Worcester daily spy. [volume] (Worcester [Mass.]) 1850-1888, 1871-01-03
The Home Insurance Company.

The disastrous collapse OF the Home fire in
surance company, of New Haven, is a mystery
which the columns of reports in the Connecti-
cut papers of discussions, inquiries and an
swers at its stockholders meetings do nothing
to unraveL The company was supposed TO be
very strong and safe one, and its capital stock
was one million dollars Last summer some
thing appeared TO be wrong, and some invest-
cation was made which showed the resources of
the company to be much impaired. The matter
was smoothed over, however, and, though there
were then suspicious ofmismanagement, not TO
say fraud, the deficiency was attributed to a
succession Of heavy losses The capital was re-
duced 10 half million dollars, aud the public
were assured that the company could continue
to do business probably and safely. These rep.
reservations did in great degree restore conf
dence in the company, and lis officers and agents
went on issuing policies, as it now appears,
with almost unexampled recklessness. New
Smoarrassments having arisen, a more thorough
Investigation discoses the fact that the liabili-
ties Of the company exceed its assets by several
hundred thousand dollars, and, of course the
stock, which three years ago sold at one hun
dred and thirty, is absolutely worthless.
It would appear, so far as we can learn from
the discussions at these recent meetings, that no
fair and adequate statements of the resources
and liabilities Of the company has ever been
made TO its stockholders, or 10 the public. Its
assets have been Systematically exaggerated and
its liabilities understated But while this is
freely admitted, there seems to be no DISPOSE
ton 10 inquire or TO disclose the authors or the
motives Of this misconduct. There was consd-
cradle vaguely, indignant, or apologize talk
about mismanagement, eXuavagant eXpendi.
ture, taking extra hazardous risks, etc.; but no
names are mentioned except in the suggestion OF
one Of the stockholders, that he chad heard that
Others than Wilson and Satteree, were re-
sponsible." The connection of "Wilson and
Satteri se" with the affair was perhaps well
enough known to his hearers, and probably for
that reason be failed to state who they are and
what they have done. There were also obscure
references TO dishonest president"
The latest report of the New York insurance
commissioner mentions this company as in good
standing. His estimate was based on the sworn
statements of the company's officers in July,
which are proved TO have been entirely uutrust-
worthy and fallaCious. Little as we can learn
of the authors or the motives of the frauds that
have evidently been practiced, two lessons of
this collapse are obvious. One is, that the re-
ports Of insurance commissioners, though of
great value in many respects, yet being founded
not on an actual investigation of the affairs Of
the respective companies, but on the statements
furnished by their officers, cannot be accepted
as satisfactory evidence of their financial sound
ness; and the other, that the directors of such
companies can never be justified or safe, what
ever may be their private opinion Of the integ-
rity or business capacity of the president or
other managing officer, in allowing him to con-
duct the affairs Of the company without super
vison OF thorongh periodical investiraticn