New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1906-03-31
BILLS IN.
ONE IMPORTANT CHANGE.
Precision Drafted IN Interest of
Equitable POHcyhOlders.
TBy telegraph to The Tribune. !

Equitable POHcyhOlderS.
TBy Telegraph to The Tribune
Albany, March 3O.-With one important change
in addition to those announced after the night
session of the Armstrong committee and the
insurance committees Of both houses broke up.
the insurance reform bills were presented TO
both houses Of the Legislature this morning.
Printing of the revised version will be rushed,
so that the bills may be on the members desks
in final form on Monday night. Discussion of
the bills cannot be held, under the rules. until
Thursday, and real progress consequently can
not be hoped for next week.
Opposition to the bills, the investigating COM
mittee believes, will have been lessened greatly
by the technical changes introduced, which, while
not altering the reform tendencies Of the bills,
will remove unnecessary hardships on companies
and agents Opposition still is expected, and
numerous amendments to the bills from sources
friendly and unfriendly will be a matter of
course. Even among the committeeman them
selves there is not unanimity of opinion on some
of the provisions.
At a supplementary meeting Of the Armstrong
committee. Charles E. Hughes, counsel, and
Miles NJ. Dawson, it's actuary, this morning a
further provision was drafted in the interests
of the poncyhoIders of the Equitable. relating to
the section of the bills treating of naturalization
of stock companies and the retirement of stock.
This provision is:
The propriety Of said retirement and of the
proceedings in connection herewith and the
determination by said plan Of the amount to be
paid as the fair present value shall be subject
to review at the instance of any party in inter-
est, including a stakeholder. or poHcyholder, by
the Supreme Court, any other court of COM
petent jurisdiction.
THE EFFECT ON THE EQUITABLE
The effect of this on the Equitable where
valuable because Of it's claim 10 the S1OOOOOOO
surplus over all possible liabilities, is that when
retirement Of the stock is effected in accordance
with previous sections of the bill, any dissatis-
fed stockholder may bring action to determine
the justice Of the price paid for the stock, and
the arrangements by which it was retired.
What may be taken authoritative state
rnent Of the committees views on this subject,
complied after discussion Of this section Of the
bills with various members. is that by virtue Of
the naturalization provisions. with the consent
Of Mr. Ryan and his trustees, the pOlicyholders
will be allowed to elect twenty-eight Of the fifty
two Equitable directors. Then, poHcyhoders'
directors being in power through a majority of
the board, they will not allow any scheme TO
retire the stock, since they. being in control,
through the restrictions Of the other insurance
reforms could prevent any act inmcal to their
interests by those in control Of the stock.
man thoroughly familiar with the insurance
situation said tonight;
1t was not deemed necessary to have special
act TO apply to the Equitable situation. The
directors Of the Equitable about a year ago
adopted an amended charter, which provided for
the election Of twenty-eight Of the fifty-twO d-
rectors by ;he pOlicyhOlders. That amended
charter held up by an injunction i'm the
Lord suit. The question was whether Section
81. the present insurance law, gives any au-
thority 10 the directors TO give voting right TO
pOlicyhOlders. The Special Term held that the
Legislature had, in effect, no power TO disturb
the stock right Of control and exclusive voting
power without its consent and also that the
Legislature did not have the power to confer
the right.
on appeal the Appellate Division indicated in
its opinion that the legislature had the power
corporations. but that Section - as it stands at
present was not intended TO accomplish that
purpose; that its sweeping terms should not be
construed.
TURNED OVER 500 SHARES.
Under the terms Of a trust deed by which Mr.
Ryan turned over 5O2 shares, a majority of the
Equitable stock, and Mr.. Cleveland, Justice
O'Brien and Mr. Westinghouse came in as trus-
tees, it was provided that they should be author
lied to vote that stock in favor Of carrying out
the policy OF naturalization, with the right TO
the pohcyholders 10 vote Tor tWenty-elght dlrec-
tors. Mr.. Cleveland in his letter 10 the commits
sion, early i'm the investigation, adverted TO the
fact that the trustees felt bound to carry out
naturalization far possible Mr.. Ryan
the stand testified positively that he would favor
any proceedings for carrying out that plan of
naturalization The result is that the legal
owners Of the majority Of the stock in the
Equitable, the trustees and Mr.. Ryan are com
mitted in the most solemn and positive manner
20 the plan of giving the poiCyhOders the right
10 elect the majority of the Board Of Directors.
From this there would seem no reasonable
doubt that Immediately upon the passage Of this
bill steps would be taken 90 carry that into ef-
feet. The trustees and Mir. Ryan would he dis
credited II they went back on their solemn
surauces i'm regard TO that II then minorit,
shareholder should make any objection and
bring any suit he would have the least chance
OF success, the action he complained of would
be taken on the authority of the directors and
majority Of the stock If he did succeed il
would prove the Legislature was powerIess and
nothing at all could be- done II the Legislature
should attempt by force to give the poIicyhod-
ers the right 10 vote for the directors. Ignoring
this practical situation, il would almost nec-s-
sarily result in litigation. The plan now con
templated for giving twenty-eight directors to
the pOlicyhOlders would not be carried out The
affair would be turned into the courts and would
result In litigation expensive and long pro-
uacted, which would eventually go to the United
States Supreme Court.
WOULD FAVOR OPPONENTS LITIGATION
The very action OF the Legislature in paying
attention To the stock situation would favor the