William Loring Andrews.

The Continental Insurance Company of New York, 1853-1905, a historical sketch online

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future presidents of the Company inherited and
courageously battled with for many a long year
before they were brought to a termination under
the administration of Mr. Moore.

Mr. Hiram H. Lamport had served as secretary
of the Company from April 9, 1857, to July 12,
1866, when he was made vice-president, and in
August, 1885, he succeeded Mr. Hope in the office
of president, but on account of ill health he was
obliged to relinquish the position in January, 1889.
He still at the advanced age of eighty-five, con-
tinues a Director of the Company.



PRESIDENT, 1885-1889

OF NEW YORK, 1853 TO 1905

THE fourth president of the Continental,
Mr. Francis C. Moore, became connected
with the Company as a clerk in 1869.
In March, 1881, he was made second vice-presi-
dent, and on the i7th of January, 1889, was
elected to the position marked out for him by
Mr. Hope some time before the latter's death.
This office Mr. Moore retained for fourteen years,
and in his conduct of it proved beyond question
Mr. Hope's competency as a judge of character
and ability by the selection of his second vice-
president, as the one under whose direction the
Company would go on, to use his own expression,
"without a jar/' Mr. Moore demonstrated his
mastery of the science of fire underwriting, and
won high distinction, not only by the conspicu-
ously successful management of the affairs of his
Company, but also by his contributions to the
literature of a subject of highest importance to
the business world, for without insurance against
fire the wheels of commerce would not long re-

When Mr. Moore assumed the direction of the
Company in 1889 its assets amounted to $5,028,-
344.69, and its net surplus to $1,226,691.66.
Upon his relinquishment of his office in 1903 the
Company possessed $12,957,841.15 of gross assets,
a net surplus of $5,718,961.98, and an organiza-
tion and an esprit de corps which he in a large
measure created, of a value to the Company that
cannot be estimated.

Mr. Moore's books and pamphlets on "Fire


Insurance and How to Build/' "How to Build
Fireproof and Slow-Burning/' "How to Build a
Home," "Unearned Premium/' "Waterworks and
Pipe Distribution/' and "How to Build a Hotel/'
the results of his own long experience as a fire
underwriter, are recognized as authorities of the
highest practical value, and, as standard text
books they should form part of the equipment of
every fire underwriter's office.

"The mere recapitulation," says a writer in the
Post Magazine and Insurance Monitor, of London,
England, of the subjects treated in "Fire Insur-
ance and How to Build" "is calculated to amaze
even the seasoned habitues of the fire insurance
domain. The work is as admirably lucid in re-
spect of diction as it is invaluable in respect of
instructiveness. Insurance people all over the
world are under deep obligations to Mr. Moore for
this laborious and crowning contribution to the
literature of the business. It will readily be
acknowledged that the author stands in no need
of introduction to European insurance circles."

The Standard Universal Schedule, for rating
mercantile risks, prepared by a committee of
which Mr. Moore was chairman, is "generally
admitted to be the most comprehensive and
thorough schedule ever devised." It marked a
change in rate-making in the United States, if not
in the whole world, and elicited a chorus of com-
mendations from insurance experts here and
abroad. One of the most appreciative and ably
written of the many press notices of it that ap-



PRESIDENT, i 889-1903

OF NEW YORK, 1853 TO 1905

peared was the following, in "The Insurance
News," of Manchester, England, issue of July i,


"That such a question as this should have to be
put after two centuries of practical experience
may almost appear incredible. Yet in sober
truth we seem to have got very little past the
crude and uncertain methods which characterized
the early stages of fire insurance history. We
need seek no further illustration of this assertion
than the marvellous results which have been
presented by the modern system of 'tendering/
Speaking generally we may say that the methods
of rating now in vogue are purely empirical.
And we may even go further than this, and assert,
without fear of contradiction, that, omitting the
sphere which is technically known as 'first-class
risks/ five-sixths of all the remaining business is
now being done at a loss. This, it is true, largely
arises from the intensity of competition, but it is
the competition of ignorance. No underwriter,
however infatuated, would take upon his books
a quantity of business which he knew before-hand
would prove unprofitable. But in actual practice
this is being done every day. What we want,
therefore, is a clearer and more definite classifica-
tion; more light, more knowledge, against which
even the most unscrupulous would hesitate to
sin. In other words, we want to know whether


fire insurance rating can be placed upon a mathe-
matical and scientific basis. No genuine and
united attempt in this direction has yet been
made. It has been held that each oifice is best
consulting its own interests by maintaining
secrecy as to its experience in connection with
any given class of risk. This, we maintain, is an
enormous fallacy, and one that has done untold
mischief to the cause of fire insurance as a whole.
It is, as we have said, ignorance which is pre-
sumptuous, and not knowledge. If during the
last ten years it had been clearly known where lay
the line which divided profit from loss, we should
scarcely have had fire insurance reduced to the
unsatisfactory, if not even perilous, position in
which it is found to-day.

"All very well, it may be said, but is it possible
to place fire business upon such a basis as that ad-
vocated ? A very remarkable and clever attempt
in this direction is now being made in America,
where the evils and irregularities of unscientific
rating are even more conspicuous than in Great
Britain. A committee consisting of four mem-
bers, President Moore, of the Continental', Mr. Sil-
vey, of the German American', Mr. Babb, of the
Northern, and Mr. E. G. Richards, of the National
of Hartford, have gone into this question with the
most minute care and attention, and have pub-
lished a pamphlet entitled 'Standard Universal
Schedule for Rating Mercantile Risks/ The
starting point is the experience of the past five
years, and an assumed loss ratio of 55 per cent.


OF NEW YORK, 1853 TO 1905

of the proposed premiums a state of things
which we may almost look upon as too halcyon
for realization. But it is unnecessary to say that
this preliminary condition of 55 per cent, of loss
in no way affects the methods which it is proposed
to employ in discrimination and classification.
It is in these latter points that the value and
excellence of this attempt are conspicuous. There
are first of all laid down the conditions which will
constitute a 'standard city/ those conditions
having reference chiefly to the extent and effi-
ciency of the fire appliances, but embracing also
a variety of other features, such as the width of
the streets, the nature of the paving, good build-
ing laws, no outlying exposures, such as lumber
districts, and a previous exemption from an
abnormally heavy loss ratio. In this 'standard
city' there is next assumed a 'standard build-
ing/ in which all approved methods of construc-
tion and arrangement are supposed to exist.
Here then in the shape of this standard building
in a standard city we have what we may call the
base line, the 'normal' condition of things if
we may use our own familiar term, and for this
a 'basis rate' of 55. per cent, is fixed. There is
then a series of provisions for deficiencies in the
city standard, twenty-seven in number, and each
of these involves a penalty in the shape of an
extra rate, greater or less, according to the
gravity of the case. We thus arrive at the rate
for a 'standard building' in any city whatever,
an enormous advantage, as may be easily seen.



In like manner the building itself is dealt with,
and deficiencies from its standard are provided for
by accumulated rates in precisely the same man-
ner. Any building i. e. any mercantile build-
ing in any city, is thus rated on strictly scientific
and logical principles, the elements of risk being
divided into two main branches, those arising
from the city, as a city, and those from the build-
ing, as a building. But, as will have been noticed,
all buildings are thus far rated as empty, and we
have now another elaborate schedule, under the
heading of 'Charges for Occupancy/ giving, in
alphabetical succession, a list of about three
hundred different trades and tenantcies, with a
rate in each case for buildings and contents, to be
added to the rate as previously ascertained for the
building in its unoccupied state. There are
various other provisions expanding or modifying
these general principles to meet special circum-
stances, but the main outline of the scheme will,
we trust, be sufficiently clear from the description
we have already given.

"We welcome this effort with the utmost pleas-
ure. It is a distinct advance upon anything of the
kind we have yet seen. It contains the true
principles of scientific fire underwriting. We do
not offer any opinion as to the inadequacy or
otherwise of the proposed rates ; at this stage that is
a very small matter. Experience will speedily cor-
rect what is wrong in this respect. We have here
for the first time in a practical form, a genuine
attempt to estimate the one hitherto intangible


OF NEW YORK, 1853 TO 1905

factor in fire insurance, risk. We have dealt
with this fact heretofore by a priori methods,
the present is an effort to deal with it a posteriori.
Years ago we pointed out that risk itself was ca-
pable of being divided into two elements: first,
the probabilities of fire; second, the probabilities
of suppression. The first embraces all features of
construction and arrangement, the second, the ad-
equacy and efficiency of extinguishing appliances.
We can never have sound underwriting until, in all
cases, the relative significance of these two factors
is carefully and accurately adjusted. Our Ameri-
can friends, whether consciously or unconsciously,
have based their whole system upon the recognition
of these truths; their 'standard building' is where
the probabilities of fire are least, while their
'standard city' is where the probabilities of sup-
pression are greatest. Magna est veritas. When
old Kepler had discovered his three immortal laws,
he expressed himself as willing to wait a century
for their recognition, since the maker of the uni-
verse 'had waited six thousand years for an ob-
server/ Our sphere is a very humble one, but
there is truth in matters small as well as in matters
great; laws in commerce as well as in science; nay,
commerce is science, if we but knew it. We have
had enough of rule of thumb in fire insurance, and
just now rule of thumb has brought us into a strait
place. Suppose we now try science. The efforts
of this American committee are deserving of every
encouragement, and if such a system as they sug-
gest could be perfected and adopted, its advan-



tages would be enormous. The least we can do
is to urge every fire manager to send to America
for a copy of this extremely able and suggestive

AT a meeting of the Board of Directors held
September n, 1902, Mr. Moore an-
nounced his intention to retire from the
presidency of the Company early in the following
year, feeling to quote from the minutes of that
meeting that a long period of rest was necessary
after his thirty-four years of service in the Com-
pany. Messrs. Orr, Low and Babcock expressed
the sentiments of the Board in urging the President
not to retire and sever his official connection with
the Company, but to take such time as he thought
necessary to restore him to a condition of perfect
health; and, on motion of Mr. Orr, seconded by
Mr. Babcock, the Executive and Salary Committees
were jointly made a Special Committee to confer
with the President and make such recommenda-
tions to the full Board as seemed best. To the
Board's great disappointment the Committee was
obliged to report its inability to induce Mr. Moore
to alter his resolution.

At the Directors' Meeting of January 15, 1903,
Mr. Moore having declined a re-election, in accord-
ance with his previously expressed determination,
Mr. Henry Evans, who had enjoyed a quarter of a
century of experience in fire underwriting under
Mr. Moore's wise guidance, and for more than half
that period had served as vice-president of the



OF NEW YORK, 1853 TO 1905

Company, was nominated and unanimously elected
to fill the vacancy thus created.

Mr. Moore's retirement was the occasion of deep
regret, not only to his Board of Directors, but as
the columns of the prominent insurance journals of
the country abundantly testify to all interested in
fire underwriting. On January 28, 1903, a compli-
mentary dinner was tendered him by the National
Board of Fire Underwriters at the Waldorf-As-
toria Hotel, which was said by the managers of
that world-renowned caravansary to have been the
most largely attended banquet ever given to a pri-
vate individual within its walls.

THE number of directors deemed adequate
by the promoters of our various banks,
insurance, and trust companies, differs
widely. A few of these directorates are limited
to seven members, while in others "the more the
merrier" appears to be the motto, and fifty are
not thought to be too many. The forty-six
directors with which the Continental began its
career were, however, found to be a superabund-
ance, for on November 14, 1895, the number was
reduced to twenty-one, by vote of the Board.
This action of the Directors was approved by
the stockholders, December 12, 1895, and that
number of gentlemen now constitutes the Board.
Few directors have ever resigned their offices,
but death has occasioned numerous vacancies in
their midst, and many are they who have come
and gone in the Company's council room during



the half century that has rolled away. Mr.
Aurelius B. Hull is now the sole survivor of the
incorporators of the Company.

The present Officers and Directors of the Com-
pany are the following:

OFFICERS: Henry Evans, President; Edward
Lanning and George E. Kline, Vice-Presidents;
Joseph E. Lopez and Edward L. Ballard, Secre-
taries; Charles R. Tuttle and James A. Swinner-
ton, Assistant Secretaries. Mr. R. J. Taylor is
the General Adjuster and has been with the Com-
pany for nearly forty years.


William L. Andrews, William G. Low,
George F. Baker, Richard A. McCurdy,

Clarence W. Bowen, William J. Matheson,
John Kerr Branch, Francis C. Moore,

Henry Evans, Charles A. Moore,

G. Trowbridge Hollister, Alexander E. Orr,
Aurelius B. Hull, Frederick P. Olcott,

George E. Kline, Cyrus Peck,

Hiram H. Lamport, William A. Read,
Edward Lanning, Daniel G. Reid,

John L. Riker.

The New York and Chicago offices of the Com-
pany have a clerical force of two hundred and
seventeen, and it has been the uniform practice of
the Company to promote from this trained body of
employees men to fill the higher and official posi-
tions. All of the present officers have been pro-
moted from the ranks.


OF NEW YORK, 1853 TO 1905

OVER thirty years of exemption from great
and destructive conflagrations had bred a
feeling of scepticism as to their possible
recurrence. The constantly increasing number
of buildings of reputed fireproof construction, and
the greater efficiency of the fire departments in
most of the principal cities of the country seemed
to warrant this conclusion, but on the yth of
February, 1904, there came a rude awakening from
this fond dream of security in the Baltimore fire,
which in forty-eight hours consumed about thirty-
five million dollars worth of property, and entailed
a loss upon the insurance companies of approx-
imately thirty millions. A noteworthy feature
of this conflagration was the full insurance carried
by the property owners, over eighty per cent, of
the loss being covered by insurance. Many of the
local companies were thrown into bankruptcy, but
fortunately for the insured only a few of the out-
side companies transacting business in Baltimore
were forced into liquidation. The Continental's
losses in this conflagration (1925,000), and the
ones that immediately followed it at Rochester,
New York, and Yazoo City, Mississippi, amounted
to over a million of dollars; nevertheless, in con-
sequence of its large and widely distributed busi-
ness, and the ample surplus accumulated through
conservative management in previous years, the
Company, on the ist of January, 1905, was able
to exhibit an increase in both its gross assets and
net surplus, as may be seen by the appended
comparative statements:

4 1



Cash on deposit and in office .... $808,503 . 53
Loans on Bond and Mortgage (on

real estate worth $66,000) . . 32,150.00

Stocks and Bonds 11,288,515.00

Real Estate 1,113,000.00

Premiums in course of collection . 864,577.86

Interest and Dividends (accrued). 83,744.57

Rents accrued 1,686.67

Total Assets $14,192,177.63


Reserve for Insurance in force. . . 5,646,414.36

Reserve for losses in process of ad-
justment 464,893 . 23

Reserve for commissions, taxes,

and all other claims 217,441 .51

Reserve for contingencies 300,000.00

Cash Capital i ,000,000 .00

Total Liabilities 7,628,749. 10

Net Surplus 6,563,428. 53



Cash on hand and in office $764,442 . 67

Loans on Bond and Mortgage (on

real estate worth $60,500) . . . 28,900.00

Stocks and Bonds 1 1,674,865 .00

Real Estate 1,1 13,000.00

Premiums in course of collection.. 866,740 . 13

Interest and Dividends (accrued) 94,495.65

Rents accrued 709.87

Total Assets $14,543,153.32


OF NEW YORK, 1853 TO 1905

Reserve for insurance in force. . . $5,903,813 .33

Reserve for losses in process of ad-
justment 410,545.05

Reserve for commission, taxes and

all other claims 172,133.41

Reserve for contingencies 300,000.00

Cash Capital 1,000,000.00

Total Liabilities 7,786,491 . 79

Net Surplus 6,756,661 . 53



Increase Gross Assets $350,975 .69

Increase Net Surplus 193,233.00

Increase Reserve for Insurance in

force 257,398.97

In this connection the following table of great
fires in the United States is of interest. It shows
the location, date and estimated magnitude of the
conflagrations causing losses of five millions of dol-
lars and over that have occurred since 1835:
New York City.. Dec. 16, 1835, 530 buildings . ...$15,000,000
Charleston, S. C . Apr. 27, 1 838, 1,158 buildings .... 5,000,000

New York City. June 20, 1845, 300 buildings 6,000,000

Pittsburgh, Pa. .Apr. 10, 1845, 1,100 buildings. .. 10,000,000

San Francisco. . .May 3, 1851, 2,500 buildings 5,000,000

Sacramento,Cal.Nov. 12, 1852, general 10,000,000

Charleston, S.C.Dec. 11,1861, general 7,000,000

Portland, Me.. . .July 4, 1866, 1,743 buildings . ..10,000,000

Chicago, Ills Oct. 8, 1871, 2,124 acres 168,000,000

Boston, Mass . . .Nov. 9, 1872, 65 acres 75,000,000

Seattle, Wash . ..June 6, 1889, general 6,600,000

Spokane, Wash. .June 6, 1889, general 5,000,000



Lynn, Mass . . .Nov. 26, 1889, factories, &c $5,000,000

Milwaukee, Wis. Oct. 28, 1892, 230 buildings 5,000,000

Hoboken, N. J.June 30, 1900, vessels and docks. . 5,000,000

Jacksonville, Fla. May 3, 1901, 130 blocks 10,000,000

Paterson, N. J . ..Feb. 9, 1902, 400 buildings. . . . 10,000,000
Baltimore, Md. ..Feb. 7, 1904, 140 acres 35,000,000

This table brings into prominence the fact that
of all the cities of the United States, Chicago holds
the unenviable pre-eminence of having sustained
a loss by fire of nearly one hundred million dollars
in excess of that resulting from any other single
conflagration. Boston follows next, then Balti-
more, and, lastly, New York.

Our neighbors of Canada have had their full
share of disastrous fires during the past twenty-
five years. The great fires in Montreal, Quebec,
Ottawa, Hull, and St. Johns, Newfoundland,
alone consumed property valued at forty-five
millions of dollars. This insurance loss fell
mostly upon foreign companies, for relatively few
companies in the United States venture across
the border with their insurance policies.

THE Continental Fire Insurance Company
began the transaction of the business for
which it was created in the basement of
6 Wall Street, but shortly migrated to 14, and
in 1856 to 1 8 Wall Street. In 1860 it ac-
quired the property at 102 Broadway and i Pine
Street. Number 100 Broadway was purchased in
1871, and in 1892, Number 104 was added to the





OF NEW YORK, 1853 TO 1905

Company's holdings, which gave it a frontage of
sixty-two feet on that unique block in lower
Broadway which faces the open ground of Trin-
ity Church-yard, and enjoys a perpetual ease-
ment of its light and air. This entire property
cost the Company about $450,000, and was sold
November, 1892, to the American Surety Co. for
$1,050,000, a record price up to that time for
Broadway property.

In April, 1894, the Continental removed to the
commodious offices it now occupies in the fine
thirteen-story building erected under the careful
supervision of the then Vice-President, Mr. Henry
Evans, at Nos. 44-46-48 Cedar Street; a section of
the city in which the old-time three and four-
story brick warehouses were then just beginning
to disappear before the towering office buildings
of modern construction, where now the fire insur-
ance companies, both foreign and domestic, most
do congregate. The Continental also owns the
building occupied in part by its Brooklyn offices
at the corner of Court and Montague Streets,
one of the most prominent business locations in the
City of Churches; and it has recently purchased a
lot, 25 x 100 feet in dimensions, at No. 158 Monta-
gue Street. It proposes to improve this property
by the erection of a four-story office building, to
which its Brooklyn branch offices will be removed.
This change is contemplated for the same consid-
erations that influenced the Company's removal
in New York from Broadway to Cedar Street, to
wit, the shifting of the center of the insurance



business, and the increased value for other pur-
poses of the property vacated.

THE steady financial growth of the Company
during the first half century of its existence
is exhibited in detail in the Fifty-year table
which will be found in the Appendix. The An-
nual Statement for January i, 1906, (the fifty-
third issued by the Company) shows an additional
gain in net surplus of over two and a half millions
of dollars, and in net assets of over three millions.

In the valuation of its real estate, stocks and
bonds, the management of the Continental has
shown unusual conservatism. For example, in its
statement of January i, 1906, the actual "market
value" of its securities alone was over one and
one-half million dollars in excess of the figures at
which they had been inventoried in making up the
total assets of the Company.

The real estate could undoubtedly be sold for
several hundred thousand dollars more than the
stereotyped valuation at which, for years past, it
has been carried on the books of the Company, and
as a cap-sheaf, the sum of $300,000, set aside and
called "reserve for contingencies," constitutes an-
other bulwark against losses by fire, and is an
extraordinary precaution, which is taken by few
other fire insurance companies and is not required
by law.

It must not be overlooked in this resume that an
important part of this very favorable result is due
to the care and management of the Company's in-

OF NEW YORK, 1853 TO 1905

vestments by the Finance Committee of the Board,
which has always included men of prominence in


Online LibraryWilliam Loring AndrewsThe Continental Insurance Company of New York, 1853-1905, a historical sketch → online text (page 2 of 3)