Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-04-08
DEFENDS BIG SALARIES
BRIEF BEFORE
WISCONSIN LEGISLATURES.

NEW YORK, April S-The Constitutions
| of the United States has been called by ex.
| President Grover Cleveland to the defense
| of the high salaries paid the presidents Of
| the big life insurance companies. In a brief
which was made public yesterday he de.
clared that the life insurance companies,
| whether mutual stock are the same a.
| persons so far as their rights are con.
| cerned. and that they are "on the same
footing as citizens OF the United States and
Of the several states"
Mr.. Cleveland cited the fourteenth amend.
| ment OF the federal Constitution, which pro.
vides that:
No state shall make or enforce any law
which shall abridge the privileges or i'm.
munites of citizens of the United Statest
nor shall any state deprive any person OF
LIE. liberty or property without due process
of law
The necessity for this latest barking back
to the Constitution is movement In vari.
Gus western states. where legislatures are
considering laws limiting the salaries of life
| insurance officers to $4,000 In some states
and to $4,000 In others. The penalty for
companies which pay more than this IL q
| prohibition from writing business within
| the state
The four presidents who would be par.
! ticulary affected by these laws are:
Charles A. Peabody Mutual Life.
Paul Morton, Equitable Life.
John f. Dryden. Prudential Life.
Alexander e. Orr New York Life.
All Of these men are members of the As.
sociation of Life Insurance Presidents from
which Grover Cleveland receives a salary Of
$4,000 year a counsel.
The brief will be tried today before the
Wisconsin Legislature, which hau an ,nsur.
ance committee similar to the Armstrong
committee of this state, and which is now
considering some seventy insurance bills
the passage of which, the companies al.
lege. would compel them to cease writing
policies in that state.
After calling the federal Constitution to
his aid. Mr. Cleveland says:
1T is clearly the intent and inevitable
effect of the contempla ted legislation to
abridge these privileges and immunitles' Of
corporate citizens of the United States, by
imposing upon them limitations concerning
the compensation TO be paid their officers
and employees, in the face of the law Of
their creation and domcie. which makes
them free from such Limitation.
"A law which forbids the possession and
enjoyment of property by life insurance
companies, except upon a condition which
involves the abandonment of their right to
contract for the equipment and manage
ment of their businesS-a right inherent to
their organization, permitted by the law Of
their creation and necessary to the proteo.
ton of the impressive interests they have
In charge-and condition which exacts as
the price of doing business a surrender OF
| the guidance of sound judgment and safe
experience in its prosecution under a pen.
atty of a forfeiture of interests to which in
common justice they are entitled. cannot
be regarded otherwise than as bald unequi.
vocal and unmitigated deprivation OF privi.
leges. immunties and property, without a
chance for escape.
New, Startling Legislation.
Legislation Of this character is so new
and startling as to indicate a disposition
to depart from all conservative and steady
sentiment touching state supervision and
regulation of life insurance companies
Measured by. the standards fixed by
those adJudications OF the highest tribunal
of the land 1t seems quite certain that the
legislation we are considering would amount
to an unconstitutional use of state legisa-
tive authority 1t cannot be claimed that
1t would promote either the health. peace,
morals, education and good order of the
people, or increase the industries of the
state develop its resources and add to its
wealth and prosperity.
1T does not proceed within reasonable
limits and general usage but goes far be.
yond all former excuses of state legisla-
tion and results in clear and hostile di4.
elimination against particular persons and
classes. especially such as are of an un.
usual character. unknown to the practice Of
Our government
Instead of a fair, reasonable and appro-
pirate exercise of the police power of the
state, 1t assumes the completion of AN un-
reasonable, unnecessary and arbitrary in.
reference with the rights of the individual
to his personal liberty. or to enter into
those contracts in relation to labor which
may seem to him appropriate or neces.
sary.'"
Salaries .OO29 of Premiums.
Mr.. Cleveland cites the fact that the an
nual premium receipts of the twenty nine
companies in his association amount to
$40 eos 9OS, and that the percentage OF
these receipts paid to presidents and vice
presidents is 29-1OO of l per cent. He says
that according to the best estimate that can
be made OF the number Of policyhoders in
the companies affected by the proposed
salary limitation, the saving, If distributed
among them, would amount to less than
one cent a year.
After arguing that the doctrine OF comfy
forbids one state from seeking to interfere
with the internal affairs of citizens OF other
states, except where absolutely necessary
forx the protection of Its own citizens. he
concludes:
These corporate citizens of the United
States, having entered states other than
their own, exhibit in their defense the GER
tificate Of fitness and approved equipment
granted them by their home states. They
ask such consideration of those certihcateS
as will save them from anomalous and IN
furious limitations upon their business oper.
ations and such treatment as their homo
Endorsements and faith in the American
love of fair play have led them to en-
pect."