Show writes long letter to insurance investigation committee detailing difficulties encountered in Socie ts reform 1 yiew boric sept 22 the text in full of the letter of grover cleveland chairman 0 the board ot trustees of iho equitable life assurance to clety under the thomaa F ryan purchase of hyde stock as presented to the legislative isla tive committee on investigation ot life insurance today is as follows r N II 11 sept 18 hon W armstrong chairman a the new york investigating commute appointed to investigate the business of life insurance in new york dear sir the ees who are the holders for voting purposes ol 01 the majority stock of the equitable life assurance society of the united states are so fully in accord with the objects an daims the committee have in hand that they cheerfully comply with your desire for a statement from them touching upon the methods thus far pursued in the discharge of their trust the instrument under which the trustees hold said stock and which defines their duties in respect thereto was executed on the day 0 june 1905 A copy of said instructions is annexed to this statement it will be observed that its declared purpose Is to carry out so far us possible a elal tor of said society adopted by its directors through an amendment of the socie tys charter which contemplated the election of at least 28 of its sa directors being a majority ot the kind by the policyholder a of the society under the charter of the society its 52 directors are divided into four equal classes each class holding office for four years so that in each year but thirteen directors are elected unless vacancies by death or other wise exist at the lime of the annual 1 election which occurs in the month of december in conformity with the provisions of the charter and for the purpose of effecting the measure of referred ot it is directed in the second section of the trust agreement that the trustees in the exercise of the voting power ot the stock transferred to them out of the thirteen persona voted for by them shall be policyholders policy holders selected in accordance with the wishes of those insured expressly as provided pr ovideA in said trust agreement and that the remaining six persons to be annually elected shall be voted for by said trustees in their uncontrolled discretion inasmuch as no annual meeting of the society has been held since the trustees assumed the duties of their trust there has thus far been no occasion for their direct interposition aa voting stockholders in the selection of the directors to fill the places of those so classified that their terms shall ex alro with the close ot the present year the trustees were however at confronted with conditions in the management of the society which resulted in such numerous resignations from its board of directors that it became absolutely essential to ithe proper and orderly administration of its affairs that the directorate should be immediately reinforced by filling to some extent at least existing vacancies on the board the authority of the trustees to act in this emergency Is derived from the provision of the fifth section of the trust agreement wherein it is declared that in case of vacancies in the board of directors due to resignations deaths or other cause the trustees may make recommendation to the directors of the society as to the persons lo 10 be to fill such vacancies to the end that the purposes of this agreement may be promptly and effectively accomplished though the action of the trustees under this section of the trust agreement was nominally advisory they should expect their recommendations to be followed by the remaining directors still in office and though not so distinctly limited as when directly electing directors at annual meetings they conceived their responsibility to the society and its in the premises to be none the less binding and impressive and they interpreted the last words of this section 0 the agreement under which they were to act as indicating their obligation in thus filling such vacancies to further the scheme of which has become the declared policy of the society thereupon and at the time of the execution of the trust agreement the trustees determined that the persona they would recommend for election to fill file existing vacancies in the board should be taken entirely from the pol of the society on tho of june the day succeeding the completion of the trust agreement a notice addressed to the policyholder a ot the society was prepared by the trustees and signed by them A copy ot ahls notice is hereto attached its objects were quite apparent in the first place it was deemed useful to thus early notify those to whom it was addressed of their privileges the matter of designating tho persons among their body for whom they desired the trustees to vote at the annual election in december and also inform them of the manner provided for he expression ot their preferences and to urge them to avail themselves of their privileges in the premises although it was only necessary that euch preferences should be known to the trustees as early as tho first of november ensuing and a further pur notice was to make known lefall that the trustees contemplated at t aril garty date to recommend pol to tha board of directors for election to fill vacancies in that io give such opportunity as the necessity of speedy action by the trustees permitted or the expression on theart of the ot their preferences in the matter of filling such vacancies this notice was immediately given wide circulation through the press and by mailing copl eaSto numerous policyholders policy holders to this notice the trustees received reports from a number of associations ot in dif who gave valuable ifrid concerning the hose chev represented but ith ml this and with diligent effort in other ways to secure information themselves of their combined acquaintanceship the anis tees at a meeting held on the day of june were ablo to recommend w nine persons for election by tho boarde to fill vacancies on the following day another notice from tho trustees to policyholders policy holders was published in the press as extensively as possible again strongly urging them to give the trustees the ld of their expressed preferences in vacancies in the board ot directors and pledging themselves to do all in their power to tho interests of such said notice Is hereto appended between the date of this notice and the alth day of july when the trustees made their last recommendation of persons to fill vacancies in the board the trustees considered all suggestions gest ions made to them on the subject of policyholders policy holders and sought information from other sources lists of those holding policies taken from the books of the society were examined and the qualifications of persons ivhon they anew nore discussed with the that a meeting held the day last mentioned they were enabled to recommend to the board fourteen additional persons to be elected to fill that number of remaining vacancies all the persons recommended to the board have been elected two of these however after they were elected declined to serve the net result therefore of the labors ot the trustees in this direction under the authority of the trust agreement Is represented by tho addition to the department of board of directors ot twenty one new members of such character and business ability as insures the faithful and intelligent discharge of their duties AH of these new directors are policy holders in the society except two atho it is expected will as soon as possible balte out policies four vacancies still exist in the board of directors it should baere be mentioned that the right of the society to put in operation he plan of contemplated tem plated by its amended charter and made mandatory upon the trustees under the terms of the trust agreement has been challenged and a suit brought by a minority stockholder in which an order has been obtained from the couric enjoining the society from proceeding under said plan an appeal from said order is now pending n ahe appellate division ot the supreme court ana its decision on such appeal at an early date is expected in order however that there may not be in any event an infirmity of qualification in a majority of the directors a number of the members of the board have acquired stock of the society and these together arth the old members owning constitute a majority of tho board of directors yours very truly GROVER CLEVELAND chairman of trustees |