Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-08-17
TO TAKE UP INSURANCE
PRESIDENT HAS DECIDED UPON
PROPOSED LEGISLATION.

hold of the question of federal control of life
insurance companies. Senator Dryden of
New Jersey, author of an insurance bill in
troduced at the last session of Congress.
and James NJ. Beck, former assistant attor-
ney general, and now counsel of the Mutual
Life Insurance Company, visited Sycamore
Hill yesterday at the Presidents request to
confer on the feasibility of passing federal
insurance bill at the next session of Con-
gress.
AS a result of this conference bill will
be introduced by Senator Dryden that Will
have the full support of the administration.
Its object is to test before the Supreme
Court the much-disputed constitutonality
of a federal insurance statute
The Presidents own position on the sub
jeCt was expressed in his last message,
when ne said The business of insurance
vitality affects the great majority of the
people of the United States and is national
and not local in its application. 1t involves
a multitude of transactions among the peo-
pie of the different states and between
American companies and foreign govern
ments. | urge that Congress carefully con-
slider whethe the power OF the bureau Of
corporations cannot ConstitutiOnaAy be eX-
tended to cover interstate transactions in
insurance.
Base Hopes on Lottery Decisions.
A further investigation of the subject
brought to the President support from the
insurance men, but not much satisfaction
from the Department of Justice as to the
constitutionality of the proposed law.
Every decision of the United States courts
in which an effort has been made to bring
state insurance laws under federal jurisdic-
ton has been against the United States gov
ernment. 1t is the contention, however, OF
or -
anCe authorities in the country, that the
question whether Congress has power TO
deal with the subject has never been tested
because no Congress ever enacted any In
surance laws. He hopes the Supreme Court
will decide Congress has the power TO con-
troll insurance, as 1t has with regard to
railroads and lotteries In fact, II Is on the
recent decisions in the lottery cases that
the advocates of federal insurance control
base their hopes. Nevertheless, both Sena-
tor Dryden and Mr.. Beck admit that fine
point in the theory of states rights is at
issue.
ITO be perfectly frank, said Senator
Dryden, after the conference at Sycamore
Hill, "a federal insurance law will meet
with serious constitutional obstacles. l in
troduced my bill in the last session simply
to put the question before Congress for dis
cussfon. 1 had it referred 10 the Judiciary
committee because It would be passed on
there by the ablest minds in the Senate. 1t
IS only fair to say that the highest legal
opinion Is divided.
'Wiu you change your bill in view of re-
cent insurance developments?' was asked.
At Least an Even Chance.
There may be some changes necessary"
replied the senator. ito meet the new con-
ditions, but the bill will be reintroduced
and pushed at the next session. Those who
hold that the bill Is unconstitutional go
back to the decision of Justice Field, In the
10 ri,,Ia tn,
in which the power to interfere in state in
surance under the constitution was denied
the United States. There have been many
similar decisions, but all OF them against
constitutional authority, not congressional
enactment You must remember the Su-
preme Court handles acts of Congress with
a good deal of consideration, for 1t knows
that each bill is subject to the most careful
legal scrutiny before it becomes law.
think we have at least an even chance Of
getting a favorable decision from the Su
preme Court in the insurance bill
rs your bill supported by the big life in
surance companies?'
II have had hundreds of letters indorsing
the BILL and believe that all the great irsur-
ance companies favor IT. The purpose OF
the bill. is to bring life insurance under
harmonious and continuous control The
great companies will prefer. no matter how
strict the supervision may be, to adjust
their methods, to meet an unchanglng law
rather than to adapt themselves, as they
ferent departments. Moreover, the various
state laws often vary widely in their in
terpretatiOns from time 10 time FROM an
insurance point of view the great object
gained will be continuity of method. Con-
gress has passed laws prohibiting lotteries
and the Supreme Court has sustained them.
We hope Congress has an equal right under
these decisions TO control life insurance
State Insurance Authorities Object.
Roth Senator Dryden and Mr.. Beck say
they have found no opposition to the pro-
posed national legislation from Insurance
cornnanies or from policy holders Never
tbeless a bitter fight is expected on the
mart of state insurance departments against
the destruction of source that in the past
has supplied endless opportunities for
graft. -.,...
Mr. Beck said, in answer 10 question
as to what he, as lawyer considered the
CT ances were of overcoming the constitu-
tional obstacles:
II wouldn't be here if I didn't think they
we're good. The last few months have
made it plain that some governmental ac-
ton is necessary in the control Of bust
ness that handles $JUo,Gco,Ooo annually OF
the peoples money in the different states.
"AlI the presidents of the big life fnsur-
auce companies, with the possible excep-
ton of the recently chosen president of the
Equitable. have publicly Endorsed federal
control. Mr.. Mccall of the New York
Life gave lecture on the subject at 1ale'
II fact, ! have not heard of any opposi-
ton from any quarter Insurance can be
made "A separate bureau in the Department
of Commerce and Labor We already have
a bureau for the collection of life insur-
ancc statistics of the various states"
Gould the new bureau be made a part Of
the Treasury Department."
THAT would be perfectly feasible and ap-
propriate. The control of insurance COM
panies is akin to the supervision of ma
tional banks Everywhere else in the
world life insurance is under central
government control. This is notably true
of the states of the German empire and of