New-York tribune., 1908-02-25
| KELSEY. FILES ANSWER
FULL DENIAL OF CHARGES
Sharp 1ttach, on Fleming for Bias
and Suppression of Facts.
by Telegraph to The Tribune.


Superintendent Kelsey. of the Insurance Depart
ment 1t was notable for a thinIy veiled attack
on Governor Hughes for persecution of the 1nsur-
Superin ntendcnt and bitter attack on MI
Fleming for unfair and unjustsmethods in his in
vestigation of the department.
When the document handed down by thc
presiding officer Senator Raines moved that 1t &c
tabled 'pending printing. There was no discussion
whatever. This defence will be taken up on
Wednesday with the Senate's resolution of pro-
cedure on the demand for Mr.. kelsey's removal
The following is a synopsis of Superintendent kei-
sey's defence
At the end Of the answer submitted to the Senate
csIIy every subject hercinbefore referred TO
g. 1907. or was in existence at that time. I might
well have rested nv answer" Superintendent
Kelsey adds, upon the broad proposition taat my
the Senate it is contrary the traditions and the
However / have been content TO submit to your
honorable body an answer to charges however
Mr. Kelsey makes specific answer to each one one OF
SuperirtSndent bay. been free from investigation.
months and nine days, Notwithstanding the unusual
and extraordinary conditions including the recent
great financial panic. A typewriter copy of al,
m esGd 6m chSrse b1 M Esm1 Egned he d I @ and
these charges as contained in the typewrtten copy
Ss be the m same ehsTres paTaphrased by Mr Fleming
in the beginning of his report TO the governor .nI'
1er @ me dinly or iega5 ga PeI9igs headIines of
newspa per-" Superintendent Kelsey says that he
had never been informed that there existed s any
other charge of any description from any source
whatever. He says that Notwithstanding request
which he communicated ~ Mr.. Fleming on Decem.
forth a full statement the entire work of the de
arad b a nd Fmn r e4e @ at any time m
dica In character and that it is apparent mat M
truth he was an attorney seeking to find special
Instances OF complaint in order to Place place Ihereon
at failing to present those matters and things intg
est during his administration. ,, :,
Neither In the message of the Governor nor IN
the report of Mr. Fleming, declares Superintendent
plant of corruption malfea sance or wrongdoing OF
connected with the department since have been
testimony in Substance or fact that the rights Of
jected to loss injury during my ADMINISTRATOR
SUBSTANCE OF CHARGES.
According to superintendent Kelsey's view. Mr.
FirsteFaiiure 10 rcorganze ;he Insurance De-
second-Failure to enforce the law.
tons eight of which were dismissed by Mr. tlen-
ing which lei sx Te nc the Subject of
ments and to the alleged failure to investigaIe
s9perintendent Kelsey treats these charges and
heads: Failure TO reorganize. the Insurance Depart
ment; the subject of insurance elections: the sub
Answering the alleged charge of his failure 70
Mr. Fleming makes criticism as TO the character
stant actarv Ksefer is criticised for his employ
nent from 1900 to 1902 by the Security Mutnal LIZ LII
a"fmarial work for that company. while connected
with the department Nj keefeEs rsPpiinHt of
The company to do some work; that he subInLtsd TIED
,fd .at fhov saw no reason why he might no prop
criy the work provided il was done atsr
connected with other state departments; 4.o,, tho
Regarding the alleged failure oi MI, Ii reseryes
chief actuary to discover that the poIIC! o!b al
reported by the Washington Life on December o.,
1902 and also Decem6er }" Iy HhonI5 have ap
noared as a liability the annual statement Su-
Mr. Fleming would have shown that TINS was a
cunningly devised scheme by the oHlgeus - ,nerts
washington Life to misead insurance dPpaluueh!,S
by changing lne'r ' t, rgenIant wear changing
hack from a paid-for TO written basis III ctdSI
that there might he comparisons MADE OF lI 1It
tst ocSvsd not only the actuary the New
York department but the departneeRuts me us oL every
other state in which the company did business. +,
Every emrloye criticised by Mr Fleming was IN
the Insurance Department wren me LI1 ds I,ear
against removal of Superintendent helsey IaSt
Most of them have spent the greater part Of Their
No Question as TO the honesty and integrity Of any
of them With single exception, the matters
complained of occurred prior 10 superintendent
Kelsey's administration.
USE OF FUNDS IN INSURANCE ELECTIONS.
Answering the charge that failed nvesti-
gate the use of companies funds in recent 1nsur-
aOre elections SUPERINTENDENT Kelsey says the
complaints of correspondents were fully presented
the Senate last winter and evidence adduced OF
the courts of New York state The opinion of Su-
preme Court Justice Bowling in the case of Farrell
act New York life is quoted and Superintendent
Kelsey declares that his Judgment. based on the
afidavits of large number Of persons from many
states has not been impeached by Mr.. Fleming,
nx ,iastton ma on co0d1cted bv The departr3ents of
Michigan. Tennessee. kentucky and New York
The courts hold that ne1ther the moneys of the
New York Life the time of its employees during
business hours has been devoted to the election OF
the administration ticket, to the distribution Of
votes or proxies There have been two judicial in
vestigatons by the courts Of New York and Ken
tucky in regard TO these elections both OF which
have adtudicated that there was no evidence which
sustained the complaints and charges
Replying to the charge thdt ne fatIed 10 take
proper action with regard To dividends appOrtiOn-
the insurance companies. superintendent Kelsey
says that answer TO this so-called charge seems
Fleming That MIR. kelsey says that he was ad-
vfsed by the Attorney General that under these
provisions he could not require such statements
until December 81. 1907
SUPERVISION OF INVESTMENTS
The next answer Of Superintendent Kelsey relates
properly" He says so much of this charge as
involves the disposal of securities by companies is
dismissed by Mr.. Fleming. as he recognizes the
wide discretion conferred upon the officers of
SI,Tance companies and the superintendent by the
statute BY lnnuendo Mr. Fleming assumes that
should have exercised power not conferred upon
sell their stock in banks and trust companies and
the stocks notes and bonds of public service cor
statute he does not know the law. but If his con
StTuCt0n correct the experience Of the finan-
ciaI world recently demonstrates the disastrous
effect which would have resulted from forced sales
Regarding the purchase OF securities il IS a sutfi-
cent answer that the present Attorney General has
ruled that such cases as are cited by Mr.. Fleming
in violation of Section 30
AS 10 section 100. M Fleming says that the
purchase by the companies of the IHterbOrough-
Metropolitan and the Chicago K Northwestern
securities antedated the prohibition contained i'm
the statute. and were. therefore legal and that as
"a the purchase of the Northern Development Com
pany'S securities. they We're UuqueStiona blv we'll
secured. lie only criticises me not making
innMrN Mheiher thAsa Ai.lA-ast