Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1906-06-16

MEN SPLIT
CRISIS. IN SITUATION GROWING
OUT OF THE SAN: FRAN
CISCO DISASTER
MAY BANKRUPT MANY
NAY BANKRUPT MANY
Strong Companies Decide to Carry
Their Weak Sisters no Longer--Ex.
pected that Some Companies Will
Withdraw From California. Field
Bitter Feeling Among insurance Men

Oakland, Cal., June 14-AThe crisis
| IN the Insurance. situation growing out
OF the San Francisco disaster seems to
have been. reached. The strong and
the weak have come to the parting of
the ways: With the rupture that now
seems certain within few days will
come the end Of the policy Of ti.ne-kill-
ing which saved the. weak companies
from, ruin or at least put off the day Of
| disaster The retirement of Chief Adj
juster Atwood, which occurred some
days ago, was one of the results of the
serious friction between. the, com
painless
/ The conviction that the time for set
tlement Is at hand is driving some COM
panies out Of the California field. The
Eagle Insurance. company of New York
4 has served notice on its agent, Arthur
g. Mason, that tt Will cancel all out
standing policies and withdraw from
the state. The conpanys surplus was
but $676,000. while its losses in the
great fire were about $1,000,000. 9th
er companies probably will make simi-
lar announcements in the near future.
Majority Favors Cut.
The policy of delay which has serv-
ed to protect the weak companies can.
not be- resorted to- longer, and more
than three-score companies are near
bankruptcy. At a meeting Of the adj
| justers yesterday d resolution was in
troduced providing that all proved
losses should be shaved 25 per cent.
Sixty companies voted for the cut.
Thirty companies refused fatty to
abide by this vote About ten com
panfss were not represented, while
nearly thirty companies were excused
from going on record at this time as
to their attitude toward the payment of
policies. While the vote is not bind
ing upon any of the companies, it
places on record more than one-half of
the corporations carrying fire risks in
| San Francisco as III favor Of slash
In the payment Of adjusted losses.
This action Is the result of an agita-
ton which has been in progress for
several weeks It reflects decisions
reached in many of the eastern and
some of the foreign home offices. 1t
places fatty on record those companies
I which have finally decided to refuse to
meet in full the face losses after adj
justment.
Faced by Bankruptcy.
There is much bitter feeling among
the insurance men over this question
Of discounting losses. Nearly sixty
/ companies are IN d position where they
cannot meet their losses fairly and re.
main in business, while for some full
payment is impossible. Il these com
panies are forced into court they must
default and go into bankruptcy. They
are seeking compromise in the hope
that they will be able to float through
the storm Some of the strong com
;. panies are paying all losses, and nat
urally are making capital Of the fact
that they can do so. For SOME weeks
they aided the small people in delaying
adjustment. but finally became con
WINGED that this policy was injuring
; themselves, as the public was clamor
ing for payment and denouncing the
underwriters AS a result they deter
mined to act independently and pay
their losses.
The situation, however, was compli
Gated by the fact that most Of the bis
losses had been reinsured In some
cases almost the entire amount hat
been split up among small companie:
by the big insurer When the large
company paid UP and called upon the
i reinsuring companies to make goot
they were met with the reply tina
owing to the earthquake they had de
cided not to pay in full, or that thu
matter was under consideration. Thes'
questions have not yet been adjusted
but they caused much III feeling.
; The policy holders feel that insur
ance is a gigantic bunco. They hav
paid their money for years only to flint
they have little assurance that the.
will get even rs per cent Of the fac
) Of the policies. Threats Of suits onl.
bring the statement that such a cours
would mean months or even years o
delay, and might force the connpan,
into insolvency.
Publicity as Weapon.
Insurance Commissioner Wolf Q
California is working theoretically o.
his plan to force companies to settl
on his basis by threatening them wit,
undesirable publicity in case they er
, force their own ideas. He has arrane
ed to send information as to the att
t tude Of each company to the insuranc
!; departments of all the states, an
t hopes that some of them will revok
+ the license of the companies he put
3 under the ban. He also making
] combination with the commercial o.
t ganizations to have them notify thei
8 members Of the action Of the con
. panies.
{ President Nichols Of the National c
q Hartford, who is in San Francisco, ha
\ appointed McNear & Wayman as Pr
t cific coast managers, succeeding Ges
/. D. Dornin, who resigned because c
. dissatisfaction with the company's pla
of settling losses. McNear & Waynna
occupy similar position with tn
Colonial Underwriters, which is COZ
trolled by the National. Mr.. Dornin