Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1907-08-28

ceded as such. The supervision should
not entail financial burden upon the
state, but neither should the business
of the state be conducted at a profit
when that occurs either one class of
taxpayers is being robbed at the ex-
pense of another, or somebody con-
nected with the state government has
a graft. Statistics furnished to the de-
partment of commerce and labor show
that twenty-eight states in the year
1902 received from the insurance COM
panies, exclusive of taxes, over five
million dollars more than they ex-
pended in the supervision of these
companies. The figures prove that the
actual cost of such supervision to the
states is but about ten per cent of
what they charge and receive for it,
but in at least one state a bill was
passed during the winter which in
creased the burdens of the companies
for fees, thereby adding to the cost of
insurance, and in the present state of
public sentiment no insurance COM
missioner could secure a reduction of
these eXactions even though some of
them believe they ought to be scaled
down. Many states tax companies of
other states at a higher rate than they
do their own thereby making the poll
icy-holder pay that much more for his
insurance as a penalty for patroniZng
outside companies. Some states have
enacted laws under which is exacted
that species of tax known as recipro-
cal, but which is more aptly termed
retaliatory. This tax is "A joy to the
state commissioner whose conception
of his duty is to make a showing of
moneys collected, but the cost of in
surance in the retaliating state is
thereby increased, and the tax is con-
demned and characterized as a. relic
of barbarism by many thoughtful
men.
Your committee view with alarm
the growing tendency in many states,
already evidenced by enactments in
Texas and Arkansas, to require that
a large proportion of the reserve value
of life insurance written by anv COM
pany within the state shall be invested
within that state. Such a policy is
open to two very serious objections.
The first Is that such an interference
with the management of the COM
pany's business must seriously cripple
its efficiency and thereby work an
injury to the policy-holders. the very
class which the state is rightly solic
itous to protect. If such statutes shall
surance companies will be compelled
to scatter their assets and to maintain
in all states in which they are doing
business costly investment agencies.
The result will inevitably be to lower
the rate of interest received for invest
ed assets and to increase unnecessarily
the cost of efficient management. The
second objection to such enactments
is that they transcend the proper
bounds which should be set to state
Interference with corporate activity.
They are merely restrictive not regu-
lative. Such statutes do not protect
citizens of the state against fraud or
unfair practices on the part of tho
companies nor do they materially aid
in securing to the policy-holders the
discharge of matured obligations due
from insurance companies. Their
manifest purpose is to compel these
companies to keep within the state
funds. which should, in accordance
with the spirit of the union of states
be permitted freely to seek the most
profitable field Of nvestmen,"