Page:The Green Bag (1889–1914), Volume 17.pdf/97

 THE GREEN BAG over all interstate corporations, speaks as follows concerning the powers of his bureau over insurance corporations: "Federal control over insurance and the exercise over insurance corporations of the compulsory powers of the Commissioner rest upon the same legal basis, raising at the outset the question whether insurance is in any of its forms interstate commerce. "A long line of decisions of the Supreme Court of the United States, commencing with Paul v. Virginia (8 Wall. 168), estab lished the legal proposition that insurance was not interstate commerce in any of its forms — fire, life, or marine — as presented to the court. This line of decisions has been further supported by the uniform holdings of State courts. "If this legal proposition is irrevocably settled, the powers of the Commissioner relative to insurance are purely of a statis tical, voluntary, non-compulsory nature. He may collect, compile, and publish such information as may be voluntarily furnished to him, but he can not compel the produc tion of such information, nor would he be justified in recommending any Federal legis lation directed at Federal control of insur ance. The rapid development of insurance business, its extent, the enormous amount of money and the diversity of interests involved, and the present business methods suggest that under existing conditions in surance is commerce, and may be subjected to Federal regulations through af firmative action by Congress. The whole question is receiving most careful consid eration upon both legal and economic grounds." Since it is thus apparent that an attempt is being made to bring about in some way Federal control of the insurance business, it becomes a matter of interest to learn the origin of the movement. Statutes enacted by the states for the purpose of regulating the business of cor porations operating within their respective bounds are found in nearly all instances to

have sprung spontaneously from the legisla tures, inspired by more or less clearly de fined popular demands, while the corpora tions themselves doubtless pray, so far as their soulless character and metaphysical constitution will permit, for nothing so devoutly as immunity from further state regulation. But when their eyes are turned to the national government a change comes over the spirit of their dreams, and they crave national control. That is, the de mand for national control of corporations comes almost exclusively from the corpora tions, and especially from the insurance cor porations and those acting in their interest. And the reason is not far to seek. Under the law as it now exists, the foreign insurance corporation is absolutely at the mercy of the states in which it desires to do business. The state has an absolute right wholly to exclude it if it so desires, or to admit it upon such terms as public policy, political cupidity, or legislative igno rance may suggest. The state may impose, as conditions of admission, not only capri cious and arbitrary requirements, but in effect, it may also lay and enforce conditions in themselves illegal and void. For, since the state has an unqualified power to refuse the license required for admission, so it may revoke the license once granted, for any cause whatever, good or bad, or for no cause at all. Thus it has been held, and with manifest correctness, that the con tract made by an insurance corporation as a condition of admission into the state, that it would not take advantage of its consti tutional right to remove its causes into the Federal courts, is void and of no effect.1 But it is also held that while the corporate insurer has the right to disregard his agree ment and remove his cause to the Federal courts, the state may make the breach of such a void agreement a ground for revok ing the license of the recalcitrant corpora tion. The right of revoking the license being absolute in the state, the reason for 1 Home Ins. Co. v. Morse, 20 Wall. 445.