The Washington times., 1914-07-11
COMMERCIAL FIRE
SEES BIG SURPLUS

Probed two years ago by Congress,
I connection with the valuation placed
pom the Southern Building, its equity
I which is its principal asset. the Com
percial Fire Insurance Company of
Sais city had on April so last liabilities
exceeding its assets by SIS 2S7.20 as a
-,osult of the reduction in the appraise-
nent of the building by Superintendent
If Insurance Nesbit from 100000 to
5000 This fact is set forth in the
eport issued today by the Department
4 Insurance of the District on its ex-
animation of the financial condition Of
he company.
Recognizing the impairment of its
capital stock by this reduction in the
appraisement of its realty holdings, the
officers of the company and the board
of trustees recently recommended the
reduction by half of the capital stock
and the transfer of the fund thus
gained to the company's surplus.
The meeting to pass upon this pro-
posal was convened Thursday. but car
ried over until Monday in order that the
board of tellers might have opportunity
TO canvas the large number of proxies
presented for voting. The new board
Of trustees selected at the annualSmeet.
ing of stockholders yesterday assert
that they have ample majority OF the
,-otes TO assure the adoption of the
-esolution providing for the stock re-
duction.
In commenting on this proposal the
department of insurance gives IL ap-
0royal and SAYS that by such step the
company will place itself in thorough
" solvent condition and provide net
surplus approXimating sl5eoU. RoDeIt
r. futile. president of the company,
n1rrc rt-ill a
S275.OoO with the contamination of tne
plan as a result of reinsurance Whlcn
has been turned back into surplus ana
the expiration of liabilities since APRIL
The time of the examination.
Litigation of Concern.
Since the investigation by Congress,
The Commercial Fire has been beset
with internal discussions which recent
" eliminated with the filing in the
District Supreme Court of a petition by
a group of the stockholders, asking the
appointment of a receiver for the COM
uany This petition. is still pending and
will come up for a hearing on July 20
Certain of the disgruntled sharehold-
ers, besides making capital OF the i'm
pairment of the ccmpany's capital stock
through the changed value OF the
Southern building, point TO traRsac-
ton whereby the District Nationaf
Bank. Of which Robert y. Harper. a
trustee of the Commercial is presi-
Gcnt, borrowed certain bonds belonging
"a the company for deposit with the
treasury Department The portion of
the paragraph in question reads:
When We went to the safe de-
Iosit vault in the District National
Bank TO examine the bonds and ccn-
rare them with the list VIC found in
-tead of certain bonds, a receipt from
the bank for the loan OF said securities,
amounting 20 slS2,ooo par value"
Loaning of oBnds.
From the records of the company It
was made to appear that Robert r.
futile, the president of the Commercial,
had loaned the bonds before the ap-
Droval of the executive committee had
ueen secured. In explaining the situa-
ton both Mr.. futile and Mr.. Harper
laid that the loaning of bonds was
visionary transaction with insurance
companies, which was admitted by the
officials of the Department of Insur-
ance.
While the minutes showed that the
approval had not been recorded before
the bonds were transferred. Mr.. Harper
said that Mr.. futile lad called per-
sonally upon the members of the eX-
ecutive committee and secored their as
sent.
The record of the fact. however. was
not made. he said, until the next for
nal meeting of the committee was held.
The bonds were borrowed ~ the time
that the Treasury Department was pre-
paring to distribute Government funds
among the local national banks to offset
the drain made by tas payments in
MAY, and were deposited with the
Treasury Department as security for a
PORTION of the fund which the District
National Band received. For these
oonds the bank is paying per cent and
hey are still in the Trexsury Depart
nent-
AS a result of the Congressional In
vestigation which involved the First
National Fire Insurance Company as
veil as the Commercial. the former
company being a half owner of the
Southern building. the Commercial Fire
was seriously affected. The report of
the Superintendent of Insurance shows
that Ss a result of its operations dur
ing the year 1913 there was a loss in
its surplus of $i4S, 600. The business of
The company, it is said, shows fur
Their reduction of the surplus of approx
mately $4,000 for the first four months
Of 1914.
When to this drain was coupled the
$1,000. which had to he marked off
from surplus as Il result of the reduc-
ton of the Southern buildings ar
praisement, the portion Of the reduc-
ton which the Commercial must bear.
the liabilities were found to be in eN-
cess Of the assets.
The surplus of the First National Fire
Irsurante Company, joint owner of the
Southern building. has been reduced by
similar amount. but the insurance Of
fcials contend that while they have not
made a recent investigation Of that
Company. i. will not be seriously af
fected, since its surplus is much larger
than was that Of the Commercial.
While the present officials Of :he
Commercial are confident that the stock
reduction will be made and the surplus
thus augmented. Robert H. Mcneil. VINO
heads one of the rpcalcitrant factions
Of share holders. still maintains that
there is a possibility of its defeat at
the meeting Monday.
After a service Of four years as sec
retary-treasurer Of the National FEEDER
alton Of Remedial Loan Associations. j.
T. Exnicios has retired from that po-
sltion. The annual meeting OF the fed
Grafton was held in Philadelphia Thurs
day and yesterday Mr.. EXniciOs re-
turned TO Washington, todag. The re-
tirement of MI ENnicios followed that
Of the founder OF the federation. w. y.
Finley. Of Baltimore. who had been it's
president since its inception. During the
closing hours of the annual meeting,
the members Of tho federation express
ed their appreciation Of the services OF
Messrs. Finley and IExniciOs in speeches
q in "a 1Y,l