New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-07-04
A Searching Examination.
Continuing the statement SAYS:

| Continuing the statement says:
| The examination just completed covers
| the transactions of the PheniX Insurance
| Company since the last previous eXamlna-
tion which was as of the statement Of June
80. 1887. 1t has been particularly searching,
however, as to the recent years OF tne
company's existence From such exarnind-
ton the examiners conclude that the SUI SUI
plus of the company on December 81, 1910,
was actually but S2S6, AT, though reported
as 81, 626, ATT: that though reported for I9aI
exist. but the capital was impaired to the
extent of SS72, 429; and, SIMILARLY, that n5o
though the company on December 81, Lso',,
claimed a surplus of S,010,453, its capltal
was actually impaired to the extent of
s12S, 167, a difference of S1,136,620.
The present examina ton was made as or
September 80, 1893, and the examiners nnd
at that time surplus above capital OF
| S421 200 instead of S1.546,648. as claimed by
| the company in its quarterly statement as
| of that date.
The difficulties of the company seem to be
mainly traceable to two causes: First, the
purchase by President Sheldon. early IN
securities of the Council Bluffs water
Works Company, nearly half of whose
| stock and bond issues seem to De owned
| by the Phenix Insurance Company; and,
| second an apparent general want Of super
vision or examination by the State Insur-
ance Department during a period OF upward
For the bonds and stock of the Council
Bluffs Water Works Company the Phenlx
| paid approximately $4,000. and such hold
| ings-the water works company now being
| in the hands Of a receiver-are and for
| some time have been of problematical
value, they being carried in the examiners
statement at S1124O0 These securities have
| for many years passed in and out OF the
| books of the Phenix at the time of its an
| nual statements, such books being manlp-
ulated and other securities purchased ana
| devious means devised; all to the end that
their actual ownership by the insurance
company would be concealed from the de-
trQ
| was in January 1909. when Coincident with
| the deposit by the insurance company OF
s25O.0OO III the Carnegie Trust Company ano
| s225 600 in the Empire Trust company tns
| Council Bluffs and a small amount or othei
| securities were transferred to the Carneeie
| Trust Company for $40, 400, President oneI-
agreeing for the insurance company tnae
| he would repurchase such securities at Ine
| above price plus commission Oh per
| cent ninety days after date
Agreement Was Renewed.
This agreement was renewed and these
securities were held by the Carnegie trust
| Company at the time of the eXaInlIlaliol.
and the disclosures which followed, II
claiming also that the deposits 1lldue VIZ
- and the Empire Trust Company were as
collateral to such agreement AiIo
Not only was the purchase by the insur-
ance company of the water WorhS Con-
nanv securities largely Responsible loI tLls
tneS1,ne Of the books and for repeated
fafse annual statements. but many otneLs
of the criticised transactions OF the p ITsiLo
dent of the company seeiA ~ "
10 Among 1uIu the new matters brought out by
Ii That all dividends declared since at lease
the losses incident to the san Salarfd Tpon
CoILlta Heures a condition Of impair
ment rather than of surplus hd'LlS eAi7O'
during most of this time ,. r, non
oo0 nractfsed upon the department by the
company in stating its losses at san + rali-
The carrying of a special account IN con
nection with such losses that the oepa a,,t-
ment and even the directors OF the COM
The purchase of the company's stock with
IT'S own funds and a number of peculIar
and Questionable transactions at the chi
cag6 agency particularly In f F4ancisco
which resulted in the ultimate Justification
of the books and seemingly considerable
loss to the company