The San Francisco call., 1906-10-29
Sureties of City
Officials Are
Uneasy.
Companies Realize That
Risks of Suspected
Men Must Stand.

The surety companies are not par
ticularly anxious to hold the bonds Of
some of the city officials at present, if
you want my impersonal opinion on
the subject" said F. B. Lloyd, general
manager OF the National Surety Com
pany, which is on the bonds of num-
Der of the members of .he Board of
Supervisors and other officials who may
fall under the ak of Eeney.
The surety companies are uneasy,
but so far there has been no tendency
to cancel outstanding bonds, and, ac-
cording to several surety managers.
there is no such action contemplated
There are several reasons for this 10y
atty in the face Of danger. In the first
place, the crimes which the Super
visors are alleged to have committed
are done and over with, so far as the
responsibility of the surors is con-
cerned. If the companies should with
draw from their dubious clients at this
time they would still be held liable to
the city for any 1ooting of the treasury
which might have been committed
Again, If a company should wish to
cancel the policy of an official the
client could plead injured innocence
and sue the company for damages done
by adding extra tarnish to a tainted
name.
LIABILITY OF SURETY.
so far as the disclosures to date
would indicate" said one surety man
last evening, "the Supervisors, If they
have taken any bribe money. have not
taken it from the city, but rather from
other people. Now, it is a question un-
der the law whether or not a surety
company would be responsible for that
lr Ind Of
been looting the treasury the company
becomes directly responsible for any
amount up to the face of the policy
But if the graft has been upon other
interests the action against the city
would have to be in the shape of suit
to recover exemplary damages for the
injury done the city. and the amount
of damages would be difficult to fix"
The municipal officials are, with few
exceptions, guaranteed to faithfully
perform their duties by any one Of Ave
companies doing that sort of business.
The companies with these grave con-
tracts on their hands are the Fidelity
and Trust, which, among its other obii-
cations, vouches for the efficiency OF
Mayor Schmitz; the Aetna, which has
the felicity of guaranteeing both Dis
trict Attorney w. H. Langdon and the
pseudo District Attorney, Abe Ruef. the
Company, the National Surety Com
pany and the American Bonding Com
pany. Mayor Schmitz's bond is set by
the charter at s25.000 the District At
torney's at $4,000. with no reduction
when two men claim the office, and
each Supervisor must qualify for $4,000
SITUATION STUDIED OUT.
Paul NJ. Nippert, Pacific Coast mana
ger of the Aetna Company, stated last
night that his company would not with
draw from any bond although the
managers had given serious thought to
the local situation. we would be held
accountable for any derelictions of duty
which the Supervisors may be shown to
have been guilty Of even though we
should withdraw now said Mr.. Nip
pert. "As for the future risk, that is
the immediate future risk, would pre-
sumo that whatever sins the members
of the board may have been guilty of
they will be very good now.
In our company we have both Lang
don and Ruef. guaranteeing them as
District Attorney. That is not a para
dox-it is simply a business proposi-
ton"
Within the past fortnight w B.
Joyce, president of the National Surety
Company, was in the city, and, in view
of the increasing charges of graft
which are being hurled against the adj
ministration, gave considerable atten-
tion to the subject. He decided that it
would not be advisable for the COM
pany TO withdraw from any bonds it
held. An official of the National Com
pany. in discussing the part played by
surety companies in the history of
graft exposes, asserted that surety
company is a very cold blooded bust
ness enterprise and stands ready to
accept any client who is willing to pay
for his policy. The company, however
retains the privilege of determining
how hazardous a risk may be and set
ting the premium accordingly