Monday, June 7, 2010

NubCity: A Story of Handouts or Handless

One of my executive MBA students pointed the following story out to me. You can read it and see videos related at:

How does a town become known as Nub City? Why did more than two-thirds of all loss-of-limb accident claims in the United States in the late '50s and early '60s come from the Florida Panhandle? What was the first event in the bloody chain that led a national insurance investigator to Main Street in Vernon, to sit in a parked car on a hot summer night, watching the maimed walk by in a shuddersome parade?

We have a few clues.

Vernon was cursed with a long run of misfortune in the first half of the 20th century, according to a history of the town by Mary Cathrin May. The steamboats stopped running and the sawmill closed and all the major railroads through Washington County passed the town by, even though it was the county seat, and then voters moved the county seat to Chipley, and jobs became scarce, and bright young residents left for college and never came back.

As for the Nub Club, as they would later be called, someone had to be first. His identity is lost to history, but this much we can guess. One day he took a look at his hand and he compared its future earning potential to the value of his insurance policy and he made a simple calculation.

There was an accident.

Money changed hands.

Word got around.

More accidents.

L.W. Burdeshaw, an insurance agent in Chipley, told the St. Petersburg Times in 1982 that his list of policyholders included the following: a man who sawed off his left hand at work, a man who shot off his foot while protecting chickens, a man who lost his hand while trying to shoot a hawk, a man who somehow lost two limbs in an accident involving a rifle and a tractor, and a man who bought a policy and then, less than 12 hours later, shot off his foot while aiming at a squirrel.

"There was another man who took out insurance with 28 or 38 companies," said Murray Armstrong, an insurance official for Liberty National. "He was a farmer and ordinarily drove around the farm in his stick shift pickup. This day - the day of the accident - he drove his wife's automatic transmission car and he lost his left foot. If he'd been driving his pickup, he'd have had to use that foot for the clutch. He also had a tourniquet in his pocket. We asked why he had it and he said, 'Snakes. In case of snake bite.' He'd taken out so much insurance he was paying premiums that cost more than his income. He wasn't poor, either. Middle class. He collected more than $1-million from all the companies. It was hard to make a jury believe a man would shoot off his foot."

Not that the insurance companies didn't try. According to Ken Dornstein in his book Accidentally, on Purpose: The Making of a Personal Injury Underworld in America, they hired John J. Healy, the above-mentioned investigator, to look into the accidents. He observed that Vernon's second-largest occupation seemed to be watching hound dogs mating in the town square, and that its largest was self-mutilation for monetary gain.

Nearly 50 men in Vernon and surrounding areas collected insurance for these so-called accidents. None were convicted of fraud. But the increased scrutiny - along with some companies' refusal to sell any more policies in that area - brought an end to the maimings.

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