The Salt Lake herald-Republican. [volume] (Salt Lake City, Utah) 1909-1918, 1909-12-07
Maladministration Of George
P. Sheldon, Member Of Many
Clubs and a Member Of the
Board Of Fire Underwriters.
ROTTEN CONDITION OF
AFFAIRS DISCOVERED
Former Officials of State In
8uranCe Department Accom-
mOdated With Large Loans
as Price of Their Silence,
DIRECTORS FlGUREHEADS

Washington, Dec. 6.-The Phe-
nix Insurance company of Brooklyn
is under investigation for irregu-
larities, which are believed to have
impaired its surplus at least $1,000
900 and to have resulted in grounds
for possible criminal action. Super
intendent Hotchkiss Of the state de-
partment today laid the matter be-
fore the district attorney.
Tt is charged the president has over
drawn his salary; that he has unloaded
doubtful securities on the company,
and that he has used the COmpany's as
sets as collateral to secure his own
private speculative accounts. Nor do
the directors escape Censure,
In a formal statement issued tonight
superintendent H0tchkiss does not be-
lieve the capital of the company is
impaired. and thus far there is no
evidence that its securities are not In
tact, but he admits that the present
investigation Is still inCompleted.
Sheldon Prominent.
George p. Sheldon, a member OF
many clubs and chairman of the laws
and legal committee of the national
president of the PneuiX since 1857,
and it is charged that under his ad-
ministraUiOn, annual reports OF the
company made to the insurance de-
parJment in ten years and probably
longer are false in more than one par
tiCUlIr.
Under the law the insurance depart
msut ifs required TO examine all life
insurance companies at least once I'm
every three years. Mr.. HOtchkiss adj
yOeates an increase I'm the examining
force that insurance companies other
than life iusUJduCe companies may be
examined 1t least once every five
years. AIr HotchlSiss says the PheniE
company, which is a fire concern, had
not been examined for nearly twenty
two years.
Concealed wash" Sales.
The insurance department alleges
that it finds the questionable seCuri-
ties originally sold to the company by
Mr.. Sheldon have, year after year,
passed through wash sales, and, by this
method. have been concealed in the
annual report. Speculative accounts
have been maintained by President
Sheldon, according to Mr.. HCtChkiss, I'm
at least one brokerage house, and the
assets of the Phenix have been put up
as collateral to cover his operations
1t is charged also that for several years
the presidents salary account has been
oyerdrawn and now is paid up In fun
to October I, 1910.
In the last seventeen years, it Is
alleged, members of the state insurance
department whose duty ii was to SUI
pervise the company have accepted col
lateral loans from it, made to them by
President Sheldon, i'm amounts varying
from $40 600 to $4,000.
Dummy Directors.
The PheuiE Insurance company of
Brooklyn does a fire risk business. is
incorporated for $500 600 and is cred
tied with a surplus of S1.O10,453. The
directors are George J.. Sheldon. Frank
j. Logan. William j. Logan john Cart
ledge, George NJ. Hard, Edward O. Con-
verse, George Ingrahsm, Benedict i.
GreenhuI and Charles T.. Coster.
Mr.. H0tchkiss says that, in the judg-
ment OF the insurance department di-
TeCtOrs who have permitted President
Sheldon to do as he has done are
equally responsible to the public. Tt
might be said that the Phenix Iusur-
Continued on page eleven.