New-York tribune., 1893-11-23
A RECEIVER ASKED FOR.
CASUILTYS WRECK COMPLETE
GENERAL SIOCUM WILL NOT CONTINUE AS
PRESIDENT OF THE COMPANi.
CRIMINAL CHARGES LIKELY TO DE PREFERRED
AGAINST THOSE RESPoNsIBLE FOR THE
INSURANCE COMPANY's CoLLAPsE-TnE
STATE SUPERINTENDENT OF IN
SURANCE TO PROTECT NEW



STATE SUPERINTENDENT OF IN
sURANCE TO PROTECT NEW
YORK POLICY HOLDERS.
The directors of the American Casualty and Sc
curity Insurance Company determined yesterda!
that it was useless to try to carry on the business
of the corporation, and to ask for the appoint
,nent OF a receiver In other words. they deter
mined that the wreck complete and that II was
impossible to save anything This work may get
some men into serious trouble, for II Is known '"'
there has beer the utmost recklessness in the coh-
duct Of the affairs OF this company. as there was
in the mana cement OF the American Steam 8oiIer
Insurance Company. 1t has been we'll known IN
insurance circles for some time that the American
Casualty Insurance Company was IN a pau way
and that desperate efforts were being MADE 10 put
1t on it's feet again. These efforts nave not peeh
successf,l and Yesterday the directors passed
resolution asking for the appointment OF re-
ceiver The company originally had capitai oi
S1,0o0,cc0 and surplus of $VV0 All OF 'hi7 HAS
disappeared. and there an impairment OF over
$00,0c9 beyond this. due 10 the methoos VI '"o'e
who have had control OF IT,
The American Casualty Company Is the child Oh
the old American Steam Boiler insurance COM
pany. After the men who had controlled this ids'
named concern had made all the use they couiu Vi
it they conceived the idea of organizing another
company and getting what they could out OF tha''
The men who were responsible for the organiza-
tion of the American Casualty Company are He'Iy
B. Beecher. William e. Mdgley ana vincent IT,
Schenck Midgey the vice-president Oh the
Steam Boiler Company and the president OF une
American Casualty Company Schenck was secre-
tary of both companies. When these men saw that
there was nothing further for them IN the Aine'i-
can Steam Boiler Company they organized Ill
Maryland the American Casualty and fought Tor
some time for admission into this state Ihev were
not permitted to do business here until they had
secured a legislative act. and Timothy d. sullivan
handled the bill and David b. Hill signed it. After
the American Casualty Company was organized
the business of the American Steam Boiler lnsur-
snce Company was turned TO it. In those
States in which the insurance officials would no' al
low the new company to do business the name OF
the Steam Boiler Company was Kept up put III
other States it disappeared. and the American CAS-
ualty took its place. Investigation OF the anars
of the American Steam Boiler Company some time
ago showed that $5Oo000 had disappeared without
any sufficient reason. 1t did not appear that IL
had been lost in the regular line OF business pu'
there was adequate accounting for It, Apphca-
ton was made for the appointment OF receiver
and two weeks after the application the receiver
was named.
STOCKHOLDERS BEGIN INVESTIGATING.
In the mean time the stockholders Of the Ameri-
can Casualty Company set an investigation on foot
which showed that not only the capital OF sloooVo
had been wiped out, but the surplus OF $'ooV' hiu
disappeared, and that there was an apparent uei-
icit of s5OoOco. Further investigation showed
N
for the company were indebted to it to the amount
of 100000 further examination was had, and as
result of it General Henry w. Socum was
asked to accept the position of president put ne
decided 10 wait until he could have an examination
made on his own account. This showed that not
only the capital of the company was impaired
but that a line of business had been undertaken
which might wreck the strongest company ms
was wholesale railroad insurance Ihe casuaioes
of a number of railroad companies were taken
hutfhp
d,sappeared and the company is left with suits
against for accidents on railroads asgregating
N0O0O00 II one-quarter Of this amount could De
collected against the company 1t would nave Deeh
wrecked anyway
1t has been brought out by further examinations
that Beecher Schenck and Midgley have been loan
ing one another sums of money on stock which
was practically worthless. Stock OF the American
Steam Boiler Company has been used TO secure
large loans and the stock of this company which
is an absolute wreck. Is not worth anythng nov"
THE NEW PREsID IDENT's FIRST STATEMENT.
II was not until few weeks ago that General
slocum would accept the presidency of the Ameri-
can Casualty Company. He did so on the report
of the expert accountants who assured him then that
there something left for the company ai'er
ALL At the meeting OF the Board of Directors OF
The company on October "a. he made a statement
10 them in part as follows:
Gentlemen This is meeting Of this Board OF
Directors held since my president assumed
the duties OF my Office the 18th inst and nave had
only ten days study the condition OF the COM
pany business methods deem 1t my duty 10
report 10 you this time. frankly what have
learned. what has thus far been done by me-
I assume that all Of you know the conditions under
which consented o the duties OF president
statement presented TO purporting 10 give the
liabilities and OF the trust deed was
made the administration the voting
power on the held BY all OF the general managers
and an assignment made OF certain securities to Sc
cure payment outstanding obligations OF these
managers An agreement was also placed In the hahds
the trustees by which any desired changes coud DC
made in the contract existing between this
company and It's general managers l found but rev
papers in the office belonging to the company
and but little TO guide me in the discharge OF my oute
On after assuming the duties Of president
teIegraphed Mr.. Austin. vice-president. requesting
him TO meet me the purpose Of examining the
assets company. This examination resulted in the
discovery of the fact that the colaterals de-
posted FOR security temporary loans consisted chiefly
Of stock in American Steam Boiler Insurance Com
pany corporation process Of winding its business
This had been taken security TO the amount
OF $50 share / am assured that the dissolution OF
this company which speedily TO take place. it is
probable that amount will be paid the stock OF the
accuracy Of this statement | have serious doubts
On day after Mr.. Austin and myself made this
examination ] employed a thorough accountant to come
this Office and investigate the statement which had
been made me- and also TO examine all the Of
tho company this city together with the coaterals
for due the The accountant is sti
gagged at What may be the
money reported to be in the hands of what
the exact of losses prove 10 be. how
OF debts due the secured by coaterals
be collected. are all problems which cannot yet be
solved have. however, learned enough to convince
that the affairs OF the have been conducted
express mildly in exceedingly loose
The plan upon which the company founded. viz.
placing Of Of the general in control
Of the company president. the giving
general managers the virtual control OF IT,
my approval. and l do not think that II has
the approval Of the majority OF this board | remon-
stated against in the early days OF the organization
and was ouieed the that Arrangement
the president Of the company concerned.
TO he regarded but temporary In It's nature
/ grave doubt the | should
pursue Ipon advice Of friends however have de-
cided remain the position l occupy until such
time rs / advise you in detail and more ac-
crrately the true condition OF affairs and the