Sunday, July 10, 2011

$2,000,000 Loss Within Building,

January 10, 1912, New York Times, "$2,000,000 Loss Within Building,"

Half of This Involved in Destruction of Lawyers' Club and the Law Library. Building Not An Asset

Traditionally Fireproof and Was Not Insured---Neither Were Tenants, Who Lose About $400,000.

In spite of earlier rumors of a $12,000,000 or $15,000,000 property loss, conservative estimates last night placed the Equitable fire loss at not more than $2,000,000, if indeed it amounts to so much.

The Equitable Company itself issued a statement late yesterday afternoon that the building itself, although twenty-five years ago one of the show buildings of the city, had become so antiquated that the rents from it didn't yield enough to pay interest on the amount of capital tied up in the land on which it stood.

The Lawyers' Club and Law Library, containing 22,000 volumes, were completely destroyed by the fire, and the loss of these may reach $1,000,000. The Equitable Company places the loss in furniture and fixtures at $300,000. Various fire insurance companies estimated the losses of the 325 tenants of the building in furniture and fixtures at about $400,000. Few of the tenants, according to Frank B. Jordan, who placed most of the fire insurance in the building, are insured.

Here is the statement issued by the Equitable late yesterday afternoon as to its losses:

Judge William A. Day. President of the Equitable Life Assurance Society, has asked that the exaggerated reports of the Society's loss by the destruction of the building itself will make no reduction in the Society's assets, as on account of its smallness, its age and the very high value of the land on which it rests, the building has not been carried as an asset, and the Insurance Department of New York has not allowed it as an asset for several years in checking up the resources of the Society.

The land is worth more with the building off, because of the cost of tearing it down; therefore, the total loss should be well within $300,000, which will be largely offset by the Society's Insurance Fund.

Supt. of Insurance Hotchkiss, who reached here last evening from Albany, made the following statement after receiving reports on the Equitable Building fire:

"I am glad to say that reports received from members of the department indicate that the financial loss of the Equitable has been much exaggerated. the home office building was carried both by the company and the department at zero. Only the land value, appraised at about $13,500,000, was considered in putting up the financial statement on the last and the pending examination, while the building and its contents were uninsured.

"The actual loss, therefore, is not a real loss. The company's generous surplus stands tonight substantially where it stood yesterday. Likewise as to the records, those of vital moment to policyholders---that is, the policy records---were in the company's annex, the Hazen Building, in Albany Street. The records in the main building, while important, can probably be largely replaced.

"Though the department data on the examination begun last June were also lost, our examiners' report was already partially drawn, and their check shows that the assets claimed by the company were intact and of the value asserted for them. From the best information obtainable, the vaults in which were kept the securities and the policies deposited for loans are in good condition and their contents practically undamaged. Policy holders should be patient, and for the time not ask too much of a management that seems to be meeting a difficult situation with care and skill."

"The loss to the Equitable policy holders through the fire is practically zero," E.E. Rittenhouse, Conservation Commissioner of the company, told a TIMES reporter yesterday afternoon. "The company hasn't carried the building on its books as an asset for 10 years. The fire has not reduced the companies assets. On the contray, it saves some of the cost of tearing down the building to rebuild a more modern structure which would earn an adequate interest on the capital invested, as the burned building has not done for several years.

"The burned building for years has not been able to earn the interest on the value of the land on which it was built. The cost of tearing down the building, even would have been more than the building was worth. I cannot tell what the building was worth. The land it occupied which has been freed for th possibilities of a new and more modern structure by the fire, is worth from $12,000,000 to $15,000,000."

Mr. Rittenhouse said the only insurance on the building and the fixtures in it was a fund which the company itself had set aside every year on its books. He was the only officer empowered to do any talking yesterday. He said he did not know how long the Equitable had been thus insuring itself and how big the fire insurance fund had now grown to be.

According to officials connected with the State Fire Commissioner's office at 165 Broadway and officers of various fire insurance companies, the Equitable has been setting aside a fund of about $1,500 a month out of its surplus for fire insurance purposes for the last fifteen years at least. Before that time it is said to have carried a fire insurance policy with the Westchestewr Fire Insurance Company of $100,000. The company was said yesterday to have once carried policies comparatively small in comparison with the original cost of the building---about $18,000,000---for $100,000 or so in other companies. The present amount of the fund which the Equitable has been setting aside from its surplus was yesterday said to amount to only $200,000.

Mr. Rittenhouse was asked to confirm these statements of fire insurance companies yesterday, but admitted that he could not do so since they applied to conditions of more than fifteen years ago.

"Is it true that the Equitable gave up insuring in fire companies because its Directors didn't wish to conform to the 80 percent co-insurance clause?" Mr. Rittenhouse was asked.

Mr. Rittenhouse said he didn't know anything about that.

Estimates of the loss were complicated yesterday by various estimates which were given of the value of the burned building. The building, excluding the land, was appraised by the city tax department last year at $2,600,000.

To the Armstrong Committee, in 1905, on the other hand, the Equitable Life officers submitted an elaborate
exhibit concerning the value, income, and cost of the headquarters building at 120 Braodway. The items were as follows:


Stock value..........................$15,000,000
Actual cost...........................$18,781,640
Gross income, 1904.......................$806,791
Including Society's occupancy............$385,031
Net income...............................$415,692
Percentage of book value.....................2.68

It was charged years ago when the old edifice was built that there were commissions paid to favored persons which made the total cost to the society run up to excessive figures. Gerald R. Brown, head of the bond and mortgage department of the society, in answer to questions put to him by Mr. Hughes, testified as follows before the Armstrong Committee:

Q.--You say the book value (of the building, 120 Broadway) is $15,510,000, the actual cost is
$18,781,640, When was the $3,260,000 difference between the book value and the actual cost written off?
A.--I think it was written off at different periods between 1887 and 1904.
Q.--The gross income in 1904 is given at $806,794. Is that inclusive of the amount allowed for space occupied by the Society?
Q.--Does that include rental from the Merchantile Trust Company?
Q.--There is charged to the Society $335,031 for the space it occupies; does that include the Cafe Savarin?
Q.--Or the Lawyers' Club?

Supt. F.J.T. Stewart of the New York Board of Fire Underwriters refused to make any estimate of the loss.

"The main floor of the original building was almost completely destroyed by fire, and about 25 percent of the floors have collapsed. The damage of the Nassau Street end of the building is not so great," Supt. Steward said.

"Do you think the entire damage to the building and furniture of the company and the furniture of the tenants also will reach $12,000,000 as reported?" Mr. Steward was asked.

"I think $12,000,000 is much too high a figure," he said.

Henry L. Rosenfeld, an agent of the Equitable, when seen in the street near the burning building, said he believed that the entire loss through the fire would reach $15,000,000.

At the house of August Belmont, it was said last night, that the losses of his banking company, which occupied offices one flight up in the Nassau Street side of the building, were confined to furniture and that this furniture had been fully insured, the exact amount of the insurance not being stated.

Alvin W. Krech, President of the Equitable Trust Co., made this statement last night:

Beyond the flooding of its premises and damage to fixtures, the Equitable Trust Company of New York suffered no loss of records or property. The books of record and all necessary documents were rescued from the building and housed with the Hanover National Bank and the National City Bank, which latter institutiion extended itd facilities for the clearance of cash items during the day. Before the day closed quarters were engaged at 115 Broadway in the North Trinity Building. The company's vaults sustained no damage whatever and the contents will be removed to its new location forthwith.

Probably the loss most difficult to replace is the Lawyer's Club, with its elaborate collections of portraits and tapestries, and the Law Library, with its 22,000 volumes. President William Allen Butler of the Lawyers' Club said last night that it was impossible to estimate these losses in terms of money.

Mr. Butler said that the 22,000-volume Law Library, which is a complete loss, was one of the five largest law libraries of the city. Mr. Butler said he did not know whether it was insured. Mr. Wilson sent out word that he was too worn out with the day's anxieties to discuss the details of the property loss.

Visits to the largest fire insurance companies of the city revealed the fact yesterday that few of the tenants of the Equitable carried insurance. There has always been a strong tradition, according to fire insurance men yesterday, that the building, although it was far from modern, was unusally fireproof. Fire insurance men went so far as to open their books and show a TIMES reporter that, although the Equitable has for years refused to take out fire insurance, the building is down in the fire companies' books as an excellent risk, requiring a premium of only 15 1/2 cents per $100. This fireproof tradition caused most of the tenants to neglect to take out insurance. Each of the city's dozen big fire insurance companies, in consequence, carried an average of only about two of the Equitable's 325 tenants among their policy holders. Ansorge & Co., brokers, for example, carried merely at $1,500 fire insurance policy on their records and furniture; the basement bootblack, V. A. Catoggio, carried a ploicy of $1,000 on his books and furniture. William P. Martin, a lawyer, had a $1,100 policy in the Westchester Fire Insurance Company. Peter Henderson, the seed man, had a lot of seeds stored in the basement vaults of the building and carried a policy for $3,000 on them in the Royal Insurance Company.

Most of the tenants carried no policies at all, however, according to Frank B. Jordan, the fire insurance agent for the building.

"The Cafe Savarin was a subsidiary of the Equitable Life," said Mr. Jordan last night. "The Equitable felt so safe that it didn't insure any of the fixtures of the restaurant, and these were a total loss."

The fire was said late yesterday afternoon to have caused a big boom in fire insurance, over $4,000,000 having been written, according to one conservative estimate.

One of the reasons why the 325 burned-out tenants were so hard to find yesterday was that most of them were busy finding new quarters. Among the firms finding new homes were Lawrence & Lawrence. They have found temporary offices at 115 Broadway.

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