Omaha daily bee., 1899-03-01
LIGHTLY GOES ON The STAND
Former Insurance Deputy Appears Before the
Investigating Committee.
THROWS LIGHT ON coRNFLpS METHODS
when Nephew simpson Is sent Out to
Examine Companies the Audit
or'S wife TX Put ON the
Pay Roll.


witness, was still absent and Samuel Lichty,
former insurance deputy, was put on the
stand The record OF Lichty's testimony
given several days ago was read. 1t related
to the hold up practices of the Office, OF the
way ne found out about these practices and
uow he obtained possession of the celebrated
Palm letter Continuing his testimony,
Lichty said he took the place as Insurance
deputy on the eth day Of January, 1891 and
held 1t until the 10th day of February, 1922
Cornell had selected him to take the place.
Before coming to Lincoln Lichty was farm
ing and had since 1887 been an officer of the
Richardson County Mutual Insurance COM
pany and was also president of a Nebraska
cyclone insurance company. Said he:
soon after we entered the office Gov
ernor Holcomb came over TO see me anu |
urged thorough examination of the eastern !
companies. We agreed that the companies !
had gained possession of properties here at
a large figure which were at present bring !
ins in no rent, and vet were listed in their |
property statement at what they cost. The |
companies also held considerable of Spanish !
bonds We concluded, too, that they were
using part of their money for political pur-
poses and felt that competent examiners
ought to 90 through the books and accounts
of the companies.
Later the governor and l had another
conference on the subject and l told Cornell
of our talks. At meeting between us then
it was agreed that l should so to Kansas
| City and meet representatives of other states
! there to form a combination for the purpose
OF examine tion."
Mr. Lichty said the states of Nebraska,
Kansas and South Dakota made an agree
ment while Missouri, Arkansas and Colo
RADIO were almost ready to go in. An agree
mept was made that the charge for exam
| nations should be $40 per day for full
DAVIS work A few days later Cornell notified
I.ichty that he would have nothing to do
with tho combination scheme and letters
could not be sent out under his sanction.
Witness could not tell what had happened
to make the auditor change his mind.
Thought Cornell Jealous.
He thought Cornell was jealous because
the governor was taking an interest in the
manaGement of the insurance department
Cornell and Lichty had disagreed over some
insurance companies which Lichty objected
TO on account of their character or insoi-
vency One of the latter class was the Fra
ternal Tribune of Rock Island influential
men had visited the auditor in his private
Office and induced him to admit objection
able companies to do business. Lichty could
not tell to a certainty that money had been
used to influence the auditor.
When you gave reasons why these com
panies should not be aGmitted what did the
auditor say?'
"He seldom made any reply"
Iichty then told the committee of the
failure OF the examiners to keep a record
of their work. He also told how Nephew
Simpson, who was bond clerk, was sent out
of town to examine insurance companies,
the auditors wife being put on the sta'e
l pay roll in his place
About the first OF 1898 Lchty said there
4 was a change in the way of running the
Office The business relating to eXamina-
y tions was kept in constant consultation
with Pool and Price on insurance mat
3 ters This was when Palm was sent east
: on his extended trip PALMS instructions
we're given in the private room ana tne
e witness was not allowed to be present The
n talk in the Office was that Palm was to
Il carry out the arrangements that mad peer
+ talked over in the meeting with the gov
/ erpor. The intention was to examine the
J. great companies of the east. The agree
l. ment at the office that the examiners
le should only charge $40 per day. Palm sooi
'i wrote back that he trembied in the presenc
of these big companies and hesitated u
examine them but said he needed som
money and wanted to know II he could no
,s take money from them anyway, LIGHT
To said he wrote Dack 10 ann nv " 'Nn
ho money unless he made examinations and
he needed money to draw on him (Lichty
for 500.
A Iichty Instructs Palm.
- AS to the instructions given Palm i
,e Lichty letter written by him to the e>
aminer was found in the copy book.
was dated December 4, 1897, and was AZ
dressed to Palm at New York City A
! extract from the letter was as follows.
a. II have wired you this day not to recei'
= a cent from any company unless there Is
y thorough examination, and / hereby confir
ne that message, asking that you do not tai
he any fees Of any kind from any compaI
'se that is not examined thoroughly III y;
ne should look over the reports for the e.
en- aminations by another state, or anythil
ue aside from a thorough examination OF yo
IN. own. do not take any fees for any SUI
INT work, as it would reflect upon this ofh
vii to do So If the Mutual will not be e
Ia amined and you cannot be reimbursed I
of your expenses in any other way, VIII p
ish you from funds at my disposal in this d
partment,'
94 Continuing in his testimony. Llchty to
ish of his many protests about keeping Pa
because of his llegality and because of
ia. holdup practices. He had often seen Pa
,o, engaged in insurance work here. Palm h
a. said that his business here was brngi
- him $500 per month. Lchty had favor
, sending Archard and Simpson out TO c
~, anime in the hopes that Palm could
eu displaced by man who would act fair
NC but Simpson at once commenced hold
est up companies worse than Palm ever d
'or Cornell usually asked for passes for thu
he' men when they made trips. Lichty L
sla- how the Montpelier company had been h
rn- up, how It had refused to be examined, h
the auditor telegraphed the company to
lst- effect, mo examination, no business in
all braska" The company wired back II wo
iple quit the state. An attempt had later b'
are made to collect $500 from the agents
IRA the company. The company later has b.
ned, renstated, but Lichty could not tell whet
xist the money demanded by Palm was paid
hall not.
, ,a simpson Rode ON Passes,
ner Ldchjy said he instructed Archard to foil
sht5 the law. charging S. per day for fraternit
moa and $40 per day for old line companies
chard examined only fraternity or NUT
benefit companies. When Archard returl
Cornell instructed him not to return any
rkl, the oyercharge. J. A. Simpson made
1t to Lawrence and Topeka year ago VIII
pod he wanted to visit relatives, and at the sa