USA > Connecticut > Hartford County > The memorial history of Hartford County, Connecticut, 1633-1884, Vol. I > Part 62
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It is said that this, which is now the largest company in the country, owed its origin to the following curious circumstance : The secretary of the Hartford Fire Insurance Company had friends in Wethersfield with whom he regularly spent Sunday, leaving his office from Saturday noon to Monday noon. Annoyed at finding the office closed, some persons determined to have a company whose office would be open at all busi- ness hours, and so a meeting was held at Joseph Morgan's Inn, where the Ætna was practically organized. The capital was $150,000, with ten per cent cash ; the rest in notes. Its assets now exceed $9,000,000.
The business had its ups and downs, and for some time there was only slow progress. Stockholders were much discouraged, and the notes, which they had expected to cancel by profits, began to look like liabilities. People talked of the danger of assessment, and Ætna stock not only ceased to have any market value, but was hard to give away. There are plenty of instances to be cited where stockholders boasted of having found some one who would take their shares off their hands, liabilities and all. What fortunes were made by those who had the courage to take the stock may be judged by the fact that, when in 1866 the Ætna's cash capital had become $3,000,000, only $196,000 of that sum had been paid in by the shareholders; the rest was capitalized profit, independent of the dividends that meanwhile had been paid.
The year 1871, however, changed this record very materially. By the Chicago fire the ÆEtna lost over $3,750,000. This swept away the vast surplus, and so impaired the capital that it was reduced from $3,000,000 to $1,500,000. It was immediately raised again to the former figure by the paying in of $1,500,000 more of cash. The stock fell after the fire from $240 to $105 per share, but the rights to sub- scribe for new stock sold at a high price. In the next year the Boston fire took over $1,600,000 more, and the capital was reduced $1,000,000, and new money to that extent was paid in. Thus, in a year the stock- holders paid in $2,500,000 to make good what had disappeared. In 1881 the capital was raised from $3,000,000 to $4,000,000, by issuing $1,000,000 of new stock at par to shareholders. This made the Ætna the largest company in the United States. Since it was established it
LETNA NATIONAL BANK
ÆTNA LIFE INS COMPANY
THE ÆTNA INSURANCE COMPANY'S BUILDING, ON MAIN STREET.
505
INSURANCE.
has paid in losses the immense sum of $58,750,000. The first president of the ÆEtna was Thomas K. Brace, who served from 1819 to 1857. Mr. Brace was born in Hartford in 1779, and died June 14, 1860. He was graduated at Yale College in 1801. In 1831 and 1832 he repre- sented Hartford in the legislature, as his father had done in 1798. He was elected mayor of Hartford three successive years, beginning with 1840, and was a candidate for Congress in 1843 and 1845. He was identified with the Ætna Insurance Company from its organization, and its great prosperity has been attributed in no small degree to his wise management. After him came Edwin G. Ripley, from 1857 to 1862; Thomas A. Alexander, 1862 to 1866; and Lucius J. Hendee, who was elected in 1866, and is still in office.
The third company was the Protection. It started in 1825, absorb- ing a charter which had been granted to a marine company in 1803, and used from 1805. Its first president was Governor W. W. Ells- worth. Thomas C. Perkins was its secretary. The subsequent presi- dents were D. F. Robinson, 1837-1840; Hezekiah King, 1840-1841 ; Eliphalet Averill, 1841-1842 ; and Daniel W. Clark, 1842-1854.
Like its predecessors, the Protection was established with a nominal capital of $150,000, of which ten per cent was cash. It had the same opportunity as the other companies, and it exercised an important in- fluence on the insurance business ; but after occupying for some time a commanding position, it closed in disastrous failure in 1854. In this case the liability of stockholders on their notes became a painful reality. At the time of the failure the notes were for fifty per cent of the capi- tal. The company had raised funds by pledging these notes of stockholders to money-lenders as security for loans; and when its career terminated, they lost their investment and paid their notes besides, making a loss of two hundred per cent. The Protection Com- pany, having made use of a marine insurance charter, took marine risks, and these proved the real source of its weakness and failure. It insured many whaling vessels, and was very slow to drop a line of busi- ness that was all the time a cause of loss and steady drain upon its re- sources. Its collapse has been ascribed to accident rather than necessity. It was not doing well, and a heavy loss struck panic to the management and led to the determination to give up the struggle. Experienced un- derwriters have maintained that the failure was unnecessary, and that with an earlier abandonment of the marine underwriting it would have been saved by its splendid fire business, and would have ranked with the other great Hartford companies. It was the first of all of them to establish a general agency at the West, and at one time and another many of the leading men of the city were interested in it.1 For a series of years the Ætna, Hartford, and Protection had almost all of the fire insurance business of the United States outside of the great cities, and the Protection was especially active at the West, where it was the lead- ing company. Its fire business was excellently organized, largely by the Hon. Mark Howard, one of the oldest underwriters of the country, who
1 In 1837, at the time Mr. Robinson became president, the directors were, D. F. Robinson, W. W. Ellsworth, Nathan Morgan, Henry Hudson, Thomas C. Perkins, Charles H. Northam Ebenezer Flower, A. H. Pomeroy, Philip Ripley, William Kellogg, James M. Bunce, E. G. Howe, Thomas Belknap, Haynes Lord, Hezekiah King, Austin Dunham, and Julius Catlin.
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MEMORIAL HISTORY OF HARTFORD COUNTY.
was for years connected with the Protection, and who has probably done more than any other individual toward placing the business of fire in- surance upon a systematic and scientific basis. Mr. Howard, in May, 1849, at the time of the great fire in St. Louis, was able to do a most important work for Hartford insurance. The loss of the Protection Company there exceeded $130,000. The cholera was raging fearfully ; business was prostrated, and it was all one's life was worth to go to the city. He went, however, representing that company, which was largely interested, and also the Ætna, which had a great deal at risk there, and he settled and paid the losses at a time when the business was full of discouragements, and the talk of abandoning it was fre- quently heard. This action brought a great return of confidence, and although at the time it was considered bold, its results proved its pru- dence and gave a fresh impulse to Hartford insurance.
The Phoenix Insurance Company was chartered in May, 1854. Chester Adams, Erastus Smith, John A. Butler, N. M. Waterman, N. H. Morgan, S. B. Beresford, Ralph Cheney, E. T. Pease, Elisha T. Smith, William Faxon, James C. Walkley, and Lyman Stockbridge were the corporators, and they, with Joseph Merriman and Charles G. Geer, were the first board of directors. The capital was $200,000, on the usual terms of ten per cent cash and ninety per cent in notes. In 1855 a dividend of ten per cent was paid and indorsed on the notes, which was equivalent to one hundred per cent of the actual capital. The next year ten per cent more was paid, and then the remaining seventy per cent was called in, in cash. In 1859 the capital became $400,000; in 1864, $600,000. At the time of the Chicago fire the company lost over $987,000, - more than one and one half times its capital, - but the stockholders paid in a new $300,000, and went on as before. In 1876 the capital was made $1,000,000, and in 1881, $2,000,000, putting it in point of capital next after the Ætna in Hartford, and fourth in the country. The Phoenix had the honor of paying the first Chicago loss. The Hon. Marshall Jewell, who was an influential director, largely interested in the company from 1855 until his death, was at the West when the fire occurred. He went at once to Chicago, and among the mourners in the burnt district, who believed all the fire companies were ruined, he mounted a dry-goods box and announced that the Phoenix was going to pay all losses. To prove it, he offered to pay any that the resident agent would pass as an indisputable claim. One for $10,000 was pro- duced, verified by the agent, and paid on the spot, Oct. 13, 1871, by Mr. Jewell, with a draft which was honored at once. The presidents of the Phoenix Insurance Company have been : N. H. Morgan, until 1855; Simeon L. Loomis, 1855 to 1863; and Henry Kellogg, who has served since 1863.
The Connecticut Fire Insurance Company was organized in 1850 and re-organized in 1872. Its first board of directors consisted of Jo- seph Trumbull, E. D. Morgan, Julius Catlin, T. M. Allyn, James Dixon, D. F. Robinson, B. W. Greene, Harvey Seymour, John L. Bunce, Edson Fessenden, E. G. Howe, Tertius Wadsworth, and James B. Hosmer, of whom but two are living in 1885, Messrs. Catlin and Fessenden. The capital was fixed at $200,000, and remained at that figure until 1871. The company re-organized after the Chicago fire upon a capital of $500,000, which in 1876 was raised to $1,000,000. The presidents have
PHOENIX
PHOENIX
PHOENIX
DE
THE PHOENIX INSURANCE COMPANY'S BUILDING, ON PEARL STREET.
509
INSURANCE.
been, B. W. Greene, who held the office until 1865; John B. Eldredge, 1865 to 1872; M. Bennett, Jr., 1872 to 1880 ; and J. D. Browne, who has been in the position since that date. The Connecticut has erected on the corner of Prospect and Grove streets one of the most noticeable buildings in the city.
The National Fire Insurance Company, which was organized imme- diately after the Chicago fire, by the Hon. Mark Howard and others, who had been in the old Merchants' Company, began with $500,000 capital, and has since raised the sum to $1,000,000. Mr. Howard has been its president from the start. The Merchants' Company, of which he was president for over fourteen years, through its whole existence, was the first organized in Hartford with a full-paid cash capital ($200,000), that being the condition of his acceptance of its management. It was very successful until its light was extinguished by the Chicago fire, as also was that of the City, organized 1847. capital $250,000; Charter Oak, organized 1856, capital $150,000; North American, organized 1857, capital $300,000 ; and Putnam, organized 1865, capital $500,000.
The Orient Fire Insurance Company was organized in 1872, with $500,000 paid-up capital, which in 1881 was increased to $1,000,000. The charter was taken by persons who had been interested in the City Fire Insurance Company, and this was in a sense the successor of that. The first president of the Orient was Charles T. Webster. He was succeeded by S. C. Preston, and he by John W. Brooks, who took the office, at the expiration of his term, as insurance commissioner.
The Hartford County Mutual Fire Insurance Company has been in successful operation since 1833, and the State Mutual since 1867.
The Hartford Steam Boiler Inspection and Insurance Company, whose corporate name fully explains its business, was the first of its kind in the country. It was organized in 1866 and has had a most suc- cessful career. By its intelligent system of inspection it has had a very large influence in reducing accidents from boiler explosions, and so in saving life and property. Its office is in the building of the Charter Oak Life Insurance Company. Mr. J. M. Allen, has been its president for about twenty years.
The present condition of the companies of Hartford is indicated by the following figures : -
Capital.
Gross Assets.
Surplus, including Capital.
Amount Insured.
Ætna .
$4,000,000
$9,214,000
$7,202,000
$288,606,000
Hartford
1,250,000
4,746,000
2,694,000
278,036,000
Phoenix
2,000,000
4,488,000
2,922,000
216,963,000
Connecticut
1,000,000
1,975,000
1,304,000
92,458,000
National .
1,000,000
1,854,000
1,474,000
50,875,000
Orient .
1,000,000
1,552,000
1,131,000
54,349,000
10,250,000
23,829,000
16,727,000
981,287,000
Steam Boiler Insurance Company
250,000
584,000
362,000
33,415,000
$10,500,000
$24,413,000 $17,089,000 $1,014,702,000
The Chicago fire, besides taking all there was of six companies, took over $6,250,000 from those which remained solvent, and caused suffering in Hartford second only to that in Chicago itself. At the close of that year (1871) the Hartford companies reported only
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MEMORIAL HISTORY OF HARTFORD COUNTY.
$5,100,000 of capital, while now they have more than double that amount. A peculiar incident of the calamity was, that if it had occurred nine days earlier the stockholders would have suffered some- what less. The Connecticut law taxes citizens upon the property which they own on the 1st of each October. The fire insurance stocks were listed as usual, Oct. 1, 1871, and on the 9th of the month they had either entirely disappeared or undergone fearful depreciation. Never- theless, under the law, the stockholders, when the next July came around, had to pay their taxes upon the property which had ceased to exist.
The insurance department of Connecticut was nominally established in 1865, with Benjamin Noyes, of New Haven, as commissioner. He held office until 1871, when it was reorganized and Dr. George S. Miller, of Enfield, was made commissioner. Subsequent commissioners have been : John W. Stedman, 1874 to 1880; John W. Brooks, of Torring- ton, 1880 to 1883; Ephraim Williams, of Stonington, 1883 to 1886. The first general law of the State applying to insurance companies was passed in 1833, requiring the secretary of every insurance and turnpike company to report to the comptroller the amount of capital stock owned by residents and non-residents. In 1854 an annual tax of two per cent was laid upon the receipts of all foreign insurance companies doing business in the State. In 1865 this law was amended by creating the office of commissioner to supervise the foreign (extra-Connecticut) companies. In 1871 the authority of the commissioner was extended to Connecticut companies also, and regulations establishing standards of solvency were adopted.
Chattonkins black
NOTE. - The writer is indebted for much valuable information as to early fire insurance to the pamphlet of Mr. C. B. Whiting, formerly secretary of the Hartford Fire Insurance Company, who now (May, 1886), while this work is on the press, has been elected president of the Orient Insurance Company.
-ATYHT
Respectfully Meny Gomy R. Philps
511
INSURANCE.
LIFE AND ACCIDENT INSURANCE.
BY FORREST MORGAN.
I. - LIFE.
THE development in the United States of this great business, of which Hartford has long ranked among the foremost centres, and by which it is perhaps better known outside than by any other branch of its activities, may be said to belong in the main to about the middle of this century. Of course some straggling exponents of it considerably antedate that period, - a microscopic one in Philadelphia, for Presby- terian ministers only, dates back to 1759, - and some very powerful companies were formed subsequent even to 1860; but no less than thir- teen companies still in vigorous life were organized between 1843 and 1853, and that is on the whole its chief period of sound and permanent establishment. Hartford was the earliest place, except the three great cities of New York, Philadelphia, and Boston, to give this system a firm foothold, and perhaps the very first to do a widespread and lucrative business in it ; and five of the nine companies organized here are still in active and growing existence, -four of them ranking among the leading institutions of the kind in the country. Their combined assets amount to over one hundred million dollars, invested with great care and solidity ; and they have returned to their policy-holders since or- ganization more than two hundred millions of dollars.
The credit of establishing the life insurance business in Hartford belongs to a group of men who would hardly have been selected as the probable founders of a vast financial system, -a lawyer in delicate health, a carriage manufacturer, and an apothecary ; to wit, E. O. Goodwin, Elisha B. Pratt, and Guy R. Phelps. But they were all men of superior capacity, energy, and integrity, who needed only some such field for their talents. The memory of Mr. Goodwin's fine abilities and lofty character is still cherished with pride by his descendants ; he would have gained distinction at the bar had his strength sufficed. Dr. Phelps was the most prominent figure in their company after it started, and for many years one of the leading representatives of the life insurance interest in the country, and deserves a brief biography. A na- tive of Simsbury, in this county, and a graduate of Yale Medical College in 1825, he practised successively in New York City, Simsbury, and Hart- ford. Later, he established a drug-store in Hartford, and did a fair business for a long period, especially winning fame and profit as the inventor of " Phelps's Tomato Pills," which were a favorite panacea in all well-regulated Hartford County homes for many years. In 1846, his attention having been drawn to the new system of life insurance, he grew enthusiastic in its favor and took out a policy on his own life ; and when Mr. Goodwin, casting about for some employment less
512
MEMORIAL HISTORY OF HARTFORD COUNTY.
confining than a lawyer's desk, conceived the idea of organizing a life company and inoculated Mr. Pratt with it, Dr. Phelps willingly agreed to abandon the drug business and cast in his lot with them. After much hard work they persuaded several gentlemen of means to pledge themselves for $50,000 as a guaranty fund to secure public confidence. These foster-fathers of the system, whose willingness to hazard part of their fortunes enabled the new company to do business, were : Thomas K. Brace, president of the Ætna Fire Insurance Company of Hartford ; Eliphalet A. Bulkeley, vice-president of the same, lawyer, judge of the Middlesex County Court, afterward judge of the Hartford City Court, Mayor of the City, State Senator, and Speaker of the House of Representatives ; Edson Fessenden, proprietor of the Eagle Tavern, on the site of the present United States Hotel ; Richard M. Brown, tavern-keeper; David S. Dodge, physician ; Thompson J. Work, grocer ; L. B. Goodman and Hoyt Freeman, shoe merchants ; James A. Ayrault, leather merchant. (Messrs. Goodman and Fessenden are the only ones living in 1886 of the entire group.) They, with Goodwin, Phelps, and Pratt, obtained in 1846 a charter for the Connecticut Mutual Life In- surance Company. The plan was purely " mutual," the policy-holders electing the officers and nominally controlling the company. It is the only one of the kind in Hartford.
The company organized with Mr. Bulkeley as president, Dr. Phelps as secretary, and Mr. Ayrault as actuary. The Connecticut Mutual wrote 205 policies during the first year, of only a few weeks, nearly 3,400 in the next two years, 4,243 in 1849, and 5,589 in 1850; its assets increasing meanwhile from nothing to $918,406.73. Its finan- cial standing was much solidified by the severe economy in which Dr. Phelps had been trained, and which was part of his nature.
After 1850 the company began to decline in new business, until it reached its lowest point in writing only 587 policies for 1856; then fortune changed. Gaining regularly, it wrote 1,544 policies in 1860, and 14,161 in 1867. But through all times alike its financial position steadily improved. Its assets, which had been only $3,760,748 in 1861, rose to $7,225,040 in 1865, 827,566,479 in 1870, and $40,371,939 in 1875. In 1848 Mr. Bulkeley retired from the company, and was suc- ceeded by Major James Goodwin. This able business man retained the position until 1865, when he gave up the presidency (though remaining a director and financial adviser), and Dr. Phelps assumed the headship. In 1869 the latter died, and Major Goodwin was again called to the presidency, which he retained until his death in 1878. His name is intimately connected with the great growth and prosperity of the com- pany. He was succeeded by Colonel Jacob L. Greene, then the secre- tary of the company, and previously an executive officer of the Berkshire Life, of Pittsfield, Mass. John M. Taylor, previously a lawyer, also from Pittsfield, is vice-president, and William G. Abbot secretary. The com- pany still remains the largest in the city, and is the fourth in size in the United States; its statement of Jan. 1, 1886, showing gross assets of $54,383,650, and surplus to policy-holders of $4,680,143. Its total payments to policy-holders since its organization have been $118,077,835. Its beautiful building on the corner of Main and Pearl Streets, erected in 1870, is one of the ornaments of the city, and contains also the offices of the Phoenix Mutual and the Connecticut General.
513
INSURANCE.
The immediate and brilliant success of the Connecticut Mutual brought a swarm of rivals into the field, and within five years four strong competitors were established in the city. The first was the Hartford Life and Health Insurance Company, organized in Sep- tember, 1849, with a capital of $100,000. Its executive force was strong : James Dixon, long prominent in Connecticut politics, Repre- sentative to Congress from 1845 to 1849, United States Senator from 1857 to 1869, was its president, and attended to his business ; William T. Hooker, cashier of the Farmers' and Mechanics' Bank (afterward cor- porator and president of the Guardian Mutual Life Insurance Company of New York ), vice-president ; Henry L. Miller, previously a dry-goods merchant, - a capable man, of determined character, -secretary. Its specialty was to be the granting of weekly indemnity for sickness, and it need hardly be said that this portion of its business was an unquali- fied failure. In 1852 the " health" feature was abandoned, and the name of the company changed to the Hartford Life Insurance Com- pany. For some years from its organization it did a good and increas- ing life business ; accumulated several hundred thousands of dollars of assets, and in 1853 advertised $300,000 surplus; and was considered one of the strongest in the city, and one of the most promising for future growth. But its disastrous health business, and a very singular and illegitimate speculation which was really property insurance, and utterly foreign to the truc object of life insurance, - the insuring of negro slaves for their masters, and of shiploads of coolies in transit to South America, Cuba, etc., - fatally weakened it, and a fierce quarrel among the directorate helped to discredit it outside. Its days being evidently numbered, the president and secretary and Chester Adams (director and sheriff) bought out the other stockholders and wound up the company, finishing in 1859. This company built and had its office in the block on Pearl Street now occupied by the State Savings Bank.
This business of slave and coolie insurance is curious enough to warrant a paragraph by itself. So utterly vanished are the systems that demanded the one and the state of public feeling that allowed the other, that it seems incredible that it was transacted as late as thirty years ago : yet such is the fact. This was not the only company in the city that transacted such business, but it had the least excuse, as it was not drawn in by Southern agencies and connections. The amounts writ- ten on slaves were rarely above $1,000, and often much less, and the premiums were extremely high, sometimes rising to ten per cent of the principal a year ; but the business was disastrous from the start, and was abandoned about 1855. One reason was that planters commonly insured only the slaves engaged in very hazardous occupations, as load- ing cotton on steamers, etc. ; and the deaths from being knocked over- board and drowned, crushed by falling bales, etc., were frightfully numerous. The policies were not for life, but for very short terms, from a year down to a few weeks, usually to cover some special temporary risk. Probably as potent a cause of loss was the impossibility of identifica- tion. Whenever a slave died on a plantation, by a remarkable set of coincidences it was pretty sure to be one of the insured ones, and one of the highly insured ones. They were insured as "Tom," "Joe,"
VOL. I. - 33.
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MEMORIAL HISTORY OF HARTFORD COUNTY.
" Cæsar," etc. ; and whichever died, " Tom " had to be paid for. Add to this that it was no uncommon thing for a brutal owner to beat a negro to death out of sheer cruelty or drunken whim, even at the loss of a valuable piece of property, and that an insurance on the slave's life did not tend to make the owner any more careful of his welfare, and it will be easily understood why the business did not pay. The coolies were of course insured in the lump as a cargo, the company paying for the number who died ; but this was as little profitable as the other.
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