New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-04-26
WORK OF VANDERPOEL
His and Hunters Failures ShOzcn an
Hughes Inquiry.

/ lar and in some instances dishonest methods
/ prevailed among the insurance companies and
| that the State Insurance Department not only
failed TO check the irregularities and abuses
! but also failed 10 detect their existence. II is
! necessary to go back 20 the testimony taken be-
! fore the Armstrong Committee to recall how
/ largely Isaac Vanderpoel. the chief examiner,
and Robert II. Hunter. the first deputy super
intendent of insurance, both of whom che pres
| ent Superintendent Mr. Kelsey. regarded as in
! dispensable at least for several months in the
management of the department contributed to
the failure of the department to discover and
correct the evils in the insurance world
| Eanderpoel entered the Insurance Department
! in 1870 and became its chief examiner In 1895,
continuing in that capacity till a few months
ago. Hunter appointed first deputy in 1897
| by Lou T. Payn, assuming charge of the New
| York City Office, where he continues to serve.
In the period of these mems service in an inn
portant capacity there have been three or four
superintendent. These two men held office
throughout several superiors' terms. They
knew the ropes" They had the practical
knowledge of the department which made their
superiors lean upon them. II is usual in de-
partments of that sort. whose heads are ap-
pointed from private political life with little
knowledge of the subject which they exer-
else authority for some permanent deputy or
clerk really TO control the policy OF the depart
ment, and Che Armstrong Committee reports
that superintendent allowed Hunter and the
examiners "to conduct examinations in their
own way. practically without direction or inter
ference"
How bad their own way was is disclosed by
Nanderpoels testimony before the Armstrong
Committee In his examination of the Mutual
Life Insurance Company he did not discover
how Iar Gala % he or ETa
merely found a lump amount posted as the SAL
airy account and inquired no further He did
not learn about the very large commissions paid
Robert H. McCurdy. son Of the president r.
II. McCurdy's account was the only one kept in
such way that it impossible to tell from
the books the commissions actually paid to him.
Did this irreguarity strike vanderpoel as some
thing to be investigated? mo. It did not
The supplies department 20 whose expense
account was charged the buying OF legislatures.
he examined no further than 70 that the
vouchers had the approval of some one in
authority This was the department that, as
the Armstrong committee readily developed,
maintained Andrew c. Fields and his House OF
Mirth" at Albany, and for Juggling the accounts
Of this department two vice-presidents of the
Mutual now under Indictment. Mr. Van
derpOels testimony discloses the reason why he
discovered none OF these things and the reason
why insurance examinations in this city con-
Quoted by him under the supervision Of Mr..
Hunter never served TO reveal or check the mis-
use Of the pohcyholders' money. Questioned by
Mr., Hughes. he testified as follows regarding
the scope and thoroughness Of his examination:
.Q.-whenever you found on a voucher the stamp
showing the approval OF the committee on exDendi-
Were satisieds AT !, vas eioheHa' Is 10 say you
go that far as the examination was con-
q
MONEY FOR any purpose; provided IL was authorized
eisrnT a They could ''''-' ''''''''s 'O1' CRU
Q1,,Tihe result Is that your examination was not
az an irected 70 the proprety OF the expenditures,
but to The fact OF the expenditures? A.-To the
Q--As shown by the approval OF the committee?
Q-But il really was no, an audit Of the e1-
nenses further than 70 require the production OF
Q-Why dd you limit It that way? Al always
Q.-Has that been the practice in all the exam
o-Never to go behind the voucher? Al, has
,C-Even though the voucher does not disclose
the nature Of the services rendered or any detail
OF the services rendered provided II IS approved
by the appropriate committee or appropriate OH
go II anywhere you have an oficial voucher
OF any officer or OF committee. that closes your
inquiry? A.-That closes my inquiry.
paTtment have been no check whatever upon waste
be? A~Not been intended to be
Q-There has been no effort 10 ascertain whether
A.-Not thar know Of.
Tha. extract from his testimony tells the
whole story OF the failure Of the insurance de-
partment in this city. The examiner looked
merely for a balance Any skilful doctoring OF
books could draw from him n certificate that
could be used in advertising an insurance COM
pany 70 attract patrons. He made no examina-
ton to determine IL any of the officers were
interested in the buying and selling OF securi- |
ties He did not put any OF the officers on oath |
and examine them as the Armstrong Commit |
tee did with remarkable results. The matter |
of distributing gains TO polcyholders was not |
inquired into He did not ask whether any of |
the officers had participated in syndicate opera |
tons.
oYou simply Locked Ct The amount I'M that had
0-And endeavored to whether the subsidiary |
DE 69q s5e 1 ddssF and Gs
O.-That the extent OF the examination? A
Yes. sir
In the examination of the Equitable Mr. Van
derpoel testified to following his usual policy.
o.-Did you examine into the propriety of any
p9yme eF y3n had Voucher that Gid not disclose
the purpose OF the expenditure. did you go behind
go that your examination in the Equitable as
IN Ie o. discose whether the expenses had been
Iegtimately incurred? A-No
swhen the examiners did find the books doc
tored or the assets juggled to make false but
desirable showing in the annual reports, they
overlooked these irregularities. Mr.. Vanderpoel |
testified that he was cognizant Of tho juggling
with securities. Ito make favorable showing
at the end of the year" He knew of $1O.OO0OOO
in the case OF the Equitable loaned" just before
December 81, and paid just after Many OF these
fictitious borrowers were subsequently shown
to be mere clerks in a banking house. Had Mr..
yanderpoel learned that? No. 1t did not occur