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About Omaha daily bee. (Omaha [Neb.]) 187?-1922 | View Entire Issue (April 4, 1899)
* ' " st THE OMATIA DATITVT T13E : TUESDAY , APttTL . 1S5M ) . CONDEMNS STATE AUDITOR' Complete Ecport Piled by the Legislative i Investigating CoraihiUeo , FIND MANY THINGS DECIDEDLY QUEER IiiMiranro I'tniiilnorx > ot HIP Only On on to Tnt < c Money * , t Hlulilfiilly IJiie 'I IH-III tlntlro MniuiKC- nicut of HIP Olllcc I.ax. LINCOLN , April 3. ( Special. ) Follow Ing Is the report of the committee appointed by the legislature to Investigate the charges of crookedness In the conduct of the auditor's oillco. The report was a unanimous ono nnd bcnrg the signature of every member of the committee , which was composed of Senators Currlo of Custer , Prout of Gage , republicans. Halo of Madison , democrat , representatives Evans of Adams , Fisher of j Dawes , republicans , nnd Weaver of Rich- ' nrdson , { unionist. "Your Joint committee appointed to In vestigate the management and affaire of the ofllce of the state auditor of public ac counts during the Incumbency of the Hon. John F. Cornell beg leave to submit the following : "In pursuance of the appolntmecnt of this commltteo by the legislature of the state of .Nebraska . nnd the authority granted by sold body to employ stenographic iwslst- nnce , Issue subpoenas and other process and carry out the purpcso for which said com mittee wnn appointed , John W. Dlxon was rhoson ns clerk and stenographer , and he has had during said Investigation the ns- idstnnco of three other stenographers , for all of which services this committee issued vouchers for the sum of $1,000 ngalnst the appropriation for legislative expenses of the Twenty-sixth session of the legislature of Urn state of Nebraska. "This committee also employed J. A. Abbott , nn expert accountant , to make nn examination of the accounts of the auditor and lesued a voucher In payment therefor for the sum of $130 against the same ap propriation. "The committee has also Iwued vouchers for Incidental expenses to tJio amount of above $50 , making the total of $1,1SO This IncludtB the entire expense Incurred by said committee. Ohjrrtn fit tin * Cnmnilttrc. "It ban been the purpose of said commit tee to eliminate all politics from this In vestigation , ns well as nny matters of per sonal controversy between the auditor of public accounts and his discharged Insur ance deputy , Snmuol Llchty Mr. Llchty has appeared befoio this commutes tbo same as any other witness for what Information he could give the committee. The purpose of this Investigation has not been to pass \ipon the question of Mr. Cornell's loyalty to the tenets and teachings of the po litical party to which ho gives his allegiance. Mr. Cornell's party loyalty or his party- treason Is a question for the tribunal of his own party associates , and the commltteo has therefore disregarded any popular clnmor cither for or against htm on the grounds of party expediency. The sole ob ject In creating this committee , the sole purpose of the committee after It was created. Is and bus been to fairly and Im partially , without political prejudice or n consideration of personal differences of any persons whomsoever. Inquire Into the con duct nnd administration of the ofllce of the auditor of public accounts during the In cumbency of the present occupant of that ofllce. With this purpose In vlow the com mittee has hold in all thirty sessions , iwhlch , with the cxpeptlon of ten executive BPss'lona , have been open to the general pub lic. A great mass of testimony has been takpn covering 1,217 pages , exclusive of re ports , of typewritten matter , which we herewith submit ns part of our report. From this testimony we respectfully re port the following findings of fact : biiimiiiiry > f f " 1. Thnt John F. Cornell has been audi tor of public accounts of the state of Ne braska since January , 18ci7. That during his Incumbency In hald ofllce there has been n great deal of friction between the va- ilous departments of the office , owing to the unwise selection of his subordinates. This condition of affairs Is responsible to soms degree at least for the Irregularities occurring therein und hereinafter pointed out " 2 That John F Cornell , by virtue of his ofllco ns auditor of public accounts , received carious fees from Insurance companies doing business In this state from the date of his Inauguration as auditor in 1897 until Feb ruary 17. 1898 , nnd Instead of paying them directly to the state treasurer , we find that bo deposited same partly to his private ac- rount In various banks , and partly to his account us auditor In another bank In this itnte. That these funds In most cases were deposited and mingled with his own private funds , and that ho had so deposited various sums throughout said period. At one time the amount of such funds In these private banks aggregated the sum of $0,000 , which the committee finds he had In his possession1 , nnd so deposited for a period of three months. This practice at the state auditor has been the custom of the ofllce for years past The fact that the state i treasurer objected to receiving small chocks i Is a partial explanation for the auditor con tinuing this unbusinesslike nnd dangerous method in vogue under former regimes Mr. Cornell testifies that he regarded these fees i as atato money Wo * further find that t the auditor did not speculate with nor loan nny of this money to private Individ uals , and received no Interest or anything of prollt from these funds , and that the banks In which such money was deposited have always been Institutions of 'high ' stand ing nnd solvent In every respect. Mr Cor nell testifies , and wo have no evidence to the contrary , that ho was able to pay over to the state nt nny time all moneys of the itate BO I'eld by him. That since February 17 , 1S98 , which Is about the tlmo that the Bupromo court rendered its decision In tile Eugene Moore casu , the auditor has not re ceived any such teen , nnd that all money- retained by him temporarily previous to this dale has been paid In full into the state treasury. Wo arrive at the above facts from the testimony of Samuel Llchty. as well ae Irom the evidence of the state auditor him- lelf. "Your committee further finds tliat Samuel Llchty , os Insurance deputy , also kept foi i short period at various times , Insurance tees coming Into his hands , It having been the rule of the otllco that ho should wad mill a page of entries was completed before turning the said moneys over to the stau ludltor. "Mr. Llchty was also In the habit ol using cash out of the cash drawer of the In- urance department and depositing thereto ! his due bills , and settling for such itcmi by check with the slate auditor at the van Dim dates of settlement. Mr. Llchty test ! ' ties that ho had tbo equivalent of suet amounts In the bank and that the practice was followed merely for convenience. Drew 1'ny IllrKnllj. " 3. The committee further finds that sev eral employes of the auditor's ofilco per formed services for the state nnd re ceived pay for the same to which they were not entitled F. A. Archard , while acting na employe of the office , performed services ns accountant for the Mutz Investi gating commltteo nnd drew therefor the sum of $183 This waa also true of J. A. Simp son and W. n Price , nnd who whlto acting ns paid employes of the state received ad ditional fees for packing books and revenue blanks to be shipped from the auditor's office. One of the stnto janitors , nt least In ono Instance , performed part of this work , receiving no pay for the same , which nil went to W B Price , whom the auditor had permitted to do this work. From the testi mony before us upon this point the com mittee finds that the services for this work were Indefinite , that the tlmo necessary to perform It uncertain , and that the amounts paid far such services were not a Just charge against the state and wholly Illegal. Thla work could have been done , and ahould hnvo been done , by regular em ployed of the .stnto without drawing upon an appropriation not made for that work. Pal He nnd Krniltilont Afllitn lt > "This committee also find that In March , 1897 , C C Pool , deputy auditor , drew a warrant to himself for $225 , alleged to have been In payment for work < lonc by him In transcribing , correcting and sending to the clerks of the various counties abstracts of government lamJn In Nebraska upon wblcn full entry had been made during the year ISflG. The evidence shows that the affidavit upon which thin warrant was Issued was faleo and fraudulent. That this work for 1896 had been done by employes of ex-Au ditor Eugene 'Moore. ' nnd who hod been paid therefor the sum of $300. Mr. Pcol , a * well ns the auditor , was con- versint with these facts. The commltteo also finds thnt Mr. Pool , according to his own testimony , did not transcribe any ab stracts cf the year 1896 , and that the work done by him was confined to making correc tions which were not all completed at the time the voucher was lesued and the war rant drawn. That said corrections have not yet been completed and that 1896 ab stracts are still being returned to the office for correction. Wo find , therefore , that the value of the services of making 'correc tions , should Mr. Pool have been entitled to pay for the sa.rae , was wholly speculative and uncertain at the time ho received pay ment. Wo find that Mr. Cornell approved this claim without knowing at the time of Its presentation to htm how much work had been done or even that It was in progri-ea. Wo further find that the work of transcrib ing and correcting such abstracts la ordi nary clerical iwork and that $50 would have been sufficient compensation for such terv- Ices. That there was usually paid by the state the sum of $300 , or thereabouts , for thla work annually. I' . O. Hedlund , ex- deputy auditor , testified bcforo the com mittee that thin had been the custom for eight years. During the regime of Eugene Moore as auditor this work was generally done by aorne relative at Ihe cuntcmary ex orbitant charge. It has been Impossible for this committee In thu brief time allowed It to ascertain to what extent corrections were made In 1896 abutracts by Deputy Pool , as this work was done by letter and no record ever kept in the office. Mr. Pool could not remember a single abstract , a single cor rection made for 1896 , or a single county clerk in Nebraska to whom ho had Bent the same. "Your committee further finds that It is not the Intention nor spirit of the law that thin woik should be paid for by the state. The appropriation out of which payment of such services is usually made was Intended for payment of the original abstracts for which fees had been charged by the various land offices. Mr. Pool evidently takes this vlow of the case now , for since the charge of $2i5 In March , 1817 , there have been no claims filed for this work upon abstracts for the years 1897 and 1S9S , although work has been done for both years by Mr. Pool. It Ir , therefore , the judgment of this com mlttce that Deputy Auditor Pool should be required to pay back the amount of $225 to the state. Draw Double I'a > . "Fourth The commltteo finds that County Treasurer Examiners J. A. Simpson and F. A ArcharJ , while acting In that capacity nnd drawing salaries from the state , at various times during their terms of office examined Insurance companies and received pay from the Insurance companies BO ex amined , J. A. Simpson having received the sum of $470 for one month's service. We find that the practice of the auditor In al lowing county treasurer examiners to work In another capacity and receive pay for the same IB In contravention to the letter and spirit of the law prescribing the duties of county treasurer examiners Their full time should bo given to the state , to the end of un efficient and prompt public service. We find that all county treasurer examiners ap pointed by the present auditor as expert accountants and have succeeded In examin ing every county Jn the state at least once In two years , as required by law. This Is the first tlmo all counties have been ex amined In this manner since the law went Into effect The committee further finds that the expense accounts of the county- treasurer examiners above mentioned were kept In a loose and unsatisfactory manner nnd that the books of original entry or memoranda made by said agents have been lost or misplaced by said examiners Sev eral Items charged for could not be satis- factorily explained , because of the absence of such a record In this connection It is proper to report that F A. Archard drew nn expense ao.ount of $100 before nny part of said money was expended In the dlBcharse of his duties Mr. Archard also turnol over to his wife for her private use several hun dred miles of railroad mileage , the property of the state of Nebraska He should pay to the state the value of said mileage , as well as the Item of $7 Mi which he over charged the state , undoubtedly by mistake , ns expense while acting as county treasurer examiner. of luHiiriincc Companion. "Fifth Your commltteo reports further that It has carefully Investigated the Insur ance department of eald ofllce inasmuch ns the committee was created primarily be cause of scandals therein. We find that It Is legal and customary for the auditor of public accounts to commission ono or more persons to examine any Insurance company ho may think It proper to examine for the benefit and protection of policy holders In this state Wo find that Auditor John F. Cornell bag commissioned various exam iners at different times to make examina tion of Insurance companies That the only record made of such examination consists of the report of each examination filed In the auditor's office and signed by the ex aminer. We find that -while Mr Cornell'/ ! Instructions to his examiners were to make the examination thorough and their charges reasonable , these Instructions were not car ried out , and that the auditor Is responsible WALTHAM WATCHES f The best and most reliable timekeepers made in this country or in any other. Tbe "PerfectedImerican IVatcb , " an illustrated book of in teresting information about watches , will be sent upon request. American Walt bam Watch Co. , IValtbam , Mass. or the neglect nnd extortion -which the cvl- enco discloses to have been the practice. lo failed to exercise thnt careful super- Islon over his appointees demanded by the ntercftts of those Insured In this state. The xamlnotlona made wcro largely superficial nd the results obtained no more than could mro been reached by a careful cxamlna- on of the sworn and printed reports of the ompanlcs. In each case the vast majority f the assets of Insurance companies were lot examined or Inspected by the examiner , icnce In most cases It was Impossible for 10 examiner to ascertain the solvency or isolvency of those corporations , which umld bo the main purpose of any cxamlnn- on We also find that Auditor Cornell , fter arrangements had been made to form combination of several western states for 10 purpose of nn Investigation Into the flairs of several largo Insurnnce companies t the United States stopped further pro- cedlngs so far as the state of Nebraska as concerned by refusing to allow his oputy , Samuel Ulchty , lo proceed with the rrangcments which had been partially com- > letcd. Hulcs had been adopted by Kan- is , South Dakota nnd Nebraska , \\hlch prn- Ided that one set of examiners should value ascts nlone Including lands , mortgages and ther securities In various parts of the ountry Examiners were to be allowed 10 per day and expenses. Milken ni > t'lmlne CliniiKC. "Your committee thinks , In view of the act that the largo Insurance companies in only be successfully examined by n com- Inatlon of several stntcs , this being the ccopted rule of practice , that the action n the part of the auditor was utuvlsc and specially FO In vleu of the fact that Mr. Cornell soon thereafter sent Examiner Oluf V. Palm cast to cxnmlno alone and allowed tm to charge any amount he could get and ven charge companies which were not c\- mlned. No record of the charges of said xamlners Is required by law , nor has nny uth. record been kept by any auditor except ho present Incumbent of that olTlce and hen only for the year 1897. At the In- tanco of Samuel Llchty , Insurance deputy , his record was kept during said year and ho auditor agreed to the wisdom of such course. In 189S the record was abandoned nd Mr. Cornell has not required It to be ept after such abandonment. During the ear 1S ! > 7 all communications between the nsurance department and the insurance ex- miners passed through Mr. Llchty. Since hat time the letters from such examiners nd especially those of Examiner Palm came lirected to the auditor 'personally' or were ent to his private residence In the city of jlncolu at 1704 Washington street. During he year 1897 it appears thnt a record was egnlarly filled out by examiners and the barges found therein were limited to $5 per day for fraternal societies and $10 per ay for old line Insurance companies. This ule was but a verbal one , and Its existence corns to have been uncertain in view of the act that late In 1897 Samuel Llchty wrote x letter to George W. Cornell , which was ntroduccd Into evidence as Exhibit 92 , tatlng that he thought Mr. Cornell would flx the examination charges for Palm and illlau , who were at that tlmo contcmplat- ng a trip east to malic examinations , at 10 per day and expenses. This would In dicate that there was no fixed rule for charges and the evidence discloses that Mr. Cornell did not know what his examiners vere charging Insurance companies. The auditor approved but few bills of exam- ners and then only because some company lad refused to pay the examiner until the auditor made the requlbltlon which Is pro- Idcd by law and should have been made In every case. Your committee finds In rcla- .ion to charges made by Palm and otbci nsurance examiners , as follows : I'nj , lint .No 'Work. " ( a ) Companies that vvero not examined were charged , and O. W. Palm , who was so paid by the New York Mutual Life , could not remember the amount paid him , but ad- nitted thut It might have been $2.0 An attempt was made to collect by threats a bill of over $300 from the National Insur- inco company of Montpeller , Vt. , when no examination was made , and the expenses In curred by bald examiners , about $130. The auditor know of this attempt and of these : brcats and still retained Mr. Palm as an examiner. Such proceedings were shame ful and reflect discredit upon the auditor's ofllce and the great fctate of Nebraska. " ( b ) The average charges paid Palm and Glllen were $20 each per day and expenses , each day consisting of four hours' work , $10 per day for eight hours' work would have been ample consideration. " ( c ) The testimony shows that Mr. Palm nvarlably presented bills for larger amounts than were received In settlement , and from the testimony of Olllen , Palm made all the Charges and gave bargain examinations , each company paying for what It got and according to the time consumed In the ex amination. Palm substantiates this finding by testifying that several of the companies examined by him could not be given a thorough examination In the time consumed. " ( d ) Mr. Glllen had no previous ex perience as an examiner and acted simply as an assistant , performing clerical work under the direction of Palm and uilng no Judgment of his own and making no reports to the auditor. Wo think therefore that $5 per day would have been ample considera tion for such clerical services. " ( e ) Mr Palm had no experience as an Insurance examiner before his appointment by Auditor Cornell and the largest salary he had received previous to his entering the Insurance buslnets , which was about five ' years ago , was $7C n month. Ills appoint ment was made for political reasons and not i actuated by a consideration of the state's i Interest In the selection of a man of tbo i most approved integrity and ability " ( f ) J. A Slmpnon , while acting as In , surance examiner , charged old line Insur ' ance companies of other states from $25 to 1 $35 per day , charging fraternal societies $15 per day besides his traveling expenses In i each case Each day consisted of from i four to live hours' work The auditor has , testified that $10 n day was a sufllclont charge for any fraternal organization to pay , and that an examiner . making a higher charge should be compelled to refund all In i excess of said amount. Tbe auditor has i not required J A Simpson to make such i restitution ; he still has an opportunity. The following exhibit Is made a part of this section and Is but one sample of the ex ' tortion practiced upon a fraternal bene ' ficial order by tne Insurance appointees of t the auditor's ofilce. Suniplo of niliirtlon. The Nntl Aid At sn , Ur , to J. A Simpson , Examination . . . . . $75 Expenie 25 $100.0 ] Heed payment , Jan C , IbH J. A SIMPSON. Btato Kxumlner , N < bra ku Ins Dept. " ( K ) I' ' A Archard also examined several fraternal insurance companies In Iowa and Illinois and following In the practice of Palm and Simpson charged In such cases $15 per day and traveling expenses The auditor baa this additional opportunity to have Archard refund the excess over what he regards by his sworn testimony the limit of examination charges for ouch com panies. " ( h ) Examiner R. M. Taylor's conduct and charges disclose ouo of two things , either the rule of the ofllce was $5 pet day for fraternal societies and Simpson and Arohard grossly and without reason trub- bled the legitimate charges or the rule waa changed by the auditor , for the testimony of Mr Taylor shown that ho was employed as Insurance examiner of fraternal societies for twenty-threo dayu at $5 per day and that he regarded the remuneration adequate and fair. In either case above mentioned the action was unwarranted and the charges ! tuade against U > o fraternal and beneficial orders of the United States by the Ne braska Insurance department under the prccent auditor Jiuve been excessive and un reasonable. "The findings of fact above pointed out In regard to the examination of eastern old line Insurance companies are fully cor roborated and substantiated by the testi mony of Thomns ( llllen , who acted as an examiner with Palm. Glllen says that $300 was too much to require of the Hartford fire , that $100 would have been sufficient knowing as he did the tlmo consumed and circumstances surrounding the examination He says also In substance that the Insur ance companies were not treated fairly and that ho knows of no reason why the Na tional Life of Montpeller should pay one cent to any examiner. That Is the company to which Palm presented his bill of $300 when no examination was made and at tempted with Cornell's knowledge to col lect the came by threats The evidence be fore the committee Is conclusive tint while the charges mndo by the Nebraska exam iners have not been In excess of the fees charged by other stales or even by Insurance examiners of this state under Auditor Moore nnd hh predecessors , the charges of Palm and Glllen were excessive for the services rendered nnd precedents upon this point within Nebraska or outside of It constitute no measure of the Just and rea onablf > charge which the auditor of this state should see Is hereaf'cr the rule In the conduct of such examinations PromlKOM f Pr "Your committee has had no evidence taken or testimony given which shows thnt John T Cornell has received any part of or shared In any respect whatever the ex cessive and Illegal fees so collected. How ever , the committee has evidence and so finds , that the Insurance Examiners Palm nnd Glllen eaoh expected to present Mr. Cornell with n present of some Kind cither In money or other article The expression "complimentary" was used In several let ters and the words and figures $100 In an other letter. The committee can best ex plain the evidence upon this point by setting out the following exhibits , numbered 21 , 31 and 32. ALLYN HOUSE , HAUTroitD. Conn , Tob. 1 , 1898. My Dear Mr. Cornell- shall try to make the bill large enough so that youj will be remembered We got $100 apiece from the Hartforn Yours. 0 W. PALM ALLYN HOUSE. HAIlTrOKD Conn . 1'cb. I. 1898. Hon John F Cotncll. Auditor of Public \ccounts , Lincoln , Neb Dear Sir : Mr. Palm Is writing you regarding our ex periences In Hartford , nnd I might add u word on the same line , but will be brief The situation has been peculiar owing to the quadrennial examination provided by the law of this state. Our relations with the Hartford Fire passed off pleasantly. Mr. Batterson , president of the Travelers , has a standing reputation of being a fighter from the start to finish , although v\c must con fess that he treated us better than we ex4 pected In the beginning. The end of things , howevei , ds generally n reverse of the be ginning , and so It was in this cabe. He begged us to consider the matter of accept ing the report of examiners now nt work , which wo know nothing of befoie we came here , but after looking Into the matter wa | found that the examination was beinc car ried on in a very thorough manner , the Con necticut department having employed two expert actuaries from New York , one Mr. , Whiting , being considered the best In that 'line ' in the United States. i ' We decided for the present to accept their reports when finished as being full enough to submit to you for your consideration , but in no way binding upon you to accept It ns final Mr. Uatterson was asked to share our expenses. He said ho would flx that with you , as U was nothing but a d - n steal , anyway ; he would look ut > the law. Mr. Palm had you forward authority. Ho was called over to lht > ofiloo thU > morning and ' was considerably Insulted , as was evident ] , when he returned. As I understand it the' old gentleman tried to auction him off with $50 bids , reaching $150 , ntler which Mr. Pulm come to the hotel In disgust , almost deter mined to obtain orders for n full examina tion. I felt that I must have been Kent here for some purpose , and together we con sidered the matter and flnallv calmed the troubled waters by compromising the mat ter at $200. Mr. Palm thought. In such a case , where $5,000 was saved bv the com pany , that we ought to have had $ JOO at least $300 as we fully Intended to send you a complimentary , but as he Is on n heavy ex pense , and I nra hardly remunerated for trip , and further traveling and hotel bills to pay , we are compelled to disappoint you this time , sorry to say. Will hope for better things In the future. Mr. Palm Is making a request jegardlng my name being mentioned In letters If agreeable to you it would certainly relieve him and myself from much embarrassment. Thanking you again for the privilege of the experience of this trip , with kindest regards to yourself and family , I am very truly yours. THOMAS H GILLEN. IlnttcrHoii u Ilnrd l'ruio > iltltiii. ALLYN HOUSE. HARTFORD. Conn . Teh 4 Hon , John F Cornell Lincoln , Neb My Dear Sir. Wo have today closed operations with the Travelers , not to our batlsfnctlon fLlly , but after due consideration we decided that It was best to do for the present. The examination which is being made seems to be thorough , as we have said before , and we do not feel like beginning n new ex amination right in the face of the four states , heretofore named , and two have ac cepted a partial report from them and two have joined In to finish , would have been nn Injustice to ouieelves and the state , so wo decided to await the icport. and so In formed Mr Uatterson. at tbo same time placing ourselves at his mercy for the ex penses. Mr. Batterson recolvfd vour tele gram authorizing mo to receipt for money paid on expense account and we were greatly surprised when old Mr Datterson offered to pav us $100. which he afterwards raised to $180 , which we promptly refused , After returning to the hotel Mr Glllen and 'I I talked It over carefullv and decided that I Inasmuch ns we hud Intimated that we would await the completion of the present ex- aminatlon It would beera vcrv much like t Epltework to change cur plan at this time , so we telephoned Mr Hattoibon for a I proposition In the matter , which was then placed at $200 , which we decided to accept \ ' rather than bring upon oursulvefc nnd the i state Insurance department unnecessary newspaper notoriety I was called over to 1 i lecelpt bill and receive check. I never rc- i cclved sui.h cool and uiiKentlomanly treatment - ment In all my dealings In life , and was alnuet compelled by my feelings to demand access to the books and papers for reexamination - examination , except for reasons heretofore given He wrote the check for J200 nnd I receipted for It , thankltiK him for his court- esy , which was far fiom beluc worthy of any ; hanks I expected to receive no less than $300 , and had fully decided that If we should receive that amount to send you $100 i ns a complimentary Hut whether wo dl \ right or wrong In yielding to the old gentleman - tleman will remain for the future to dls- close , but the fact remains that wo sot $100 apiece and will not be able to draw on our- I selves this time which wo very much regret And now , Mr Cornell 1 will enclose a new lift of names and ask you to klndlv forward me now letters , and that these letters muist t ' 10 changed no as to Include Mr. Olllcn nlso. herewith cnclcso n cop ) which will prob- bly bo near the point what wo need. You lll understand that It will save u * sending n ny telegramt. nnd with complete author- ty lo act In each and every caie. which wo murp yen shall not be abused In nnv event. lp ldes this It will keep the companies from looking uprn Mr Glllen with suspicion , he Umine tin direct authority from you. leads to iisklng many questions , which will be un necessary Trusting that vou will fully un derstand the situation , which WP have tried to make plain Will wait nt Park Avenue hotel New- York. for your answer. With kindest rc- nards from Mrs Palm. Mr. Gillen and my self to yourself nnd famllv. also remem brance lo the bovs In office. 1 urn as over , very truly yours , 0. W PALM. Ic cr > Inn tit CeiiMiri' . "Before < ho auditor was confronted with these letters he testified that should he have received such n letter or letters ns the above he would have considered It dishonorable conduct on the part of the examiner and that ho would have discharged him This , John T Cornell , upon receiving such let ters , failed to do , nnd the auditor deserves the strongest censure from his constituents of the citizens rX Nebraska for retaining In his employ men whose purpose It was to overcharge Insurance i ompanlos for the pur pose of dividing with nn executive atato of ficer whose salary and total compensation are fixed by the tonslllutlon of the state The explanations of this letter by Palm and Gllicn wcro unsatisfactory to the committee. These letters show a confidence on the part of the writers that reflected seriously upon the public servant to whom addressed H is proper to say In connection with exhibit 32 that Palm collected $300 from the Hart ford Fire. His explanation that the other $100 was used to pay his and Glllcn'a rail road and hotel expenses Is not corroborated by the evidence. Ho never paid Glllcn's ex penses nnd the whole expenses of both ti ( nnd from Hartford did not exceed one-half of that amount. Iiixiirnnoc AKCittM Appointed , "The committee further finds tliat Mr. Cornell with the full knowledge of the law upon the subject hap , In violation of that law , appointed Insurance agents ns Insur ance examiners. That he has retained Ex aminer Pnlm after his attention had bceri directed to the matter many times by Ills Insurance deputy , Samuel Llchty , ana reputable citizens of the city of Lincoln. The undisputed testimony Is that both Palm and "GIllLii were Insurance agents when In New York nnd New England examining for the Insurnnce department , nnd both se cured the agencies of nt least ono com pany at that time Whllo Palm ostensibly transferred his Insurance business to tils wife , previous to his appointment. It WHS a mere subterfuge , no real transfer either of property , business or anything connected with the ofllce has btcn made. The certifi cates were Issued to C L Pnlm , his wife , Instead of O W. Pnlm 0V Pnlm , how- ovc : , solicited Insurance except when away from home Ho directed the employes , shared In the profits , nnd even the bank ac- countfi remained In his name. He contin ually refencd to his agency In letters to M : Cornell and this committee finds that M.\ Cornell was a party to this fraud upon the people of the state. The law providing that an Insurance- agent shall not act ns an examiner Is a good one nnd there Is no ex cuse for its flagrant violation by tie auditor These facts nro equally true of Examiner Glllen , with the exception that ho mndo no pretense at a transfer of his agency , and has been In the Insurance busi ness since 1S92. Ho thoroughly understood the law as to his qualifications nnd testl- fled that he raised that objection to G. W. Cornell , who was acting as spokesman for hla brother , the auditor. Olllen , however , acted merely as an assistant , although : i commission was Issued to him Jointly with Palm as stated , but he was not an examiner In fact. "Sixth Your committee further finds that section J3 nnd other provisions of our In surance laws known ns the reciprocal fea ture , the enforcement of which would brlnn the state thousands of dollars ot revenue annually. have never bee-i enforced by any state auditor In this state John F Cornell Is the Hrst state 'auditor ' who has made nn attempt and ho 1 hm bucceeded In collecting several thou sands of dollars for the year 1S98. His at tempt , however , has been very weak and the state has unquestionably suffered there by. Ho was continually questioning the validity of the law and even nt times as serted that It was n bad law He doubted his power and authority to collect theo reciprocal taxes and failed to consult with the legal advisor of the state , the attorney general , upon this point , as an energetic ofilclal. watchful of all the state's Interests affected by the business nnd conduct of hla office Ho never attempted to collect euch I fees nnd taxes due the state In years preceding - ceding his term of office which he should have done. Ho sent out his first notice Ih the fall of 1897 , which wo copy as an ex- j hlblt. The part underlined Is the notice leferrcd to , nnd is weak and Indefinite , anO reads ojs follows , having been attached to the end of a letter sent out In regard to ether business Secondly , I will call the attention of the I Insurance companies to the reciprocity 1 feature In our Insurance laws , which pro- ' vldes that any company doInK business In ' Nebraska and comlns from a state whose laws fix hlchcr fees and taxts than the laws of this ntate. then such companies shal pay to Nebraska the higher fees am taxes of their own statoH JOHN F. CORNELL. State Auditor of Nebraska. Amount Lout I'liUnnmi , "The committee Is unable to report th exact amount of taxes owing the state by Insurance companies under this roclpro-ca provision for the term of Mr Corncll'n ad ministration , or fcr the terms of his prede cessors The amount , however , Is larg and aggregates many thousands of dollars and the auditor should proceed nt onto t collect these taxes lawfully due the state Ho bbculd advlso with the attorney genera and have him take the iiereHBiry legal step to compel payment If further collection I resisted. "Seventh Wo find that Samuel Llcht wab partly responsible for t-omo of thes gross Irregularities already pointed out ; on of them we have mentioned Ih the custon j of retaining fees temporarily. It Is propc to mention several ctheis Llchty urgec I upon paid county treasurer examiners th advlKablllty tf their making examination of Innurancn companies. Ho also urged on of thu state Janltoia to secure the contrac for pru king bjoks and revenue blanks to b shipped frm the auditor's ofilce He wen to these extremes from a desire to gup Drex L Shooman Is Busy Today For het \ > tearing out the back end of our store. Wo Just have to have moio loom and for a while jou inn hear the hum of the carpenter' * bavv when .vou come to the stoic , but then that Isn't going to Intel fuie with out Helling you a pair of the new Rpilng Hhoeo ilm new masculine JaHts for the women Ihe bulldog toe we keep the bl/.eb t > o complete In them that we can lit any one the beauty of a fehoe Moie like outs is that , no matter when you buy , you IIIB mire to get the very liveliest Bhoo of the jear kid , c.ilf , tan or black. Drexel Shoe Co. , Omha' Up-to > dBtc Shoe Home , 1410 FAKNA.M STltEEl' . l rliiK CulnluKiiv n < > read ) bent for ( he WHY TAKE ANY CHANC We Return the Money if it Fails to Cure. NO OTHER ILL DO TH3S. This Fact Alone Should Prove to You the True Value of This Treatment. Since the Introduction of the new treatment which cures by Inhalation sKtv-onr manufacturers and specialists have droppel thulr old methods , cures , etc , and are low advertising Inhalem Although this U the strongest evidence which could possi bly be Introduced to show the wonderful BUCCSS of the new treatment , It Is thaught ocoieary by the regular medical profession to make nn explanation to the public re garding HYOMEl. In the first place , although it IB only through the air wo ircathu that diseases of the tiead , throat and lungs can be icached , the success of his now treatment Is not duo to that fact ; Inhalation 1ms been used for years wlth- ut any good results , becaubo there was no dry air germicide known which could bo arrlcd In the air to all pans of the bendthroat and lungs. Hyomel Is the first and only one ever found , and It Is due to Its discovery alone that cures by Inhalation can 10 made , without Hyomel , all Ulo Inhalations In the world will not cure disease * of ho respiratory organs Sufferers from Catarrh , Bronchitis. Pneumonia and Consump- Ion should remember this In purchasing treatments which claim to cure by Inhala- ion. No matter what you reud , no matter what you hear , icmembcr there Is but one Iry-alr germicide known , "Hyomel " Every ounce of Hyomel IB owned and controlled by the U. T. Ilooth Co. No other nanufacturor or advertising doctor can obtain It. It Is the first and only treatment over endorsed by the regular medical profes sion Moist sprays and vapors from douches c-r atomizers cannot enter the ironchlal tubts and lungs. It Is the only remedy'for which your money Is icturned If It fulls to euro. ( ! crms of Catarrh , Coughs , Colds , Grippe and Pneumonia develop rapidly , treat- nente twlco a day cannot destroy them. The Hyomel Inhaler can bo carried In the locket , and used at all times , or nny place. It kills at once the bacilli of these diseases. PHICnS Trial Outfit , 25c ; Regular Outfit , $1.00 , Extra Dottles , COc. Hyomol Diilm , 25c. Hyomel Guaranteed Dyspepsia Cure , BOc. All duigglots , or Mint by mull. Send for free Folder and Story of Hyomel. THE R. T BOOTH COMPANY , Auditorium Bldg , Chicago. SPECIAL OFFER In order to prove that the now germicide , HYOMDI , Is a positive cure and a sure preventive for Coughs , Colds , Bronchitis , Catnrth , Pneumonia nnd Consumption , 1 have lengaged the services of an expert employed In the laboratory of the 11. T. BOOTH 3o , who will give FREE TREATMENT and explain the different methods of using HYOMEI In the various diseases which It Is guaranteed to cure. ALL ARH WELCOME , no charge U made for TRBATO1ENT or advice. FREE SAMPLES of the "New Germicide' to all who request them. < MIAUI.KS 11. SCllAUrnil , 10T1I AM ) CHICAGO VTh. , OMAHA , Mill. ilant Palm nnd Price. His attitude towards his double employment was unjustifiable. "Eighth Some testimony was taken by : ho committee upon the use of passes by the auditor , his ofilce force and friends , for whom the auditor secured transportation. This committee , however , understanding that i special committee was appointed by the louse of icpresentatlves for the sole purpose - J pose of Investigation along these lines , which report has already been made and Is a matter of Information to the legislature , as well as the public generally , has not considered any findings touching this sub- led pertinent to this report. "Your committee , after carefully Investi gating the testimony In this case , does not nnd grounds foi Impeachment , as defined In the only precedent In this state , the Hastings case. Under the law as enunciated by Samuel Maxwell , In his dissenting opin ion In that case , an Impeachment of John F Cornell would bo Justified and wo be lieve wo would bo sustained. Under the law as enunciated by the majority of the court In its sweeping opinion , John F. Cor nell would not be convicted If Impeached by the legislature. "With this condition of the law and the uncertainty and utter Improbability of con viction by the supreme court , Involving , as It would , an outlay of hevcral thousand dollars' expense to the state , your com- mltteo has , without recommendation , plainly bet out the facts , as disclosed by the evi dence , and again challenge your attention to the gross Irregularities practiced by the state auditor and his subordinates. 'The above findings of fact form n plain , concise and unprejudiced statement of the evidence taken by the committee nnd are respectfully submitted for the consideration of the legislature of the state of Nebraska and through It to the cltl/enshlp In the state , which should at all 'times ' know the conduct of their public servants " Iln > luir In Idli * Iron BIRMINGHAM. Ala. . April 3 The Em pire Steel and Iron company , recently formed In Now York , which is purchasing a number of Idle furnace plants in the cast which It will develop , has bought the Day State iron furnace at Fort Payne and is Bald to be after Boveral other inactive plants In this state , Georgia and Tennessee , with a view to reviving them. The Dav State furnace ] was built by New Englanders during the Irom it Fort Payne ton years ago , but has been Idle for several years. It Is owned by the Bessemer Land and Improvement to n- pany of Bessemer Ala The Empire com pany's plan Is said to be to secure and develop - velop Idle furnace plants throughout the south and west and thus become a larger producer of pig iron. New York capitalists are behind it. ItPiiiurUiiIili. * xtf-Kniic. Mrs. Michael r'urtntn. Plainfleld , III. , makes the statement that she caught cold , which settled on her lungs , she was treated for a month by her family physician , but grew worse. He told her she was a hopeless victim of consumption and that no medicine could cure her. Her druggist suggested Dr. King's New Discovery for Consumption ; she bought a bottle nnd to her delight found herself benefited from first dos-o She con tinued Its use and after taking six bottles found herself pound and well , now does her own housework , nnd is as well as she ever was. Free trial bottles of this Great Dis covery at Kuhn & Co.'s drug store. Only BO cents and $1.00 ; every" bottle guarauteed. IVniitM Co in in err I n I ( ' < IIICUNHOMN. TACOMA , Wash , April 3. Oriental ad vices throw light on news from Berlin that Germany Is to send an expedition to seize I-Chou. Shan Tung province , China Ac cording to a letter received at Shanghai from 1-Ohou. Germany's real purpose Is to compel the Chinese government to grant to German firms some talc commercial ton- cessions. Before the discovery or On- Minnie Coiih Cure , ministers were greatly disturbed by coughing congregations. No excuse for It now. We have broken the spell of high prices on optical goodx lint our work Is the iiHiiul h'gh Mundnrd that tome from Aloe & J'enfoU s U e examine ey a free , but wo furnish g .IHS < ? H only when nuwledVi haw our own man ufacturing plant und grind all our own Icnwi THE AlOE & PENfOLD CO. , Leu ill n > f Sclfiitlllu OiiltclnriH. 1408 Fanmm. OMAHA. opposm : PAXTON HOTEL. For a Short Time You arc going to lx > nfolo to buy n piano at iitk'i'H never licfoio heard of Hood plunoH for VVP'IO K liiK to lemndt' ! our store and among other thlngn liavu u Ini e music Imll-and to have 100111 to do all tills \\e must pell neiuly all of our niuseut laige ptoi-k of pianos M will l > o a Inilug-opportunity that will never occur again and it will pay yon to call nnd heo the many baigalns we ntu otter- Ing. ofi fi. { tnm $ * i iyc4 < a & / * -i CA A. HOSPB , C > , S We oelelirntr our snili liu lnr Rani * vcr.nrr Oct. itird ; , 181)1) , Music and Art 1513 Douglas. We're ' No ! Going to Say a Word- About Ice cream In bilt-Ks , lio.xes or barrael Moday. but devote our vvholu tlmo to telling of something manner- mote appioprlato to the thlid day of Apill. At noon you can be served with the liiK'.st inmheou in Omaha when you conic to Halduffs The sen ho Is Known far and near for HH excelleit.eTo make It moie uttnu'tlve the juice * have been IMIi r'ght In two KOI Inslanie Hot chocolate fie ; tea or i-oftee , Tic ; pie , fie ; Mvccthicad pattleu , l.V TliCMhttino prkes hold good for tliu supper at 6:30 : to S. S.BALDUFFS , lMcti-ll.70 to ZaO. Supper-5 0 U ftdft 1520 Farnam 8t