SOLVENCY THE ONLY QUESTION new york dec 21 francis hendricks superintendent of insurance of new york state was the chief witness before the investigation committee today and testified that the examination of insurance companies by hla departments are made to ascertain the solvency of the companies and that no examination Is made into the extravagance of the management of a company or into the salaries paid to officers so long aa the company Is able its obligations no investigation is made into the commissions paid to agents the system of loaning on premiums the advancing of loans to agents or loans to directors the employment of jiles people of officers in high positions Is not inquired into this has long been the custom of the department amr hendricks said and he declared further that he personally knew little or nothing about the various examinations adopted as they were entrusted to isaac vanderpool the chief examiner of the department while mr hendricks memory tailed him as to any legislation which he had suggested as a remedy to any in the laws governing insurance companies he stated that no measure that ha had ever presented had ever been opposed in cither bouso of the legislature neither bad any bills been passed his becom emendation men dation mr hendrecks said hia department spent last year about and received in fees and payments which was majd into the state treasury to make examinations that would bring out such as has been gathered by the legislative committee the witness baid would require ten more examiners and an additional appropriation of from to he thought however he could get the appropriation it he asked tor it mr II endricks 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 loab and company nor has abeso ever been brought to his attention mr hughes asked do you require the companies to present a detailed statement of their legal disbursements showing the names of lawyers who had money and what they had it tophas the department ever inquired into that no I 1 dont think so now wo find information of thit port being furnished to russia and to the new york state department here tor example I 1 have the statement of the legal expenses of the new york lite for 1890 giving in detail the amounts paid aggregating and the names of the re cep lents as furnished to the russian government now did the new york state insurance department ever have a statement like that no fio york life of any other company 1 I think not well you have got a total in the case of the new york life and the pant Is that it had not been the tradition of the of bo or chiary practice to require anything mere than so much for legal expenses and aa long as they had enough left to meet their with such a margin that in the ordinary expectations of life would not be exceeded why you would not take up the question of their 1 I dont know what report they made of course I 1 am not accurate it ia possible they did not put them all in the legal expenses they report ted now what Is your practice in acla alon to leporta that came in did you look them over yourself the annual reports not all of them it there is anything that the statistician referred to me then they aeo referred to the statistician in the first instance yes what beio his duties with reference to the reports did you look through the collateral loans 1 I dont think K who had charge of that matter mr vand did any oho in the department endeavor to ascertain whether there had apen any shifting of securities or temporary arrangement made which ln that the statement was not true no we took the report as they were made to roe unless then you had an examination you would not detect whether th at the end ot the given year were changed in nang of the next year 1 I think not without an examination when was it first you learned that hubn aeb co for example exa mple were taking alleged collateral loana 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 1 I have seen uch a statement in the newspapers I 1 never learned it did sou learn that in the course of your examination athla year 1 I dont think so mr hendricks said that in making the examination ol 01 the equitable last spring he did not believe his attention called to uio existence of a memorandum in lieu of cash kept by the cashier and be was baked what examination was made under your instructions to verify abo cash returns of the cashier as to cash on hand mr vanderpool made it I 1 did not give any instructions you are in the position of a superintendent in who relied upon your dubor donates dl nates but in looking over your reports or the reports furnished you from time to time was not your attention attracted to the very large amount expended by the equitable by the mutual and by the new york lite tor expenses pen ses 1 I thought they were large I 1 did not know what they had hid away in them have you asked during your incumbency cum bency for any information from insurance companies additional to that which was previously required 1 I dont think so sir you have not examined the provident savings lite assurance society during the time that you have been superintendent why is that 1 I cant tell I 1 suppose it bad been until I 1 had looked at that list had it ever been brought to your attention that their means were in crested by marking up the values of their real estate no I 1 never examined into it isaac vanderpool chief examiner of the insurance department followed mr Hendrick ja and detailed what was done at the examinations he said it was practically a comparison of the com banys sworn report of the books he had never known of wash sales nor of the year end loans he had never known that the salary of president mccurdy of the mutual nor had he ever inquired what it was the salaries are in one lump bum in the salary account and he had never taken steps to find out if cheso moneys had been paid for that purpose the large expenditures in the supply department had never excited hia curiosity although alie vouchers had been looked at at random these were stamped with the approval of the expenditure committee and he had never questioned their legitimacy of purpose the vouchers for the payments to the chairman of the expenditure committee he had seen tout never inquired into mr vanderpool said all examinations were conducted in this manner that he never tried to go back of a voucher or book entry this was a practice that prevailed ever since he had been in the department mr vanderpool waa on the stand when adjournment was taken until tomorrow morning