Mutually organized enterprise have had a long and snccessful history in American life insurance business. In theory, mutuals, without capital item in its balance-sheet, are owned by and operated for the benefit of the policyowners, and their boards of directors or “trustees” are elected by them, typically exemplified by the original Charter and By-Laws of the Mutual Life Insurance Company of New York, the first mutual in the United States. But in practice, officers and directors of mutuals, although claiming democracy of their companies, have completely ignored the sovereignty of policyowners, who have consequently been silent majority for nearly one and a half century.
The third president of the Mutual Life usurped the control through proxy contests and established his autocracy, so-called “Winston regime”. He and his vice-president held so many proxies, compared to “Children of Israel, ” that no one succeded in defeating his rule. Management control were dramatically disclosed by the Armstrong Committee of the New York Legislature in 1905, saying “Notwithstanding their theoretical rights, policyholders have had little or no voice in the management. Entrenched behind proxies, easily collected by subservient agents and running for long periods, unless expressly revoked, the officers of these companies have occupied unassailable positions and have been able to exercise despotic power”. With all the drastic revision of the New York Insurance laws, nothing happened in the elections of mutuals except temporary excitement, and management control continued at no stands for more than thirty years later the Temporary National Economic Committee disclosed the fact. “Life Insurance executives and directors constitute a small group that is self-appointing and self-perpetuating”. Another thirty years-plus have passed since TNEC, and the situation remains the same. All the while mutual managements have been criticized and refuted in the courts, legislatures of the stastes and journals, it has been desparately impossible to find out an effective means to bring indifferent policyowners to annual elections.

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The purpose of this paper is to compare the relation between the Mitsui Bank and Tokyo Electric Light Co. with the relation between the Mitsui Bank and Toho Electric Power Co..
In the 1920's and the 1930's the Mitsui Bank had been positively financing both of the two electric power companies. Nevertheless, the Mitsui Bank intervened in Tokyo Electric Light Co. alone. On the other hand Toho Electric Power Co. was its own master.
This contrast was due to the difference in point of administrative ability of managers of the two electric power companies. Owing to loose-spending management by Shohachi Wakao, the president from 1926 to 1930, Tokyo Electric Light Co. was in financial difficulties. Therefore Tokyo Electric Light Co. could not pay back debts from the Mitsui Bank sufficiently during the latter half of 1920's. Shigeaki Ikeda, the head of the managing directors of the Mitsui Bank interfered in human affairs concerning directors of Tokyo Electric Light Co.. Firstly he dispatched Seinosuke Go and Ichizo Kobayashi in 1927. Secondly he changed the president from Wakao to Go in 1930. Under capable management by Go and Kobayashi Tokyo Electric Light Co. recovered itself in the 1930's. The Mitsui Bank had never intervened in Tokyo Electric Light Co. directly after 1930.
The intervening in Tokyo Electric Light Co. by the Mitsui Bank was a temporary phenomenon in order to preserve credits. The Mitsui Bank had never intervened in Toho Electric Power Co. which could pay back debts sufficiently under excellent management by the president Yasuzaemon Matsunaga. Therefore the commonly accepted theory is not adequate, which asserts that electric power capital was put under the control of Zaibatsu.

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