Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-12-29
REPORT UNDER SCRUTINY
Chairman of House Subcommittee
Conducts Investigation.
PROBE OF INTEREST PAYMENTS
Showing of Commercial Company's.
Receipts and Expenditures and
Its Methods Analysed.

of New York, a member of the House
subcommittee which is investigating
insurance conditions in the District OF
Columbia, succeeded in getting into the
record during yesterday afternoons
session Of the inquiry his own idea of
the state Of the Commercial Fire In
surance COmpanys business, and while
he was interrogating all the way
through his examination of Edward j.
Stellwagen he made the assertion that
the Item Of paid to stockholders for
interest on dividends had to be paid
out Of premiums on the sale of stock.
Mr.. Redfeld's questioning Of Mr.
Stellwagen was the nearest approach
to any investigation of insurance that
there has been during the three days
of the subcommittee's session. The at
torneys and the members of the COM
mittee have avoided the question OF
insurance quite carefully and, In fact.
the whole hearing bears a marvellous
resemblance to the sessions OF the
George assessment and taxation hear
ings
Scarcely Touches Insurance.
The inquiry has developed testimony on
values, jealousies between insurance
and Mr.. Stellwagen, lunch parties at
which bankers have been present. and
other similar incidentals, but the matter
of insurance has scarcely been touched
Mr.. Redfield obviously made his observa-
tions yesterday in the form of queries
with Mr.. Stelwagen on the stand simply
to pave the way for Insurance experts
who will testify within day or two.
Mr.. Stellwagen said he did not appear
as an insurance expert by any means.
Mr.. Redfield began by handing Mr..
Stellwagen a copy of the report on the
Commercial Fire Insurance Company
made in the insurance department OF the
District of Columbia: and by series OF
instructions bade Mr.. Stellwagen to set
down, add up and subtract the various
items in the receipts and expenditures
columns. Mr.. Stellwagen added total
premiums and interest on mortgage
loans" interest on bonds" interest
from all other sources and commissions
on mortgage loans" These Mr.. Stellwagen
found to make q total Of $197,S3o.6a
Then Mr.. Redfield said
Look carefully at that statement or
the insurance commissioner. Mr.. Stell-
wagen. and tell me IL the five items
which thus total S191 ,33069 do not in
clude every item Of income the company
on sale of stock and the increase by ad-
1ustment in the val4e of real estate. Is
there any other item this company has
other than the five, except the premium
justment in the book value Of real
estate?
"They are ALL replied Mr.. Stellwagen..
Discusses the Disbursements.
Turning to the disbursement side of
the report Mr.. Redfield instructed Mr..
Stellwagen 10 take down sum of
figures totaing s213. i22.54. This sum, he
said. represented the expenses of purely
insurance matters. payment of losses.
etc. The difference between the two
sums reached by MIR. StellwaSen amounts
| to $16.O31.So.
Mr. Redfield said:
so. it is true. Mr.. Stellwagen. as you
have calculated it, that the total income
of this company without the premium OH
the sale of its stock, without the increase
by adjustment i'm the value of real estate.
| was insufficient to pay its policy losese.
commission and brokerage. its expenses
of adjustment and settlement, 10y
| 16.09l.S5; is that not so?"
That would seem to be so. by this
statement" replied Mr.. Stellwagen.
Mr.. Redfield continued his queries:
$50 that the item of paid to stock
holders for interest on dividends had to
be paid out of premiums on the sale of
stock; did it not?''
"If they had nothing left, but that.
everything had to be paid out of il" was
Mr.. Stellwagen's answer
Regarding the Reserve Fund.
Mr. Redfield then wound up his queries
by asking Mr.. Stellwagen if he found on
the report any mention of money trans
ferred to an insurance reserve. Mr.. Stell-
wagen DID not find such an item, and Mr..
Redfield stated:
You find nothing of tat kind. So that
as a matter Of fact the company had to
use the money which was paid into by
stockholders i'm the shape of premiums
upon stock to pay its dividends, to pay its
salaries, and a large number of these
other expenses, because its entire
premium income was more than used up,
together with the interest II received from
other sources, in paying its losses and the
expenses incidental thereto: you find?'
"If these figures are correct, It would
look that way
Charles +. Carusi. attorney for the in
surance compa nies. asked Mr.. Stellwagen
If he was an insurance expert, and re-
ceiyed a negative reply. Shortly there
after the committee announced an adj
journment until tomorrow morning at 10
O clock.