The Washington herald., 1914-04-21
INSURANCE RATE
Law Held Valid
Dissenting Justices Call De-
cision Wedge to Fix All
Prices by Legislation.
OPINION Is FAR-REACHING
Holding Kansas Act Constitutional
Will Strengthen Agitation
for Minimum Wage.
OPINION Is FAR-REACHING

The Supreme Court yesterday handed
down q decision which three Of the
eourt's members, including the Chief
Ju,t,ce. characterized as the opening
wedge to the assertion Of the right to
nx by legislative action the price Of all
commodities, including labor.
Iavyerf who heard the opinion re-
gnrded II as one of the most important
and far-reaching in its possible conse-
uuences 70 business that has been handed
down since the courts epoch-maktng de-
cisions In the antitrust cases The de-
cisIon, Il was pointed out, is bound to
ada strength to the agitation in favor
of LEGISLATION fixing a minimum wage and
also legislation in favor OF giving price
fixing powers to government commissions.
Yesterdays decision by Justice McKenna
upheld the validity of a statute OF the
State Of Kansas regulating the rates OF
nre insurance. Justice McKenna- in the
majority opinion, declared that the text
to be applied in reaching a conclusion
as to the constitutionality Of the Kan
sas statute was:
'.Is the business so far affected with
q public interest as to justify legislative
regulation of its rates? And We mean
> broad and definite public interest"
Reviews State Acts.
The Justice reviewed the acts OF many
States legislatures regulating insurance
notably the New York statute of 1853,
and the Massachusetts, statute Of 1851
regulating unearned premiums.
The State" said he, has stepped in
and imposed conditions upon the COM
panies restraining the absolute liberty,
which strictly private companies are
permitted to exercise"
These are based on the interest, the
Justice said, which the public had in
the solvency of these companies, which
would greatly affect the wealth of the
country.
We have shown that the business Of
insurance has very definite character
istics," said Justice McKenna, with a
reach of influence and consequences be-
yond and different from that Of ordinary
business of the commercial world, to
pursue which a greater liberty might be
asserted"
He pointed out that the price of insur-
ance was not fixe Sover the counter. but
mulgated in schedules of practically con-
trolling constancy dich the applicant
for insurance is powerless to oppose"
Nowhere in the majority opinion, how
ever, was there asserted a right to fix
prices in the ordinary acceptance of the
terms The majority of the court up
held the Kansas law solely upon the
peculiar character OF Dusl-
ness, which made il so closely related
to the public welfare.
Justice Lamar Dissents.
The title of the case was that OF Ger
man Alliance Insurance Company VS.. Ike
Lewis superintendent of insurance OF the
State of Kansas The insurance COM
pany is a New York corporation, incor-
porated in 1879 Under the power OF the
Kansas statute the superintendent re-
duced the rate for fire insurance about
y per cent The law authorized the
raising or lowering of rates so long as
they continued reasonable.
In dissenting. Justice Lamar, speaking
for himself, the Chief Justice and JUS
tice Van Devanter. said:
Insurance is not production, nor man.
ufacture. nor transportation. nor mer-
chandise. The fact that insurance is
strictly a private and personal contract
Of indemnity puts it on the extreme
outside rim and removes it as far as
any business can be from those that
are in their nature public. So that II
the price of a choice in action can be
fixed, then the price of everything with
in the circle Of its transactions can be
regulated.
considering, therefore, the nature of
the subject treated and the reason on
which the courts opinion is based, 1t is
evident that the decision is not a mere
entering wedge, but reaches the end from
the beginning and announces the prin-
ciple which points inevitably to the con-
clusion that the price of every article
sold and the price Of every service Of
fered can he regulated nv ststufe