A HEAVY CALAMITY.
In the year 1875, the blow fell which destroyed the Beaver Insurance
Company, and well nigh ruined every man concerned in it, from the
president to the remotest agent. In April of that year, a bill was
passed by the Dominion Legislature relative to mutual fire insurance
companies. It so happened that the Premier of Canada was then the Hon.
Alexander Mackenzie, for whose benefit, it was understood, the Hon.
George Brown had got up a stock company styled the Isolated Risk
Insurance Co., of which Mr. Mackenzie became president. There was a
strong rivalry between the two companies, and possibly from this cause
the legislation of the Dominion took a complexion hostile to mutual
insurance. Be that as it may, a clause was introduced into the Act
without attracting attention, which required the Beaver Company to
deposit with the Government the sum of fifty-thousand dollars, being the
same amount as had been customary with companies possessing a stock
capital. For eighteen months this clause remained unobserved, when the
Hon. J. Hillyard Cameron, being engaged as counsel in an insurance case,
happened to light upon it, and mentioned it to me at the last meeting
of the Board which he attended before his death, which took place two or
three weeks afterwards. At the following Board meeting, I stated the
facts as reported by him, and was instructed to take the opinion of Mr.
Christopher Robinson, the eminent Queen's counsel, upon the case. I did
so at once, and was advised by him to submit the question to Professor
Cherriman, superintendent of insurance, by whom it was referred to the
law officers of the Crown at Ottawa. Their decision was, that the Beaver
Company had been required by the new Act to make a deposit of fifty
thousand dollars before transacting any new business since April, 1876,
and that nothing but an Act of Parliament could relieve the company and
its agents from the penalties already incurred in ignorance of the
statute.
On receipt of this opinion, immediate notice was sent by circular to all
the company's agents, warning them to suspend operations at once. A bill
was introduced at the following session, in February, 1877, which
received the royal assent in April, remitting all penalties, and
authorizing the company either to wind up its business or to transmute
itself into a stock company. But in the meantime, fire insurance had
received so severe a shock from the calamitous fire at St. John, N. B.,
by which many companies were ruined, and all shaken, that it was found
impossible to raise the necessary capital to resume the Beaver
business.
Thus, without fault or error on the part of its Board of Management,
without warning or notice of any kind, was a strong and useful
institution struck to the ground as by a levin-bolt. The directors, who
included men of high standing of all political parties, lost, in the
shape of paid-up guarantee stock and promissory notes, about sixty
thousand dollars of their own money, and the officers suffered in the
same way. The expenses of winding up, owing to vexatious litigation,
have amounted to a sum sufficient to cover the outside liabilities of
the company.
These particulars may not interest the majority of my readers, but I
have felt it my duty to give them, as the best act of justice in my
power to the public-spirited and honourable men, with whom for
twenty-three years I have acted, and finally suffered. That the members
of the company--the insured--have sustained losses by fire since
October, 1876, to the amount of over $45,000, which remain unpaid in
consequence of its inability to collect its assets, adds another to the
many evils which are chargeable to ill-considered and reckless
legislation, in disregard of the lawful vested rights of innocent
people, including helpless widows and orphans.