The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-10-16
No Constitutional Bar,


constitution, to do as he suggested.
Since that time, however, it is under
stood that the president has made up
his mind that no constitutional difficult
ties are in the way, and in this position
he is reinforced by the opinion Of a
majority Of the members Of the commit
tee on insurance law Of the American
Bar association.
Hitherto the chief argument advanced
in opposition to congressional action
toward placing insurance under govern
mental control has been the argument
of the alleged unconstitutionality Of
such action, and no doubt that argument
will again be advanced. Those who hold
to this opinion plant Themselves upon a
decision by the supreme court, in the
case Of Paul VS.. Virginia, handed down
in 1868. Discussing this decision, Sem
ator Dryden says: .
Insurance by this decision was de-
clared not to be commerce, and there
fore not subject to federal control. This
decision has given rise to endless dis
cussion, which it would be neither profit
able nor advisable to revive. The argu-
ment may be summed up in the state
ment that while the decision Of the su-
preme court seemed to dispose Of the
the same manner as banking, transpor-
tation, telegraph messages, ETC., it did
not In fact do so. The decision, and
those which have followed, did not relate
to the real point involved in a consider
alton Of the regulation of the insurance
business as interstate commerce by the
federal government. This point cannot
be considered until after congress has
passed law regulating such business In
general conformity with the interstate
commerce act. No such law has yet been
passed, therefore the decision Of the
supreme court that is referred to does
not apply
Strong Arguments for Control.
One Of the startling facts brought out
by Senator Dryden, which form strong
arguments for federal control, is that
state supervision Of insurance in this
>nuallY several million dollars more than
such supervision actually costs the
states. According to tables compiled by
the bureau Of corporations, twenty
eight statese, in 1902, received from in
surance companies, exclusive of taxes,
over $5,OO0,0O0 more than they expend-
| ed in the supervision Of those -compa-
MES; in other words, the several states
| have adopted the policy of turning in
| surance into a means Of state revenue,
correspondingly increasing the pre-
1ll1uI1O VI CuO 1uou1 ONs
/ Another argument in favor Of federal
| control is the well-known fact that
state Legislatures, even when honest,
| rarely act wisely ON questions Of insur-
| ance comfy. Under the existing sys-
| tenn, there are about fifty different in
surance departments in this country,
and any corporation doing large bust
ness is compelled to treat with all, or
nearly all, these departments. with
their diverse and frequently conflicting e g
laws and regulations. On top, Of all
is the tendency to graft in legislatures
foreign insurance companies usually be:
ing a shining mark. All these things
combine to make insurance dearer than
it ought. to be, thus preventing the poor
citizen from giving his family the pro
lection to which it is entitled.
- Action in Wisconsin.
Still another difficulty Of the present
, system is illustrated in the action Of
Wisconsin several years ago. The leg
islature of that state forbade corpora
moving causes Of action to the fedora
courts. When this was done, it was NJ
doubt well known at Madison that thu
act was unconstitutional, but it was
done because the penalty Of expulsion
was considered sufficient to prevent any
corporation from availing itself Of !;
guaranteed right.
It is legislation Of this characte
which helps sustain the present demand
for federal regulation, apart entirel.
from the present sensational exposure
in, New York. It is believed that i
the limelight could be turned on tn
Legislatures and insurance department
Of the several states, a condition of at
; fairs would be seen almost equal in i'm
portance to that brought to the publ
gaze in New York.
1t is said that in the state Of Mime
sofa there is annually collected from
insurance companies which are non
= resident sum largely in excess Of tn
cost of supervision, and that what i
done in Minnesota is done in practically
every other state in the union. An.
:. this fact takes no account of consid
l. cradle sums which are expended in tina
state and in the others, too, at almos
every session of the legislature, in a
effort to prevent legislation originate
Eby grating members.
: 6 The" yellow-dog's fund set aside b
= : New York. companies for use at Alban
II has counterpart in numerous othe
!. state capitals; and all this adds enorn
: ously toithe cost of insurance, and as
result to the cost of premiums.
|. WHY ACKNOWLEDGEMENTS!
Q Senator Dryden, discussing the &C
y vantages that would follow the natio1
alization of the business, says: 1t
my firm conviction that such an &C
would be productive of the most e,
$ cellent results, increasing the securit
f Of insurance to the policyholders, dimi,
e fishing the now considerable amount {
t needless clerical labor to meet the r.
!. quirements Of some fifty different state
and territories, decreasing the expens
rate, decreasing the burden of tax;
i ton, increasing the returns to polio,
9 holders, and thus decreasing the cost
l. insurance, broadening the scope of a,
i ministration, and, in a word, nationa
i ling the business. Such an act woul
n I give to insurance the protection of tt
e federal government, to which it is RICH
= fully entitled, because it's universalit
k and high social and economic function
:. now made in indispensable to the we
!, fare of the public. -
= Interstate Affair.
d When the constitution was adopte
n L II.