The Spirit of 1906 | Page 7

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