The Montgomery advertiser., 1909-12-07
SUSPECT INSURANCE HEAD
NEW YORK OFFICIALS INvESTI-
 GATE PHENIx COMPANY.
Alleged That IrreGulsrties Have In- paired Its Surplus at Least
 e1,0O0, ,00o-Claim Presi-
 dent's salary Over

New York, Dec s.-The Phenix In- surance Company. of Brooklyn. 10 un- der investigation for Irregularities, which 1t is believed, have impaired Its its surplus at least $1.000.ooo.
 A statement concerning the condi- tions was laid by Superintendent Hotchkiss, of the state Insurance De- partment before the district attorney for possible criminal action.
 It 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 se- cure his own personal speculative ac- counts. The directors come in for share of censure.
 In . formal statement issued to- night. MT. Hotchlxiss says he does not believe the capital of the company is impaired. and that thus far there is no evidnnce that It's securities are not in. tact, but he admits that the present investigation is unfinished.
 George F. sheldon. member of many clubs, and who. as chairman of the laws and legal committee of tho Ma. tional Board of Fire Underwriters, if one of the best known insurance mer in the country, hae been uresident ot the Phenix since 1887. It 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 long. CT. are false in more than ons par. ticular.
 Under the jaws, the insurance de- partment is required to examine fnto the condition of all life insurano~ com panies at least once In every three years. but Mir. Hotchkiss says, the phe- nix had not been examined for nearly 22 years. or since Mfr. Sheldon be- came president. s4
 The insurancs department alieges that it finds that questionable. sscuri- ties originally sold to the company by Adr. Sheldon. have. year after year passed through wash sales" and by this method have been concealed in the annual report Speculative acc counts have been maintained by Pres ident sheldon, according to Mr. Hotch- kiss, in at least one brokerage house. and the assets of the Phenlx have been put up as collateral to tpver fin operations. It is charged also thas for several years the presidents salary account haa been overdrawn and now is paid up in full 10 October k ieie During the past seventeen, years it is alleged that members sf the State Insurance Department, whose duty is was to supervise the company, have accepted collateral ioAns from 1t, gnAsie to them by President Shslden, ta amounts varying from eSo.eee to sino..
 The Phenix Insurancs Company of Brooklyn does fire risk business. is incorporated for sl,E00s000, and is cred ited with a surplus of si.ei0.4ss. The directors are George P. Sheldon, Frank J. Logan, William ]. Logan. John Cart ledge. George M. Hard. Edward Con- verse. George InGraham. Benedict l.. Greenhut and Charles 8. Costsr. MT. Hotchkiss says that in the Judgment of the insurance department. "the di- rectors who have permitted him (Pras- ident sheidon) to do as he has done. are equally responsible to tho public for the acts committed. It might be said that the Phenix Insurance Com pany was really George P. Sheldon. and that the directors have seemingly never objected to his operations. :"
 Among ths loans to officers of the in 4 surance department specified are the following: :
 To James F. Pierce. while he was State Superintendent of Insurance. loan of $3e.s0o.
 To Isaac yanderpoei. while he was Chief Examiner of Insurance Compa- nies. loans of e10o.ooA.
 To Robert 8. Hunter while he was deputy Superintendent of Insurance. loan Of es0.04o.77.
 To William H. Buckley, while Third Deputy Superintendent Of Insurance, loans agEregating s6i.00o. .t
 It was announced tonight that at c meeting ef the Board of Directors held today. President Sheldon was removed from ofiice and that in his stead D. W. T. Gray, formerly auditor of the Con- tinentai Insurance Company. was siect. ed President.