FEDERAL CONTROL OF INSURANCE CORPORATIONS some fifty different despots under which they now labor. And such liberation from state control would seem to be the necessary consequence of the assumption of control by Congress. Granting that Congress can, under the commerce clause, assume the reg ulation of the insurance business, any state legislation that would interfere with such national control would unquestionably be unconstitutional under the well settled doc trine that although state regulation of in terstate commerce in regard to matters upon •which Congress has remained silent may be constitutional, such legislation becomes un constitutional as soon as Congress speaks. Therefore, it seems that the effect of enact ing a valid Federal law in regulation of insurance would wipe out practically the •whole mass of state legislation on that subject, and leave only the one Federal depart ment of insurance to be satisfied by those insurance companies operating within the bounds of the Federal Union. That such a consummation is devoutly to be wished for, or even prayed for, by the insurance corporations seems clear. But is it equally desirable from the standpoint of the other party in interest, the people? It certainly would possess for them this gen eral advantage—increased publicity. A reg ulation "hatched up" by or against the in surance corporations could not be "sneaked through" Congress at Washington as easily as in any of the state capitals. The lime light of public interest and of the public press is turned steadily upon Washington, and it is rather more difficult for lobbyists of the lurking, slimy variety to hide in the Capitol there. Likewise, it is probable that the degree of intelligence displayed in de vising insurance regulations would be rather higher in Congress than is ordinarily to be found in the state legislatures, although, of course, no one would be so hardy as to refuse to credit Congress with its fair share of legislative mistakes in the past. The term "graft" has become distressingly fa miliar in connection with the officials of the
great departments of the Federal govern ment, and there is little basis for the hope that no "grafting" would take place in a Federal department of insurance, but it seems scarcely possible that the insurance corporations would be subjected to the monstrous blackmailing seen to exist in connection with the state departments of insurance, and money saved from the black mailers is, presumably, saved to the policyholders. All these considerations, — pub licity of enactment, intelligence in regula tion, more honest and efficient administra tion, together with the greater certainty in the law determining rights under insurance contracts, — would seem to commend Fed eral control of insurance most highly to the people as well as to the corporations. But there are other phases to the proposi tion, which are equally incident to the whole movement to transfer to the Federal government control of all interstate corpo rations, which will give the members of Congress pause before voting for the bill which has been introduced by Mr. Morrell, of Pennsylvania, in accordance with the President's recommendation concerning in surance. The old state lines still exist, and the states are still regarded as locally in dependent sovereignties. Since the most important enterprises are carried on by corporations, and since practically all im portant industrial corporations are engaged in interstate business, an act giving the Federal government control of all interstate corporations would strip the states of a large measure of their power, and deprive them of a large portion of their revenuesWe can scarcely expect the states, or their representatives in Congress, to consent to so extensive an abdication; and even if the states would consent to abdicate, we may well question whether such an impairment of the original foundations of the Union would not be too great a price to pay even for a change in the present almost intoler able condition of corporation law in this country.
