AN EXHIHIT OF THE
CAPITAL, ASSETS, AND LOSSES
OF THE COMPANIES, TOOETHEK WITH
/ <//////> Account #/ the (fireat jjji
NEW YORK AND CHICAGO:
J. H. AND C. M. GOODSELL,
l'i nr.TMiKi;-; DI THK Si-i-.c PATOK.
TH SPKCTATOR Piuira, .i-rly St., N. Y.
THE CHICAGO FIRE
FIRE INSURANCE COMPANIES.
AN EXII I DIT OK THE
CAPITAL, ASSETS, AND IOSSES OF THE COMPANIES,
A Graphic Account of the Great Disaster,
MAPS OF CHICAGO SHOWING THE BURNED DISTRICT.
NEW YORK AND CHICAGO:
J.H. and C. M. GOODSELL,
PUBLISHERS OK THE SPECTATOR.
Entered, according to Act of Congress, in the year 1871, by
J. H. AND C. M. GOODSELL,
in the office of the Librarian of Congress, Washington.
THE INSURANCE COMPANIES AND THE
OUR FIRE INSURANCE SYSTEM.
THE tremendous losses, resulting from the Chicago fire, sus-
tained by the insurance interest of the country, and the prompt
settlement of those losses so far as the companies have been
able to meet their liabilities, while they bear testimony to the
beneficent mission and great usefulness of this interest, must
necessarily lead to greater caution and conservatism in its future
It is a mere truism to say, that the benefits of both fire and
life insurance should be more widely distributed. But in order
to accomplish this, it will be necessary to proceed upon a basis
which shall attract capital to the business of insurance, and ren-
der it profitable to the insurer as well as the insured. It is use-
less to expect that capital will flow into this channel from mere
considerations of public utility and general benevolence. The
men who own or represent capital are noted for their caution,
and do not embark their merans in extra hazardous enterprises,
unless their profits are commensurate with their risks.
Though cheap insurance is certainly a desideratum for the
general welfare, there is such a thing as making it too cheap for
the safety and advantage of all concerned. This is just what
has been done for the last few years, during which we have had
the maximum of risks with minimum of rates ; and the result
has been, (as the history and statistics of fire insurance since the
war will show), that the business has become unremunerative,
and has been gradually transferred from the strong companies,
which had nothing to gain and everything to lose, to the weak
ones, which had everything to gain and but little to lose.
While the former have been steadily curtailing their risks,
4 The Insurance Companies
and limiting their operations to the best property of their own
immediate surroundings, the latter, through their agents, have
been scattering their policies broadcast throughout the country,
without proper discrimination as to the character of their risks.
Many of these expanded companies, with small capital and no
surplus, have been swept away by this great calamity, while the
solid ones, which refused to enter into cheap competition with
them, for the most part stand firm as a rock.
The dear-bought experience of hundreds of ruined policy-
holders, upon this occasion, will probably teach them that " the
cheapest is not always the best," and that our fire insurance
system, in order to be efficient, and to practically afford that
protection to the community which it professes to guaranty,
must be established on a sound and strong foundation. Prop-
ertyholders cannot expect such sure protection unless they are
willing to pay a fair price for it ; and by encouraging that cheap
competition among insurance agents which is manifestly incom-
patible with a safe and legitimate business, they only repel and
restrict the sphere of those conservative and prudent institutions,
which alone are trustworthy, and capable of performing what
they promise in such emergencies as the present.
THE DUTY OF THE HOUR.
WHATEVER other effects rnay follow the recent disaster at Chi-
cago, there is one result which MUST come from this calamity,
as matter of vital necessity both for the agents and for th'c com-
panies they represent. The rates of premium must be advanced
at once to a paying point, and by means of concerted action GJI
the part of all agents everywhere. We doubt not the agents'
recognition of this necessity, nor their disposition to meet it ;
but action, not theory, is what is wanted, and they should not
lose a moment in profiting, by the public engrossment with
insurance matters, to organize themselves in a solid phalanx
against a relapse of insurance interests into the old channels of
Widespread as is this disaster, and seriously as it has crippled
a number of companies, it is a subject of pride that in the great
And the Chicago Fire. 5
majority of cases losses will be promptly settled. And when
the facts and figures are finally spread out in authentic form, we
may expect a reaction in favor of insurance and its promoters
such as will astonish even its most ardent friends. Few compa-
nies have failed as regards their policyholders, and those which
have suffered heavy loss will reorganize at once, with less
financial capital, perhaps, but with a reserve of moral capital
and honorable prestige which will make their policies worth
more than ever before.
It is the duty of agents as men who, in prosperous times, have
reaped the largest share of the harvest, to come promptly to the
help of the companies at this juncture, and this they can do by
immediately taking steps to make the public realize the value of
insurance, and the difference between sound and cheap policies.
Already, in many cities and towns the rates have been advanced
to an adequate standard.
Rates should be immediately doubled everywhere in the
THE GOLDEN OPPORTUNITY.
NEVER, was there a better opportunity for earnest agents and
sound companies to push their fortunes. By striking while the
iron is hot, while the ruins still smoke, a live company may
accomplish in the next six months more than it could in ten
years, under ordinary circumstances.
Active agents, energetic officers, solvent companies, will now
come to the front and carry all before them.
The public is alive to the value of insurance policies which
mean indemnity, and will not higgle about rates in the light of
the Chicago fire and its crushing testimony against cheap and
Now is your chance to enter in and possess the land, gentle-
men, officers and agents ! The people are running to meet you
more than halfway. They are anxious for once to pay full cost
for insurance, if it only be insurance. Let none of you stand
back, while a few live men rush in and gather a harvest in
which you should have a share. Advertise, circulate your docu-
ments, let your rivalry be only that of getting the best risks at
6 The Insurance Companies
the highest rates, and thus present the insurance companies of
the country as a spectacle of bounding elasticity and vitality.
Great as have been the losses at Chicago, there is not a com-
pany whose assets justify continuance in business, but can turn
this seeming disaster into a positive and permanent benefit.
The prestige of a company passing through this fiery trial,
without succumbing, will be (or should be made) equal, in
moral power, to a doubling of its cash capital. See to it that
this shall be the result to your own company !
A CORRESPONDENT writing from Hartford discusses as follows the
altered condition of fire insurance and fire insurance rates : This
disaster will also bring its lesson, for, good and unpalatable as it may be,
nevertheless it will be one notonly for the benefit, immediate and direct, of
the insurance companies themselves, but also, indirectly and eventually,
of the people at large. It will learn us to put underwriting on a more
lasting and enduring foundation, to set aside the petty jealousies and
private rivalries which have hitherto existed much to the detriment of
the business, and while there will be, as there must, a general competi-
tion, yet it will be based upon system, founded in principle, and tend in
no way to lead insurance interests into the paths of recklessness and
ruin. As a matter of course this fire will affect the subject of insurance
rates, and they will no doubt be advanced. The low rate system which
some of our smaller companies have followed has proved disastrous,
and the experiment will not probably be tried again. And this we do
not regret. A man is always willing to pay a good price for a good
article; and, if in future policyholders are charged a larger amount for
their insurance, they will not be disposed to grumble at the advance if
they know the concern in which they place their risks is pursuing a
course which is not experimental and adventurous, but which on the
contrary is founded in security and safety, and is dictated by all the
reasons which human precaution and foresight can invent to guarantee
prosperity and success.
ONE of the newspaper reporters, describing the great fire, says :
' Huge blocks of stone were crumbled to dust. The foundations disap-
peared almost to the bottom stone. The walls were licked up as though
of pasteboard, and the huge beams of iron were warped and disappeare<|
like straw. The vaunted fire-proof structures offered also as little
resistance as the humblest shanty and went in the common ruin." It
may be that this statement requires to be accepted with considerable
allowance. But the fact remains, proven incontestibly for the first time,
And the Chicago Fire. 7
that a conflagration may rise to that degree of intensity which will
seriously endanger the most massive structures that man is capable of
building. Just as the eternal rocks are swept away by fierce volcanic
eruptions. Yet AVC should not depreciate the value of the so-called
"fire-proof" methods of building. A fire-proof building is at worst a
barrier to the extension of fire. It checks a conflagration by staying the
progress of flame, and, if there be only a sufficient number of these
barriers, the duration of the fire cannot be long. Who can doubt, for a
moment, that the northern division of Chicago would have been entirely
unharmed if in that ill-fated business district in the south side there had
been a hundred " fire-proof" buildings, instead merely of two or
THE three great conflagrations of modern history have been the great
London fire of 1666, burning of Moscow, and burning of Chicago. It
is remarkable that the magnitude of these conflagrations was not very
far from equal in the number of buildings destroyed. The fire in
London consumed 13,200 houses. The Moscow conflagration consumed
11,400 houses. The conflagration in Chicago consumed not far from
15,000 houses. The Chicago conflagration was- much more extensive
than either of its prototypes in the extent of territory devastated. The
burnt district includes nearly four square miles; that of London less
than one square mile; that of Moscow considerably more. In the
destruction of property, also, the Chicago conflagration has taken the
first place in history, the loss amounting in round numbers to
$150,000,000. In the rapidity of the conflagration, the Chicago fire is
without a parallel. It required sixteen days to burn a square mile of
London, and several days and nights to burn a somewhat greater area
in Moscow. Twenty hours sufficed to consume four square miles of
Chicago, a rate of combustion averaging a square mile every five hours.
THE pluck exhibited by almost all the companies, with reference to the
great fire, has been something which falls little short of being sublime.
It is not every man who, suddenly cut down from wealth to poverty,
will instantly resume active operations and push forward with even
greater energy than before. But here are. many companies which have
lost money by the million, we might almost say, rising out of the ruins,
and as eager for the fray as ever. It would be invidious to mention
names, even were it worth while, in illustration of the wonderful
elasticity and vital force of the companies in this severe ordeal. The
country has reason to rejoice that its underwriters are of the nyielding
sort, and that, both in spirit and in act, they stretch out the helping
hand towards Chicago, although it may seem like the dividing up of
their last crust.
8 The Insurance Companies
The Hartford Courant says, that when New York suffered under the
great fire of 1835, the Hartford, ^Etna and Protection fire insurance
companies were weak, in comparison with the great corporations of these
days. At the first word they went to the front and, with the personal
credit of their directors backing them, paid promptly every dollar.
James G. Bolles was secretary of the Hartford in those days. The stock
was only partially paid in. The directors pledged their own means for
the remainder, and sent Mr. Bolles to New York to open an agency near
the fire. There he settled the claims as fast as possible and gave out
that he was still ready to insure. All the New York insurance compa-
nies but one had failed. Before all the claims had matured, Mr. Bolles
had received enough in premiums to pay them! Mr. Bolles was a man
to do his duty if it bankrupted him. But it made the fortune of the
IT is within bounds to say that in almost every large town in the
country insurance rates are, to-day, not more than half what they should
be. In all the cities, this is absolutely the fact, without qualifications.
The volume of average loss makes up the main element in the cost of
insurance; and, now that the companies are called upon to pay forty or
fifty millions on account of Chicago, it is obvious that the cost of insur-
ing has increased by just the ratio thus added to the loss ratio of former
years. If the $3,500,000 paid to Portland justified doubling the rates in
1866, what shall be said now when rates have again touched bottom and
the cost of insurance has actually been quadrupled? The simple test
will be to add the cost of the Chicago fire to the average cost of insur-
ance for twenty years past, and then tell us what the rates ought to be?
AND now from all parts of the country comes the gratifying intelli-
gence that an universal advance in fire insurance rates has followed the
Chicago disaster. The companies which will be able to continue busi-
ness are none too many, and are none to strong to satisfy the require-
ments of the business public without this advance in rates.
THE GREAT FIRE.
A COMPREHENSIVE ACCOUNT OF THE CON-
IT was at 9.45 o'clock on Sunday night, October S, when the bell sounded
the alarm from box 342, for a fire which proved to be the most disastrous
in the world's history. Flames were discovered in a small stable in the
rear of a house on the corner of De Koven and Jefferson streets.
Hardly had the first alarm sounded when it was followed by another
from the same box, and this in turn by a third, or general alarm, which
summoned to that vicinity every available steam engine in the city.
was blowing a perfect gale from the south-southwest. With terrible
effect the flames leaped around in mad delight, and seized upon every-
thing combustible. Shed after shed went down, and dwelling houses
followed in rapid succession. Block after block gave way, and family
after family were driven from their homes. The fire department were
powerless to prevent the spreading of the calamity.
At first it was one structure on fire; then another and another were
swallowed up in a whirlpool of flames, until finally it was blocks and
blocks of buildings which were going down, like grass before the
scythe. For upward of fifteen weeks there had been no heavy
rains, and the wooden walls were dry like unto tinder in that portion
of the doomed city. In vain the firemen fiercely fought the-
approach of the conflagration. In vain were fences and small houses
hurled to the ground. In vain did the vast crowd rush hither and thither
trying to save the entire west side. Onward stalked the fiery flame and
red-hot air which caused all to flee from before its scorching blasts.
With the heat increased the wind, which came- howling across the
prairie, until at last there arose a perfect hurricane. Mighty flakes of
fire, hot cinders, black, stifling smoke, were driven fiercely at the people,
and amid the terrible excitement hundreds of them had their very clothes
burned off their backs, as they stood there watching with tearful eyes the
going down of so many houses.
When the flames had crossed over to Clinton street, between Ewing
and Forquar streets, there were left probably half-a-dozen houses which
lo The Insurance Companies
seemed lo have been forgotten in the excitement of the moment. But
they were not permitted to escape the awful flames. Backward swept
the red demon, silently and softly, but swift enough to elude all pursuit,
and before the terror-stricken multitude could prevent, all these frame
buildings were burned to the ground.
The wind continued its roaring fierceness, and house after house was
burned. To the left the fire spread forth its heat like the leaves of a fan
until all of the eastern side of Jefferson street was enveloped in the furnace.
To the right it had been driven with great fierceness, and Clinton street
and Canal street and Beach street, and then the railroads which run
along the western shore of the south branch were in its grasp. Now
was the fire at its fiercest. Upward of 20 blocks were burning. Up-
ward of 1,500 buildings, including outhouses, were on fire. Upward. of
500 families were fleeing from the seeming wrath to come. The streets
were almost impassable. Carriages, and wagons, and drays and carts,
and all sorts of vehicles were brought into requisition, and were speedily
loaded with household goods. Empty wagons were filled with freight,
and where there were no beasts of burden to draw the load, human
hands sprang to the rescue and dragged the property toward the north.
Then the fire reached over the street, and while that terrible south-
western wind howled onward, it forced its way into the planing mills
and the chair factories, and all the other shops which skirted the creek
in that portion of west Chicago. Then it got into the lumber yards and
into the railroad shops, and the round houses were soon wrapped ia its
dead embrace. The bricks themselves seemed only additional fuel.
The rolling stock in the railroad yards seemed but a bit of kindling
which helped along a fire already fiercely intense.
But worst of all the elevators were next in danger. For a few moments
it seemed as though one or two of the largest would resist the flames
.and pass through the fire ordeal unscathed. But this thought was not
of long duration, for an instant later and the immense piles were in
flames from top to bottom.
Like the advance of a great army the fire moved forward in several
columns, and like a powerless but unconquered foe the fire department
slowly retreated. But th ey stubbornly contested every foot of ground and
would not surrender, although often almost entirely surrounded by the
dread enemy. Then they would cut their way out and retreat for a
short distance, only to turn again and hurl their charges of thousands
of gallons of water full into the face of the enemy. But no power on
earth could stem the torrent. Never did firemen fight more fiercely to
conquer, and never before did their heroic efforts sejem so utterly in
Suddenly away to the north and east, fully five blocks distant, a small
flame broke forth and lighted up the already brilliant heavens. The
sight sent an awful shudder to the soul of every man, woman and child
who saw it. For a moment every one was spellbound and speechless.
And the Chicago Fire. il
Just where it was, the newly discovered fire, was as yet unknown,
but it seemed to be in the neighborhood of the South Side gas works,
and there was no one in all that vast concourse of people, but
who knew the great danger which was already threatening the other
side of the river. Every moment witnessed an increase in the blaze,
and presently the outlines of the immense reservoir told the story
of its immediate vicinity. The fire marshal at once sent every avail-
able engine to the south side, and prepared to follow with the remainder
immediately. But the flames mounted higher and the fire grew fiercer,
and spread itself out in all directions, until it was impossible to stay it r
As early as twelve o'clock, the air of the extreme south division was
hot with the fierce breath of the conflagration. The gale blew savagely,
and upon its wings were borne pelting cinders, black driving smoke,
blazing bits of timber, and glowing coals. These swept thickly
over the river, drifting upon house-tops and drying the wooden build-
ings along the southern terminus of Market, Franklin, Adams,
Monroe and Madison streets still closer to the combustion point for which
they were already too well prepared.
The housetops were covered with anxious workers, and cistern streams,
tubs and buckets were in constant use to subdue the flying bits of fire
(.hat were constantly clinging to shingles and cornices.
THE FIRST FOOTHOLD
obtained by the destroying angel in the south division was in the tr.r
works adjacent to the gas works, just south of Adams street, and nearly
opposite the armory. Almost instantaneously the structure was one
livid sheet of flame, emitting a dense volume of thick black smoke that
curtained this portion of the city as with the pall of doom. Faster than.
a man could walk, the flames leaped from house to house until fifth
avenue (Wells street) was reached. A steamer or two were sent thither,
but their previous experiences were only repeated, and no perceptible
check was given to the onward progress of the flames. From the gas
works to the point it had now reached, nearly the entire space was filled
with small wooden structures, and their demolition was the work of but
a few minutes.
THE FIRST GREAT DANGER
apprehended from the ignition of the tar was of its communication to the
gas works, and in less than ten minutes the entire establishment was on
fire, the immense gasometer being completely surrounded by a wall of
flame. The danger from its explosion drove the crowds away, and other
scenes of equally absorbing interest occupying their attention, when the
explosion came, it was witnessed by comparatively a few people, and was,
12 The Insurance Companies
it is believed, unaccompanied with any fatal results. The grand metre
was apparently filled to about half its capacity. Its destruction did not
occur until some three hours later.
Apparently but a few minutes subsequent to the ignition of the gas
works, the wooden buildings south of the armory were found to be on
fire, forming the apex of another widening track of desolation, and very
soon joining with the other, the two unitinglike twin demons of destruc-
tion, the armory helping to glut their fiendish cravings.
It may be of interest here to note the peculiarities of the wind cur-
rents and their strange effects. During all this time, as during
the entire continuance of the fire, the wind was blowing a gale
from a southwesterly direction; and above the tops of the buildings its
course from midnight until 4 or 5 o'clock, varied but little, not veering
more than one or two points of the compass. To the observer on the
street, however, traversing the main thoroughfares and the alleys, the
wind would seem to come from every direction. This is easily explained.
New centres of intense heat were being continually formed, and the sud-
den rarification of the air in the different localities and its consequent
displacement caused continually artificial currents, which swept around
the corners and through the alleys in every direction, often with the
fury of a tornado. This will account partly for the rapid widening of
the tracks of devastation from their apex to the lake, as well as the
phenomenon of the fire to use a nautical phrase, "eating into the
THE GRAND PACIFIC HOTEL,
upon which the roof had but just been placed, and which, like the still-
born child, was created only for the grave, was among the first of the
better class of structures assaulted by the fire. Angered at its imposing
front, and scorning the implied durability of its superb dimensions, the
flames stormed relentlessly in, above, and around it, until, assured that