The Washington herald., 1913-02-28
DirectOrs' Small Holdings.

Calling attention to the comparatively
small holdings of the directors, the re?
port continues:
After a somewhat careful eXamina-
ton of the witnesses on this branch of
the case. We were unable to find any one
connected with the active management
of the company who was not also a
member of the corporation of Tuttle.
Wightman & Dudley. In other words.
there is no one now connected with the
company that is actively and aggres-
sively looking after its interests. We be-
lieve that in this fact lies the trouble
that has come to this company"
The report quotes the statement of the
committees actuary to the effect that
the fire loss of the company during 1912.
together with adjusting expenses. were
III per cent of the net premium income.
and that the average loss was not large.
The report deduces from this that the
large losses Of the company were du.
primarily to the selection of risks
Referring t. the defense of the com
panies that II Ia to the interest OF Tut
tie. Wightman & Dudley to keep the
companies in a solvent condition in view
of their fifteen-year contract. the report
says:
They would doubtless he careful not
egg. but We have serious suspicion
that they are too close to the nest and
mighty easily beat the other stockhold-
ers TO it If golden eggs were laid
Concluding this phase Of the report, the
committee holds:
In our opinion, this corporation cannot
have permanent prosperity until such re-
organization shall take place as will make
its officers interested in the company, and
M in rffo, a..
prof1ting by its operations
Parallel Is Drawn.
The report reviews exhaustively with
the organization and business OF the Pro-
tective Holdings Corporation Of Syra-
cuse. which was organized by Tuttle
Wightman & Dudley. Attention is called
to the striking similarity between the
methods employed in that case and those
followed in the case Of the Commercial
The similarity Of the contracts between
the companies and Tuttle. Wightman &
Dudley in each case Is stressed by the
committee.
The criticism of the New York Insur-
anCe Department upon the Protective
and the criticism of the committee upon
the Commercial are held to be almost
identical
In dealing with the First National. the
committee declares that. because of the
brief period of its existence as an under
writer of insurance. nothing in the state
ment in the record shows whether this
company has up to date made or lost
money on its insurance business" The
committee applies however with sub
stantially the same force to the Ma
tional its criticisms upon the contracts
of underwriting and stock selling in the
Commercial.
Some Profits shown.
Discussing the business of the under
writing firm. the report says:
We find that Tuttle, Wightman K
Dudley had received in all. under its con-
tracts with the Commercial Fire Insur-
ance Company and the First National
Fire Insurance Company. as follows:
For selling Commercial stock $40 rs 20
For selling First National stock ..... 20 ri u
Commercial Fire Insurance Comrany IN
deTwr1tirg commissions. ................ 50 Io4 3,
First National Insurance Company un-
derwrtins commissions. ns................... 30 u
"Out OF this amount they paid the un-
derwriting and stock sales expenses. We
are not able 10 determine exactly the eX-
penses of TuttlC. Wightman & Dudley in
the execution of these contracts for the
wear 1872 but il would seem that they
made net prOilt ct SlII, ,lDb.I. They de-
Clared dividends amounting to s10S.4a0
The insurance companies during 1872
show an underwriting loss of s137.l141l
TUttle. Wightman q Dudley. Inc. for
the same period show net profit of
slS1. % indenendent Of salaries received
by the officers of this company from the
insurance companies. This ought to sug-
gest at least that II is not a good policy
to have the officers and directors of the
insurance companies interested in compa-
MES showing such large profits derived
from contracts made with the insurance
companies, largely through themselves"
Value on Building.
The committee values the Southern
Building and ground at sl.sS,720 This
is divided between the building, $4,000,
and land, sSSS,72o, placing the land value
at $40 a foot.
Commenting upon the difficulty in ar
riving at fair conclusion. the report
says:
1T was apparent from the beginning
that there were two interests contending
in this hearing for different results. 1t
was apparent to the committee that
there were certain witnesses that were
anxious to keep down the value of this
property for fear that ii would affect
the assessed valuation of property in
that neighborhood. On the other hand
there was a class of witnesses that
Af s;p