Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1902-12-31
Executive Council Will Make
Statement Regarding Mer-
riam's Alleged Extortion
QUARREL WITH MovEY INVOLVED
Merriam, Finds a Shield for His lnsur-
ance Irregularities in Personal Row
With the Law Firm of McVey & Nc
vey-Mullan's Opinion Goes to the
Council Today-An Insurance Row.
special to Times-Republican.

Special to Times- Republican.
Des Moines, Dec 31.-Frank F. Mer-
riam after four years as auditor of
state steps out Monday and Will be
succeeded in that important office by
ex-senator Beryl T. Carroll, of Davis
county. During the past few weeks
this office has been the center of at
traction at the state capitol on ac-
count of various accusations when
have been made in regard to Irregular
ities in the management of the office.
These relate to the question of exan1in-
alton Of insurance companies outside
of the state and to the fees exacted
for such examinations. Nearly two
years ago, when the present auditor
was just entering on his second term,
runors became common that his IN
surance examiner. one Beehler, had
been engaged in making big money
examining insurance companies out
side of the state. Complaint was made
that in the case OF Canadian COM
pany an enormous fee had been ex-
acted for a limited amount of examln-
alton and for a time the company con
sidered the advisability of making a
fight against the fee. This was
dropped Then trouble arose over the
fee exacted of the Mutual Reserve
Fund company, of the New York, and
the company refused to pay the fee
4 a Lat I
The examiner claimed that he had
mot been allowed to make the exam
ination or to complete It, The au-
ditor refused to issue a certificate. Ihe
company went into court to fight the
case. but after being shut out of the
state for several months the matter
was settled and the certificate issued.
The bill was paid. For time little
was heard of this matter until last fall
when the examiner and the state au-
|ditor went to Philadelphia and New
Yorst to continue the regular axal:l
Iinations. Their departure was known
to almost everyone In the state house.
After they had been absent about two
months the complaints came of extor-
tionate charges. The executive coun-
ell was compelled to act on the charges
made against the auditor and he nur-
ried home on telegraphic notice OF what
was going on. There was laid before
the council letters which indicated that
the auditor and his examiner had been
making enormous fees. In one case 1t
was stated in letter from an insur-
|artce company that fee of S275 was
charged for what appeared to be two
half days work for the two men. Other
similar accusations were made, all OF
which were promptly and emphaticallv
denied by the state auditor. 1t was
in this condition of affairs that there
was submitted to the attorney general
OF the state query as to the rights
and duties of the executive council in
the matter. There appeared to be
some doubt as to whether or not the
auditor has any right to make these
examinations. If he has the right he
can also collect fees in accordance
with his whims. The auditor claims
that he obtained verbal consent from
the council more than two years ago.
He alone is the only member of the
council left who was a member at the
time he claims to have obtained the
consent.
While the legal phases of the ques-
ton have been hanging fire, prepara-
tions have been going on for the trans
fer of the Office from the present state
auditor to his successor. This will be
done Monday Mr.. Merriam had up
a fidelity bond for 100000 and it is
understood that Mr.. Carroll will give
a personal bond rather than fidelity
bond AS nothing can be done by the
council to dispose of the troublesome
insurance matter before the change in
office is made it will rest with the
insurance companies to dispose of the
case afterwards. The council will prob
ably be content with issuing state
ment to the public.
The stirring up of this little scandal
has almost brought to the surface
some other matters not so pleasing 1t
now appears beyond any question that
the chief instigator of the accusations
against Merriam and his examiner has
been Judge McVey, of the Polk county
district court The firm of which he is
the head and his son most active mem
Der, is prominent in insurance mat
ters. The firm has clashed with the
state auditor and others frequently.
1t was Judge McVey who as attorney
for the insurance combine prepared
what is known as the Iowa uniform
policy of fire insurance. This policy
was prepared and put in force by the
companies on the supposition that it
was a policy in accordance with the
Iowa laws. Judge NfcYey prepared and
1t was printed, an elaborate exposition
of the law and the policy. Some time
last spring trouble arose between Me-
Vey and Merriam over a receivership
1t appears that the junior McVey was
attorney for the receiver of company
and his charges We're so large that
the receiver wanted young McVey re-
moved. The judge descended from his
bench and read a curtain lecture to
the receiver about taking business
away from that firm. Merriam got
mixed up in 1t and took the side of the
receiver. Ill feeling arose. Then Mef-
riam and Attorney General Mullan got
their heads together and prepared
policy of insurance that would In fact
comply with the Iowa law and the state
auditor gave the companies notice they