Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1913-02-10
Dryden COntradicts Him on Eff
feet of Taxing ''Pru'' De-
ferred Dividend Fund.
1T WOULD HIT HOLDERS
OF POLICIES, HE CLAIMS
Cites Opinions of Lawyers and
Road Commissioner Stevens
to Support Assertion.

Counsel NuSent advocating the pas
sage of Assembly bill No. 81, which
authorizes the city of Newark to tax
the Prudential deferred DIVIDEND
fund. Mr.. Dryden says:
"My attention has been called 10
brief filed with the members OF the
Senate and General Assembly OF tue
State of New Jersey by Mr. James
r. Nugent advocating the passage OIL
Assembly bill No. 81, in which Mr..
Nugent criticises previous sta1e-
ment made by me in connecuoh
Herewith.
This brief is the only argument
vet advanced in support of the pas
sage of this bill. The newspapers OF
the state have unanimously joined In
condemning the Rowe bill as unwise,
unjust and unprecedented. Labor or
foundations and workers for economic
reform have united in attacking the
measure as harmful to the interests
of the Wage-earners of the State and
country.
1.-THE charge made by Mr. Nugent
is that the statement made by me
in relation to the. attempt to tax this
10 d 4116hCeAAAiBs
makes this statement twice. although
in one instance he qualities his charge
by saying that I was 'misinformed
and that my error was 'unintentional'
and due to misunderstanding on my
part.
my original statement was not
misleading nor was it based either
on misunderstanding or 'misinfor-
nation in regard to either the pur-
pose OF effect of this bill. 1t was
made deliberately and with a full
knowledge of the facts.
Nueents Arguments.
ITO justify his charge Mr.. Nugent
seeks to deT1Dnstrate that the de-
ferred dividend policy holders will
bear no part of the burden of taxa
ton sought to be imposed by the
passage of this bill. In support of
this position he cites no authorities,
but rests his case upon his own un-
supported assertion. His whole argu-
ment is contained substantially in the
following excerpts from his brief.
The bill does not subject to taxa
ton the funds apportioned to de-
ferred dividend policy-holders.'
1.-The tax is levied against and
payable by the company, and not by
tho policy holders
1T is unnecessary to continue the
controversy in relation to the owner
ship of these funds or the effect of
the passage of this bill thereon. The
Supreme Court and the Court of Err
srors and Appeals have twice deter
mined that the fund is the property
of the. deferred dividend policy-hold-
ers and must be distributed to them.
The matter is. therefore, not open for
further discussion.
In order to verify my interpreta-
tion of these decisions l have sub
mitted the issue raised by Mr..
Nugent to Chancellor William j.
Magic. ex-Justice Bennett Van Syckel,
ex-Justice Gilbert Collins and Mr..
Richard ". Lindabury. all of whom
are members of the board of direct
ors, and, as such, thoroughly familiar
with the questions involved, request
ing legal opinion from them as to
the ownership of the fund and the
effect of the passage of the bill there
on
Their opinion given me in response
TO this request is as follows:
The. undersigned, members of the
board of directors of the Prudential In
surance Company Of America. have re-
ceived from You q request for their opin.
ion as to the, effect of the enactment Of
Assembly bill No 81. now pending In
the New Jersey Legislature upon the
deferred dividend fund held by the
company.
tors we are thoroughly eouyersant with
the character of this fund. We are
also familiar with the opinion of the
Supreme Court and the Court Of Errors
tween the city of Newark and the com
pany in relation to the taxation of this
fund, In which the courts held the fund
10 be exempt from taxation.
The fund consists of apportionments
made to the deferred dividend policy
holders under the provisions of chapter
y of the laws Of 1907 of that part Of
the surplus earnings of the company to
which such deferred dividend policy
bolders were entitled under the provis-
ions of their policy contracts plus the
interest earnings thereon and the accre-
tions thereto. and less the payments made
to polieyhOlders therefrom.
Tn our opinion the fund, with all
ADDITIONS. incln ding the interest earn,
81 the deferred dividend poiicyhoiders
n which neither the company, rs stock
holders or its, other pollcyholders have
say interest whatsoever. 1t must eyentu-
ally be distributed amenR the deferred
dividend policyholders to whom 1t be-,
Assembly bill No. 81. If enacted Will,
remove the exemption from faSation Ia
which this fund Is now entitled nv law
and II will therefore become subject To
sxa tbe IDS tundi being the property
any tax. imposed upon it,. or upon the
Prudential on account of 1t. must, Of
course, be borne by such policyholders
from their funds: Very truly yours,
WILLIAM ]. MAGGIE.
"BENNET VAN SYCKEL,
GILBERT. COLLINS,
- RICHARD v. LINDABURY'"
This opinion, l think, fully meets
Mr.. Nugent's s, charge that ] have in
any way misrepresented the effect
upon the deferred dividend policy
holders of the passage of this bill.
An Erroneous Stand.
II do not charge Mr. Nugent With
Misrepresentation in the presenta-
ton of his argument, although it is
demonstrated that his position is ems
tirely erroneous. prefer to think
that he himself has fallen into error
by reason of failing to fully appre-
ciate the full effect of this bill upon
the deferred dividend policyholders,
~ should hesitate to charge him
with having knowingly urged the
passage of a bin which would be so
disastrous to their interests.
Mr.; y Nugent also criticises the
methods employed by the company in
apportiening to these policies from
the premiums received thereon the
earnings TO which they are entitled