New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-10-23
KELSEY ON STAND AGAIN
Questioned by Fleming, the Coo
errors Special Commissioner.

Albany oct 22.-Otto Kelsey. Superintendent of the
State Insurance Department, the stand for
several hours to-day and this evening before Mat
thew c. Fleming, the special commissioner APP
pointed by Governor Hughes to investigate the de-
parment.
The examination OF Superintendent Kelsey was
directed chiefly as MIR. Fleming's questions indi-
Gated, to ascertaining his familiarity with the
work of his department his control its per-
sonnet and the measures taken by him to prevent
the repetition of the evils disclosed by the egisla
tive investigation of 1905.
The most important matters brought out In his
testimony had reference TO transactions of insur-
ance companies and the steps taken by the super
intendent 10 enforce the law forbidding purchases
after June last and requiring them to dispose of
their holdings within five years from December 81.
1906.
This came up in connection with questions as to
the duties of G. 5. Crippen department satStician,
who was required to examine the reports of the
companies Mr.. Kelsey swore that Crippen had
never called his attention to notable stock trans
actions Of the Mutual and Equitable shown in their
reports of last December. He had learned of these
only recently. he said. Mr.. Fleming put in evil
dence volumnous figures this subject. He
pointed out further that under date OF october 10
the Mutual had outstanding loans, including the
following five: Southern Pacific Railroad Company,
100000; Delaware & Hudson Company $500 900;
Northern New York Development Company, $500
Gc0J Illinois Central, $4,000. These loans were
the corporations concerned, among them bonds of
the Hudson Valley Railroad securing the loan to
the Northern Development Company.
If Mr. Crppen had called your attention TO the
Northern New York company's loan" asked Mr..
Fleming would you have looked into the validity
of the collateral? l do not mean to imply that 1t
is not safe Mr.. Peabody holds that it Is worth
par although he admits that the Mutual is for tho
moment the only immediate market"
II certainly would satisfy myself as to any mat
ter affecting loans If It had merit seemed doubt
full" replied the superintendent.
Mr. Fleming then reverted to figures showing
that the Equitable had exchanged 800 shares Of
marlborough Rapid Transit stock for $4,000 in
collateral trust AZ per cent bonds and S3O6,90O In
common stock Of the so-called 'Inter-Met." mer-
ger. It subsequently appeared that this
tered on the compauy's report by mistake as hav-
ing taken place on June Q, 1907 after the date fixed
by law tho limit for stock purchases; the real
transaction had taken place in March The depart
meut did not inquire into it, however, until the
present month.
one transaction Of the Equitable referred to was
the sale of Fidelity Trust Company stock Of par
value S249500 John f. Dryden for $1.f970OO the
terms being $50 600 down and the balance held as
a loan with the stock security. This. Mr.. kel-
sew said had not been brought 10 his attention.
and he would not even now offhand pass on its
legality, but he had ruled against a similar trans
action In real estate
OF s26O00ODD IN securities kept in the department
vault Mr. Kelsey said he did not know whether or
not they were negotiable II stolen. Later in the
day he said he had made inquiry. and found that
they were all registered and transferable only by
Joint action Of himself and the State Treasurer.
Deputy Superintendent Appleton he said, had the
combination Of the vault he did not know whether
or not Deputy Behan had IT,