Evening star. [volume] (Washington, D.C.) 1854-1972, 1912-12-30

Mr. Bell said lis company carried oNei
S14O0OOOO of in surance on bis'r'e' VI
REPRESENTATIVE johnson said he wanted
10 know whether either OF the Two com
panies involved is carrying assets WiIcn
might be called illesitimate. MI. oen
,aid he would rather not answer
lyon have called one a get-rfcn.quck
concern. and the col nmittee would IKE %
have you reply to my quesuoh, ~ i
Johnson wanted to now MI. beli go
ms TO the value of thai Southern puiid1ng-
"Thev purchased the building Tor 81
10000 and see no reason why 1t snM14i
be increased SO largely two DAYS aiuet
ward The worth of a thing Is what YOU
nav for II. II was suggested to me 10 Nly
ina. building several months ago at
about 81 500. OO0.' ooo,,
DO you think IT is worth &.OooWO-
IT do not Mr.. Darneille asked me 90
about si.4ooooo. valued the land at
about $50 or SIS foot"
Mr.. johnson Talks Land Values.
Representative johnson left the insur-
ance theme and talked land values to MI.
Bell for several minutes. Eventually MT
Johnson handed Mr.. Bell an insurance
report and asked an opinion
"My fundamental objection" said Mr..
Bell. els that ! don't believe IN q com
pany CARRYING as an n ass nr+e am ea Of 81
3oo.C~o. The report also SHOWS 'heS 'ai'
behind about s10sOO."
Mr.. Bell took the report of the insur-
ance company and read 1t carerlly, IN
order 10 expiain his reasons for saying
the company ran bRliind
"I think the loss is probably greater
than 100000 he stated. but gave
them credit for certain items.
you believe thai they we're losing
money and, therefore were not Justified
in paying dividends
al don't know-the item here says theS
paid interest or div1Q6nde
Further on Mr. Bell said:
az my premises are correct they were
not justified"
Mr.. Bell said, replying 10 a 1ues s,ota
that he does not believe a real estate
holding is the best thing for fire insur-
ance company, because 1t Is not reaoliy
converted into cash.
Representative George inquired:
"Mr. Bell, you're a large Lender on
real estate. and not a purchaser or dealer.
and isn't your mind likely to Took at real
estate at a minimum price
IT take a conservative view.
In reply to questions. Mr. Bell SAID ne
believed real estate here in some in
stances is carried at hisn rate.
Back to Insurance Topic.
Col. hudson got the investigation back
TO insurance by handing Mr.. Bell an in
surance report and asking him to make
certain calculations with the. Commercial
Fire Insurance Company surplus and pre-
MUM on sala OF stock. The first result
was s. 123. 4s. which Col. Ju1son said is
the surplus of this company, without the
increase in the real estate value"
What is fair thing to do win the
premium on sale or stock!
1T should go to surplus
what would be fair amount to take
out of premium on sale of stock for ex-
penses of selling Stock?
''Why should they take any out!'
so you believe they should have had
s216. s6426 as a surplus ana they actually
had s2Z2.49?'
1T appears So"
And what was the loss. apparently
81 don't like to give an offhand opinion
like this. but prefer to take up the matter
in a different way
Col. Jud son said:
The loss is the difference between the
surplus. pAus the premium on sale OF stock
and the sslm of $2.723 40, which is $2l4.-
14OB, OF whereabouts. Col. Judson con-
tfnued to ask questions In order to get
into the raOrd his idea that the COM
mercial Fire Insurance company neures
are susceptible OF translation in more
than one wal
Under Cross-Examination.
Charles F. Carusi. attorney for the in
surance comp any. cross-examined Mr..
Bell
"Do YOU know that insurance company
examinations are made in prescribed
forms?''
NO
.ryou do nNt know that all kinds of
receipts are cauajogued under income?
''No, I didn't know 1t.
Assuring the increased value OF reai
In calling that aIs income? And that the
board Of directors is not guilty Of misrep-
resentation In the resolution raising the
price Of stock
II should say the resolution is not a
true statement. because they haven't that
earned amount of money:
Mr. Bell said he did not believe the in
crease In the real estate value had been
earned in the proper vense Of the word.
Mr. Carusi went carefully into Mr..
Bells understanding Of the ownership OF
the Southern building. lie also asked II
Mr. Bell is expert in insurance account
ing.
. Mr. Bell said NO"
Mr. Carusi then attacked Col. Judsons
figures of $1OsOOO loss. lie asked Mr..
Bell what he knew of the item Of 'ac-
crued taxes which appears in the state
ment Mr.. Bell said he knew nothing
about the technical methods of insurance
accounting. and the attorney went on, IN
dicating the construction placed by the
companies on the reports
1T would not be remarkable. then, II
your figures do not accurately state the
condition of the Commercial al any timer
said Mr.. Carusi in conclusion of that line
OF quiZZing.
Practice in Paying Dividends.
Mr.. Carusi asked about the practice of
fire insurance companies aging dividends
out OF the surplus. Mr.. Bell said he
knew little about IT. Mr. Carusi said
that. as a matter of fact, fire insurance
companies pay dividends from surplus
regardless of whether not there has
been a profit In underwriting. and that
dividends paid from investments would
not deplete the surplus. Mr.. Carusi said
that Inghan's report on the purchase Of
the Southern building is in error In the
statement that the companies had 'as-
sumed'' a mortgage.
Mr.. Bell told him he had no experience
in organizing companies on the popular
subscription plan.
Charles A. Douglas asked:
You know Judge Atkinson"
IT know OF him."
You know Judge Could"
Yes"
You know Cen wynne-all these are
members OF this board?'
Yes"
What Is your opinion Of their integ-