New-York tribune., 1906-05-25
EQUITABLE FIGHT LIKELY
MUTUALIZATTON OR NOTg
LaToyers Sag Minority Stockholders
VIII Fight Proposed Plan.


After studying the proposition Of the Equitable
so far TO mutualize the company to allow the
poicyholders to elect twenty-eight of the fifty
two directors next December certain lawyers
said yesterday that it might not be carried into
effect as easily as had been imagined. Without
a doubt the minority stockholders will oppose
the proposition. One who was closely in touch
with these interests said:
The grounds on which Franklin B. Lord. rep
resenting the minority stockholders asked for an
Injunction restraining the former attempt at
naturalization were: First, that the conditions
OF the statutes did not permit it, second, that
even If the statutes did permit it, 1t could not be
done against the consent of the minority stock
holders. on the ground that It would be taking
away their property rights. This injunction was
granted. and was affirmed substantially by the
Appellate Division, although appeal has been
taken to the Court of Appeals.
The Armstrong legislation recently passed
changes the law that policyholders of a stock
company may be given the right to vote for the
directors But that does not take away our con-
tention that such law is unconstitutional
II the Legislature can give the policyholders
the right to control the Equitable, why can't it
give the Board of Aldermen power to elect the
directors OF the Consolidated Gas Company? e?
Ihat would solve the problem of municipal
ownership.
The Appellate Division. in somewhat modify
ing the injunction granted by Justice Maddox
limited that the Legislature might pass a law
giving the directors the power 20 mutualize the
company. At the Office Of Paul D. Cravath
counsel for Mr.. Ryan, it was said that the ap-
plication for a modification Of the Maddox in
junction would be made as soon as the papers
could be drawn and presented to the courts It
is understood that this may be done on Mon
day.
Henry De Forest Baldwin said on behalf Of
Mr. Lord that they had not yet determined
whether they would oppose the modification OF
the order. 1t was denied that Mr. Ryan had ac-
quired the Lord and other minority stock to do
away with that opposition to naturalization
The question as to whether the new mutuali-
zation plan can be carried out or not will m
doubtedly resolve itself in test of the con-
stitutionality Of the Armstrong law on that point
and there is a possibility that the fight NAV be
taken as far as the United States Supreme
Court There were those yesterday who went
so far as to say that Mr.. Ryan knew when he
made the move for naturalization that it could
not be carried out for some time. Others took
the view that it was a sincere effort on his part
to keep his promise TO mutualize the Equitable
and that he would fight to overcome any opposi-
tion to his plans
Ihose familiar with the work involved in pre-
pairing the lists OF policyholders Of the Mutual
and New York Life for filing with the State
Superintendent Of Insurance by July IS said
yesterday they did not believe the Equitable
a
the limited time
Notices were sent out yesterday for a meeting
of the trustees of the New York Life on Monday
afternoon The regular May meeting was ad-
Journed subject to the call Of the president On
Monday the reports of the firm of public ac
countants in this country and the firm Of char
tered accountants in England which have been
going over the books both in this country and in
all the foreign offices will be submitted by the
TTTv-f -frw-a ,,,,s&A III
final report Of that committee, which will not be
made until the regular June meeting Of The
board. 1t was thought, however that it would
be well to get the report Of the accountants be-
fore the policyholders at the earliest possible
moment
Robert Olyphant chairman of the expenditures
committee of the Mutual Life returned from Eu-
rope on the Teutonic yesterday. He came back
earlier than he had expected at the request OF
President eabody. who wished him to testify
before the insurance grand jury. He will be the
principal witness before that body to-day
Soon after leaving the ship Mr. Olyphant had
a conference with a member of the firm, of
Bowers & Sands, his counsel in the suit hrouebt
against him by the Mutual to recover moneys
alleged to have been spent through his neglect
member Of the expenditures committees He
also saw several Of his fellow trustees He re-
fused to make any statement for publication
regarding his return, his testimony before the
grand jury the suit against him
The witnesses before the grand jurv Yesterday
were Dr. Walter r. Gillette, formerly vice-presi
dent OF the Mutual; Frederick L. Allen second
in authority in the legal department of the
Mutual, and Theodore F. Stevens head book
keeper Of that department. Information was
sought from these witnesses regarding the large
sums of money turned over to the law deDart
ment simply on the represenfafjon tbot ar.
were needed for legal expenses" The general
impression has been that much of this money
went to campaign funds and the Legislative
fund" Before the Armstrong COMMITTEES II was
brought out that $4,000 year at least was
turned over to the law department quarterly
for two years.