Evening star., 1944-06-23
House Seen Indorsinq
High Court Minority
Writer Halls Quick Answer
To Decision on Insurance
By Dapid Laurence


overwhelming vote has Just backed up
the three members of the Suprene
Court--Chief Justice Stone, Justice
Frankfurter ard Justice Jackson--wiD
on June S said that the Sherman anti
trust law should not be applied to tfe
insurance business.
This is one of the quickest answers
ever made by Congress to q Supreme
Court decision The four Justices of the
court who held that Congress intended
all along to cover the insurance busineas
in the Sherman antitrust law are nov
told that the present House OF Repre-
sentatives, at least, does not share that
view Of congressional intent.
For rs years insurance men have re-
lied on decision Of the Supreme Coust
that insurance was not technically 10
be defined as interstate commerce.
Legislation providing for Federal cor
troll OF insurance has been suggested st
various times only to be met with re-
lection In Congress on the ground thst
the Supreme Court had held insurance
to be a matter for control by the States.
Accomplished by Minority.
Now. however. in view Of the Suprers
Courts decision, which Justice jackson
called reckless one, the Congress fins
1t necessary to act promptly In ordG
to prevent chaos in the insurance bus.-
ness. This was the nrst case in ths
history Of the court in which both i
constitutional question and reversal d
precedent were accomplished by q M
nority OF the court. namely, four justices
of the nine.
When two Justices of the nine dis
qualified themselves from sitting on tie
case the traditional procedure would
have been to let the decision of the lover
court remain affirmed. The fact that
four justices undertook to issue rulint
In the face Of this unprecedented stu.
alton has caused Nationwide comment
and q good deal Of resentment becaus.
constitutional questions ought never b.
passed upon by minority OF the court
The vote in the House of 283 to 81
shows that substantial number d
Democrats as well as Republicans ar,
opposed to Federal regulation OF in.
surance or. rather, they prefer to let tn.
situation remain as 1t is today, namely
under the effective supervision sof tn.
insurance departments OF the differen,
States. Majority Leader McCormact
and Representative Ramspeck. Demo
cratic whip, both voted for the measure
In the Senate a similar bill is pendin.
in the Judiciary Committee, but repor.
to the Senate Is not expected until afte.
the coming recess. The Senate probabl'
viii pass the bill
There has been some discussion as b
whether President Roosevelt will vep
the measure. If the bill comes up to hin
for signature before election 1t seems
certain he will sign 1t, but II 1t il be
tween November and next January b
VIII probably veto 1t. This is becaua
the effort to control the insurance busi
ness Is pet New Deal measure, and
except In the middle of an electioA
campaign when Mr.. Roosevelt need
political support, he favors the enlarge
ment OF bureaucracy whenever he can.
Argument ON Precedent.
The biggest argument that Win +
made against the passage OF the bil
exempting the insurance business from
the application Of the Sherman ard
Clayton antitrust laws is that "prect-
dent" will be established and other Ell
emptions will be sought by other eroub,
The fart NJ hA d. il
insurance was exempted by Congressn n
1920 and labor unions are at preseat
exempt from the provisions of tie
Sherman law and the Clayton AMI
trust law.
There has been some talk that lie
labor unions might oppose the ins,r-
ance measure on the ground that In
some way they would lose the prote-
ton of the Wagner Act or the wfe
and hour law. But the Supreme Co,rt
has already ruled that the Wagner lsw
and the wage and hour law do apuy
to employees In the insurance business.
So 1t seems far-fetched to contend tiat
exemption from the Sherman law could
possibly mean exemption from the Wat-
ner law or the Fair Labor Standards Ait.
The chief momentum behind the bll
passed by the House is the fact th!t
chaos In the insurance business is liabe
to result unless the recent decision Ii
the Supreme Court is specifically clarI-
ned by Congress. This Is because cor
tracts made during the last rs yeas
with the approval of State insurance
departments may now be called ino
question by the Department Of Justie.
and considerable confusion would result
from the questioning of the validity II
the millions of contracts involving ii.
surance policies of all kinds.
II the Federal Government some div
wants to control the insurance business
which, of course, is not desired BY tie
majority of members of Congress t.
day-the logical way to proceed woud
be to exempt Immediately insuranie
companies from the application of tie ;
antitrust laws and then In an Orderly
manner take up comprehensive lesiI-
lation as to the part the Federal CD
eminent should play In supplementiig
the regulatory activities of the Stats.
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