, 1922-01-28
AS A PREY FOR sPouLsMEN.

7ASeAL Ot ncc1eO. II hdyHs
insurance rapidly is replacing the railroad. as a
Legislative toy. Having reduced the transportation
systems of the country to a condition Of submission. |
impoteney and near bankruptcy, the sect of charlatan-
ical political spoi.sfnen which everywhere abounds is
seeking some livelier ~plaything to juggle with and fl
nelly to toss aside, when ~dismembered, into the indus
trial scrap heap now containing the pitiful w~reekages
Of past governmental folies. Unfortunately iusur-
nnee seems to fill the need for something new to rule,
requisite and ruin and the speed with which the various
state legislatures have recognized the golden oppor-
tunity for spoilati0n Is quite appalling.
The drift is unmistakable. The threat of danger
precise and certain. In 1916 there were 720 bills re-
istng to insurance introduced in state legislatures. In
1921 there were 1929 such bills presented. The gain
In the 5-year interval was almost 100 per cent. While
some Of these proposed laws were constructive and
necessary measures, the great bulk of them were of a
radical, restrictive or harassing nature with a distinc-
tive socinlistic background. Minnesota, with 1O1 regu-l
latory bills dumped into the 1921 Legislative law hon.
per, stood second on the list of states. Massschu-
sets was first with 10s. This brings the problem Of
state control of or participation in the business Of in
5urance on to our front door step.
"The anxiety of our legislative medicine men, who
seek to cure all ills by a dose of laws, to. experiment
with insurance now that the railroads have sunk into
desuetude should occasion little wonder. As n bust
ness IL ranks with the foremost enterprises of the age
and therefore offers a fruitful field for political ter
rorism and plumber. It would be as difficult to think
OF commerce without insurance as it would be to think
OF transportation without railroads. Modern life has
become so completely immersed in the theory and
practice of insurance that there are few contingeir
cies affecting human relationships to which its prin.
c.ples have not been successfully applied. 1t is per
haps our most universal institution, reaching in its
wide sweep all classes Of people, all industries and all
business ventures. To human progress it has be-
come essential and as n means towards general eco
nomic security it is indispensable. The prospect, there
fore, that it may be tinkered with and exploited by
designing, corrupt or ignorant politicians is worthy of
the most serious consideration.
"The origin of insurance was In private enterprise,
and it has attained its present leading position as a
world force through the initiative, ability and fore
sight of individuals. State interference with or state
participation in this vital business never has added a
new or better theory or an imDrOypmaut in Qanarnl
practice or procedure. Success has come from free
dom and the slavery imposed by excessive govern
mental domination is incompatible with its future
progress, just as much as 1t is with the future progress
of any essentially individualistic enterprise.
'The state has fulfilled its duty to the people in re-
gard to insurance when 1t provides for general over
sight of the business, sees TO 1t that corporations en-
gagged in covering risks are solvent and able to meet
all present and future obligations, recognizes their Of
fcers and agents as members of a profession to be Ii
censed in the same manner as are doctors and law
yers, prevents wild-catting and fraud, and furnishes a
prompt and speedy remedy at law or in equity for
those having grievances as to the adjustment of claims.
Aside from such stewardship In the interest of the in
sured the state has no more concern with the insur-
ance business than 1t has with the grocery or dry
goods business.
"The greatest menace 70 insurance stability and
prosperity is the tendency towards state participation
In the business and the trend towards repressive and
unsound rate regulations. These largely are purely
political manifestations, agitated and sponsored with
out any regard for economic considerations and coma
. parable with the anttrailroad propaganda, the results
Of which now are such a CHASTITY reminder of the ruin
Gus effects Of too much government in business.
y an no instance where II has been tested has state
: insurance. even though heavily subsidized, proved a
. success. Wisconsin tried life insurance and failed
. miserably. Massachusetts is stumbling through the
= same dark corridor of theory with the pit of failure
ahead and yet to be evaded, North Dakota entered in
to a variety of insurance ventures and the Nonparti-
san league proposed still more, and we know the re-
d suit of state socialism there. The Minnesota legisla-
tive commission which studied the subject OF state
workmen's compensation insurance in Ohio and else
where reported most unfavorably, and the effort to
. fssten such a system on this state proved to be a
: happy failure. In New Zealand, England and other
countries state life insurance has had a fair trial and
Il never has been able to compete on equal terms with
y private enterprise.
g "But despite the many lessons which have been
) learned In the school of experience, 1t is easy to lead
T the ignorant and unthinking astray by holding out the
3 lure of a state largess or bounty, or by pointing to
o the few Isolated examples of sharp practices, excess
n i've rates and law evHsions of privately operated in
e surance companies. The facts are that as a whole in
Il surance has been conducted on n cleaner, more honor
!, able and more scientific basis than has any other large
i enterprise and the tendency always has been upward.
Insurance lends itself so readily to competition
\ and there is such an Unsuitable demand for new capi-
4 tai that In most instances rates are at the lowest min
i imum compatible with safety. In fact one of the
n gravest dangers which the business has had to contend
i with has been the unwarranted reduction In charges
sometimes made by the companies themselves as a re-
D suit of competition, and the consequent threat of re-
d serve depletion and ultimate disaster. Some of the
< there even has been a tendency, as in Minnesota where
I a state board fixes workmen's compensation charges,
5 to require all insurers to make the same levies in or
der to avoid disastrous cut-throat competition. Such
3 substantial companies as to the general principle in
volved.
s 'There is, however, a present trend towards sum-
mary legislative rate revision downward which must
orally speaking, on scientific and mathematical deter
limitations, or as near so as is humanity possible. These