New-York tribune., 1908-07-31
PROVIDENT SALE SURE
DESPITE BAD REPORT.
4ctuary's Statement Condemns Con-
dtiOn an Inter-SOutherH.

house. Insurance Commissioner Of Colorado.
against the contemplated sale by New York
banks to the Inter-Southeru Life Insurance
Company of Louisville. Of the majority stock OF
the Provfdent Savings Life Assurance Society.
IT seems probable that the pending negotiations
will result In a sale
In the report of s H Wolfe an actuary Of
this city. who investigated the Kentucky con-
cern last November at the request Of Henry R.
Prewett who was then Insurance Commissioner
Of Kentucky. a severe arraignment OF the
methods Of the managers Of the company Mr.
Wolfe said the capital had been impaired to the
extent OF $4,000 on October 81 by such methods
allowing stock 10 be paid for entirely by
notes and paying more for the requirement. OF
new business than the premiums amounted TO-
He calls the expenses of the company excessive.
ridiculous and ruinOus." and says that only one
condition can possibly result. and that Is in
soIvency. 1t reported yesterday. however
that the deal whereby the control OF the Provi-
dent will pass TO the Inter-SOuthern will be
closed in a few days. while there were afoat
rumors that the transfer OF the stock had al
ready been arranged The latter. however. were
denied.
The first public intimation that Il was tbs
Inter-Southern that was the most favored Of
the institutions that seek to take over the Provi-
dent and that the Colorado Insurance Commits
sioner would oppose such transaction was print
ed in The Tribune yesterday. The telegram which
Commissioner RIttenhouse, sent TO Royal Victor.
of Sullivan & Cromwell. attorneys for the banks
holding the stock, read as follows:
Am told banks are selling Provident savings to
s nissioners in public protest Please advise
Mr.. Victor sent this reply:
Banks stIu hold stock Dealing with various
purchasers. Writing.
SALE WILL co ON
Sullivan & Cromwell gave out statement
last evening saying that the sale of the stock
would be completed in a few weeks. The state
ment follows:
The published reports of the completion OF sale
the Provfdent Savings Life Assurance Socletys
A large majority of stock is held by trustee for
the benefit of the several banks and otner dep3s-
itors Active negotiations have taken place with
numerous financial interests which desire 70 puT-
though it is likely that the transaction will
completed within the next two weeks: ~,
In making the sale all the parties involved fUiy
realize the desirabity of dealing only with pUr-
chasers Of such standing that their control Of the
holders, wen the Insurance Departments ,nn &
Nothing material is being done without prior con-
sutation with the Superintendent OF Insurance %
this state,
board has been entirely eliminated The sale whe-s
It takes place. viii confer upon the purchasers a ,5S 4
| fully concentrate complete control
| The details or the negotiations IpE lne inter-
southern's acquisition OF the Provident stock. IL
| is said are being handled by Arthur g. Lang
| ham. of Louisville. and Senator Horace White.
| of Syracuse 1t largely due 10 the aetiv-
| jty Of Commissioner Rlttenhouse that the
exact state of affairs in the Provident became
known The Colorado Insurance Department.
together with the Insurance Department or the
State of New York. conducted an examination
into the society's affairs last December. which
ON
missioner Rfttenhouse and Commissioner kel-
sev 1hereupon directed that the PrOvident cease
tbe solicitation OF any new business A ma
ioritv of the Providents stock. amounting to-
about one thousand shares. is now held by the
METROPOLITAN Trust Company. the Mechanlcs
and Traders Bank and the Consolidated Ma
tional Bank as security for loans made TO f. r
Thomas and Orlando F. Thomas. who formerly
controlled the stock. The banks assured ths
insurance commissioners OF the two states that
no sale would be made without their approval
of the purchasing parties; but II appears from
Commissioner Rfttenhouse's telegram TO Mr.
Victor that he is not officially informed of the
pending negotiations Hence his warning
The Kentucky company against which the
Colorado Commissioner protests is the Inter
Southern which hopes 10 acquire the Provi-
dent There are two other bids from Insurance
companies for the Provident stock Mr. Fitten-
house has copy of the report made by Mr..
Wolfe.
CHARTER NOT CARRIED OUT.
Referring to the capital stock OF the Inter-
Southern. the actuary reported:
Tho charter Of this company provides for
captaI stock Of S250.000 Of which StSO.O00 sfaiI
be surplus If the provisions OF the charter had
been properly carried out the COMPANY, would i
necessary fund for the establishment OF its bust
ness Instead OF that however. the certificates
have been issued in such way that the entire
anlT an f aRDits Rde Stock with no reference any kind
to the subdivision OF this amount into capital ard
surplus The result Of this error - 70 impair Lne
capial Of the company This impa lrnlent amount
ed to about S66 OO6 on October 81. 1907
II becomes my duty 10 calI youIo attentlcn 70
the fact mat although only s1s5O00 OF the ai-
thorzed capital Of s290ooo has been ISSUED ~ ne
offiCer cor for the purpose OF selling some
scrfbed for You will probably recall that the first
call issued by the COMPANY to US s{ocknoioerS Nss
for 50 per cent aT S ct paF and some of the stock
holders paid the entire amount IN notes no cSsl
ne tocT ms 9vvbfct is now being sold premium ot
d par cent 30 per cent, which premium II not
biera5 vbo have given their notes less OF course.
any commission which has TO De paid 10 ths
GEe of the employees was frank enough 10 admit
that by this method he hoped evenIaal!y y ytos- 20
6ein, renuired to pay for it, It Is almost un-
necessary to state that this is very Improper
procedure.
EXPENSES OF COMPANY HIGH
Taking up the expenses Of the company. Mr..
Wolfe discussed them at length in his report.
He said:
The expenses OF this company are excessive.
ridiculous and ruinous The commission paid the
siby result from these methods. VIZ. the insol-
vency of the company. An idea may be obtained
OF the course Of events from the following hrier
outline