Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1909-12-03
MORGAN PLANS TO
MAKE EQUITABLE
MUTUAL COMPANY
Wall Street Hears That Change
Will Follow Bankers Pur-
chase of Control.
STOCK TRUSTEESHIP NOT
SATISFACTORY SAYS O'BRlEN
Arrangement Prevents Placing
Direct Responsibility for
Management.

NEW YORK, Dec. 3.-The purchase
OF the majority Of the stock of ths
Equitable Life Assurance Society by J
Pierpont Morgan-a move of vast I'M
port in the financial world, because o.
the virtual passing of control of nearly
half a billion dollars of assets and tne
domination of two large trust COM
panies-is believed in Wall Street to-
day to f~oreshadow a still more i'm
portant move-the naturalization of the
Equitable.
The Naturalization phase OF the
Equitable purchase by Mr.. Morgan
from Thomas F. Ryan was. generally
discussed today, but no definite in
formation was obtainable. Former JUS
tice Morgan j. O'Brien, one of the
Equitable trustees, declared that the
pr sent system, whereby the stockhold-
ers and policyholders join in the cleo
ton of directors, is not desirable, as
the responsibility of control could not
now be fixed on either the stockholders
or the policyholders.
II am sure that a naturalization OF
the company would be to its interest,
said Mr.. O'Brien.
v tllldlI IL IJOlClthtDEg fDtoNS PaRCA'A
tendent of insurance, said today that
the subject of complete naturalization
of the Equitable has been the sub
ject Of consideration for some months.
Discussion in financial circles is busy
today with the probable price Mr.. Nor
gan paid for his stock, and 1t was re-
called that a year and a half ago Mr..
Ryan was said to have made an offer to
sell his shares to the Equitable Society
itself at what they had cost him, ST.
500, 900, with interest at A per cent.
1t was further pointed out by hose
we'll informed that with the contro of
the Equitable Life will also pass con-
troll Of those trust companies in the
stocks of which the Equitable Life held
heavily. Mr.. Morgan, it was t bought,
might very possibly realign these trust
companies in new groups of combina-
ton.
Mr.. Morgan's' purchase is made sub
ject to the deed of trust made by Mr..
Ryan to Grover Cleveland, Morgan ].
O'Brien and George Westinghouse as
trustees of the stock held by him.. This
deed of trust was executed June 10, 1905,
and ran for a period of five years so
that it does not expire until next June.
According to it's terms the trustees may
renew it ON the expiration Of the agree
ment.
Mr.. Ryan has been in his Virginia
place.. Oak Ridge, for several days and
no statement as to his reason for sell
ing control of the stock was obtainable.
On behalf of Mr.. Morgan the following
brief statement, given out from his
office, was all that was officially said:
MIR. Morgan has bought the majority
of the stock of the Equitable Life AS
surance Society, formerly owned by
Thomas F. Ryan. This purchase is
subject to the trust under which Grover
Cleveland, Morgan J. O'Brien and
George Westinghouse were made vot-
ing trustees for the benefit of policy
holders, and it covers all Mr.. 'Ryan's
interests, including all the stock pur-
chased by him from James Hazen
HYDE
From one standpoint control of the
Equitable does not convey the I'M
portance thai was attached to it when
Mr.. Ryan got it. Then the stock nom
mated all the trustees and h trustees
had practically unlimited power in the
investment of the upward of $40O, 900, O0C
assets of the company. The power Of
the stock in naming trustees MI. Ryan
voluntarily abridged, so that twenty
eight of the fifty-two trustees have
since been named by the policyholders
The laws passed on the recommends
ton of the legislative Investigating
committee nave stricken stocks ant
several classes of bonds from the lis
of securities in which the company has
a right to invest the moneys under 1t:
control.
Notwithstanding these changes, ant
though the transaction does not involve
as great an moun of money as Others
in recent years, transfer of it's Stocl
control is one of the most importan
matters of finance since the panic. Th'
society is the wealthiest of the insur
ance organizations and sound and Sc
cure financial management is of tn
utmost Importance to a by no means
small army of ~policyholders. The out
side insurance written by the cornpan.
amounted at the date of the last re
port to $1,a26, AIS, $40. 1t had then
surplus of $751; 1851, 467, a general insur
ance reserve of 1884, 152, $50, and tota
assets of $472, 1888, 500.
OF the company's assets at the tim
Of this report the market value of TIL
bonds was 1910, 1867, 456; of the ban
stocks, $2s, 7SO.1S2, and of the railroa
stocks, s113, 81, 740. Among the ban
and trust company stocks the heavies
holdings were in the National Bank Q
Commerce, the Equitable Trust Com
pany II the Mercantile Trust Com
pany.
The Equitable and Mercantile Trus
companies are among the strongest !
the city and transfer Of the control {
the Equitable Life might mean a trans
fer Of control In these institutions an
also In the National Bank of Com
merce, though nothing at all was sal
as to whether a transfer of control !
them is contemplated as a result of til
Equitable Life transaction.