detailed statement of facts with regard to the character and conduct of the business and the uses made of insurance; but the decisions are based upon the misconception of the facts touching the conduct of the business as they are recited in Paul vs. Virginia, and upon the theory that the business of insurance involves only the making of a contract between a citizen of one state and a corporation of another.

As long ago as 1877 the supreme court refused to give the decision in Paul vs. Virginia the scope and effect claimed for it by Mr. Justice Field. In Pensacola Telegraph Co. vs. Western Union Telegraph Co., 96 U. S. 1, it is said:

"We are aware that in Paul vs. Virginia this court decided that a state might exclude a corporation of another state from its jurisdiction, and that corporations are not within the clause of the Constitution which declares that the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states.'

"Upon principles of comity, corporations of one state are permitted to do business in another unless it conflicts with the law or unjustly interferes with the rights of the citizens of the state into which they come. Under such circumstances, no citizen of a state can enjoin a foreign corporation from pursuing its business."

The court held that the Western Union Telegraph Company, a New York corporation, had the right to erect and operate a telegraph line in the State of Florida, notwithstanding an act passed by the legislature of Florida incorporating the Pensacola Telegraph Company, which granted it "the sole and exclusive privilege and right to establish and maintain an electric telegraph" in certain parts of the territory within the State of Florida which the Western Union Telegraph Company wished to occupy.

Mr. Justice Field dissented, and quoting extensively from Paul vs. Virginia urged the importance of state control over corporations doing business within their limits. In this connection he said:

"By the decision now rendered, congressional legislation can take this control from the state, and even thrust within its borders corporations from other states in no way responsible to it."

The statement of Mr. Justice Field in Paul vs. Virginia that the policy does not take effect until delivered is not true in thousands of insurance transactions of this day. It is true insurance is not a subject of trade and barter, but neither is a telegram; it is not a commodity to be shipped or forwarded from one state to another and then put up for sale, but neither is a telephone message. When the Constitution was adopted there were no steamboats, no railroads, and the telegraph, the telephone and supplied electric power have become public utilities and recognized as instrumentalities of commerce within the lifetime of the youngest member of this Association. (Judson on Interstate Commerce, 12, 70.) But it does not follow that because a thing is new, it may not be covered by the Constitution, for Marshall characterized the Constitution as "intended to endure for ages to come and consequently to be adapted to the various crises of human affairs." (McCulloch vs. Maryland, 4 Wheat. 316, 415.)

Chief Justice Waite said of the powers granted to Congress by the commerce clause of the Constitution :

"The powers thus granted are not confined to the instrumentalities of commerce, or the postal service, known or in use when the Constitution was adopted, but they keep pace with the progress of the country and adapt themselves to the new developments of time and circumstances." (Pensacola Telegraph Co. vs. Western Union Telegraph Co., 96 U. S. 1.)

Mr. Justice Miller said that the power of regulation under the commerce clause has been applied "to a method of intercourse which had no existence when the Constitution was framed." (Lectures on the Constitution, p. 450,)

Mr. Justice Brewer more recently said:

"Constitutional provisions do not change, but their operation extends to new matters as the modes of business and the

habits of life of the people vary with each succeeding generation. The law of the common carrier is the same today as when transportation on land was by coach and wagon, and on water by canal boat and sailing vessel, yet in its actual operation it touches and regulates transportation by modes then unknown, the railroad train and steamship. Just so is it with the grant to the national government of power over interstate commerce. The Constitution has not changed. The power is the same. But it operates today upon modes of interstate commerce unknown to the fathers, and it will 'operate with equal force upon any new modes of such commerce which the future may develop.". (In re Debs, 158 U. S. 591.)

That profound student of the American Constitution, Mr. Bryce, says in substance that our Constitution has developed in at least three ways: by amendment, interpretation and usage; that the development by usage has established rules not inconsistent with its expressed provisions, but giving them a character, effect and direction which they would not have had if they had stood alone. Again he says:.

"The American Constitution has necessarily changed as the nation has changed; has changed in the spirit with which men regard it and therefore in its own spirit." (1 Bryce, American Commonwealth, 389.)

The question, then, whether Congress may regulate the business of interstate insurance depends not necessarily upon the conception which the framers of the Constitution had of the commerce which that instrument placed under federal control, nor does it depend upon mere definitions, but rather whether the thing itself bears to the business life of the nation that intimate and vital relation which other conceded instrumentalities of commerce bear to it. When the Constitution was adopted there were only one or two fire insurance companies in the United States, and they were mutual companies, one of which was founded by Benjamin Franklin. The oldest incorporated stock fire insurance company is the Insurance Company of North America of Philadelphia founded in 1792. There were about ten mutual and four stock companies and

partnerships in the United States transacting the business of fire insurance prior to 1800. (Richard M. Bissell's Historical Lecture on Fire Insurance in Yale Insurance Course, 1903.)

THE NATURE AND USES OF INSURANCE.

The development of the business of insurance has been concurrent and co-extensive with the development and expansion of all commerce, and now policies of insurance are issued to protect not only against the perils of the sea and loss by fire, but against the destruction of property by wind and hail; its loss by burglary; against negligence, boiler explosions, broken windows, bad debts, dishonest employees, accidental injury, sickness, death, etc. Disaster and ruin go hand in hand with each one of these risks, and but for the system of insurance which has been developed within the last hundred years, commerce as we know it, credit as it is, civilization as we live it, would not have been possible.

Fire insurance serves as a basis of credit. It is, in fact, collateral. None of the great manufacturing or commercial enterprises could be carried on in their present magnitude except for the confidence based upon insurance. The merchant desiring a line of credit from a manufacturer or wholesale dealer in a distant city is required to assure his creditor that the merchandise will be insured, not only while in transit, but after it has reached its destination. Insurance is a recognized asset, and the credit system of the country rests upon it as much as upon the financial responsibility of men and mercantile corporations. Bankers require their borrowers to carry fire insurance. Borrowers upon the security of buildings are required to agree in advance to keep the property insured for the benefit of the lender. All these various uses of fire insurance are enjoyed under a substantially uniform contract (many provisions of which are held to mean one thing in one state and another thing in another state), which agrees to indemnify the insured in the event of loss or damage by fire.

Every fire insurance contract written by a company outside the state of its creation involves interstate commercial intercourse. The policy is signed by the officials of the company at its home office; it is countersigned by the local agent who reports to the home office or the department manager all the details with regard to the risk, and frequently upon receipt of such report the insurance is ordered cancelled; the premium is remitted by the local agent to the home office or the department manager, and in case of loss an adjustment is made by the company's representative sent from the home office or its department headquarters.

Hon. Wm. P. Hepburn, chairman of the House Committee on Interstate and Foreign Commerce, at the hearing before that committee (p. 174) upon the bill which established the Department of Commerce and Labor, said:

"The power to insure a cargo or a vessel lessens the hazards of trade, and it has become so much the custom to rely upon that that it would undoubtedly be a wonderful impairment to the possibilities of commerce if the inability of men to insure should become a fixed fact; men would not undertake ventures that they now do if that were so.

In the debate on the same bill in Congress, January 17, 1903, Mr. Hepburn said:

"The insurance business of the United States is colossal. The wealth of insurance companies is greater than all of the values of all property in the United States at the time this government was formed. The business of the insurance companies is greater in volume per dollars and cents than all of the combined business of all regions of this country at the end of the revolutionary war. It is colossal. There are three corporations doing business in one single city in the United States, whose assets aggregate more than $1,000,000,000. Now, it has come to pass that all commercial business is in a large measure dependent upon insurance. As I said the other day, if you were to obliterate the insurance of the United States you would well nigh obliterate the commerce of the United States. The business of commerce could not be under