The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-03-07
CRACKS FOUND
IN GIBRALTAR
Report of New Jersey Senate
Committee Upon Life Insur-
ance Companies.
PROBING OF PRUDENTIAL
SEVEN PROPOSED LAWS TO COR
RECT ABUSES.

Trenton, n. j.. March 6-Senator Hiliev
today presented to the senate the report
of the special committee appointed last
year to investigate the subject of life in
suranee in New Jersey. He also offered
seven bills. drafts of which were en-
bodied in the report. to carry out the
committees recommendations.
Devoted to the Prudential.
BY far the greater part of the report
is devoted to the Prudential Insurance
company of America. the largest of the
four companies under investigation. Prin-
cipal among the recommendations is one
that bill be enacted limiting the amount
of capital stock which any life insurance
eompauny may have to 100000 and the
dividends which may be paid thereon
from future earnings, so long as the COM
pany continues to conduct the partici-
pating life insurance business. to 10 per
cent upon the stock; and providing that
upon the dissolution of the company, the
stockholders of the company shall have.
out of the ultimate distribution of assets.
not more than 81 for one of the face value
of their shares. This bill provides how
ever that where accommodations greater
than that amount already have taken
Dental. the stockholders shall not be de-
prived of their rights thereto.
Companies Must Choose.
Among other recommendations are the
following:
That after Jan. /. 1908. no domestic COM
paHy shall write both participating and
n-participating policies. all stock com
panies to elect on or before Sept. of
this year whether they shall conduct a
participating or non-participating business
after the following first day Of January.
and that an annual accounting be made
to policyholders by classes Of the portion
of the sulplus belonging to them and the
setting aside of such appOrtiOned part of
the surplus to their credit.
The committee reports that upon the
whole it found that the companies under
investigation have been carefully admin
istered. their funds well invested and the
salaries of their officers not so high as
to require restrictive legislation. The Mu-
found TO be purely mutual company and
to have shown steady growth.
Stockholders Claim All.
The report contains an extended review
of the Prudential from the time of its
organization in 1873 under the name of
the Widows and Orphans Friendly soci-
ETY.. with a capital of $4,000, until the
present when it has capital stock of
s2O00.000 and surplus of S1S.5S0.O00.
''If the story of the stockholders be cor
rect, that the surplus of this company in
law belongs to them" says the report.
the present surplus of s1S.5S0 900 affords
s204 for each dollar of the S9l 900 contrib
ton to annua. dividends of 100000 or 2ls
per cent paid for many years past.
Belongs to PoticyhoIders.
THE truth is that this vast accumula-
ton of money. now amounting to more
than $4,000 600 was all contributed by,
and in ethics all belongs to, the policy
holders after far deduction for the ex-
penses of operation and just and liberal
return to the promoters of the enterprise.
1T has been stated that at the pres
ent rate of progress this surplus is likely
to be at the end of 1907. $23, 900. 900, and at
the end of 1905. $2S.0oo,0 900. This money
ought in some way. TO be assured to the
except such part as justly
now belongs TO the holders of the stock
Rather than to allow this accumula-
ton to go on for the benefit of the stock
holders we would favor the repeal of the
charter of the corporation and a re-or-
ganization of il under the general law"
II is in place of this extreme measure
that the committee prepared the bill lin
ting the amount of capital stock of any
insurance company to S2.O090eJ. and re-
stric;fnQ the DrOfits of stockholders.