
able Building and paid a visit to the Morton
Trust Company Building where ne coileTreu
Gage r Tarbell visited the office of Henry
D N9cdona one of Mr. Ryans representatives.
Later Mr. Tarbell accompanied by Bainbrldge
Colby of counsel for President Alexander Visit
ed the Offices of Henry rogers 4,op Mr.
Equitable financial manager ana lnroush NJ M
Winthrop sought TO obtain an audlehce win
Paul Morton Mr.. TaTbel, 1t Is SAID Is SttiNliib
his utmost 10 satisfy the new adnllLls
Friends Of AIR IIvde express the opinion that
Mr. Tarbelrs resignation will be accepted atIeI
the Hendricks report shall have beeh Puellshe'
and the situation shall be ripe aoi ~ The man
tance They point out that changes IN tiie Iiisi I
agenent Of the Eouitable's immense aSehc!
force cannot be made ofhand ~
The Crimmins pOlicyhoIdeFs coinlliIIr 1tio1 eT
mouslv adopted Yesterday reSolutioh A.
pressing its belief that the Vouns -uuSt 80 = ~
assure an honest administration OF the society ,
affairs in The interest of the policyholders' anu
that IN view OF the delay in the consurflfratio
Of naturalization, the present pan - etIoi'ae ~
10 the support Of the pohcyhoioeIS OA 'i' -
ciety.