The Birmingham age-herald., 1914-11-24

which was partly a corporation and partly a mutual association. If there were to be liquidation of the company. then in law the stockholders would receive each his proportonate part of $40, ,000,000 of sur plus. This lurking right put an inherent value in the stock which would have caused it to be quoted, had the company been liquidated, at perhaps unprecedented hgul es.
 As the corporation is very close and as 1t has been since the days when it's pros perlty began in the control of practically the same board of directors. it became evident few years ago that in the nat ural course of things one after another of these directors and the stockholders as well would soon pass away. Some of them were men of national reputation. The late Gen. Stewart L. Woodford was for more than 30 years associated as a stockholder and director in this company. The late Silas Butcher, at one time Of prominence both as banker and as a politician, served on the board for many years. Former Postmaster General Thomas l.. James. who Is now an invalid on account of his years, has been for more than 90 years associated with this company. The former chief justice of the appellate division of the supreme court, Morgan J. O'Brien. has been tdentined with the company for years. All the di- rectors are men well past middle age and some of them are of advanced years. Their management of this giant corpora
 ton has never entailed criticism. al- though at the time of the investigation into the life insurance companies of New York, which was directed by Charles E. Hughes, now of the supreme court bench at Washington, there was some disposi- ton to take to the courts proceedings in- volving, as alleged, the rectitude of Pres fdent Hegeman. The courts, however, threw these proceedings almost contemp- tuously out, and President Hegemans standing and reputation were vindcated.
 In view of the inevitable passing away in the course of a few years of the present board and the stockholders and also in view of the fact that public opinion
 strongly approves the naturalization of
 life insurance companies, the corpora tion now proposes voluntarily to deliver over to the policyholders the management of the company and the control of it's resources and much the greater part of
 it's surplus. The stock of the company Is
 of the par value of s25. This stock is in
 law the owner of the surplus It is pro-
 posed to take from the surplus sufri-
 cient amount to liquidate the entire stock
 capital, and S6,oO0,O00 will be required for
 that purpose. That would leave about
 $S4,0oo,000 Of surplus to place under the
 control of the policyholders
 When the reorganization of the Euuita- ble Assurance society was undertaken the
 question which caused most trouble and
 which has not yet been answered, is this i. What should the stockholders in the
 Equitable receive for their stock? The policyholders maintained that the surplus of the company belonged to them and for that reason it could not be lawfully en- croached upon in order to liquidate and
 cancel the stock. No question of that kind can be raised with respect to the surplus of the Metropolitan Life. The cor poration in law owns the surplus and fl
 Is regarded here as some evidence of the good faith of the stockholders that they are willing to accept $75 a share for their stock, the par of which is s25, the gross
 sum needed to be taken from the sur plus.
 The naturalization Of a company as great as this will not be as difficult or technical as were the attempted mutuali- zations of other life companies immedi- ately after the insurance investigations were ended. For 1t has been learned how to mutualize. Of course, it Is expected that policyholders will send proxies to a responsible committee, this having been the course pursued by other large life in- surance companies when mutualiza ton was in progress. The naturalization of this great company will reduce to min. mum whatever danger there might be when the present management is passed away and new men secured control o- the stock of using the vast resources and
 power of the institution for private ad. | vantage.