The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-03-13
TOEOUITABLE POLICYHOLDERS
CRIMMTNS COMMITTEE Calls
FOR LEGISLATION.
Sees No other Adequate Relief Than
Law So Amending the Charter That
Every POlicyholdcr May Vote for
Directors. and Himself he Eligible.

! Society will be taken to-day, when there
will be mailed to policyholders pamphlet
prepared by the policyholders committee.
| The pamphlet is directed more particularly
10 policyholders in this State with the idea
Of securing their advocacy of bill in the
| Legislature amending the charter OF the
corporation so that every pollcyhoder
may vote in person OF by proxy for the di-
rectors and may himself be eligible 10 the
office.
/ Contained in the pamphlet are the views
! of the committee in regard to naturalization
the original petition Of President Ale1an-
der and his associates to the board OF di-
rectors. the protest against the reelection
Of james Hazen Hyde as vice-president,
newspaper articles reCounting various
stages OF the controversy and extracts from
the reports of the insurance commissioners
of Massa chusetts and Wisconsin.
In beginning its argument to policy
holders the committee notes that request
for list OF the policyholders has been
refused and continues as follows:
1T is manifest that the society's admins
tration should be placed upon sounder
and broader foundations than those now
existing. The number of the society 8
policyhoders within the State Of New York
Is, we are informed, over 100, coo. Its policy
holders throughout the world number
600 900. lts outstanding obligations amount
to 81 500 900 900. It's annual income, as
shown by its last published statement, Is
$50 900 900. It's assets now amounting
to s4l3 900, are increased at the present
rate of $50 600, 0OO a year Although there
IA no question as to the financial strength
of the society, it is obvious that the control
OF this vast and rapidly enlarging trust
should not be in the hands of the owners OF
the majority for the time being of its nomi-
nal capital stock OF 500 900.
That such power in the hands OF one
man can be welded in way that IL detri-
mental TO the interests OF the poncyholders
Is apparent from the petitions addressed
To the board of directors and signed by al
most the entire executive stan of the society
The signers Of these petitions are men who
have grown up with the society, who are
conversant with it's needs aud whose eN-
presslons as to the sooiety's government
and control are entitled to the greatest
weight.
1t is the opinion OF this committee that
no adequate relief for the present situation
can be obtained except through legislation,
at the present session of the Legislature.
IL this opportunity Ia permitted 20 pass, we
zee continuation Of the present unsatis-
factory conditions. without any ehectual
means Of remedy.
The society has been proclaimed for
years as mutual company Its charter
provides that It's business shall be conducted
on the mutual plan II the charter pro-
vision and the statements constantly Issued
by the company mean anything, the policy
holders. under the principle OF mutual in
surence, are the beneficial owners Of its assets
and are entitled 70 participate in the control
and administration OF the society We
print for your information extracts from
recent reports of the insurance departments
OF Massachusetts and Wisconsin on the
subject OF stock control.
The committee intends TO act alertly and
energetically IN the protection OF all IN
terests Of the pt.icy holders. and TO COM
muuicate further with the policy holders
from time TO time. The somewhat hurried
form Of THIS communication Is due TO the
committees strong belief that the best
means at hand should i've taken for quickly
informing the policy holders Of the condi-
tons in the society. 50 far as they are known
in order that the present opportunity of
securing for the policy holders a controlling
voice III the direction OF the society should
not be lost through any failure OF concerted
action on the part OF the policy holders in
support Of the movement Tor naturalization
inaugurated by the society's officers
The committee lays stress upon the re-
ports of the Insurance Commissioners Of
massachusetts, and Wisconsin for 1908.
In commenting upon the eager quest by
promoters for funds to finance all kinds OF
enterprises the Massachusetts Commits
soncr says there IL no cause for wonder
If coyetous glances are turned toward the
massive accumulatlons OF the life insur-
anCe companies.
Insurance corporations on n capital
stock basis give their policyholders' no
voice in their management To obtain
control OF such company II Is necessary
only TO control by purchase or otherwise
a majority Of its capital stock, If a king
of finance should start out with the de-
termination TO secure a majority Of the
stock Of such corporations the chances
are that in some cases at least he would
be successful. He might, II Is true. be
obliged 10 pay more than the book value
OF the shares; but perhaps control of q com
pany assets would well be worth twice or
thrice or even more than what could be
figured out as the value Of the stock on the
books Of the company. On no other theory
can the figure offered for life Insurance
company stock in some cases be accounted
for. since these offers are not warranted
bv the surplus nor by the dividend paid
nor by both combined.
The Wisconsin commissioner takes the
same view of the dangers Of syndicate
control. but goes further by suggesting
remedy which the committee, having
given prominence 70 it, may be considering
as one Of the relief measures in cOntempa-
ton. He says, in part;
1.-The requirement of certain amount OF
assets or capital stock in the organization
the partnership character OF the organiza-
ton. but i merely z statutory safeguard 10
pre- vent the organization OF life Insurance
companies by irresponsible parties. Capt.
tai stock adds no special security and il
unnecessary when once a sufficient number
of individuals have become contributors
to apply the experience Of mortality tables,
and as in the very nature OF these organi2a-
tons the members are insuring themaelye
the law should require that when the re-
quircd membe rship has been obtained IN a
company having a capital stock. the mem
hers be relieved from the additional cost
imposed by the payment OF stock dividends
the capital stock to be called in and can
celled az the accumulated funds Of the
company will permit.
blank petition TO the Legislature 10
p1ss the bill desired by the committee will
he mailed with the pamphlet The inn
portance Of immediate action ia urged, as
Ii Is declared to he essential that legislation
he secured at the present =ossion The
committee expects to distribute at least
100 600 copies OF the pamphlet and perhaps
100 900.