Produced by David Schwan








Geo. W. Brooks, Secretary and Treasurer, Founder of the Company as
reorganized in the year 1905



The Spirit of 1906



By George W. Brooks

Founder of the California Insurance Company (as reorganized in the year
1905) and who has continuously occupied the position of Secretary and
Managing Underwriter with the Corporation since that date.



Published by the California Insurance Company of San Francisco 1921



Copyright 1921
By Geo. W. Brooks



Dedicated to the Directors and Shareholders of the California Insurance
Company in 1906 who so nobly, at their own financial cost, did their
"Big Bit."



"On fame's eternall beadroll worthie to be fyled."--Spenser




Foreword


Whatever of effort has been given in the pleasant pastime of writing
these rambling and sketchy pages of reminiscences is dedicated to those
who in the hours of trial and tribulation felt with Sir Philip Sidney,
"Honor is the idol of man's mind" and determined to do that which honor
demanded knowing that if they lost their honor they lost their all.

Reading between these lines, it is hoped there will be found some
intimation, some outline, of the character of the men who composed the
directors and stockholders of the California Insurance Company, who
acted well their part, who fought the good fight and held the faith,
whose stern sense of duty and heroic courage led them to lay upon the
altar of their idealism the financial sacrifices which they made.

Theirs is the honor achieved. They neither faltered nor hesitated in
upholding and protecting their own individual good name, the fair name
of the Company nor the integrity of the financial institutions of
California, and they, like Bacon "May leave their name and memory to
man's charitable speeches, to the next age and foreign nations."




The Spirit of 1906


The California Insurance Company having played one of the leading parts
in the reconstruction of San Francisco following the disaster of 1906
and there being no record of its activities, I have, after insistent and
repeated requests from directors, stockholders and others, finally
yielded to their importunities to preserve for reference my impressions
and memories of that most important crisis ever known to fire insurance.

From the time when Nero played the violin accompaniment to the burning
of Rome, down, through the ages, to 5:15 a. m., April 18, 1906, and up
to the present date, the San Francisco disaster is the most prominent
recorded in history. It was the greatest spectacular drama ever staged
and produced the biggest heap of the "damn'dest, finest ruins" the world
has ever seen.

In transferring the records from the tablets of my memory to the printed
page, I am dealing with accurate historical facts of the California
Insurance Company together with my own impressions. The facts and
figures regarding the Company are incontrovertible. My own impressions
are but those which were felt by thousands of other San Franciscans in a
greater or lesser or more varying degree. These may be taken as merely
the local color, the object being to set forth for enduring vision, the
splendid performances of honorably disposed fire insurance companies
amongst which none discharged to policyholders the liabilities under
their contracts with any greater sense of equity, honor and liberality
than did the California Insurance Company.




The Morning of April 18th


In common with the other half million citizens of San Francisco on that
fateful morning, I was awakened from a sound sleep by a continuous and
violent shaking and oscillation of my bed. I was bewildered, dazed, and
only awakened fully when my wife suddenly screamed, "Earthquake!" It was
a whopper, bringing with it a ghastly sensation of utter and absolute
helplessness and an involuntary prayer that the vibrations might cease.
Short as was the period of the earth's rocking, it seemed interminable,
and the fear that the end would never come dominated the prayer and
brought home with tremendous import the realization of our
insignificance, of what mere atoms we become when turned on the wheel of
destiny in the midst of such abnormal phenomena of nature's forces.

It was 5:15, broad daylight, and as I glanced at my watch those figures
were indelibly fixed in my memory for the rest of my existence. The
terror and horror which suddenly sprang like a beast of prey out of the
gray dawn and grasped our heart strings, came unheralded from a day that
otherwise promised all that should make life worth living. The night had
been particularly warm and inviting. So vivid was this impression of the
glory of the morning that I was possessed by a feeling of irony that
such a beginning should herald the inception of so bitter a calamity.
Fascinated, I stood gazing at a weathervane on the top of a house across
the street. It swayed to and fro like the light branch of a tree in a
heavy gale. I was jarred out of my inanition by a terrific shock. The
house lurched and trembled and I felt that now was the end. It was
afterward discovered that this crash and jar was caused by the falling
of a heavy outside chimney, attached to the adjoining house. It had
broken and struck our dwelling at about the first floor level and torn
away about twenty feet of the sheathing, some of the studding and left a
big hole through which the dust and sound poured in volumes, adding to
the already almost unbearable confusion.

The first natural impulse of a human being in an earthquake is to get
out into the open, and as I and those who were with me were at that
particular moment decidedly human in both mold and temperament, we
dressed hastily and joined the group of excited neighbors gathered on
the street. Pale faced, nervous and excited, we chattered like daws
until the next happening intervened, which was the approach of a man on
horseback who shouted as he "Revere-d" past us the startling news that
numerous fires had started in various parts of the city, that the Spring
Valley Water Company's feed main had been broken by the quake, that
there was no water and that the city was doomed.

This was the spur I needed. Fires and no water! It was a call to duty.
The urge to get downtown and to the office of the "California" enveloped
me to such an extent that my terror left me. Activity dominated all
other sensations and I started for the office. As all street car lines
and methods of transportation had ceased to operate it meant a hike of
about two miles.

My course was down Vallejo street to Van Ness avenue, thence over
Pacific street to Montgomery. When I reached the top of the hill at
Pacific street where it descends to the business section, a vision of
tremendous destruction, like a painted picture, opened before my eyes. I
saw fires on the water front, fires in the commercial district and also
portentous columns of smoke hovering over the southern part of the city.
Then like a blow in the face came the realization that all fire fighting
facilities were nil owing to the lack of water. One short hour previous,
San Francisco was sleeping peacefully in its prosperity, and now the
sight was appalling. Devastation, far as the eye could see, was spelling
death and destruction.

My route was down Clay street from Montgomery to Sacramento. In that one
block I counted twenty-one dead horses, killed by falling walls. They
had belonged to the corps of men who bring in to the market with the
dawn the city's supplies. When I reached the corner of California and
Sansome streets (the California office being one block away on
California and Battery) I found a rope stretched across from the Mutual
Life Insurance Company Building to the site where the Alaska Commercial
Company building now stands. All beyond was policed. A soldier of the
regular army was on guard and no one was permitted to pass. Arguments
and beseechments to get to the office were of no avail. The necessity
and the emergency, however, stimulated my determination and aroused my
ingenuity. Suddenly, I ducked under the rope and ran a Marathon which
was not only a surprise to myself but also to the officers and the crowd
who yelled after me. I am sure that in this one block my speed record
for a flat run still stands unequaled.

I reached the office and there found every intimation of a hasty
departure on the part of the janitor. The front door of the building
stood wide open. I rushed in, threw open my desk and hastily gathered an
armful of what I deemed were the more important books and papers.
Glancing around to see if there was any way of saving anything else I
again received a jolt by noticing that the fire was coming down a light
shaft from an adjoining building and through an open window into the
rear office of the "California's" office. In fact, furniture was already
burning in the president's room. This was no place for me. The only
avenue of escape was the way I had come, since so rapid was the spread
of the conflagration that north, south and east were already in flames.

Upon reaching California street I rushed and headed west, and the
instant I had passed, the entire four-story outer wall of the building
located on the southwest corner of California and Battery streets (then
known as the "Insurance Building"), fell with a roar, completely
blocking the street over which I had just made my escape. Realizing that
my safety was measured by a matter of seconds, I was for a moment
unnerved. My legs trembled, my heart pounded and my breath came quickly,
and only by a great exertion of will induced by the thought that it was
time to do and not to hesitate, I made the effort and arrived safely at
the rope from which I had started. I shook as if with the ague. Sweat
and grime poured from me, but the shout that went up from the watching
crowd and the many friendly hands that sought mine, gave me my second
wind.

I had already made up my mind that possibly the Liverpool and London and
Globe Insurance Company and Colonel C. Mason Kinne would allow me to
store within their vaults whatever salvage I had taken from my desk. My
trust in their courtesy was justified. I was made welcome and the
Colonel, in the name of the company, placed anything and everything that
it had in the shape of assistance at my disposal.

As we stood talking on the corner of California and Leidesdorff streets,
a friend still living in San Francisco who had an office in the
Liverpool and London and Globe Building suggested to me that I had
better take an option on some of that company's vacant rooms. I spoke to
Colonel Kinne, a verbal agreement to that effect was made, and I turned
and smilingly remarked, little knowing what the future had in store,
that the California Insurance Company would resume business in the
Liverpool and London and Globe Building "tomorrow morning."

I then stood and watched the firemen lower a suction pipe through a
manhole in the middle of the street and pump sewerage on to the old
Wells Fargo Building. It had about as much effect as a garden hose and
the supply was soon exhausted. The firemen stood perfectly helpless,
like soldiers without ammunition, in front of the enemy. The fire had
now about everything east of Sansome street and in the absence of water
it was only a question of one or two days at most when the entire city
would be in ashes. This was not alone my impression but the same ghastly
prospect impressed itself upon all those who were gathered in the
vicinity.

The minutes had ticked off until it was now about 8 a. m., when another
violent shock occurred--a sort of postscript to the original 5:15
trembler. It was of short duration but while it lasted it was decidedly
impressive. The crowd scattered and I with them, for we suddenly
realized that another wall might fall with a crash and that we might be
caught. This is the only reason I can assign for our agility in getting
away, unless it might be that we simply followed the first and natural
impulse of our overwrought nerves.




The Dominant Thought


As the various impressions and shocks succeeded one another, there
always came in the interim the dominant thought of the California
Insurance Company. This thought again became uppermost and I concluded
to at once get in touch with the president. I proceeded by devious ways
over bricks, past wreck and ruin, through the stunned and gaping crowds,
until I reached the St. Francis Hotel where he resided, and finally
found him in the lobby, which was packed by an excited throng of
humanity. If ever the St. Francis needed the S. O. S. sign, it was the
morning of this day. Everybody in the hotel must have been, with others,
in the lobby.

The president was in his usual hopeful and optimistic frame of mind. He
had no fear whatever but that the fire would be shortly under control.
How this was to be brought about, he could not tell, but he was
perfectly satisfied that it would be done. I looked at the man in wonder
and admiration. Such colossal optimism was superb. To expect from fate
what appeared to me to be the impossible was indicative of a hope
sublime. I envied such a nature. It was not only a great asset but was
also a great solace in the face of an unprecedented disaster. But he had
not been where I had been nor had he seen what I had seen.

Then my thoughts turned toward home and my depression increased almost
to despair as I walked past the wreck and ruin and through the crowds
who themselves were fleeing in indescribable habiliments and with all
sorts of futile treasures grasped in their hands.

No water! Little, if any, police protection! In fact, nothing,
apparently, except Divinity itself, to prevent the conflagration from
finally burning to the ocean. A most sublime tragedy! It meant the
impoverishment and lack of homes to thousands; it meant the sweeping
away of accumulations of years of endeavor; it might mean starvation; it
meant beginning again to climb the uphill trail to success; and last,
but worst, it meant the tremendous death toll either from immediate
causes or from after effects. Even today, years after the conflagration,
many men and women live in San Francisco in a greater or less degree of
ill health, the seeds of which were planted by the terror and mental
strain which they endured on the morning of that day.




Progress of the Fire


The day passed. Neither I nor any other can remember all the details
which marked the hours of suspense. It is to be presumed that others
like myself found various, and what then appeared to them to be
tremendous, things to claim their attention and then--the second day!

The fire had now reached Van Ness avenue and again came the messengers
on horseback who shouted in passing that everyone must move. My home was
on Vallejo street about five blocks beyond Van Ness and it was generally
believed that inasmuch as that street was one hundred and twenty feet
wide that it would form a fire break which could not be crossed.
Backfiring had already been started to meet the oncoming conflagration,
but everything, including the elements, seemed to favor destruction and,
as time passed, the worry and fear increased. Owing to inability to
combat the fire, through the lack of water, doubt began to creep in as
to whether the width of Van Ness avenue and the puny attempts at fire
fighting would check the march of the flames.

About this time the question dawned upon myself and neighbors as to what
we should do with the more precious of our personal belongings. Mr.
Joseph Weisbein, a friendly neighbor, since dead, and myself evolved a
scheme to bury our belongings in the garden at the rear of my house. We
assembled four trunks, packed these with silverware and wearing apparel,
and some of the hardest physical work I have ever done was in burying
these trunks, digging the hole with a worn out shovel and a broken
spade. Then, with the help of our Chinese cook, I brought out of the
cellar a baby's buggy which had lain forgotten and unused for several
years. We loaded it with bedding and other things and trundled it down
the hill to Lobos Park near the bay shore. Trip after trip we made
before we decided that we had all that was necessary or, rather,
absolutely needful for a camp existence. The next question was shelter.
After prowling around the partially quake-wrecked gas works, I found
some pieces of timber out of which I constructed a sort of framework for
a large A tent. I borrowed a hatchet from another refugee, a stranger in
adversity. The disaster had broken down the barriers of formality and we
all lent a willing hand each to the other. I secured some spare rope and
got up my framework. This was covered to windward with some Indian
blankets sewn together by those we were trying to make comfortable.
Under that hastily erected rude shelter nineteen people slept on
mattresses that night. I did not have the good fortune to sleep. Sleep
would not come to "knit up the ravelled sleeve of care," and through the
long hours I watched the intermittent flashes, heard the noises and in
the darkness went through the added suffering of overstrained nerves.

A neighbor, J. F. D. Curtis, since dead, but at that time and for years
after the manager of the "Providence Washington Insurance Company,"
passed the silent watches of the night with me, each of us smoking
ourselves blind and watching--talking but little, although thinking
and feeling a whole lot. We were a mile from the fire, nevertheless it
was so light that a newspaper could easily have been read by its glow
from the time when the sun set on the ruins to the hour when it rose on
the next day of horror. Curtis, turning and pointing to the flaming
city, inquired in quiet tones if the California Insurance Company could
pay the bill. I replied that as a stockholder in the company, I felt
that I was ruined and I feared that the company would "go broke." He
stated that he believed the Providence Washington would weather the
storm and if the worst came to the worst with me, he would like to have
me join him in the management of the company he represented. It was a
ray of sunshine. It was a beacon of hope. It was like a life buoy thrown
to a drowning man, and I shall never forget the encouragement that came
with his offer nor the gratitude I felt, and, although subsequent events
have shown that my first fears were wrong, my gratitude endures to this
day.

The night passed and while we were eating a cold breakfast, principally
composed of sandwiches, the man on horseback arrived again; this time,
however, with the glad tidings that the fire had been stopped at Van
Ness avenue and we could return to our homes. It was afterward learned
that the salvaging of the section of the city beyond Van Ness avenue was
due to the excellent work done by two salt water streams pumped from the
bay by tugs stationed at the foot of Van Ness avenue and carried along
by relays of fire engines. So intense and so furious was the fire that
while one set of firemen, their heads covered with blankets, held the
hose, the second stream was used to drench them, also the engine.
Further proof of the fierce and terrific heat was shown in the
circumstance that houses one hundred and twenty-five to one hundred and
thirty-five feet across the avenue had windows cracked and paint
blistered. The last grand heroic stand of the fire fighters was made at
the corner of Van Ness avenue and Vallejo streets.

A man was found with a wagon to cart our things back to the house and,
while we did not have much worldly wealth in our clothes, we were
prepared to pay liberally. Under the circumstances, when his modest
charge of two dollars was met we felt that he had earned it many times
and in addition, our gratitude. Arriving at the residence, we found the
sidewalks and the street in front of it three inches thick with ashes
and cinders. Now came the task of unearthing the trunks and with it came
the thought that had this section been entirely burned how difficult it
might have been to locate the place where they had been buried.
Necessity for action and to be up and doing was too strong, however, to
allow time for any such conjectures. There was too much going on to
dwell on post-mortems. That night the streets were patrolled by marines
from United States warships in the harbor, whom the government had
hurried to the scene of action with all promptness possible.

No lights nor fires were permitted in houses. It was either retire at
sundown or retire in the dark. Whatever water was needed had to be
carried from the nearest well and even after the mains had been restored
to normal efficiency this practice was continued for fear that the
possibly broken sewers might contaminate or pollute the water. No fires
nor cooking were permitted in any building until every chimney and flue
had been passed upon by the authorities.

In order to obtain water it was necessary first to procure buckets, then
carry it from an old well in Lafayette Square, some dozen blocks away.
Baths were forgotten and shaving was a luxury. It entailed severe labor
to secure water with which to prepare the necessities of life and to
maintain a reasonable degree of personal cleanliness. In common with
every other citizen our stove was placed on the curb and this was our
kitchen and dining room for over six weeks. As there was no oven, baking
and roasting had to be dispensed with, boiling and frying being the
established fashion.

The second day after the fire, a food station was opened across the
street in an old carriage house which belonged to Mr. J. L. Flood. Here
lines would form to receive rations, the millionaire rubbing shoulders
with the laborer. The panhandler got as much as the plutocrat. The
disaster leveled all classes. A million dollars in one's pocket would
have been of little use. Nothing could be bought with it and it could
not serve as either food or drink.




Getting Back to Work


Betweenwhiles, as one crisis after another came and went, I was still
constant to the idea and still felt my responsibility to the California,
and from time to time as circumstances permitted, was strenuously
endeavoring to reach the directors and stockholders. The president, in
spite of his optimism, had fled from the Hotel St. Francis and gone to
the home of his mother on Clay and Larkin streets. For the same reason
he left there and went to the yards of the Fulton Iron Works where his
yacht "Lady Ada" was laid up, got her off the ways and tacked over to
Tiburon where he remained for some time. Finally word was received from
him that the directors of the company would hold a meeting at the Blake
and Moffitt Building on the corner of Eighth and Broadway, Oakland, on
May 2, 1906. Who really located them, scattered as they were, and finally
got them together, has remained an unexplained mystery. It must have
been either the president or Chief Clerk Shallenberger. The late Mr.
James Moffitt, a stockholder in the company and the owner of the
building named, kindly secured for us two rooms in that building for an
office. They were on the third floor facing Broadway and the location
and the habitat of the company was disclosed by a canvas sign which,
banner-like, hung upon the outer wall proclaiming this to be the office
of the California Insurance Company. For furniture, there was a flat top
desk and a typewriter (both secondhand) and the balance of the equipment
was handmade, of ordinary lumber, by a local carpenter. There was not
very much cash among those thus assembled, but, fortunately, the company
had maintained a deposit in an Oakland bank and this was immediately
available for checking purposes.




First Meeting of the Board of Directors


Quietly and almost silently the directors gathered. The only emotion
apparent was that of the usual caution shown by men of large affairs who
meet to face a crisis. The president called the meeting to order and
stated that the object of the gathering was to inform the directors that
the company was heavily involved in the conflagration which visited San
Francisco on April 18, 19 and 20, 1906, that the amount of which
obligations was at present unknown, that they overshadowed the resources
of the company and that ways and means would have to be devised to
finance the California through this crisis.

The fire maps of the company were entirely destroyed and it was not
advisable to open the safe in which the records of the company were kept
until it was sufficiently cool to prevent danger of combustion. In light
of these facts, it was impossible to immediately ascertain the actual
amount of the company's obligations.

In response to an inquiry as to the probable extent of our liabilities,
I, as secretary of the company, ventured the statement that I believed
they would reach a total of $1,500,000 net, explaining that I based this
estimate upon the company's income and the average rate. I also knew
that the larger part of the entire liabilities in San Francisco were in
the burned area and that if the safe did not afford protection it would
mean the loss of the company's records, leaving it without means of
ascertaining the amount of the loss until claims were filed. This would
cause a delay of several months before the exact total could be
developed. I explained that the policy contract allowed sixty days for
filing claims and expressed the thought that this limit would
undoubtedly be extended by legislative action in view of the magnitude
of the disaster.

In the meantime, in the April 27 edition of the Examiner, on the first
page, extending over its entire width, had appeared the following
statement:

"The California Insurance Company Will Pay in Full."

This was discussed and the meeting began to assume a more lively
interest and the members to more actively participate. Director W. E.
Dean offered a resolution that has passed into history as being,
possibly, the most noticeable ever adopted by the directors of a fire
insurance company. It is a question whether a motion under like
conditions had ever before been put or carried or ever will be in the
future. This motion was seconded by Director Mark L. Gerstle. It was as
follows:

That the action of the president of this corporation in publicly
announcing that the California Insurance Company would pay all its
losses in full as ascertained and adjusted, be, and the same is hereby
confirmed and ratified, provided that each of the directors of the
corporation affixes his signature to the matters of this meeting. Unless
such ratification be unanimous and evidenced by the signature of each
director to the matters of this meeting, the above action of the board
be null and void.

The signature of each and every director was subsequently affixed to
this resolution and it then remained a matter of detail to find how
funds were to be procured to make this resolution possible of
fulfillment and something more than a mere matter of words.

In the absence of any specific or definite information as to the amount
of the company's indebtedness this action of the directors was a most
magnificent exemplification of nerve and integrity and a superb
testimony reinforcing the axiom that a California man's word is as good
as his bond.

The board might have instructed its secretary to make the best
compromise settlements possible and have wound up the affairs of the
corporation. The public mind was in a receptive mood to accept such
compromise settlements and such action would have resulted in extreme
financial advantage to the stockholders at the time when the resolution
was passed. No one at that time believed that the California would
discharge its obligations on a parity with the largest and strongest
insurance companies in the world. Indeed the public announcement that
the company would pay in full was regarded as ridiculous and
unbelievable and was generally considered in the light of an extremely
sagacious bluff.

The directors of the company were not bluffers; they were made of
different stuff. They did not hesitate. They were in deadly earnest and
absolutely meant to live up to their spoken word and the world knows how
they redeemed their promises.

My original estimate of $1,500,000 fell far short of the final net
payment which amounted to $1,840,000, but long before this had developed
the stockholders were too deeply involved to think of turning back even
had they desired to do so. Staunchly and loyally they stayed and paid to
the end, building a monument to their good name that turned the sneers
of welshing competitors into envy and admiration.




Second Meeting of the Board of Directors


In the advance of the company, the next historical date of importance
was May 11, 1906, when the succeeding meeting of the Board of Directors
was held at the home of Director Mark L. Gerstle, 2350 Washington
street, San Francisco. Again, I was called upon to bring bad news. I was
compelled to inform the Board of Directors that all the records of the
company had been destroyed as the safe which contained them had been
smashed by falling walls and the contents absolutely obliterated. The
only thing recovered was some rolls of silver coins melted together by
the intense heat. I also reported that three hundred and fifty claims
had been filed for an amount totaling over $650,000.

The loss of the records was a very serious matter and complicated
proceedings to a degree apparently almost insurmountable. Lost in the
destruction of the safe were some $900,000 in re-insurance policies.
This meant restoration of this data from the records of the re-insuring
companies and at that time this looked like a superhuman undertaking.
However, I immediately detailed two employes with instructions to devote
their entire time to this angle of affairs. The companies met the
situation with every courtesy and finally after several months' exertion
all of the reinsurance was located, with the exception of about $18,000.

I do not like to harbor the thought, but nevertheless I feel that some
company or companies, possibly still doing business, know that they owe
the California some part of this re-insurance, which goes to show that
in the insurance business, as in other enterprises, there are those who
cannot bear the light of day.

About twelve months after the "Big Fire" I remember having received a
re-insurance claim from a company whose home office is in New York. As
this particular company was one of the very few that declined to respond
to the request to assist us in restoring the lost data, I thought it the
better part of wisdom to ask it to furnish the information previously
requested, holding up their claim in the meantime while awaiting their
reply. It never came, and their claim against the California still
remains unpaid. The conclusion is too glaring to need further comment. A
few similar instances might be recorded but they are best forgotten.

This meeting also made history. It levied the first assessment of $40
per share on the six thousand shares of capital stock of the
corporation. This would bring in $240,000 and was subsequently followed,
month by month, by seven others, until the total assessment had reached
$305 per share, amounting in all to $1,830,000, of which $1,800,000, or
98 per cent, to the everlasting glory of the stockholders of the
California, be it said, was paid.

The resolution bringing this about was as follows:

"Notice is hereby given that at a meeting of the directors held on the
11th day of May, 1906, an assessment of forty (40) dollars per share was
levied upon the capital stock of the corporation payable on or before
the 13th day of June, 1906, to Mark L. Gerstle, assistant secretary, at
the principal place of business of the corporation, No. 2350 Washington
street, San Francisco, Cal. Any stock upon which this assessment shall
remain unpaid on the 13th day of June, 1906, will be delinquent and will
be advertised for sale at public auction, and unless payment is made
before will be sold on the 2d day of July, 1906, at 2 o'clock p. m. to
pay the delinquent assessment, together with cost of advertising and
expenses of sale."




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.




Adjustments


There are millions of stories with regard to the adjustment and
settlement of claims during this period. All kinds of pressure, all
kinds of seduction and all kinds of bribes were offered the adjusters.
There appeared to be in the minds of many a conviction that this was the
time to make a claim against the insurance companies; that everything
was burned and that with the upset conditions any old claim could get
by. Stevedores, laborers and others not generally credited with an
excess amount of worldly wealth gayly and festively swore to proofs
showing the loss of family plate, ancestral pictures, silk underwear,
ball gowns, evening clothes and jewels. There was no possibility of
disciplining these perjurors and it was up to the expertness of the
adjusters to defend their companies from being looted.

There were all kinds of attempts to defraud on the part of other
policyholders. One instance in which the California was interested was a
proof for a $16,000 loss on a policy covering on stock of dry and fancy
goods located in a building on Market street. I received a visit from
the policyholder who made a request for prompt payment. I explained that
our funds were being raised by assessments which were levied once a
month and that, if agreeable, we would pay him sixty per cent of his
claim and the balance in sixty days. This appeared to be satisfactory
and he left in a happy frame of mind. Thirteen thousand dollars of the
risk in question was ceded to other companies and we naturally filed
claims with the reinsurers for their proportion. The following day a
friend who was acting as chief adjuster for another office which was one
of the re-insurers on this risk, called upon me regarding this
particular claim. He laid upon my desk a photographic album and called
my attention to a large photograph of the building wherein the stock was
located. It was a two-story brick and the picture showed that the entire
front of the second story had, as the result of the earthquake, been
thrown into the street. This was taken before the fire had reached the
property. He stated that the authenticity of the photograph was
absolutely guaranteed and that in event of litigation, the testimony of
the photographer was available. He further stated that acting for the
re-insuring company, he would not follow the California for more than
sixty-five cents on the dollar. I borrowed the photograph and at once
sent for the claimant. He called the next day. It was found on
examination that he had made the statement to the general adjustment
committee that the property was not damaged prior to the fire.
Unfortunately, no affidavit was taken from him to that effect. With the
photograph before me, I realized at once that the claim was not an
honest one. I explained that the larger part of our policy had been
ceded to other companies and that some of them demanded, earthquake
affidavits with every claim; that while I regretted to put him to any
inconvenience, it would be necessary for him to produce this testimony.
He looked me squarely in the eye and said, "I'll sign it and swear to
it. Not a brick in the whole building was disturbed." He attached his
signature to the affidavit. I showed him the photograph and then stated
that we should be compelled to penalize him to the extent of thirty-five
cents on the dollar. As a matter of equity, there was little, if any,
liability under the policy. He shouted, "Fake!" "No," I replied, "simply
a matter of contractural rights and of justice. The picture is
absolutely bona fide." He left, emphatically stating that he would at
once "go to the bat." I suggested that he submit the matter to his
attorney. Fortunately for him, he had a wise one who promptly advised
that he accept the terms offered.

This is another angle of the settlement of the San Francisco losses--no
more nor less in fact, methods, and manner, than that with which other
legitimate companies had to contend.

Another instance is recalled of a claim for a thousand dollars covering
on lodging house furniture in a building on Sixth street, with the loss
made payable to the owner of the building. I supposed that the policy
was collateral for payment of rent. It developed that the claimant was a
widow with one child. She was without a cent in the world, and called to
request payment. By this time the company was running short of ready
funds to such an extent that instructions had been issued to adjusters
that all claims hereafter would take the customary sixty days before
payment. She stated that the fire had canceled her lease, that she had
seen the payees and that they would waive the claim and that she was
absolutely destitute and would be willing to take whatever we would
offer, if she could get the cash. The position of the company was
explained to her with the result that she felt that we were working for
a discount. But it was not the intention of the California to take
advantage of people's necessities and we informed her that such was the
case. Her claim was a just one. I accepted her proofs, paid her
twenty-five per cent cash and the balance at the end of thirty days.
These are but isolated instances among many.




Special Meeting of Stockholders


Another historical meeting was held August 9th. This time at the office
of the company. It was a special meeting of the stockholders. Three
assessments had been levied of forty dollars each, amounting in all to
$720,000. This money had been paid out in settlement of claims. This was
the first meeting of the stockholders proper since the fire. The
directors realized that in response to inquiries from the stockholders
who were principally interested that they were entitled to a report as
to the progress made and the policy to be adopted for the future. Over
ninety individual stockholders were present and in order to accommodate
the crowd, the employes removed their desks and chairs, and during the
time of the meeting adjusted losses and discharged their duties on the
sidewalk in front of the building. The early-comers had seats. The
late-comers stood, but so interesting was the meeting that discomforts
were forgotten. The president made a very full and analytical report,
finishing with the announcement that another million dollars would be
needed to continue the splendid work and accomplish the final result of
bringing the California through the disaster with justice, equity and
fairness to all its contract-holders. The atmosphere was charged with
optimism and enthusiasm and amongst all the speeches made, and they were
many, not one bore any intimation of regret or of any desire to do other
than march steadily ahead. Mr. Ignatz Steinhart, at the time manager of
the Anglo-Californian Bank, careful, cautious, shrewd and a hard-headed
financier, in his speech practically struck the keynote of the whole
meeting. He said in substance:

"I have lived here many years and I expect to die here. I love San
Francisco and I know you all feel the same and it is my honest
conviction that the directors of the California have adopted the proper
and only course and that its stockholders will stand behind them, and
that, the company will pay its losses at the rate of one hundred cents
on the dollar without discount. I now present a motion that it is the
sense of this meeting that the Board of Directors be given all that they
request and that all their actions are hereby heartily ratified,
approved and confirmed."

There was not a single dissenting vote. At this time a stockholder
enthusiastically jumped on his chair and proposed three cheers for the
company and the management. The clerks on the sidewalk and some of the
passers by rushed into the crowd to see what was the cause of the
commotion. When the meeting adjourned, the confidence of all was
renewed. The barometer of their enthusiasm and determination had risen
and smiles and handshakes put the period to the gathering. Seldom, if
ever, has an Irish dividend meeting been held and disbursed with such a
wholesome feeling of satisfaction. It was more like a "melon cutting"
than a preparation to excavate to still lower depths their pocketbooks.
Never was the true California spirit more faithfully portrayed.




The Final Supreme Effort


The annual statement of the company at the end of the year showed beyond
the peradventure of a doubt that the company had kept the faith, but it
was left with a very attenuated surplus. Then business began to grow by
leaps and bounds. The bread which had been cast upon the waters was
returning and another problem now confronted the company--to protect
the reserves on the rapidly increasing income. This required a working
surplus and meant more assessments which seemed to be adding insult to
injury. The stockholders had already provided the funds to pay losses
and to now ask for more money for any other than loss-paying purposes,
gallant as was the spirit of those directly interested, seemed
dangerous. The directors and some of the more prominent stockholders met
informally and discussed the situation and the concensus of opinion was
that the honor of the company demanded that it continue to the end to
accomplish to the fullest that for which so many financial sacrifices
had been made--to take any other course, to discontinue, to fall down,
or to break faith with those who had given us their confidence would be
suicidal. In this deduction proof was given of the sound judgment and
business acumen of those who bore the brunt of the burden in those hot
days of battle. They took the position that the reputation which the
company had already builded was an asset of almost unlimited value and
realized that the peak of the mountain was just a few steps further
on--that summit from which the company could look out upon the valley of
success and reap the full reward for all the sacrifices its stockholders
had made. Plan after plan was submitted for financing, change after
change was suggested, but for a time concerted action seemed almost
impossible of attainment. Finally, I called upon the largest stockholder
and treasurer of the company, Mr. Geo. L. Payne, in his office at the
Payne Bolt Works. I laid before him the plan of increasing the capital
stock from six thousand shares to ten thousand shares by the sale of
four thousand shares at sixty dollars per share which would realize for
the company a total amount of $240,000 of which $160,000 could be
applied to capital, bringing that item up to $400,000, and $80,000 to
surplus. While this did not make the surplus as much as was desirable,
we were used to economies, to making every dollar count. This has always
been a feature of the management of the company. With this sum and by a
continuance of conservative methods and proper management we believed it
possible to provide for all contingencies. Mr. Payne listened quietly, a
pad of paper before him and a pencil in his hand. When I had exhausted
every argument and made the best possible statement of the exact
conditions, he stated that he realized fully the gravity of the position
and then came the flood. He said that, if it became necessary, he, as
the largest stockholder in the company, would endorse the proposition to
the extent of taking the entire issue. The balance of the consummation
of the idea was merely a matter of detail. Another meeting of the
stockholders was called and of the many meetings that we had gone
through, this stands out brightest of all. The plan was presented and as
might naturally be expected invoked little enthusiasm and did not appear
to interest anybody. Mr. Payne quietly rose to his feet, explained the
position of the company as he saw it and then shocked the assemblage
into activity by making public the announcement of his willingness to
take the entire issue of additional stock. That was a flash of
optimistic lightning the bolt of which apparently struck every man in
the room. They sat up, took notice, and awoke to the fact that they were
possibly missing something worth while. The outcome was that Mr. Payne
was only able to secure his pro rata as the entire issue was promptly
over subscribed by the stockholders, it being understood that the right
of subscription should be confined rigidly to stockholders of record.
Never in my business career have I seen the value or virtue of a leader
expressed in so forceful a manner as in the effect of Mr. Payne's offer
upon that meeting. It was the greatest evidence of applied psychology
that ever it has been my good fortune to experience.




Recapitulation


These memoranda I have written years after the happenings which they
sketch. They are drawn from the records of the company and from the
tablets of my memory. Those upon which I have touched were amongst the
higher lights, they are vivid in recollection and as well remembered as
if they had taken place at a recent date.

Those were strenuous times. Times that not alone tested the dignity and
honor of men, but rocked them to their very foundations. Only the
admittedly honest and honorable men survived the experiences of those
days without blotch upon their escutcheons. It is naturally to be
presumed that the minds of those who passed through those days of
reconstruction recall many deeds of heroism, of sacrifices made upon the
altar of duty. Each has the surmounting of his individual trials to
remember, but amongst all that was done as the result of the San
Francisco conflagration there is, in my opinion, nothing carrying
greater, honor or higher integrity than the work and sacrifice of that
gallant band of men who were directors and shareholders of the
California Insurance Company. They were the pioneers and the sons of
pioneers who braved the hardships and terrors of desert and sea--the
founders of this great commonwealth. Incidents and happenings which have
passed from public record will still live in the memory of those who
played a part. The wonderful rehabilitation period, with all that it
meant of physical and mental suffering, but typifies today in concrete,
stone and brick the sturdy and stalwart spirit of those men who were
made absolute pioneers by the ash heap of 1906. Some of these have gone
to their last accounting, but for those who are still serving, and still
tugging at the oar, there remains but to guard the heritage which they
bequeathed--to bring upon the results of their work a continuation of
their ideals.

The spirit of 1906, glorified by San Franciscans, which alone made
possible the resurrection from the ashes of that "city loved around the
world," sitting serenely upon its seven hills by the portals of the
Golden Gate and whose destiny is oblivious of fire and earthquake, is
worthy of more than a passing tribute. Its example should thrill and
encourage those who are inclined to falter. It is a beacon light to
those who are to continue the struggle with the petty details and the
larger duties of everyday life. And among the contributors none are more
to be admired or borne in reverent respect than the directors, those men
who held either large or small investments in the "California" and were
true to their trust.




Conclusion


Whether the end justifies the means depends upon the judgment of the
critic. It is possible that there is too much of personality herein, but
in justice to the writer, it must be borne in mind that no attempt has
been made for literary style; that the task imposed upon him was
attempted solely to comply with the insistence of others and that the
use of the first personal pronoun is the readiest vehicle of expression.

No special mantle of credit rests upon his shoulders. If there be any
such garment it drapes the shoulders of every man connected with the
company from the humblest employee up through the heaviest stockholders
to the highest official. It overlaps and falls with becoming dignity on
the shoulders of those who are fellow citizens and fellow Californians,
who shared with us as we shared with them the heat and burden of the
days succeeding the never-to-be-forgotten disaster of April 18, 1906.



The Spirit of 1906 is a book of the Primo Press, San Francisco, printed
in April, 1921