Correspondence The chief province of combination in pro ductive enterprises is to eliminate waste, through a scientific organization of produc tion. The untoward features which we com plain of, stockwatering, holding companies, evasion of legal responsibility and the unre strained and unqualified appropriation of the entire social profit consequent upon this organization by the pioneers in these new economic fields, are merely incidents. As the rules and orderly government of civilization always follow close upon the heels of the pioneers who explore and settle newly discovered countries, so will the regulation of law and decency overtake the captains of industry who have discovered and explored for us hitherto unknown economic realms. Consequently the suggestion of President Taft that Congress should propose a consti tutional amendment to the states which shall authorize the imposition of an income tax by the federal government raises an issue of great importance. It comes at a period in our history that is peculiarly promising for a careful study of first principles, for the reason that so many of the cherished rules of proce dure are being found inadequate to cope with the demands of a wholly new economic development. The broadening of the limits of the federal power is an economic necessity. There do not exist in our time the same reasons for fearing a centralization of power that im pelled our forefathers to jealously guard against it. They thought only of political power. Economic force was unknown to them. Whereas in our day political power is wholly secondary and the economic strength of organized industry has become irresistible. A tariff bill is made not as a piece of state craft devised for the benefit of the entire nation, but in subservience to the wishes of the heads of great business enterprises. Already the claim is being put forth that the proposed tax on corporations is unconstitu tional. Perhaps upon test it may be found to be so, and thus become an additional argument for broadening the Constitution. The Supreme Court is bound in honor and conscience strictly to uphold the literal inter pretation of the Constitution, for it cannot properly change the clear intent of the instru ment merely to meet new conditions. If an organization governed by rules of order and a constitution finds it difficult to transact busi
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ness under those rules, the constitution and rules are promptly changed by an exercise of the right to change expressly reserved in the membership. There are other matters besides the right to levy an income tax which sorely need an extension of the powers of Congress beyond the rigid limits set by the written Constitutution of 1789. We have a national bankruptcy law. We should have a uniform law of sales, uniform regulations governing marriage and divorce, and prescribing the inheritance and descent of property, and a power in Congress to regulate the great business of insurance. Con gress now has power to regulate commerce, but the Supreme Court has repeatedly decided that insurance is not commerce. This busi ness of such immense magnitude and im portance is thus left to the varied and incon sistent regulation of the forty-five states of our country. As Mr Wickersham pointed out in his address, the Supreme Court recog nizes the unlimited extent of the power of the states over corporations transacting business within their borders A few years ago the writer suggested that insurance companies reincorporate under a federal law to be passed for that purpose in order to escape the in tolerable burden and expense consequent upon transacting a business national in its char acter under the independent supervision of our many states. But there is considerable doubt as to whether the Supreme Court would change its views upon this subject, and the necessity of a constitutional amendment which shall expressly declare insurance to be com merce thus becomes evident. The final decision upon the question of amendments rests entirely with the citizens of the separate states to whom it is finally referred. It is forty years since the last con stitutional amendment was adopted. It may be that many people are not even aware that amendments to the Constitution were contem plated by its framers and definite machinery provided for the purpose. It cannot fail to be wholesome to have a widespread discussion of the subject, one covering the entire field of government by Constitution, and a recog nition of the fact that for economic purposes at least we are one entire nation, not a collec tion of independent sovereignties. SAMUEL DAVIS. Boston, Mass.
