The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1909-12-07
FIRE INSURANCE
COMPANY SHAKY
Irregularities Are Found In At
fairs of Phoenix Company
DIRECTORS ARE CENSURED
One of Best Insurance Men of the
Country Has Been Head of the
Concern for Years and He
Is Now Very Ill.
DIRECTORS ARE CENSURED

New York, December e.-The Phoenix
Insurance company of Brooklyn is under
investigation for Irregularities, which, it
is believed. have impaired its surplus at
least 100000. A statement concerning
the conditions was laid by Superintendent
Hotchkiss of the state insurance depart
ment before the district attorney today
for possible action. 1t is charged that
the president has overdrawn his salary,
that he has unloaded doubtful securities
on the company and that he has used the
company's assets as collateral to secure
his own. personal speculative accounts.
The directors come in for a share of CEN
sure.
In a formal statement issued tonight
Mr.. Hotchkiss says he does not believe
the capital of the company is impaired,
that its securities are not intact, but he
admits that the present investigation is
unfinished.
George P. Sheldon, member of many
clubs. and who, as chairman of the laws
and legal committee of the National
Board of Fire Underwriters, is one of the
best insurance men In the country, has
been president of the Phoenix since 1887
1t is said that under his administration
the annual reports of the company made
to the insurance department during at
least the last ten years, and probably
longer. are false in more than one partic-
ular.
Examination Required.
Under the law the insurance department
is required to examine into the condition
of all life insurance companies at least
once in every three years. He advocates
an Increase in the examining force in
order that all insurance corporations 9TH
er than life companies may be examined
at least once every five years. Mr.. Hotch-
kiss says the Phoenix company, which is
a fire concern. had not been examined
for nearly % years, or since Mr.. Sheldon
became president.
The insurance department alleges
that 1t finds that 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.. Hotohkiss. in
at least one brokerage house, and tie
assets of the Phoenix have been put
up as collateral to cover his opera
lions. 1t is charged also that for sew
eral years the presidents salary ac-
count has been overdrawn and now Is
paid up in full to October, 1910.
During the past II years, it is al
legged that members of the state insur-
ance department, whose duty 1t was to
supervise the company. have accepted
collateral loans from it. made to them
by President Sheldon. In amounts vary
ing from $4,000 to 100000.
Surplus Of $1,000, 900.
The Phoenix Insurance company of
Brooklyn does a fire insurance bust
is credited with a surplus of s1,010, 453.
The directors are George P. Shelcon,
Frank ]. Logan, William J. Logan.
John CARTRIDGE. George M. Hard, Ed
ward C. Converse. George Ingrahain.
Benedict L. Greenhut and Charles S.
Coter.
Mr.. Hotchwiss says that in the Judg-
ment of the insurance department "the
directors who have permitted him
president Sheldon) to do as he has
done, are equally responsible to the
public for the acts committed 1t
might be said that the Phoenix Insur-
ance company was really George p.
Sh eldon. and that the directors have
seemingly never objected to his OPP
erations."
Among the loans to officers Of the In
surance department specified are the fol-
lowing:
To James F. Pierce while he was state
superintendent of insurance. loans of
$50 800.
To Isaac vanderpool while he was chief
examiner of insurance companies. loans
of 100000.
To Robert s. Hunter while he was dep
uty superintendent of insurance, loans
OF seo,040.77.
To William r. Buckley while third dep
uty superintendent of insurance, loans
aggregating $4,000.
1t was announced tonight that at a
meeting of the board of directors held
today President Sheldon was removed
from office and that in his stead e. w. I.
Gary, formerly auditor of tho Cont
mental Insurance company, was elected
president