Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1913-02-18
chairman Intimates MutuaIiza-
ton Measure Will Go to
Senate at Once.
ATTACKED BY MINORITY
STOCKHOLDERS COUNSEL
Mr.. Lindabury, for Company,
Points Out Reasons and~
Advantages of Plan.

rom 2 sian AOGEtSRonHNNANfA
TRENTON, n. J., Feb. Ex-senator
Davis's- bill to permit the mutualiza-
ton OF the Prudential Insurance
Company, of Newark, will probably
be reported to the Senate without
recommendations by the Senate COM
mittee on revision Of law.
This was indicated by Chairman
Johnson, who at the end of two
hours' meeting announced an unwill-
ingness to allow any further time for
hearing and also said that the COM
mite would not assume the respon-
sibllity for not reporting the BILL
The principal addresses at the hear
ing were made by Louis Marshall, >
New York lawyer, connected with the
law firm of which Samuel Inter
myer is the head, and Richard v.
Lindabury, counsel for the Prudential
Insurance Company. Mr.. Marshall
spoke against the bill, as the counsel
for certain minority stockholders, and
MIR. Lindabury spoke for 1t. me
committee was also addressed by
Banking and Insurance Commissioner
IaMonte. of New Jersey, and former
Insurance Commissioner William ii.
Hotchkiss, of New York State. Both
of the latter favored the bill There
was in addition some discussion by
julius Rippell, a stockholder OF the
company, and one Of Mr. Marshalls
clients
The burden of Mr.. Marshalls argu-
ment was to the effect that a sur
plus of the company which he stated
exceeded SIS. 600, 900 belonged to the
stockholders in addition to the cap
ital stock of 100000. He denied the
right Of the company to divert any
of this surplus and said that the
stockholders, if their stock was pur-
chased were entitled to receive not
only the capital and the surplus men
toned, but also an amount which
would represent the good will of the
business they were asked to give up.
He said the bill provided for the pay
r1ent of stock out of the surplus and
that this meant on it's face that the
stockholders would receive less than
the value of their holdings. He
argued that the status of the stock
holders was one of contract and that
It was an invasion of the constitr-
tional rights of any stockholders to
compel him to give up his stock and
take in payment therefor an amount
less than the value of the stock.
Questions Motive of Friends of Bill.
Mr.. Marshall questioned the motive
Of those in control of the Prudential
Company, who favored IA mutualiza-
ton plan, and added that when they
had disposed of their stock and re-
ceiyed the amount allotted to them
they would continue in the saddle in
the management O the company more
firmly entrenched than ever. He said
they had a perect organization and
that an attempt to dislodge them
would be expensive and probably flu
tile. He also argued that mutualiza-
ton would be expensive and that the
sending out of notices of a single
meeting to the 100000 policy hold
ers of the company would cost 100000
for postage alone.
The whole question, Mr.. Marshall
argued, was one of property rights
and the Legislature should not pass
bill which would make it difficult
if not impossible, for the minority
stockholders to maintain those prop
erty rights.
Chairman johnson said that as he
understood the bill the minority
stockholders would be protected in
their property rights through the
right of appeal to the Court of
Errors and Appeals from any de-
cision that might be reached in the
appraised value of the stock by the
appraisers to be appointed by the
Court of Chancery. He suggested that
IL, as had been asserted, insurance
commissioners of the various States
favored naturalization, IL stockhold-
ers' rights were protected, and if the