Omaha daily bee., 1899-04-04

Ne changed so as to include Mr.. Gillen also.
herewith enclose a copy which Will prob
bly, be near the point what We need. You
viii understand that It will save us sending
many kilograms. and with complete author
" to act in each and every case. which we
ssure you shall not be abused In any event.
BESIDES this. 1t will keep the companies from
looking upCn Mr.. Gillen with suspicion; he
having no direct authority from you, leads
to asking many questions, which will be un-
necessary. Trusting that YOU Will fully un-
derstaud the situation. which we have tried
10 make plain.
viii wait at Park Avenue hotel. New
York, for your answer. with kindest re-
CARDS from Mrs. Palm. MIR. Gillen and my
self to yourself and family, also remem-
brAnce to the bows In office. ! am as ever,
very truly yours, O. w. PALM
Deserving of Censurc.
Before the auditor was confronted with
these letters he testified that should he have
received such a letter or letters as the above
he would have considered 1t disnonoraole
conduct on the part Of the eXamine and
that he would have discharged him. This,
John +. Cornell, upon receiving such let
tiers, failed to do, and the auditor deserves
the strongest censure from his constituents
Of the citizens Of Nebraska for retaining in
his employ men whose purpose 1t was to
overcharge insurance companies for the pur-
pose of dividing with an executive state Of
fcer whose salary and total compensation are
fixed by the constitution Of the state. The
explanations of this letter by Palm and
Glllen were unsatisfactory to the committee.
These letters show a confidence on the part
of the writer's that reflected seriously upon
the public servant to whom addressed. 1t
Is proper to say in connection with exhibit
80 that Palm collected $500 from the Hart
ford Fire. His explanation that the other
500 was used to pay his and Gillens ran
road and dotel expenses is not corroborated
by the evidence. He never paid Gillens ex~
penses and the whole expenses of both to
and from Hartford did not exceed one-half
of that amount.
Insurance Agents Appointed.
"The committee further finds that Mr..
Cornell with the full knowledge OF the law
upon the subject has, in violation of THAI
law, appointed Insurance agents as insur-
ance examiners. That he has retained Ex-
aminer Palm after his attention had been
directed to the matter many times by his
insurance deputy. Samuel LiChty, ana
reputable citizens of the city of Lincoln.
The undisputed testimony is that both Palm
and Gillen were insurance agents when in
New York and New England examining for
the Insurance department, and both Sc
CuTbu the HStnCltS Oh at ledSl Oue NpLh
pany at that time. While Palm ostensibly
transferred his insurance business to his
wife, previous to his appointment, 1t was
a mere subterfuge; no real transfer either
of property, business or anything connected
with the office has been made. The certil-
Gates were issued to c. L. Palm, his wife,
instead OF o. w. Palm. o. w. Palm, how
cver, solicited insurance except when away
from home. He directed the employees,
shared in the profits, and even the bank ac-
counts remained in his name. He contin-
ually referred to his agency In letters to
NJ. Cornell and this committee finds that
Nj. Cornell was a party to this fraud upon
the people of the state. The law providing
that an insurance agent shall not act as an
examiner is a good one and there is no eX-
cuse for it's fragrant violation by the
auditor. These facts are equally true of
m Gillen, with the exception that
he made no ~pretense at a transfer of his
agency, and has been in the insurance bust
ness since 1892. He thoroughly understood
the law as to his qualifications and testi-
fed that he raised that objection to G. w.
Cornell, who was acting as spokesman for
his brother, the auditor. Gillen, however,
acted merely as an assistant, although Il
commission was issued to him jointly with
Palm as stated, but he was not an eXamineT
in fact.
"Sixth-Your committee further finds that
section SO and other provisions of our in
suranco laws known as the reciprocal fee-
ture, the enforcement of which would bring
the state thousands OF dollars OF
revenue annually. have never been
enforced by any state auditor In
this state. John F. Cornell is the first state
auditor who has made an attempt and he
has succeeded in collecting several thou
sands of dollars for the year 1898. His at
tempt, however, has been very weak and
the state has unquestionably suffered there
by. He was continually questioning the
validity OF the law and even at times as
serted that it was a bad law. He doubted
his power and authority to collect these
reciprocal taxes and failed to consult with
the legal adviser of the state, the attorney
general, upon this point, as an energetic
official, watchful of all the states interests
affected by the business and conduct of His
Office. He never attempted to collect such
fees and taxes due the state in years pre-,
ceding his term of office which he should
have done. He sent out his first notice In
the fall of 1897, which We copy as an eX-
hibit. The part underlined is the notice
referred to, and is weak and indefinite, and
reads as follows, having been attached to
the end OF a letter sent out in regard to
ether business.
Secondly, l will call the attention OF the
insurance companies to the reciprocity
, feature in our insurance laws. which pro-
vides that any company doing business in
Nebraska and coming from a state whose
laws fix higher fees and taxes than the
? laws OF this state, then such companies shall,
4 pay to Nebraska the higher fees ard
5 taxes of their own states.
a., JOHN +. CORNELL.
! State Auditor of Nebraska.
4 Amount Lost Unknown.
THE committee is unable to report thu
g exact amount of taxes owing the state by
!, insurance companies under this reciprocal
= provision for the term Of Mr.. Cornell's ad
I ministration, or fer the terms of his prede
cessors. The amount, however, is larg,