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- The Spirit of 1906 - 4/6 -

The "'Dollar for Dollar" Resolution

It became my duty to inform the directors that a meeting of the representatives of all the fire insurance companies interested in the conflagration was called for an early date at Reed's Hall, Oakland, and that I understood the principal object of this meeting was to secure an expression of opinion as to the method to be adopted in settling San Francisco losses, whether seventy-five cents on the dollar should be paid or settlement on a 100 per cent basis be made, and I requested instructions. This was merely pro forma as the company had already announced its position publicly as being in favor and promising to pay cent for cent the full obligation of its contracts. The board gave me the instructions I had expected.

The meeting at Reed's Hall was a most memorable one. The late Geo. W. Spencer, at that time manager of the Aetna Insurance Company, presided, and to his fair and impartial rulings and usual courtesy and dignity of manner, is attributable the fact that there was not considerably more friction than developed. Even as it was, the discussions were acrid and verged at times close to personalities and the oratory, especially on the part of those who advocated the "six-bit" policy, was both perfervid and vociferous. However, the representatives of the companies that had made up their minds that their honor and contracts were worth dollar for dollar had little to say and were not influenced by the alleged arguments of the "six-bit-ers."

They felt that in the last analysis there was no logical, honest argument for the discounting of payments unless it were a case of absolute insolvency with individual companies. It was maintained by the opponents to the "six-bit" policy that the insuring public had paid for what it assumed to be valid contracts and was entitled to just indemnity and payment in full. Finally, the roll call came to ascertain the sense of the meeting - seventy-five cents or one dollar. The roll call was thrilling in the intensity of feeling it developed and in the position in which it revealed each company's standing, whether for an honorable fulfillment on the one hand or a dishonorable scaling of losses on the other. Alphabetically, the California Insurance Company came early in the list and I voted with those who felt their obligation to be one hundred cents on the dollar. The position which the California would take had been awaited with considerable interest. The public announcement that the company would pay dollar for dollar was still recent and this announcement had appealed to nearly every person at that gathering as a promise which the company was absolutely and physically unable to perform. The registering of the vote called forth quite a demonstration. Laughter, smiles and sarcasm predominated in the part of the hall where I was located. For a moment I was the center of attraction.

Despite the embarrassment and annoyance under which I labored, I felt that I was called upon to defend the good name of the company and, gaining recognition from the chairman, I said that the manner in which the "California" voted seemed to cause some of those present considerable amusement and that, individually, I didn't see anything in it that was funny; that it was more of a tragedy than a comedy, and that it was a solemn and serious matter for the company of which I was the representative to go on record for the second time, publicly, as pledging itself to pay so tremendous an amount of money out of the pockets of its stockholders; that I was present at the meeting to carry out the expressed instructions and wishes of these same stockholders and that they intended to be scrupulously careful in keeping their promises, backing their words with their deeds and dollars. This statement brought from the dollar-for-dollar companies a gratifying amount of applause and the "six-bit-ers" sank into silence.

As the days passed and the "tumult and shouting" died, it gave a certain amount of satisfaction to find that amongst the jeerers and sneerers at the memorable Reed's Hall meeting, those who had battled most vigorously for the horizontal cut of twenty-five cents were those who afterward developed into the worst welshers and shavers in the entire history of the loss settlements of the San Francisco or any other conflagration. The "sparkling" Rhine, the "still" Moselle, the far-famed "Dutchess," the German of Freeport, the Traders of Chicago, the Austrian Phoenix, the Calumet, the American of Boston and others soon after sought the seclusion which a receiver or cessation of business in California grants, and like the Arab, they folded their tents and silently stole away.

At the termination of the meeting, President Chase of the Hartford, President Damon of the Springfield, Chairman Spencer and several others, all leaders in dollar-for-dollar ranks, some of whom are alive and some of whom are gone, gathered around and congratulated the California upon its attitude. Individually, it gave me a feeling of pride and satisfaction to be the representative of a company which manfully stood up to the rack with the best traditions of American fire insurance. It may be well to recall to mind as a historical fact that it was at this meeting the term "dollar-for-dollar" companies was born.

Coming Back to San Francisco

Early in June we made arrangements to vacate our quarters in Oakland in the Blake and Moffitt Building, and on the 5th of that month the California was moved to an office in San Francisco. This was a temporary frame structure erected on identically the same site which the company had occupied prior to the fire, and where the magnificent new skyscraper known as the "Newhall" Building now stands. As things go now, it was not much of an office either as to style or appearance, but it was roomy, light, well ventilated and comfortable and in every respect preferable to the two crowded rooms that had so hospitably housed us in Oakland. The return to San Francisco heartened us. The daily trip from the city to Oakland and return had been a hardship, in addition to the time lost when every minute was too precious to be wasted. Less time was lost in crossing the bay than in getting to and from the Ferry. The street cars were not in operation and I was compelled daily to make the walk over the hills and through the ruins threading my way through the ashes and over brick piles a distance of quite two miles, from my home to the water front. This twice a day for six days a week, and often seven, was exhausting in the extreme, so the wear was not altogether mental. The thought was very often in my mind that I had about the most trying job of anyone in the business. Other managers seemed to me to be paying very little attention, if any, to the detail of settling claims and, of course, had nothing whatever to do with providing the sinews of war. They were fortunate in being able to pursue the even tenor of their way, their entire business and time being occupied with current routine, just as if nothing of an extraordinary nature had happened. This condition arose from the fact that the companies in the East hurried to San Francisco and Oakland all the adjusters, both near and alleged, that they could obtain from any portion of the United States and a few from abroad, in order that the losses might be promptly taken care of. The home offices saw to it that the funds were provided. The special agents and field men of these offices were not disturbed in their usual work and were rarely, if ever, made use of at headquarters to make adjustments. With the California it was quite different. Our entire field force was called in and promptly clothed with authority to adjust. This left our agency plant entirely unprotected as to cultivation. Financially, we were in such a crippled condition that we felt we could not afford the expense of employing independent adjusters. These were a luxury in any event and some of them, alas, would have been dear at any price. The thought often comes that perhaps this policy was poor economics. This was a golden opportunity for representatives of the "dollar-for-dollar" companies to secure valuable agents, as carrying capacity was in large demand to replace those companies that had either failed or made unsatisfactory loss settlements. That there was an abundance of the latter admits of no dispute. Possibly, we might not at that time have been able to secure many of these valuable connections, even if we had had the field force requisite for the required technical work, for the reason that doubts were still expressed as to our ability to fulfill our promises.

Duties of the Secretary

In the California Insurance Company office, the position of secretary was closely akin to that of the celebrated "Pooh-Bah." Attached to the office was the duty of collecting the assessments on the capital stock, adjuster in chief, the underwriting, a court of appeal on technical points in disputed settlements, a diplomatic agency and encouragement dispensatory with and for the stockholders. The latter item took considerable time. Singly and in groups they fired their questions: "How many assessments will there be?" "How much do you think the losses will total?" "How soon will you know the amount?" "When we do get out of this shall we be as big as any other fire company or bigger?" This was the daily grind. But since it was their money and they were laymen, their anxiety was as pardonable as their courage was commendable.

The president occupied an office on the other side of the hail, directly opposite mine. The one door was lettered "President" and the other "Secretary."

One of the stockholders cornered me and demanded a full and explicit statement of conditions. I gave him the facts and frankly confessed that the prospect was not alluring. He bade me goodbye with a long face and went directly across the hall into the office of the president. In a brief while, he returned, his face wreathed in smiles, and quietly said 'that the president's office was "Heaven" and my office was "Hell"; that I was a "gloomy Gus" anyway, but I couldn't help it and he pitied me, but as for the president, he was the right man in the right place, and he knew our exact position.' I did not make any reply. The optimism of the president was a very great asset and in those days optimism and hope were at a premium.

Turning of the Tide

Finally the tide turned. Several months had elapsed, however, before it became generally known and admitted and the insurance world had hammered into it the conviction that the California was truly "Californian." At this time our field men were again in the saddle and the agency of the California was not only readily accepted whenever offered, but eagerly pleaded for by connections which materially contributed to subsequent success.


There are millions of stories with regard to the adjustment and

The Spirit of 1906 - 4/6

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