New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1905-05-08
ALEXANDER ON SURPLUS.
NOT FOR STOCK, HE SAYS.
naturalization VIII End personal
Proprietary Regime" He asserts.

.,sers James W. Alexander, the president has |
.nsred what IS practically an argument ex
-te in the Lord suit, although it takes the |
80, of a letter sent two days ago to Edward a. |
-roods the manager at Pittsburg. The stack |
soldiers have no interest in the surplus, says Air
alexander
objections to the election OF directors by pol
.,5olders could come only from the present
+ocl5 control. which feared to yield its posses
,son of the company, or from persons ignorant
- the real conditions in the society, Mr. Alex
,r5ar argues 3n the letter. His friends dis
,rssing the letter, say that it and letter from
G. Van Cise. the socetys actuary, must de-
-,oIjsh Mr. Lords arguments in his action to
,-avent the adoption of the charter amendments
co-ferring on policyholders the right TO elect
majority Of the directors
President Alexander's letter was sent to Mr..
Eroo5s. who is an avowed supporter of the Alex
snder party, in answer to a request for official
conformation of extracts from the company's
literature relating TO the mutual plan on which
,ts business was base4 AMI the exclusive owner
chin Of its surplus by the poicyholders.
Il recognize that, for the benefit Of present and
.-+,re polscynolders of the society, there should
r. AZ this time some clear and unequivocal eX-
--essjon on this subject" says Mr.. Alexander.
,vvithout reviewing all the society's statements
m this subject I consider thaS there can be no
sorbt as 10 three facts: First, that the business
- The society has been conducted in accordance
NTH its charter since the date Of its organiza-
.sor on the mutual plan; second, that the profits
of the society have been accumulated for its
-ojcvholders, and, third, that the surplus Of the
.,,ie-- Is held for the exclusive benefit Of its
,77rfcvbolders. I Go not recall any serious ques-
ZION having ever arisen on these points until
recently. when a claim has been put forward on
tahsif OF the stock which is at variance with
~ terms Of the society's charter, the uniform
course Of its business and all its official and un-
official statements and representations"
ACTUARY SUPPORTS ALEXANDER
,er Alexander then quotes letter written by
Ar Van else to r. A NIcNamee the Equitable's
agent at Albany, who was made secretary OF the
convention Of agents ard at its direction made
inquiry Of the actuary regarding those phases
nr The Equitables organization. The letter
reads.
As an officer of the Equitable Life Assurance
e1ri--v I fully agree with you as to the truth Of
The following statements in regard to the Equl-
table. 49,. ., .-.,,..
always be conducted on the mutual plan;
That the entire surplus belongs to policy
holders exclusively;
That each participating policy viii receive It's
due share of surplus profits in accordance with
-ha terms Of each contract, respectively:
That the agents in soliciting business on this
basis have acted with due authority.
For about thirty years / had the privilege oL
being associated as one Of the subordinate ON
czrz with Henry b. Hyde, the founder and late
president Of the society, and my recoIectloh -
that in his declarations, both verbal ana IN Writ
ing. he always stated that the business OF tIe
Equitable was transacted on the ual paIl' p
and that the stockholders could not receive more
1han the dividend Of $1,000 per annum on thelr
capital stock which was provided Tor by the
Mr. Hyde always directed me TO apportion sur
plus 70 policyholders, when entitled by thelr con
l-,r+ r7aTlr
aH belonging TO policyholders. and he was very
much averse TO any reduction OF dlNldehus uI-
less such reduction was found to be absolutely
necessary in accordance with our experience.
As actuary and assistant aCtuary Of the socle-
y. I have had special charge during more Ihah
twenty-five years OF the appor tloniAehI o4 SUI
plus 10 holders Of deferred dividend contracts at
the end Of their dividend periods. and IN making
such apportiOnments, I have always proceeded
upon the assumption that the entire surplus OF
the society belonged to its policyholders.
These statements are literally true says Nj
Alexander No greater emphasis could be given
70 the assertion that the Equitable essentially IS
P mutual company. 'in which the interests and
rights Of the policyholders are recognized as
paramount" than the conceding TO the policy
holders Of the right to elect twenty-eight direct
ors out Of the nfty-two, Mr.. Alexander says
His letter goes ONT
The amended charter designed 10 carry into
effect this reform. was adopted by a unanimous
yore ~ The board Of directors, and, although us
operation is temporarily arrested LtiousH ~ -
CATION [ am convinced that the actIon OF me
board VIII be upheld by the courts. mus lIe W
policvhOlders win exercise a cohJroIe :.
IN the MANAGEMENT Of the society rms is as II
should he While my personal We" from the pe-
ginning has been that ii would nave beeu "ISei
and more beneficial in every sense 10 Iiie SO
cetv TO have the entire board OF directors e!eCteN
hv the uolicyholders, ii is source OF sidIIIICa
tion 10 have secured so substantlaI a IeCoSi.i-
ton Of The principle of naturalization as Is IN
v0lved in the election by the poiIcS IIoiuei' u "
majority Of the board.
PERSONAL, PROPRIETARY REGIME.
Ir viii follow that the personal proprietairy
regime within the society must suc'ulll4 1, - ~
checks and restraints neceSsaIiiy ~, - a. - ~
this passage Of control 10 the poIlcy az az
raary Of the abuses and irregularities ~ MiIICH a. @
now fu course Of elimination cannot LIe4 4eoI y
Cc.-~ II ebould he a source of confidence u
every one interested in the society 'laI 49, Is D'I -
reCtiOn OF all conditions huruul IN CSilueIlCy -
effect is being accomplished wlthln Lle So 49,
i,serf T vas upon a settled conviction that IN
interests Of the society and or us poiCy 49,,
required that the latter should De EesteH Ii, &
controlling participation III the auI "a. ~ \,
Of the vast funds which they have buIlI up y.
their own contributions that l ieSo-Fe So =
initiate this movement. The prompt fespoils
and sturdy support that l have received 5IoIi 5o[
the rank and file OF the societys olHceIS ~ !I'
proved 10 be an assistance OF the gIeAIeS9.t Ia
iu establishing the principle or mulualIHao'o 1
and 7 cannot commend too highly TINS eltHlgh
of support proceeding solely from q coIlEloeI co1
of duty and quite without regard 10 PEI 9'-''
Notwithstanding the present publicity and wa wa
discussion Of the sOciety's analrs' IeS1i II
situation as fun Of encouragement Tor an WI
are rr1Iz- interested III the society and its pros
Ierity. The financial strength ana SIdo'iiCs ~ -
gLe society are not questioned j mere - =. -
abatement Of effort on me po par ol - ,I7ar fu
etan and loyal agency torce 10 perform taId
duty TO the society IN maintaining anu g -
ing its growth and prestige Ihe sI work ~T ln la+
iusugurated viii be carried 10 a succeS74ul @ -
TIefj0r In this determination there is but on