Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-01-16
ROBBERY Of INDIANS HEARING GOES ON
Report Charges Many Frauds Actuary Defends Methods of
Against Nations Wards. Local Insurance Companies.
CONDITION CALLED PITIFUL WITNESS BEFORE PROBERS
Declared Be Menacd by Greed Wolf Says Commercial First
and Inef6cency. National Are Solvent.
MAJ MCLAUGHLIN CRITICISED DIVIDENDS JUSTIFIED
Result No Would
the House-commit Prevent Operation
Remedy Be He eclares
Actuary Defends Methods of
Local Insurance Companies.
WITNESS BEFORE PROBERS
Wolf Says Commercial and First
National Are Solvent.
DIVIDENDS HELD JUSTIFIED
No One Would Have Legal Right to
Prevent Operation of Corpora
tions, He Declares.

The fire insurance companies under in
vestigation had their innings at the hear
ing before a subcomittee of the House
District committee today Under ques-
tiOning by Charles F. Carusi genera!
| counsel for the companies. Lee j. Wolf of
New York. a consulting insurance actu-
ary. gave testimony to show that the
Commercial Fire Insurance Company and
the First National Fire Insurance Com
pany were solvent, were justified in is
suing dividends. and that their literature
was not misleading.
This testimony was not given, how
ever. without many interruptions and
questions by Representative Redfield
and Representative Prouty of the COM
mittee. Mr.. Wolf said that both COM
panies were reasonably prosperous, even
omitting their gain through the pur.
chase of the Southern building.
Mr.. Wolf said that in his opinion no in
surance department would have a legal
right to keep these companies from doing
business under their present condition.
Manager First Witness.
William Frank Thyson. manager Of
the Southern building. was the first wit
ness before the committee this morn
Ing. He gave an itemized account of
the expenses of the Southern building.
total for June OF last year was
$1.91S.22 Representative Redheld inter-
rupted to say that in letter to him Mr.
Ihyson had put the total at $50 more.
Mr. Thyson explained that the figures
given today We're compiled from hls
books.
Totals for other months were as fol-
lows: July, $2.O4575; August, $l,7iil7;
September, $l.164.92; October, Sl.95l.65:
November. $2.1195y; December 81 :s4s ti.
hg vi
Mr.. ThysOn was $l3, ,Sti292 The average
per month was $1,vAO4-.
Upon request of Mr.. Douglas. Mr.. Thy
| son read into the record a statement Of
the cleaning of floors and windows. Rep
| resentative Prouty said the committee
did not care for al! these small details.
/ he asked for a statement of the rents
received by the Southern building during
these corresponding months.
| Lee l. Wolf of New York. an insurance
actuary, told Mr.. Redfeld that he had
gone over all the books of the company
and OF Mr. Thyson, and had included all
| expense items for maintenance in the
figures read by Mr.. Thyson.
Reports Found Correct.
| Mr.. Wolf stated that he and his brother
had been consulting actuaries for a num-
Der of states. including Maryland Virginia.
Georgia, Maine, Alabama, Minnesota Tex
as. Colorado and others. His brother has
| been retained by New York state Charles
| r. CaruSi. general counsel for the insur-
ance companies. asked if he had examin-
ed the books of the insurance companies
| ana mad found the reports upon them
| made by the District fire insurance Of
ficialS correct.
Substantially" replied Mr. Wolf "A
few minor changes were needed.
| Mr.. Wolf was asked whether the insur-
ances were not entirely solvent at date
| OF purchase of Southern building, without
| taking into account any gain made
through the purchase OF the building. tie
replied they were solvent. and that they
had complied with regulations even more
severe than those of the District.
Mr.. Carusi asked the witness what
would have been the net surplus Of the
First National Insurance Company il the
Southern building had not been pur-
chased. He replied the surplus of the
company would have been $l19.544 II. and
| the net surplus of the Commercial Fire
| Insurance Company would have been
$14,574. 16.
Companies in Good Shape.
| Mr.. Wolf gave a statement of surplus
| for the companies from a stockholders
| standpoint. showing the companies in
good shape. This statement was made
without taking into consideration the gain
| made through the purchase of the South
ern building.
He also stated that the Commercial
Fire Insurance Company had made a
gain through it's business operations,
| taking into consideration the purchase
of the building
Questioned Closely.
Mr.. Redfield and Mr.. Prouty question
ed Mr.. Wolf closely as to the compa-
MES business. asking what kind of a
departmental report he would have
made the companies under certain
conditions. which Mr.. Wolf declared i'm
practical. He replied that he would never
be requested to make such a report by
any insurance department.
Boom" Stock Not Issued.
Mr.. Wolf said that no stock has been
issued by the companies to any officer
or other person as boom" stock, or
without payment by other purchas-
ers He had made a careful examina-
ton Of the books He said all losses
had been paid promptly.
Mr. Wolf said that the real estate hold
ings of the companies. when their stock
was entirely paid up. would be COM
paratively small per cent of their total
assets. He testified that about 81 per
cent Of the assets of the companies were
in LIQUID form" and that this was not
excessive. Mr.. Carusi brought out by
his questions that IL a company sus-
tained losses amounting to 90 per cent OF
its assets through a confederation. a COM
pany would have to go out of business.
Mr. Carusi also brought out a statement
from Mr.. Wolf that in of a con-
fla grafton the companies would have from
six to nine months to dispose of real es-
tate to pay off policyholders.
Mr.. Wolf testified that only three great
confiagrations had occurred in this coun-
try Chicago, San Francisco and Balti-
mire.
Mr. Redfield mentioned also big fires i'm
Houston Boston and other places. but
Mr. Wolf said they were not considered
connagrations.
Fire Departments Better.
Mr. Carusi brought out the fact that
fire departments in cities have made i'm
provements since the big confiagrations in
Baltimore and San Francisco.
He asked Mr.. Wolf IL fire insurance
companies were compelled to keep CON
fiagration' guarantees on hand what
would happen. The reply was the COM
panies would have to go out OF business,
or make some new arrangements for sur