The Billings gazette. [volume] (Billings, Mont.) 1896-1919, 1909-12-07
Believed ASSETS Are
Impaired Nearly
a Million
PRESIDENT FIRED
Directors Who Allowed Sheldon TO
Have His Own Way Remove Him
After Insurance Department. UncOy.
ers Loose Management-COmpanys
Funds to Further His Own Interests.

kIEW YORK, Dec 6.-The Phoenix
IN 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.
Superintendent Hotchkiss, of the
state department of insurance, today
laid the matter before the district at
torney. 1t is charged 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 Sc
cure his own private speculative ac-
counts. Nor do the directors escape
censure.
In a formal statement, issued to-
night, Superintendent Hotchkiss does
not believe the capital of the COM
pany is impaired and thus far there
Is no evidence that it's securities are
not intact, but he admits that the
present investigation is still uncom-
pleted.
George B. Sheldon. member OF
many clubs and chairman of the laws
and legal committee of the national
board of underwriters, has been presi-
dent of the Phoenix since 1857, and it
has been charged that under his direc-
ton annual reports of the company
made to the insurance department in
10 years and probably longer are false
ri iOrY1QP
Under the law the insurance depart
ment is required to examine all life
insurance companies at least once in
every three years. Mr.. Hotchkiss ad-
vocates an increase in the examining
force, that insurance companies other
than life insurance companies may be
examined at least once every five
years. Mr.. Hotchkiss says the Phoe-
nix company, which is fire concern.
had not been examined for nearly 70
years.
The insurance department alleges
that it finds the questionable securl-
ties originally sold to the company by
Mr.. Sheldon have, year after year.
passed through wash sales and by TINS
method have been concealed in the
annual report. Speculative accounts
have been maintained by President
Sheldon, according to Mr.. Hotchklss.
in at least one brokerage house, ana
the assets of the Phoenix have been
put up as collateral to cover his ope-
rations. 1t is charged also that Tor
several years the presidents salary
account has been overdrawn and now
is paid up in full to Oct 1, 1910.
In the last II years, it is alleged,
members of the state insurance de-
partment, whose duty it was to super
wise the company, have collateral
loans made on it by President Sheldon
in amounts varying from $4,000 to
$4,000.
The Phoenix Insurance company OF
Brooklyn does fire insurance bust
ness, Is Incorporated for $500, 600.
and is credited with a surplus of
$1,010,453 Directors are George p.
Sheldon, Frank ]. Logan, William J.
Logan, John Cartledge, George NJ.
Hard, Edw. C. Converse, George In
graham, Benedict L. Greenhull and
Charles F. Coster.
Mr.. Hotchkiss says that, in the
Judgment of the insurance department.
directors who have permitted Presi-
dent Sheldon to do as he has done are
equally responsible to the public It
might be said that the Phoenix Insur-
ance company was really George p.
Sheldon, and that the directors have
seemingly never objected to his opera
tions. Among the loans to officers
of the insurance department specified
are the following:
To James Pierce, in the period he
was state superintendent of insurance.
loans aggregating $3S,500.
To Isaac Vanderpool, in the period
he was chief examiner of insurance
loans aggregating 100000.
To Robert H. Hunter, in the period
he was first deputy superintendent of
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