New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-08-22
Stockholders of
Equitable Vote
To Mutualize
Minority Interests Protest
Payment of SIS, 400 a Share
for Controlling Stock

Approval of the plan for mutualiza-
ton of the Equitable Life Assurance
Society, recently adopted by the di-
rcctors, was voted yesterday at a meet
ing Of stockholders, but not until rep
resentatives of minority interests had
voiced a strong protest against being
paid only $1,000 for their shares, while
a price of approximately S5,4OO is to be
paid for the majority holding of the
stock. The plan was carried by vote
of 615 shares to 248. The total cap
italization is 1000 shares Of 500 par
value.
Lawrence Greer, representing the
Henry b. Hyde estate, James H. Hyde,
Charles B. Alexander, the Sidney Dillon
Ripley estate and other minority inter-
! ests, introduced a resolution providing
for the retirement of the stock held by
| his clients at the same price as that
which, under the plan, is to be paid
for the majority holdings. The amend
ment was voted down after the chair
man of the meeting, Charles d. Nor
| ton, had refused to entertain motion
| by Mr.. Greer that the 564 shares OF
| stock owned by General T. Coleman du
| Pont should not be entitled to vote
at this meeting"
The plan will now be presented to
the society's 100000 policyholders for
ratification. It's final adoption rests
upon the approval of the State Super
| intendent Of Insurance, provided no
| further steps are taken by the minority
| stockholders to interfere.
Minority May Fight
There was some talk after the meet
, ing yesterday that the minority inter
ests might take legal action in sup
port of their claim that an arrange
ment which has been worked out for
retiring the stock is "inequitable.
! Under this plan General du FONT
agrees TO place the policyholders or
/ the company in control OF the stock or
/ the society by offering them his hold
] ings of 564 shares for an aggregate
sum of approximately S2,799,9OO, which
! includes payment for sixty-three
/ shares of minority stock at $1,000 a
| share. This is about S2,00O,OOO less
than he paid the late ]. P. Morgan for
| the same stock.
| The transaction is not to involve
| fat cash payment by the society. The
/
stock will be made in semi-annual in
/ stalments, covering a period o. twenty
years, by deducting the amount OF
| such instruments. which includes in
, terest on deferred payments, from the
semi-annual interest payments to the
society on the mortgage of $40, 500,0 900
which it holds on the Equitable Office
building. of which General du Pont is
the chief owner.
In this way it is expected that the
naturalization plan can be put into
effect without il being necessary TO
make any substantial reduction in the
working surplus Of the society or any
appreciable increase in the cost OF in
surance TO policyholders.
For the 1876 shares of minority stock
it is proposed to pay cash, and at
price of 81 500 a share this would call
for the sum of S654,000. AS the stock
is purchased or acquired under this
plan it will be assigned and trans
/ ferred pursuant to the insurance law
of New York to three trustees, who
have been named as follows:
John H. Finley, of Albany, Commits
sioner of Education, State of New
York; Morgan J. O'Brien, of New York,
counsellor at-law and ex-Justice of the
! Supreme Court, and George Wharton
Pepper, of Philadelphia, counsellor-at-
law.
The trustees will hold in trust the
stock acquired by the society until all
is secured and cancelled. They are also
required by the plan to vote the stock
at all stockholders meetings in favor
of qualifying policyholders to vote for
all directors.
Society's Position Unique
The Equitable Society occupies a
unique position in that it is mutual
company with a capital stock. The is
suance of stock was required by law
when the society waS organized, in
1859. The object was to protect the
policyholders while the enterprise was
in the danger period of its infancy.
In time, so evidence brought out dur
ing the investigation of the insurance
scandals by the Armstrong committee
showed, power which the control of
this stock carried with it made pos
sible the misuse of the funds of the
society.
Following these disclosures Thomas
+. RYAN purchased the majority stock
for $4,000 900, in 1905. At the time he
stated that il was his purpose to pre-
vent the possibility of such misuse OF
funds. The stock was placed in the
control of three trustees for voting
purposes.
Later, control passed into the hands
of the late J. P. Morgan, who paid Mr.:
| Ryan therefor the sum which he had
paid plus interest. The total payment
by Mr.. Morgan amounted to over
$4,000 900 Mr.. Morgan continued the
trustee arrangement inaugurated by
Mr.. Ryan. In June, 1915, General 7.
Coleman du Pont purchased the con-
troll, paying therefor about s4,i0o,ooO,
which was the sum paid by Mr.. Nor
gan plus accumulated interest thereon.
General du Pont continued the voting
trust, which is still in force.