The Montgomery advertiser. [volume] (Montgomery, Ala.) 1885-1982, 1907-04-08
States Cannot Fix Insur-
ance Companies Pay.
Ex-PRESIDENT FILES BRIEF
Limitation Would Be Violation Of
Constitutional Rights.
brands all Acts Seeking to Regulate
Salaries of Life insurance Corn
panies as Deprivation 81
Their Privileges.

New York. April 7.--Former Presi-
dent Grover Cleveland. counsel for the
association of life insurance prssi-
dents. has just submitted to that
association a brief in relation to the
matter OF salaries paid by life insur-
ance companies.
The occasion for its presentation, IL
Is stated, is the fact that certain
Western States have now pending be-
fore their respective Legislatures bills
that would limit thesalaries of some life
insurance officers to $4,000 year.
while in others the limit is fixed at
$4,000 year.
The brief. it is announced. will be
filed tomorrow with the Wisconsin
Legislature by Robert Lynch Cox, who
will appear as attorney for the assoc
citation of life insurance presidents In
| opposition to the bill providing for
compulsory investment of resarvefunds
in the State. largely increased taxation
of premium receipts and other SUBJ
| jects.
After calling attention to the fact
that insurance companies are private
corporations. Mr.. Cleveland SAYS:
violate Federal Constitution.
Whether these companies are class
| ed as stock corporations or mutual
| corporations. in either case, their bus
! ines9 interests are confined to contract
| relationships based upon the execu-
| ton of life of or other incidents at
taching exclusively to the individual
| policyholder in each corporation. It
has been tudciously determined. beyond
! the reach OF controversy, that, in le-
gal contemplation, these companies
are within the definition of persons.
and. SO far as their rights are con-
! cerned, they are on the same footing
| as citizens of the United States and or
| the several States.
The Fourteenth Amendment of the
Federal Constitution provides that nc
! State shall make or enforce any law
which shall abridge the privilege OF
| immunities of citizens of the United
States nor shall any State deprive any
persons of life. liberty or property with.
nut due process OF law.
1T is clearly the intent and newt
able effect Of the contemplated legisla-
ton to abridge these privileges and
| immunities' of corporate citizens of the
| United States by imposing upon them
| limitations concerning the compensa-
ton to be paid their officers and en-
ployes, in the face OF the law of their
creation and domicile. which makes
! them free from such limitations. A
law, which forbids the possession and
enjoyment of property by life insur-
| ance companies except upon a condition
which involves the abandonment OF
| their right to contract for the equip
ment and management of their BUSH
| ness, a right inherent to their organf-
! cation, permitted by the law of their
| creation and necessary to the protection
| of the interests they have in charge.
and a condition, which exacts as
| price for doing business, surrender
of the guidance of sound Judgment and
safe experience in its prosecution. un-
der a penalty of forfeiture OF inter-
! =
are entitled, cannot be regarded other
wise than bald, unequivocal and un-
mitigated deprivation OF privileges. im-
munities and property without chance
&c. escape"
Legislation Is New.
LEGISLATION of this character is so
new and startling as to indicate dis
position to depart from all conserva-
tive sentiment touching state supervis-
ion and regulation of life insurance
companies"
He then quotes from several decis-
ions of the supreme court of the United
States, and then goes on to say:
Measured by the standards fixed by
the adjudications of the highest trib-
unal of the land, 1t seems quite certain
that the legislation we are considering
would amount to an unconstitutional
use of state gislative authority. 1t
canot be claimed that 1t would pro-
mote either health. peace. moral, ed
ucation and good order OF the peoples
or increase the Industries of the state,
develope it's resources and add to its
wealth and prosperity. 1t does not
proceed within reasonable limits and
general usage. but goes far beyond
all former excuses OF state legislation
and results in clear and hostile dis
elimination against particular persons
and classes Instead of reasonable
and appropriate exercise of the power
of the state. it assumes the complex
ion of unreasonable, unnecessary and
arbitrary interference with the rights
of the Individual to his person liberty
or to enter into those contracts In
relation to labor which may seem TO
him appropriate to or necessary.
salaries being Paid.
He then takes up for consideratie8
salaries paid to presidents and nsW
vice-presidents in twenty-nine leM&n
ing companies, including five large
companies that pay $4,000 or more
and adds.
PROM this examination that the to-
tai premium receipts from the twenty
nine companies amounted to $440,665.-
eOS. that the per cent. OF these re-
ceints paid to presidents and Vtce-pre
ceipts paid to presidents was 9-loo
~ l per cent; that the per cent. or
their premium receipts 80 eApehueu pJ
the twenty-four companies paying SAL
aries less than $4,000, was 51-100 of
per cent. but that the per cent of
premium receipts so expended by the
five companies paying to their press-
dents and vice residents $4,000 per
annum or upwards amounted to only
1900 of l per cent
I'm view of the universally conceded
solvency and soundness of all compa-
MES paying these larger salaries, no
one can have the hardihood to claim
that the small per centage of their pre-
MUM receipts thus expended could by
any possibility impair the absolute Sc.
curity Of their policyholders' contracts,
which phase of the subject might prop-
erly be considered a legitimate subject
of State solicitude and these CON-
atoms of solvency and absolute 49,
lty gain conclusive force from the fact
that the admitted assets of these Ave
companies amount to more than $l.-
An nan Mn ~