The San Francisco call., 1898-02-07
Possible Outcome of the Present Insurance
 War.
A Growing Sentiment That the Federal Government
 Should Step In.
Plain Exposition Of the Situation by Hon. James c. Patterson
 at Hartford.


 in the courts to-day has done more
 than merely stir to the point of out.
 spoken wrath the underwriters of the
 city. It has revived an old feeling that
 the Federal Government and not the
 State government is the proper au-
 thority to control the insurance con-
 panies, and the sentiment that some
 thing should be done toward securing
 such a state of affairs is steadily grow
 ing.
 The attempt to collect the back taxes
 on the city companies will be fought
 bitterly, for the companies claim the
 taxes are levied under a Jaw that as
 long ago as 1886 was declared uncon-
 stttutional by the Supreme Court of
 California. The old Globe Company
 was the first to bring the matter into
 the courts. It refused to pay the tax
 of l per cent which was to go to the
 benefit of the firemen's relief fund on
 the ground that it was an unjust dis
 elimination against foreign company.
 The case was tried before Judge Ma
 guire and his decision in favor of the
 company was affirmed by the higher
 court. It is that decision the insurance
 men claim which covers the case now
 under dispute and they are confident
 the proceedings in court will not be long nor adverse to their contentious.
 The excitement caused by the pro- ceedings goes farther than the mere legal opposition, however, and how to
 prevent further trouble is the topic most earnestly discussed, and the old desire to get from under the State con- trol is becoming more and more mani fest as a means to prevent future com pHcations.
 In the East the same idea is under discussion and on Monday, January IS, the Hon. James G. Patterson, president of the Travellers Company of Connec- ticut, read a paper before the Board of Underwriters of Hartford in which he reviewed the situation in a manner that has caused much comment in Eastern insurance circles and has even in- 1iuenced the local men in the trend of their legal fight.
 In his paper MT. Patterson argued the legal side of the case as we'll as the practical side, and he maintained that the insurance companies should never have been placed under State control AS commerce cannot be carried on without insurance, he believed the companies as much a part of the com merce of the country as it's mails, and they should be allowed the same immu- nity from State interference. More than that he claimed the companies, as cor poratonS, were entitled to the same privileges of citizenship as the individ- ual citizen, privileges which could not be restricted by the enactment of any State law. The tendency of the various States to restrict and to tax the foreign corporations doing business within it's borders had, he said, created a system of retaliatory measures that has made the insurance laws network of limita- tionS, discriminating and unjust and most detrimental to the business. citizen, he said, can go from State to State and there Is no law allowed which will make the restrictions upon him greater in one State than in another, yet the insurance companies are met with a different set of laws and regu- lations in every State in which they establish themselves, and each State has its own commission and Its own superintendent and an insurance code peculiar to itself. In his paper he said:
 No company, whether fire marine, life or accident, can exist on the business which can be drawn from any particular State. The business is therefore not only national, but, in the case of many com panieS, international That security which is gained by the widest dispersion of risks is well known to be essential to good management. Being national in character and practice, it should be sub- ject to national supervision and control, the same as national banks, the currency, the railway traffic and all the other great systems of daily. and perpetual inter course between the people of the various States.
 The enormous aggregation of capital subject to the management of these cor porationS is a matter of national concern and should not be the subject of State legislation and control, which is never uniform, never consistent, and seldom fair This great b9raes TGlgme of 9f f5;os' aSsets' may be possibly located within the radius of very few miles: but they belong to and their final destination is in every State and Territory of the whole country.
 Each State has its own department and superintendent, and quite frequently no companies of its own; such depart ments are established nominally for home companies, but actually to make place for a political party official; and his department is supported by fees and taxes imposed upon companies in other States. The aggregate expense of these departments to the various companies to millions of dollars per an- mum, and necessarily increases the cost of insurance to the people. without bene- ft to anyone but the incumbent official; and a remedy should be provided, and can be provided, for this unnecessary evil.
 Whether license from the Federal Government to a corporation created by l State government will correct the evil nay be questioned. If the State charter s surrendered and a reorganization ef- 'ected under and by virtue of Federal act, then the government license would ,e effective in all States and Territories without interference by State officials. No State has any good reason for eX- stence except as a public organization or the maintenance of public and private lights, the administration of justice, and l , greater security for that personal free lom which promotes the highest degree | if social and moral development.
 fight to pull down and destroy by pro- lfbition, taxation or otherwise, that which another State has the right to | ,uild up and maintain Is conflict of sov- reignties which has only to be persisted | n with the same spirit which now pre- | 'ails in some States in order to rupture | he bond which the fathers of the consti- | ution declared to be perpetual That State legislation and State courts | would not be reliable in dealing with in- | erstate or national questions owing to | and local bias was perfectly ap- aren't to the framers of the constitution nd has been painfully apparent ever ince.
 The paper created quite sensation, s 1t was the plainest exposition of the | esires of the insurance men that had 1 cen made public. The sentiments ex- ressed are much in accord with the