Los Angeles herald., 1905-12-22
| DON'T KNOW
SAYS HENDRICKS
INSURANCE Superintendent
ON THE STAND
His Testimony Indicates That He Is
Ignorant of All Details of
His Office, Leaving All
to Subordinates
BY Associated Press.

NEW YORK. Dec. 21.-Francis Hen
bricks, superintendent of insurance of
New York state, was the chief wit
ness before the Legislative investigat.
ing committee on insurance and testI.
fled that the examinations of insurance
companies by his department are made
to ascertain only the solvency of the
| companies and that no investigation is
made into the extravaganza of the
management of a company or into the
salaries paid to officers so long as the
company is able to pay its obligations
| No investigation is made into the COM
missions paid to agents, the system of
| loaning on premiums, the advance of
| loans to agents or loans to directors
| The employment of kinspeople of Of
ficers in high positions is not inquired
into. This has for a long time been
the custom of the department, Mr.
| Hendricks said, and he declared fur
| ther that he personally knew little or
nothing about the various examina-
tions made. as they were entrusted to
| Isaac Vanderpool, the chief examiner
of the department.
While Mr.. Hendricks memory failed
him as to any explanation which he
had suggested as a remedy to any de-
lSClo III lHe laws governing insurance
| companies, he stated that no measure
that he ever presented had ever been
opposed in either house of the legisla-
ture. Neither had any bills passed
against his recommendation.
Needs Larger Force
Mr. Hendricks said his department
spent last year about $137,000 and re-
ceived in fees and payments $751; ,726,
which was paid into the state treasury.
| To make examinations that would
| bring out such information as has been
gathered by the legislative committee
the witness said, would require ten
more examiners and an additional ap-
preparation of from $4,000 to $50, ,000
He thought, however, he could get the
| appropriation if he asked for it.
Mr.. Hendricks knew nothing of the
large legal expenses of the New York
| Life Insurance company, the Equitable
| and the Mutual Life, as they had
never been called TO his attention. He
had never heard of the wash sales
of securities nor the year-end loans
| of the Equitable to clerks of Kuhn,
Loeb & Co., nor had these ever been
4 brought to his attention. -A-s.-a.
Mr. Hughes asked;
| DO you require the companies tc.
present detailed statement of their
legal Disbursements, showing the
| names of lawyers who had money and
what they had it for-has the depart,
ment ever inquired into that?"
| mo. / don't think So
"Now, we find information of that
sort being furnished to Prussia and
! not to the New York state department.
Here, for example. l have the state
ment of the legal expenses of the New
| York Life for 1898, giving in detail the
amounts paid, aggregating $197 725, and
49,. .tx.t. E,,..
nished to the Prussian government.
Now did the New York state insurance
department ever have a statement like
that?"
NO"
From the New York Life or any
other company"
II think not
Not Tradition of Department
"Wel, you have got a total in the |
case of the New York Life and the |
point is that it had not been the ira
dition of the department or the ordi-
nary practice to require anything more |
than so much for legal expenses. and
as long as they had enough left to
meet their liabilities with such mar
gin that in the ordinary expectations of
life would rot be exceeded, why, you
would take up the question of details
of their disbursements"
''I don't know what report they made.
OF course, 1 am not accurate; 1t is
possible they did not put them all in
the legal expenses they reported"
"Now, what is your practice in re-
gard to reports that came in? Did you
look them over yourself-the annual
reports?"
mot all of them; if there is any
thing that the statistician referred to
me"
"Then they were referred to the sta
tistician in the first instance"
"Yes."
What were his duties with refer
ence to the reports?"
"He examined all of the reports"
"Did you look through the collat-
eral loans?"
II don't think So"
"Who had charge of that matter?"
"Mr. Vanderpool"
Ibid any one in the department en-
deavor to ascertain whether there had
been any shifting of securities or tenn
porary arrangement made which would
Indicate that the statement was not
true?"
Took Reports on Faith
mo; we took the reports as they
were made to me-"
"Uness, then, you had an examina-
tion you would not detect whether the
securities paid at the end of the given
year were changed in the beginning of
the next year,"
II think not. without an examina-
ton"
when was it first that you learned
that Kuhn. Loeb & Co., for example.
were taking alleged collateral loans
at the end of the year, either in their
own name or in the name of their
clerks, without any real loans being in
existence or intended to be-"
II have seen such a statement in the
newspapers; l never learned it,"
Did you learn that in the course of
your examination this year?"
"I don't think So"
Mr.. Hen ricks said that in making |
the examination of the Equitable last |
spring he did not have his attention |
called to the existence of memoran-
dunn In lieu of cash kept by the cashier, |
ana he was asked:
"What examination was made under
your Instructions to verify the cash re- |