The Wenatchee daily world. [volume] (Wenatchee, Wash.) 1905-1971, 1909-08-25
NICHOLS ADMITS
TAKING FUNDS
SAYS HE SPLIT UP THE GRAFT
WITH SECRETARY OF STATE S.
III. NICHOLS-SCHIVE GOT
THE BALANCE

since 1905 for advance examination
fees which was divided between s.
H. Nichols and j. H. Schively has
been spent for private use, and not
one cent went into the treasury or
remains to conduct the examinations
this was the testimony Of Insurance
Commissioner J. H. Schively yester-
day before the senate sitting as a
court of impeachment.
The insurance commissioner spent
an uneasy day under cross-exam1na-
ton by Lester P Edge, of the house
board of managers, and Assistant At
torney General George A. Lee. Schiv-
ely lays the blame for extorting the
money from the insurance companies
on S. H. Nichols, formerly secretary
of state and ex-officio insurance COM
missioner. However, he admitted
that one-half of the proceeds of the
scheme went into his own pocket and
that he has spent all his share. He
AYERS that Nichols was advised by
former Attorney General John D. At
kinson that advance fees for exam
ination could be legally collected.
"You have testified that since 1905
there have been 1913 insurance COM
panies which have entered the state"
said Assistant Attorney General Lee.
-'On basis of 5000 for each company
the total amount received by You
would be $4,000. Where is that
money!"
81 did not get that much; half of
it went to Nichols" replied Schively.
"Gone to Fight Investigation"
What did you do with your half"
asked Mr.. Lee.
1T Is gone to fight these proceed
ings and the investigation which be-
gan after the legislature adjourned"
replied Mr.. Schively.
This money, then, was appropriate
ed and spent for your personal
ends?" was asked.
1T was" replied Schively.
The witness then explained that
the total OF $36,400 was not the true
total, for the reason that some of the
companies paid only 800 in excess
of the statutory fee of $50 for enter
ing the state. The companies which
were handled through the western
agency at San Francisco paid the
500 rate, while others paid 5000.
Have you any record in your pos
session or in the files of the insur-
ance department as to how much you
got?" asked Mr.. Lee.
There is no record, and l have no
way of telling how much 1 got" re-
piled Schively. Il got half of what
was collected for advance fees
Have examinations been made of
the companies from which you col
lected this money!" asked Mr.. Lee.
II have received a good many fees
for which no examination was made"
replied Schively. Il intended, so far
as l was concerned, to see that the
examinations were made"
IA Departmental Order
mot having any assurance that
you would be elected insurance COM
missioner, why did you continue to
collect money and spend it, knowing
that you couldn't turn it over to your
successor?". asked Mr.. Lee.
"That was departmental order,
issued by Mr.. Nichols" answered
Schively. Il had intended, if elected.
to discharge the obligation"
Tell me, fro mthe report of the
insurance department, If the Capital
Life Insurance company of Colorado,
and the Illinois National Fire Insur-
ance company of Illinois, from which
you collected 5000 for advance exam
ination. fees, are doing business in
this state at present." said Mr.. Lee.
"They have withdrawn from the
state replied the witness.
did you make any examination of
either company, and did you return
the money!" was asked.
81 did not" was the reply. "The
examinations were not made, and the
money was not refunded. l was not
controlling that; l was not the head
of the insurance department then"
"You got half the money. didn't
you?" was asked Where is it?''
at is gone" was the reply.
Blame Is Thrown ON Nichols.
AS the charges of the state regard
ing the collection of examination
fees without actually performing the
examinations have been admitted, the
defense will rely upon the contention
that Nichols and not Schively was re-
sponsible. Schively will contend that