New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-03-31

litigation Of the opponents. and it would be
serious question whether the poicyhOlders ever
got anything out Of 1t, apart from any question
Of theory or the power OF the Legislature in
dealing with this question in practical, states
manike way. The bill virtually says to the
majority Of the stock of the Equitable: This is
what you have agreed to do; you have pro-
vided by the trust deed a right to the policy
holder to elect a majority OF the directors. Now
this power Is given to the others. Go ahead
and do II. If there were any litigation IL would
be under disadVantageOus terms to the litigant;
that except on she hypothesis that the Legis-
lature was without power to do anything the
pOlicyhOlders would get the majority that
board. If IL should happen that the best plans
miscarrted In securing for the Equitable policy
holders such a right the Legislature sits next
January, and in the face of the reversal OF the
declared policy Of the Equitable legislation IN
the interest Of naturalization would be easily
effected.
On the subject Of the retirement OF stock, also
a vital question in the Equitable situation, the
committees views may be summed up as fol-
lows:
1t is a question whether the stock Of a stock
corporation can be retired. The Legislature can
Hquidate any corporation. 1t can repeal the
charter and wind it up. The only ground
which stock retirement be upheld as legal
is that 1t is quasi-liquidation, that the Legis-
lature may provide for the termination OF a
corporation, as, for instance. stock company.
and the creation as new mutual company by
a retncOrpOratiOn, and incident to that the
wiping out Of the stock without a technical uQui-
datiOn. That theory is the theory on which
Section 30 is put in.
A MINORITY CAN UPSET IT
That produces this situation: Under the pres
ent laws once stock corporation always
stock corporation, and the way, II II could be
done, to have transferred the stock into
mutual corporation. That presents the elements
or a bargain, the stock on the one hand, which
is started. and the policyholders who have no
interest In the property, but who have
nature OF creditors or the corporation and have
rights of accounting in connection with the
as to give a stakeholder less than he is entitled
to, a minority upset II. If they bargain
the rights OF the pOltcyholder away unsatis-
faCtOrtly, he has right 20 object The thing
has got to get a perfectly fair basis IL
thought the faiTest plan that there
should be given this vote on directors, the vote
OF the stockholders, the approval OF the Super
intendent Of Insurance and the approval OF the
pOliCyhOlders.
The ordinary stakeholder would say. You can
not do away with me; I have to consent. That
is true. unless the Legislature can act on the
theory that he is going to get the equivalent or
higher than the equivalent for his property.
Then the stakeholder says that that is fair
bargain, and If the majority act IL will be fair
from the stockholders point OF view. On the
must be called under the plan at which the
policyholder under any proxy, in person or by
mail, can vote. notice must be sent to every
policyhOlder stating the plan OF the retirement.
and there must be a majority vote in favor Of
that plan
Anybc~y who thinks Mr.. Ryan will ever see
$25OOOOO under that is mistaken. There is
reasonable conclusion that the stock has no
interest In any of the accommodations of the
Equitable 1t is simply the 100000 with in
tereSt a Z per cent basis. 1t the idea
in preparing the law in 1895 that when the
words used. the amount which should
he fairly determined to be the value OF the
stOcw" the words fairly determined meant
just what they said. that the determination must
he a right and Just one; and that implies that
there would be a right of review in case any
said II not a fair determination. But to
have no question about it, although the amend
ment did not seem necessary, amendment was
proposed to Section 80. The amendment,
quoted above, leaves ii clearly that stakeholder
or a policyhoIder challenge anything done
under it; so It is clear that policyhOlder Will
he lIniustlv dealt with. The only alternative In
the Equitable case would be generally the pro D.
osition OF a law which should compensate
stock some basis. That basis would have 20
he determined in some way. IL by litigation, you
would have long protracted litigation over a
lot Of questions pertaining to the matter
CAN GET TOGETHER IN STOCK COMPANY
Such plan would be challenged, IL IT were a
plan to retire certain basis to its valid
ity and the whole thing would be I'm shape for
lawyers to benefit more than the policyholders-
The only way 10 do that was TO draft fair agree
Inent if it to be done at all. That section
under the safeguards provided. hardly would be
used in the Equitable or any companies where
there is a sharp difference OF opinion. In the
stock company they can get together and that
they do get together on a plan diminishes the
perfectly fair basis, practically you cannot
give the stock less than 1t ought to have or in
longs 20 il. Necessarily matters must be con-
sideTed ON both sides and il YOU examine this
you will see that this plan which safeguarded all
interests was deemed fair one to present
Other amendments were chiefly along technical
lines In Difference 70 the opinions of various
actuaries with whom the committee and counsel
consulted.
There was one change In regard % political
contributions which. instead % seeking 10 pun
ish the corporation which can be done only hv
hne, provides punishment for any stockholder
officer, employee or agent who is privy 10 any
such contribution in any way. In lobbying the
scheme ia the same
The committee has been I'm consultation with
The subcommittee Of the committee Of actu-
aries and several other noted aCtuarles raDra-
Senting companies economically adrnintstere,l
The committee now thinks that criticism OF This
measure VIII not proceed from those who desire
IedI reform In these. II IS provided that four
thlhgs should 60 into the expense column OF the
hrst year-commissions on the FIRST years bust
ness compensation not paid on commission ex-
cluSlNely, Ike the salary OF a local representa-
i've or the branch office man. fees for medical
ANIMATION ana Inspection; advances TO agents
Margins are the same provided originally I'm
The h'u, and are figured at ~ to % per cent of
the premium, taking the ordinary life policy as
the basis, Nine renewals at ~ Der cent with
the provision that the renewals can be cOu-
muted so they can be paid in three or more
years, as the company likes are provided FOR
the Communication is such that the renewal that
would aggregate In nine years a total ~ ~ per
cent In three or four years would not exceed As
A GUARANTEED CURE FOR PILES