The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1907-03-07
Purely Mutual.

The Mutual Benefit Life Insurance COM
pany was found to be a purely mutual
company, and to have shown a steady
and uninterrupted growth. There is lit
tie suggested by an examination or THIS
company" says the report, which calls
for any criticism or reformatory leglsla-
ton. Its polcyholders although aggregat-
inc a very large number of persons. APP
pear never for many years to have eN-
ereised. to any great extent, their PRIV
ilege of voting for the directors
1.-The directors seem to have been select
ed with care. When a vacancy mas oc-
Cured. the practice has been for the
board itself to look about Tor some proper
representative man to I'LL the vacancy
The committee has no special recon-
mendations to make with respect to the
case of the Colonial Life Insurance cont
pany Of America, the funds of which, II
SAYS, appear to be carefully Invested, or
the North American Life Insurance COM
pany of Newark. The latter company was
organized only about month ago.
Revival Of Prudential.
The report contains an extended review
of the Prudential from the time or It's
organization in 1878 under the name OF
the Widows and Orphans Friendly So
citey, until the present when 1t has
capital stock of s., 000,0 900 and surplus or
SIS, 5S0, 900.
ut is claimed" says the report. that
this surplus belong to the stockholder'
subject to contingent liability to policy
holders. 1t would appear from the presi-
dents testimony that certainly that in
the past and in the present. some at
least of the stockholders, would If they
could divide this surplus or part OF 1t IN
the shape of cash or stock dividends.
The case presents a remarkable state Oh
affairs. BY tho investment OF s9l,wo In
cash three stockholders were able 10 ac-
cumulate capital stock Of S2,ooo,ooo where
on they have always drawn 10 per cent or
soGo GOO per year and still to accumulate
beyond that, $16500,0O0. Nor IS this all
So rand were the gains and so great
the prospect of their future accumulation
that in 1902 when the scheme for recip-
rocal control of the Fidelity and Pru-
Dental companiesw as In course OF ar
rangement. the stockholders of TINS fru-
dental Insurance company were able to
dispose of shares at six times their par
value and the principal promoters or
the company actually received Tor part
of only their holdings in November. lsoz
from the treasury of the Fidelity Trust
company s5,997,Oo0
For the shares which produced this
amount there had been paid into the
treasury of the Widows and Orphans
f1le0ulN society ny tHt PAoiio'S'' 49,
s45, 1884, or three-quarters of l per cent
of this vast sum of money.
Belongs to Stockholders.
"lf the theory of the stockholders be
correct that the surplus of this company
In law belongs to them, the present sur
plus of 1880 900 affords $204 for each dol
lar of the $1,000 contributed to the en-
terprise and this in addition to annual
dividends of 100000. on 219 per cent paid
for many years past
THE assets of life insurance conf
pany are trust funds, and the manage
ment of such a company must be deemed
to be the management of Il great trust.
while it may be true. as strictly le-
gal proposition that the obligations of
the company to policyholders are limited
by the terms OF the written contracts or
policies which it issues, yet 1t is not the
whole truth; and the Prudential company
itself has recognized that its obliga-
tions, in equity and good conscience. go
further. for they state that they have
voluntarily divided up among policy
holders. In excess of its legal obliga-
tions. more than 100000.
rho is haf this