DISTRIBUTION OF PRESIDENT'S MESSAGE

The House accordingly resolved itself into Committee of the Whole House on the state of the Union, Mr. Butler of Pennsylvania in the chair.

The CHAIRMAN. The House is in Committee of the Whole House on the state of the Union for the further consideration of House resolution 42, and the gentleman from Kentucky is recognized.

Mr. SHERLEY. Mr. Chairman, it is never pleasant to find one's self in the position of Mahomet's coffin, suspended between heaven and earth, but I was very glad to yield the floor that this committee might rise, in order that the House might maintain its constitutional rights. It is so seldom that a member of this body has a chance to protest against the constant disregard of the constitutional rights and dignities of the House that I am always willing to yield the floor for any such purpose. [Applause.]

To return to the subject of discussion, I know of no more immoral practice than that which has grown up in the House of Representatives of using the taxing power for other purposes than the raising of revenue. It may be that in other countries the taxing power has been necessary as the weapon of liberty, either by denying appropriations or by taxing particular things, but in America the theory of our Constitution has been, and still is, that through other means the liberties of the people are guaranteed, and the taxing power was given only for the purpose of raising revenue. So, when you find upon this floor serious discussions of the reference of a bill to the Ways and Means Committee, upon the implied, if not the openly expressed, opinion that the taxing power shall be used not for the purpose of revenue, but for the purpose of doing something that otherwise Congress could not do, and that it was not intended that Congress should do, I, for one, propose to protest. Therefore, I am opposed to the reference of this matter to the Ways and Means Committee. I am also opposed to the reference of it to the Interstate and Foreign Commerce Committee. It is conceded by the distinguished chairman of that committee that the Supreme Court will have to change its mind in order for this Congress to have jurisdiction under that clause of the Constitution. He enters the domain of prophecy and says that they will do it. It may be that he agrees with Mr. Dooley, who, in the discussion of the insular cases, said to Hennessy that he was in some doubt as to whether the Constitution followed the flag, or the flag the Constitution, but it was evident that the Supreme Court followed the election returns. [Laughter.]

It may be that he considers the clamor now being raised throughout the land for the regulation of insurance companies by the National Government will have sufficient effect that, in the event of national

legislation, the Supreme Court will sustain it and overrule itself. About that he may be a better judge than I am, but it is apparent to every Member on this floor that the discussion had for the past two days shows that it is the overwhelming judgment of the House that, as the Constitution is now interpreted, we have no such jurisdiction; that if we are to legislate on this subject, we must discover some other provision of the Constitution than the commerce clause.

Now, we have a great committee in this House, a committee that not only reports bills for legislation, but is also the judicial adviser of the House. The Committee on the Judiciary is supposed to be made up in its membership of the ablest lawyers in the House. They are there for the purpose of not only originating legislation, but they are there for the purpose of instructing the House upon questions of constitutional power. What more proper than to do what the Senate has done, make reference of a matter of this kind to the Judiciary Committee, that they may report back to the House whether, in their judgment, this House has jurisdiction, and if it has jurisdiction, the extent of it. Shall we determine now that one or the other of these committees may have this matter without a proper investigation? If the House is to now determine that fact, then, on the knowledge that the House has of the decisions of the Supreme Court, it ought not to refer this to any committee, because this House knows that it has been expressly declared that there can be no interstate commerce in insurance. Of course it can be reached collaterally, but is n't it a humiliating spectacle, is n't it such a spectacle as has been responsible for a whole lot of trouble in America, that men sworn to support the Constitution, representatives of a great body of the Government, are willing to disregard its plain limitations, and by subterfuge, under the taxing powers, do that which in their hearts they do not believe they are entitled to do? The fact that the House has done it, the fact that we have got precedents for it, only makes it worse. It only shows how one thing leads to another. The other day a statement was made in the other branch of the National Legislature that that provision in the law creating the Bureau of Commerce and Labor, relating to insurance, crept in there without the knowledge of that body; that had they had knowledge of it, there would have been a pronounced protest; and now we have a marked illustration of the danger of a precedent.

The President of the United States in his message says that because Congress has given to the Bureau of Commerce and Labor the power to make certain general investigations and inquiry as to insurance, therefore we have presumptively declared that it is a matter proper for national governmental control, and that declaration is used as a lever to make us go a step further. I understand that some member of the Judiciary Committee will offer an amendment referring this matter to that committee, and I hope that that amendment will prevail.

Now, Mr. Chairman, I desire to turn from this discussion of a narrow

proposition to the discussion of a broader one. I believe the House will bear me out in the statement that I have never taken a partisan, captious position on the floor. I do not propose to do it now, but if I should let pass by in silence certain portions of the President's message without a protest, I should consider that I had no reason to be upon this side of the aisle, that I ought to go over to the other side. If I am to assume the position that seems to be taken by some, of out-heroding Herod, then I propose to go into Herod's camp where I can do it effectively, and not remain outside of it. I want to protest against that modern theory so pronouncedly and ably stated in the President's message that because a thing is big therefore it must come within the national jurisdiction. It is true that this whole country has been stirred from one end to another by the disclosures in regard to life insurance. It is also true that every one of those disclosures have been made known to the public by State agency and not by the National Government. It is true that the Supreme Court of the United States in deciding the case of Paul against Virginia, in deciding the cases that followed after that, plainly indicated that the States had complete - not only complete, but exclusive jurisdiction over the subject. Yet we have sent us a message saying that the time has arrived where it is evident, in the judgment of the people, that the States can not manage these things and that we must come to the National Government.

The President in his message says:

The fortunes amassed through corporate organization are now so large, and vest such power in those that wield them, as to make it a matter of necessity to give to the sovereign— that is, to the Government, which represents the people as a wholesome effective power of supervision over their corporate use. In order to insure a healthy social and industrial life, every big corporation should be held responsible by, and be accountable to, some sovereign strong enough to control its conduct.

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The makers of our National Constitution provided especially that the regulation of interstate commerce should come within the sphere of the General Government. The arguments in favor of their taking this stand were even then overwhelming. But they are far stronger to-day, in view of the enormous development of great business agencies usually corporate in form. Experience has shown conclusively that it is useless to try to get any adequate regulation and supervision of these great corporations by State action. Such regulation and supervision can only be effectively exercised by a sovereign whose jurisdiction is coextensive with the field work of the corporations - that is, by the National Government. I believe that this regulation and supervision can be obtained by the enactment of law by the Congress. It this proves impossible, it will certainly be necessary ultimately to confer in fullest form such power upon the National Government by a proper amendment of the Constitution. It would obviously be unwise to endeavor to secure such an amendment until it is certain that the result can not be obtained under the Constitution as it now

is. The laws of the Congress and of the several States hitherto, as passed upon by the courts, have resulted more often in showing that the States have no power in the matter than that the National Government has power; so that there at present exists a very unfortunate condition of things, under which these great corporations doing an interstate business occupy the position of subjects without a sovereign, neither any State government nor the National Government having effective control over them. Our steady aim should be by legislation, cautiously and carefully undertaken, but resolutely persevered in, to assert the sovereignty of the National Government by affirmative action.

The great insurance companies afford striking examples of corporations whose business has extended so far beyond the jurisdiction of the States which created them as to preclude strict enforcement of supervision and regulation by the parent States. In my last annual message I recommended "that the Congress carefully consider whether the power of the Bureau of Corporations can not constitutionally be extended to cover interstate transactions in insurance."

That State supervision has proved inadequate is generally conceded. The burden upon insurance companies, and therefore their policy holders, of conflicting regulations of many States, is unquestioned, while but little effective check is imposed upon any able and unscrupulous man who desires to exploit the company in his own interest at the expense of the policy holders and of the public. The inability of a State to regulate effectively insurance corporations created under the laws of other States and transacting the larger part of their business elsewhere is also clear. As a remedy for this evil of conflicting, ineffective, and yet burdensome regulations there has been for many years a widespread demand for Federal supervision. The Congress has already recognized that interstate insurance may be a proper subject for Federal legislation, for in creating the Bureau of Corporations it authorized it to publish and supply useful information concerning interstate corporations, "including corporations engaged in insurance." It is obvious that if the compilation of statistics be the limit of the Federal power, it is wholly ineffective to regulate this form of commercial intercourse between the States, and as the insurance business has outgrown in magnitude the possibility of adequate State supervision, the Congress should carefully consider whether further legislation can be had.

The President's reference to the reasons that controlled the makers of the National Constitution in framing the commerce clause is, I suggest in all humility, not historically accurate. The fact is, the convention of Virginia and Maryland was called the convention that led up to the subsequent convention which adopted the Constitution of the United States for the purpose of trying to arrive at some method of settling the conflicts that arose as to the commerce on the rivers and waters that divided those two States and to arrive at some method by which States would not be able to hamper and handicap the commerce of other States.

As a result of that convention came the national convention that adopted the Constitution. Now, the commerce clause has two provisions in it. They are in the same sentence, but they are distinct in the sense that they were put into the Constitution. One of them relates to the power of Congress over foreign commerce; the other relates to the power of Congress over interstate commerce. It was desired at that time that the United States of America might have a weapon that she might use against England, who was then fighting her commerce on the high seas. It was expected that the United States of America should use its power through that provision against other nations, but that part of it which relates to the States was put into the Constitution for the purpose of preventing the States from discriminating against the commerce of their sister States. It was put in there for the purpose of keeping commerce free, not for the purpose of shackling it. Yet to-day, and for many years past, it has been made the pretext for giving power to the National Government to hamper and control. Now, I trust I am not a man who looks backward. I hope I am not speaking of the tender grace of a day that is dead, but I do feel that half of the evils that confront the country to-day confront it because we have disregarded the fundamental theory of our Government. I believe the way to govern best is not only to govern least, but to govern as near as possible at home. [Applause.]

That is my kind of Democracy. That is the reason I am where I am. If we could make the people of the States realize that of necessity under the Constitution 95 per cent of the things that relate to life, liberty, and property belong to the States, and unless we change the organic law must remain with the States if we could make them realize that therefore they must make their own State governments effective in order to deal in nine cases out of ten with those matters that affect life, liberty, and property, we might hope to solve our problems. But what has been the result? Largely as a heritage of the civil war, largely as a result of the acceleration that was given to the national power due to the emergency that that conflict brought about, we have had the spectacle that whenever a condition requiring a remedy arose in a State, the people, instead of trying to solve it there, come to the National Government and undertake to have the power under the Constitution stretched so as to bring the matter within the national domain.

The people, simply because the National Government seemingly acts, think that it always acts better. They think it acts better because they know less about its actions. They get a knowledge of what it does simply from the men who do it. The newspaper accounts which go out nine times out of ten necessarily go from the very source that has done the act which is to be reviewed by the people. Naturally the report going out is favorable, and they get the notion that if the action is by the National Government it will be better action. Maybe it is better, but, gentlemen, there is no reason why it should be as good. There is not a