The citizen. (Honesdale, Pa.) 1908-1914, 1909-12-10
President Sheldon of the
Phenix Is Forced Out.
ACTION BY STATE OFFICIAL.
Charges That Company Has Made
False Reports and Lost 81, 100000
Through Mismanagement, Spec
ulation and Bad Loans.

New York, Dec 1.-THE directors OK
the Phenix Insurance company, ST.
100000 flre insurance concern, have
removed from Office at the instance Of
the insurance department George Z.
Sheldon, who has been president OF
the company for twenty-five years.
The department believes that the
company has lost $1,O00,OO0 Of its $l3,-
100000 surplus under Mr. Sheldon's
mismanagement and accuses him Of
speculating with the funds of the COM
pany, maintaining a speculative mar
gin account on its name, putting up its
assets as collateral, drawing on the ac-
count in the brokerage Office and con-
verting the proceeds Of the draft to his
own use.
The company is accused Of making
false reports to the department for the
last ten years and OF lending its mon
ey in violation of law to President
Sheldon and Secretary Charles f. Kos
ter. Superintendent w. II. Hotchkiss
of the insurance department has called
District Attorney Jerome's attention
70 the case.
The directors have chosen as presi-
dent in place of Mr.. Sheldon, E. w. L.
Gray, who has been auditor Of the
Continental Insurance company, and
elected Henry Evans, president Of the
Continental, a director of the Phenix
mittee Of the board.
The directors who permitted Mr..
Sheldon to run the company are held
by the department to be equally re-
sponsible to the public. The present
directors are George Ingraham, vice
president; Charles F. Roster, secre-
tary, who is accused of borrowing
money from the company; John Cart
ledge, e. c. Converse, b. ]. Greenhut,
George III. Hard, Frank ]. Logan and
William ]. Logan.
1t also appears that the company
used to lend money to insurance Off
cials. Superintendent James +. Pierce
borrowed $39, 800, some of which was
not repaid until after his death; Chief
Examiner Isaac Vanderpoel borrowed
100000, Deputy Superintendent Rob-
ert H. Hunter 100000 and Third Dep.
uty Superintendent William II. Buck
ley $61,0 900. The loan to Hunter still
shows $4,000 loss. Mr. Hotchkiss re-
marks that for twenty-five years and
in all the time these men were in Of
fee the company was not examined by
the department.
Mr.. Hotchkiss gave out a statement
saying that the examination of the
company by his department "ha
shown the existence of such condi.
tions as seem to require action by the
criminal authorities"
IF the law of this state" he adds,
provides no punishment for transac-
tions of this character between an in
surance company and the members of
its supervising insurance department
that law should be promptly amended.
If it does provide for punishment and
the same now he impossible owing to
death in one case and the running of
the statue of limitations in the others
the people of the state will, am sure,
pass such verdict upon such trans
actions as to make them unlikely or
impossible in the future"
Mr.. Sheldon is reported to be at the
point Of death at The Naples, Green
wich, Conn, where he and his family
have been passing the summer He
has been i'll for a month, with three
nurses attending him, and has been
delirious for a week. His illness be-
gan with ptomaine poisoning from eat
ing scallops, and dropsy developed.
Mr.. Sheldon is sixty-two years old
and Yale graduate Of the class of 81.
His family, consisting of his wife, two
daughters and a son, all live in Green
wich. The son, who bears the ia
theirs name, was middle states tennis
champion in 1897, and in 1907 he mar
ried Mary Rowland, sister of Henry
Rowland, the novelist, and also of
Mrs. George Lauder. Jr., who is a
niece by marriage OF Andrew Carne-