The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1910-10-01
SHAWNEE is HIT
Insurance EXAMINING g Commit g
Urges Criminal Prosecution.
Vice President and Manager Of
fetal Chiefly Attacked.
MORGAN ALSO NAMED.
Record Declares Balances Were
Forced Deliberately.
Commissioner Are Told to See
About Perjury Indictments.

ceedings against the officials of the
Shawnee Fire Insurance company of
Topeka, which was forced to reinsure
last week because of a deficiency of a
half million dollars in its reserves,
were urged by the National Convention
of Insurance Commissioners after
listening to a scathing report from its
special committee on examinations.
James w. Going, vice president and
manager of the Shawnee, is the official
chiefly attacked by the report, al
though Secretary Morgan also was in
volved.
The convention evidently held the
Kansas department responsible for the
failure to discover the financial condi-
ton of the Shawnee, the report stat
ing that its capital and surplus were
entirely gone at the first of the year,
with an additional deficit of 100000.
The meeting showed this by specially
directing that the facts disclosed by
the examination be laid before the
Kansas department and it be request
ed to lay them before the proper au-
thoritieS. Each member Of the con-
vention was urged to investigate the
laws of his own state on perjury and
take action, it being held that the
sworn statements had been false for a
number of years.
Report Made by Virginian.
The report was made to the con-
vention by Commissioner Button of
Virginia in advance of the complete re-
port by E1amfner S. H. Wolfe that there
might be prompt action. Its findings
are that the annual statements sworn
to with the departments have been
false for a number of years in i'm
portant and vital particulars, and that
nf l1O
reported surplus of about 100000 the
entire capital and surplus had been
wiped out and there was an additional
deficit of about 100000.
This false statement of conditions
was accomplished. the record declares,
by deliberate forcing of balances and
intentional Justification of the un-
earned premiums and outstanding pre-
MUM account. The com pany borrowed
large sums on its notes issued by the
Although Manager Going's salary was
fixed by law, large sums have been
credited monthly in addition on orders
signed by him. The report closes with
the statement that there are evidences
of crimina1ity in some of these trans
actions and urges each commissioner
to examine the statutes of his state to
determine whether indictments for
perjury will properly lie.
What the Report Contains.
Following Is the report:
Memorandum for the National Con-
yention of Insurance Commissioners
relative to the examination of the
Shawnee Fire Insurance company of
Topeka, Kan.
Having received a preliminary re-
port on above company from s. H.
Wolfe examiner in charge of the in
vestigation, and in view of the wide
spread interest and Importance of the
case to every memb Der of this conven-
ton we have decided to present
summary of the principal points de-
veIoped by the examination in ad-
vance of the filing of the complete and
official report. We find:
"First-The annual statements filed
by the company with the various in
sI1rance departments for a number
of wears have been false in a number
of important and vital particulars
.'Second-On December 81, 1909
the company reported a surplus of
about 100000 in excess of its liabil-
tiles and capital stock. The examiner
reports that on that date the entire
capital stock and surplus were wiped
out and the company was insolvent to
the extent of about 100000
'eThird-This false statement of
conditions was accomplished by the
deliberate forcing of balances and in
territorial Justification not only of the
unearned premium account but also
of the outstanding premiums.
''Fourth-The company borrowed
large sums of money on its notes, is
sued by its officers, without any rec
ord of the execution of these notes ap-
pearing upon the records, the only in
formation which the accountant had of
the existence of this Indebtedness be-
ing an order on the vice president or
the secretary, directing him to debit
the account of the bank with GER
tain amount and to credit bills pay
able with the same amount. It is un-
necessary to comment upon the danger
of this situation
"Fifth-Although Vice President
Goings salary is definitely fixed by the
board of directors, the examiner rep
resents that each month for a num-
ber of years the said Going's account
has been credited with large sums of
money, and the only authorization the
accountant had for making these cred
its was an order signed by Going Out
side of a general resolution passed by
the stockholders each year, approving
all of the accounts of officers of the
preceding year, no approval of this dis
( burSement had been found Frequent
demands were made by the examiner
upon Mr.. Going to furnish details of
these credits which passed to his ac-
count but only one months credit was
ever explained this showing that about
SO had been repaid Going for travel
| ing expenses to Kansas City and $500
given to the State fair This is inter
esting in view of the fact that Going
| is president of the State Fair associa-
| ton.
'sSixth-Numerous other Irregularities.
| including the overdrawal of the vice pres
| idents and the sec-etary's accounts of
| July 81, 1910 by small balances.
''Seventh-There is evidences of GRIMM
ality in some of the transactions and
/ when the examiners completed report is
/ filed with US we shall transmit a copy TO
/ the Kansas authorities for proper action.
In the meantime we would urge on
you the members of this convention. the
advisability of examining tnes & of
their respective states in ore pr