Evening star., 1905-11-07
FEDERAL REGULATION
Will the Insurance Business
Be Thus Treated?
VIEWS OF AN EXPERT
MR.. MAX COHEN FAvoRS LIMIT
ED GOVERNMENT CONTROL.
The Question of Constitutionality Dis
cussed-Chances of Action
by Congress.
VIEWS OF AN EXPERT

! suranee is steadily being discussed more
| and more seriously as the Investigation
| under way in New York progresses and the
| whole matter is laid before the people of
| the country. 1t is expected that measure
! to that end will be introduced in Congress
! this winter and insurance men are now tie
| batting the chances of its passage and tie
| form which ii may take in that event. a
| Star reporter .ecently sought an interview
on this topic with Mr.. Max Cohen of this
| city, editor of Views a monthly journal
devoted to the subject of insurance in gem
| eraI. Mr. Cohen has studied the matter in
! all its phases. and is well qualified to speak.
He said in answer to the direct question
| of whether he approved of federal rcgula-
| :ion
Most emphatically l approve, but only
as far as concerns its interstate transac-
| tions-in other words In federal regulation
or Supervision of interstate Insurance IN
| stitutions. | believe that the creation OF
specific federal bureau of insurance by
Congress, say, in the Department OF Com
merce and Labor, clothed with the neces-
| sary powers, will not only increase the
surety and the protection of policy holders.
but will mcst potentiy promote the inter
ests of all legitimate insurance institutions.
Such federal bureau should also prove of
greatest value in safeguarding the public
from irresponsible and wildcat companies,
anu III applying IiS CdpdtftitS iOI d Sitt-tl
degree of publicity also best educate the
public to the knowledge that all these bur-
dens of taxation. license fees. etc, and the
confusion of the discriminating and re-
taliatory laws in the states is injustice
to the thrifty-the policy holders. 1t will
also prove an influential factor in securing
uniform laws, and thus materially decrease
| the labor and expense now imposed upon
companies in complying with the many un-
necessary requirements of the insurance
departments of nearly fifty states and terri
tories
AS to Constitutionality.
II have often been asked whether federal
regulation of insurance is, in my opinion,
constitutional. In answering this in the
affirmative l frankly admit, although /
have diligently studied this constitutional
question for many years, that l am but
layman in legal lore. But the Constitu-
ton was created because of progressive
history, and expressed the aspirations Of
the American people toward nationality,
L confidently believe that Its founders pur-
poSely framed its provisions that it could
be defined in that spirit, and not an i'm
pediment but a help in solving the newer
problems and the yet undreamed emergen-
cies in the yet greater future Of this ma
ton. In the marvellous development of the
commercial and industrial activities of this
nation, especially during the past thirty
years. there is certainly no other business
which has made greater strides and become
so closely interviewer with every fiber Of
social and commercial life than in
surance. 1t has become almost necessity
to an immense number of people, and
one of the chief mainstays of our CONNER
cial credit
"Of course, I fully aware that the
judgment of Justice Field of the Supreme
Court in the Paul against Virginia decision
rendered in 1868, that insurance is not
commerce. has impressed a number of
jurists that this decision necessarily places
an obstacle to federal regulation of in
RIt the other hand I could
also cite number of eminent constitu-
tonal authorities who have expressed the
opposite opinion, and that Justice Fields
dictum was due to the fact that Congress
had not exercised its constitutional powers
relating to insurance, or framed any laws
placing ii under national control or super
vision. Therefore, that also the subsequent
uniform lines of decisions by the Supreme
Court. confrmatory of Justice Fields die
tum, further strengthened their contention
that not until Congress legislated upon in
surance could it be endowed with the nee
essary commercial status. They further
fortify this point of view because, sixteen
years later, the same eminent justice. in
the of Gloucester Ferry Company
against the state of Pennsylvania Ola u
s., 1860, very emphaticall asserted that
the power of Congress to regulate COM
merce under the Constitution embraces
within Its control all the instrumentalties
by which that commerce may be carried on
and the means by which it can be aided
and encouraged But even those who
strictly hew to the lines of the original de-
cislons must now admit that at least this
statement in the Paul against Virginia
case-'that the policy does not take effect
until delivered by the local agents M
longer applicable to the hundreds of thou
sands of interstate insurance transactions
of this day. Therefore, that such con-
tracts, even if not acknowledged arti-
Cles OF commerce, have now become the
'instTumentalites' and effective attributes
to the means by which commerce can be
aided and encoura ged.' Hence its inter-
state transactions should at least be made
national, not local, in their legal applica-
ton. But, however divergent or conflict
ing may be the views and opinions of
learned jurists this subject it will at
least be admitted that only by and after
legislation in Congress on federal regula-
ton of interstate insurance can the Su-
preme Court determine the question of its
consttutionality.
The Chances of Legislation.
'As to whether Congress will enact such
a law. this will of course largely depend
upon the strength of the efforts to secure
such legislation. While l realize that the
Dryden or any other bill is likely to en-
counter active opposition, also believe that
as President Roosevelt will very likely rec
ommend such legislation in his forthcom-
ing message to Congress, the prospect is
bright with promise. His earnest desire 10
secure proper enactments by Congress is
further confirmed by his recent public Ut
terances that all the large corporations
should be held accountable to some SOW
ereign; that this accountability should be
real and not sham, and that in his iudp-
ment. all corporations doing an Interstate
business land this necessarily includes the
insurance corporatious) should be held ac-
countable to the federal government be-
cause their accountability should be CO.
extensive with their field of action I also
believe that If no irrelevant or harsh pro-
visions are embodied In any bills which
might in the end prove harmful to insur
ance institutions, or, again quoting Presf-
dent Roosevelt, to prevent or limit cor
porate activity, the opposition recently de-
veloped in unexpected quarters (namely.
from a number of leading REPRESENTATIVES
of insurance interests) will be eliminated.
Besides, as section of the act of Congress
entitled An act to establish the Depart-
ment OF Commerce and Labor distinctly
charges its bureau of corporations with the
duty TO gather, compile publish and supply
useful information concerning cornorati tions
doing business within the limits of tbe
United States as shall engage in interstate
commerce or commerce between the United
States and in any foreign country in
Guiding corporations engaged in insurance
the conclusion is justifiabie that Congress