The Washington herald., 1914-04-23
Another Business Discouragement.

The Supreme Court of the United States mas
decided-three of its members, including the Chief
Justice dissenting-that the State may determine hx
and regulate the rates to be charged for insurance
The decision in the particular case appealed from
Kansas court applies to insurance rates alone, but
there can be no doubt that its effect will be weighty
in the direction of sustaining the contended for rights
of the States to fix the price Of services and commo
dities generally.
Inevitably this Interpretation of the law must have
discouragng effect the nations business, which
will recognize another step toward the control OF
enterprise by government Again it is notified that
rigid limit is to be placed its prohts while 1t must
take care of the losses itself
The decision in the Kansas OF course relates
to the States action in lowering rates. We never
hear of legislature commission raising rates,
and in this very fact is exempfed the difficulty OF
maintaining an equitable basis when rates are arbi-
trarily fixed by the State. In the of insurance
companies transacting business in Kansas commits
sion might adopt just rate applicable to normal con-
ditions cabling the companies to fair profit
but an unusual series of conhagratons great and
fatal epidemic would swiftly wipe out the moderate
profits of years and leave the companies to struggle
on trusting in long period of immunity IRON a
repetition of such disaster to save them from bank
ruptcy or enforced retirement from business.
Commissions and legislatures lower rates. but do
not raise the and if they should at rare inter
walls grant an increase, such increase would not be
retroactive and the companies would be compelled to
pocket the losses incurred.
This is precisely the situation the railroads are IN
tcday Rates have been regulated and regulated and
euuitably adjusted as supposed, to normal con-
dftions Year after year expenses Of operating the
roads have advanced at astounding rate, due to
increases in wages taxes and the cost of material and
other causes
The rates are not now adequate. Revenues have
been insufficient to provide for needed improvements
Companies have not even been able to pay fair re-
turn on their investment, a plight which explains
their inability to secure capital They have been
begging for many months for permission to increase
their rates to meet the demands that exist now but
which did not exist when the rates were hxed. In
the event that the Interstate Commerce Commission
grants the rate increase it will not be retroactive. The
effect of the tremendous nroads the companies
revenues during the past few years is their own al
fair 1t does not concern the government
And so business can see only new obstacles in the
Kansas insurance decision II will hardly be contend
ed that this will benefit the country whole, and
the benefits no matter how small to any considerable
number of individuals, are problematical When
rates of compensation for services or commodities
are fixed at a point where to supply them means
loss they will not be supplied. Railroads have found
it necessary to discontinue hundreds Of trains in
surance companies may find it necessary to with
draw from Kansas