Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-01-22

Continued From First Page)
in one or two instances it had been rather
too conservative for company of its
size. Speaking of the possibility of a law
being passed which would prevent insur-
ance companies in the District of Column
bia from paying dividends unless the
cOmpany's operations at the end OF the
period for which dividends are to be paid
show an earning, Mr.. Fitch said he knew
of no state which required anything of
the sort. Judge Prouty, after some dis
cuSsiOn regarding the First National Fire
Insurance Company, asked the witness if
he thought it fair to stockholders Ito hold
out to them the fact that the company is
earning large sums of money, and that
they are in a position to pay dividends.
when the dividends were to be paid out
of part of the money the stockholders had
just paid imp
eff there was no surplus l should say
it might be criticised.
Further Judge Prouty asked:
DO you think the average man could
tell If there had been dividends. paid to
stockholders that it would impair the
fund out of which his policy was to be
paid?"
Il presume he might find fault with it
If he wanted to-
Questioned by Judge Prouty.
1.-The fact that he was getting divi-
QenuS, dSkeu JuuSe IIoulH, C'Ch
though they We're paid out of money he
had paid in, you think would stimulate
him to pay some more, do you not, on
those subscriptions
Il think he would
do you think that is really a fair
way of dealing with your stockholders!
Mr.. PrOuty.' replied Mr. Fitch. do
you put that question to me. that l am
dealing with the stockholders?
Il am putting a Hypothetical case. Of
course. But do you think it is fair to
deal with the public upon the basis Of
fooling them into the belief that they
are actually getting dividends upon stock
earned when it is really payment back
of certain payments OF money they them
selves have paid in?'
No" replied Fitch. IF ii is case as
j believe has been exposed at various
times in this country where men are
anxious to invest on the superstition that
they are making vast prohts, and then a
part Of that money is paid back to them
from month to month or from year to
year i'm dividends. enough to satisfy them,
| and then the promoters disappear with
tween that and legitimate business
| that has been established for years.
that has been profitable in the past,
that has been profitable to similar in
situations, that is subject to the ups
and downs of such a business as the
insurance business; but which comes out
in the law of average. l wan to say.
| frankly think there is a vast difference
between the two
Not Referring to Absconders.
Il have not put into my question any
intimation of abscondinS, or the rest of
it; | am only dealing with it to the date
We are finding You put that imputation
in there"
well. yes. sir: I did so Intentionally.
Mr. Prouty."
II wish to denounce II as not to be
considered as any intimatiOn OF mine,
declared Representative Prouty But
when company is not earning any
money and can only pay back to the
stockholders a certain part or that which
they pay in and when that is done for
the sole purpose of getting them to pay
more is is a square deal?
IF if can be shown the company is
losing money with no possibility of any
change i'm those conditions, and 1t is oDVi-
ously done for the purpose of deception,
| then it is not right" said Mr.. Fitch.
Robert r. futile took the stand later in
| the afternoon He gave a fun story of
| the earlier days of futile, Dudley &
Wightman He referred to the Protective
| corporation which has been mentioned
| IN the hearings several times, and said
that he had got but little money out of
the sale of it.