GIFT OF. 
 
 <ta*SL 
 
'AXATION OF ORGANIZED BENEFICENCE 
 
 DARWIN P. KINGSLEY 
 

 
The 
 
 Taxation of Organized Beneficence 
 
 By DARWIN P. KINGSLEY 
 
 An Address to the Executive Officers, Staff and 
 Guests of the Union Central Life, at the opening of 
 its Home Office, November 7, 1913, Cincinnati, Ohio 
 
\ 
 
 s 
 
The 
 
 Taxation of Organized Beneficence 
 
 STANDING within the precincts of this noble structure, 
 surrounded not only by the men who guide the destinies 
 of the Union Central but also by the traditions which 
 always cluster about a really great human enterprise, I 
 realize that congratulations from me, or from any one, to 
 be adequate must represent something more than merely 
 happily chosen words. 
 
 The facts speak for themselves. Achievement stands 
 all about us. Dreams have been made realities. Ideals 
 have been nobly pursued and splendidly attained. Noth- 
 ing that any of us says to-day can adequately describe 
 the high purpose, the wise methods, the patient labors, 
 and the moral steadfastness by which a life insurance 
 organization has been here so administered that a great 
 life insurance company has been built up. That such an 
 institution exists is proof that a high purpose has ruled 
 it, is proof that wise methods have been followed by it, 
 and that patient labor has marked its whole existence; 
 the Company itself is the rich reward of a moral stead- 
 fastness without which such success may not be achieved. 
 Words, therefore, count for little, and for nothing unless 
 they are sympathetically uttered. 
 
 When I offer, in the name of the Company I have the 
 honor to serve, sincere congratulations upon your en- 
 trance into this beautiful Home, I offer not merely words, 
 but an appreciation born of intimate acquaintance with 
 similar purposes, methods and labors, and a profound 
 sympathy and daily experience with a like moral stead- 
 fastness. 
 
 I rejoice with you in your success. I know what suc- 
 cess costs. I venerate the names of those who first set 
 your feet in the right way and established your goings. 
 My veneration is born of the pride I feel in the great 
 
 383370 
 
names which adorn the history of my own institution. 
 I greet most sympathetically those who to-day manage 
 your affairs. That sympathy is born of experience in 
 facing kindred problems, of efforts to uphold the best 
 traditions of a great business, of a determination not to 
 neglect any new processes or new standard which our 
 larger experience demands that we should adopt. 
 
 The Union Central, like all life companies of similar 
 age, has passed the experimental stages and has a his- 
 tory and an experience of its own. It has withstood 
 those economic crises which, especially in this country, 
 periodically depress business and disturb the value of 
 securities. It has gained wisdom from the failures of 
 other organizations less soundly organized. It has 
 learned how circumspect a corporation and the officers 
 of a corporation must be in order not to arouse public 
 prejudice. It has seen how necessary it is to guard 
 against the wiles of those who thrive upon denunciation. 
 On the affirmative side, it has learned the inestimable 
 value of integrity and courage. It has seen that those 
 who build upon sure foundations need not fear the storm ; 
 that public opinion in the long run will follow the rules 
 of common sense and fair-play. 
 
 Life insurance has now come to years of manhood, to 
 years of strength, and, except in New York State, to a 
 period of unlimited achievement. In all the struggles 
 that have preceded that condition, the Union Central has 
 been a factor. In the organized forces which promise 
 most for the future of general society, the Union Cen- 
 tral has a definite place, and, in the great territory where 
 it is located, the leading place. 
 
 If there were any really unchangeable and irrevoca- 
 ble canons of society and government, I should be dis- 
 posed to complete my congratulations by suggesting that 
 the Union Central's problems are all solved and its 
 troubles are all over. But unfortunately or perhaps I 
 should say fortunately your problems are not all solved 
 and your troubles are not all over. It is true that your 
 organization rests solidly on accepted tables of mortality 
 and conservative assumptions as to rates of interest ; it is 
 true that your investments are soundly made; it is true 
 
that you are organizing society against its own weakness ; 
 that you are daily assembling unrelated and otherwise 
 hostile money and impressing it with a social efficiency 
 which the world as yet only faintly comprehends. It is 
 true that your work is entirely creative, that it is in 
 sympathy with every force that builds up and is hostile 
 to every factor that disintegrates and destroys. When 
 I say that of all the organized factors of society only a 
 few can truthfully claim to possess these qualities, I as- 
 sert only what every well-informed man knows to be a 
 fact ; and yet I cannot congratulate you on that account 
 over immunity from unjust attacks in the future. In- 
 deed, so perverse are some of the forces of a democratic 
 society that your virtues and your usefulness and your 
 success are almost certain to be the source of some of 
 your gravest problems, the cause of some of your most 
 serious troubles. 
 
 One of the many problems that face you and me and 
 all men charged with any considerable responsibility in 
 this great field work is taxation. 
 
 If I proceed now to discuss problems of taxation 
 merely, I shall not have discussed the real problem which 
 I have in' mind, and yet the problem I have in mind finds 
 its most concrete expression in terms of taxation. The 
 real problem goes deeper. It is this: 
 
 How shall we make the people understand that a life 
 insurance company is a pure democracy; that it is the 
 most successful expression of democratic principles actu- 
 ally at work; that in it there is the justice which democ- 
 racy aims to accomplish and otherwise largely fails to 
 achieve; that it is a brother to all those who, from the 
 beginning of time, have sought to assert the divinity that 
 dwells in man, who have sought some process by which 
 the sovereignty of the individual could be established and 
 at the same time the immeasurable strength of men work- 
 ing together could be realized? 
 
 That this is what life insurance really means, society at 
 large does not begin to comprehend. Indignant over their 
 exploitation by the strong and the rich, men are disposed 
 to classify the successful life insurance company along 
 with the great trust, and to view it with the suspicion 
 
and fear with which they view and view not altogether 
 unjustly accumulated wealth and great business suc- 
 cess. I do not claim that life insurance is entirely with- 
 out fault. It has made some serious mistakes which have 
 given some color of justification to such public opinion. 
 But the real causes which have led to the misconceptions 
 which exist are to be found in the imperfections of human 
 nature and in some of those weaknesses which always 
 have and always will be inherent in a democratic society. 
 
 One great weakness of a democratic society is 
 that its beneficent forces are unorganized. Selfishness is 
 organized, politics is organized, business is organized, 
 even crime is organized. But the people, through lack 
 of organization, frequently are unable to know when 
 and how and where they have really achieved a triumph. 
 The politician easily fools them; business not infre- 
 quently fools them. For this reason they sometimes find 
 that the fruits of an apparent victory are at the last 
 merely Apples of Sodom. On the other hand, and for 
 the same reason, they sometimes fail to recognize a really 
 democratic movement, a really democratic achievement. 
 
 That life insurance is organized beneficence, that 
 it is democratic, that its money is the money of 
 the people, that its extent is so great as to make 
 any existing private fortune a matter of relative un- 
 importance, that its billions of accumulations are more 
 potent than any other money assembled for any pur- 
 pose because of the social efficiency with which they 
 are impressed, in short, that it answers to a large 
 degree the longings of the individual for a definite place 
 in the wealth of the world, and for definite power against 
 the organized selfishness of the world, all these seem to 
 be truths that the people comprehend with great difficulty. 
 Indeed, comprehension comes so slowly that the people 
 themselves, through their accredited representatives, 
 unwittingly harass and handicap and burden what are 
 really their own best and dearest achievements. 
 
 I can at this time touch only upon one or two of the 
 forms which this lack of understanding takes with regard 
 to life insurance. One form is taxation. 
 
 We have, as a nation, recently been re-examining the 
 
 6 
 
bases and the principles of taxation in the matter of im- 
 ported goods and of incomes. Congress has proclaimed 
 its intention to strike the shackles from trade and industry 
 and to lift the burden of the high cost of living from the 
 consumer, or at least from the poor. There are shackles 
 which bind life insurance and there is a high cost to the 
 consumer in this field which is the direct product of unwise 
 legislation, which in turn is a direct product of miscon- 
 ception by the insured themselves. Whatever life insur- 
 ance costs beyond what it should is chiefly chargeable now 
 to unwise legislation. 
 
 I shall not stop to review what may be called the 
 shackles pure and simple which still exist in life insurance 
 regulation. As a matter of fact, such shackles do not 
 exist outside of the States of New York and Texas, and 
 as originally forged they have been mostly broken. In 
 New York they remain to-day in only two particulars: 
 Limitation on the volume of business which a company 
 may legally produce annually; and limitation on a com- 
 pany's margins of safety. 
 
 But as re-examination of processes of taxation is in 
 order let us review concretely some facts with regard to 
 the processes by which life insurance is now taxed : The 
 legal reserve life insurance companies of the United 
 States paid in 1912, in addition to taxes on real 
 estate, nearly $13,000,000 on a total premium income 
 of over $666,000,000. That is to say, for every $1,000 
 of capital which the insured paid in 1912 for the 
 protection of their families through life insurance, 
 the state took, in one form or another, about $20. 
 This is a heavier tax than the property tax in New 
 York, Chicago, Philadelphia, St. Louis, Boston or San 
 Francisco. Every dollar 's worth of property upon the 
 security of which the companies had invested their funds 
 paid taxes where it was situated ; but, in addition to that, 
 for the mere privilege of existing and doing business, the 
 States first and last took this fearful toll. 
 
 This is not only taxation of capital but excessive taxa- 
 tion from any point of view. It can perhaps be made 
 more impressive if, for purposes of illustration, we ap- 
 ply the burden to some other phases of the business. 
 
The ultimate purpose of life insurance, of course, is 
 protection, and that finds expression in the money that is 
 finally paid to the insured or to their beneficiaries. 
 
 If now we assume that the policy-holder was taxed 
 upon what he received rather than upon what he 
 paid, we find that for every $1,000 paid to policy-holders 
 in 1912 the state exacted in taxes almost $29. 
 
 Again, if we assume that the chief benefit of life in- 
 surance is the amount paid in death claims, then we find 
 that for every $1,000 so paid the state exacted death 
 duties to the amount of over $63. 
 
 If it be said that expenses of life insurance are too 
 high, managements may very well retort that the item of 
 state taxes in every $1,000 expenses amounts to $72, and 
 unlike ordinary expenses is a factor entirely beyond their 
 control. 
 
 If people complain that dividends are too small, 
 that condition is in part at least explained by taxes, be- 
 cause for every $1,000 paid in dividends in 1912 the com- 
 panies were obliged to pay in taxes $140 ; in other words, 
 dividends on the average would have been 14% higher but 
 for the moneys taken by the States for the privilege of 
 doing business. 
 
 The latest development in our various forms of taxa- 
 tion in the country at large is the Income Tax. , This tax 
 reaches life insurance, as it did in the corporation tax 
 which it supersedes, by levying 1% upon net income. If 
 the Company which I have the honor to serve had paid 
 to the Federal Government in 1912 as a tax on its net 
 income what it paid to the States, the rate of taxation on 
 that income would have been four and four-tenths per 
 cent. This rate approximates the rate levied by the In- 
 come Tax on so much of private incomes as exceeds $250,- 
 000 and does not exceed $500,000 ; in other words, it equals 
 the rate applied by the existing law to those whom some 
 people call "the criminal rich". 
 
 The indictment against such taxation is not complete 
 when I recite merely the size of the burden. Another 
 clause of the indictment must tell how the States destroy 
 equity as between policy-holders. Neither in the rate, in 
 
 8 
 
the amounts paid nor in the principle underlying the 
 system of taxation, do the States agree. 
 
 Twenty-seven States levy a ta.x upon gross premiums 
 without deductions. 
 
 In one State the rate is six-tenths of 1%; 
 
 In two States it is 1% ; 
 
 In one State it is 1.44% ; 
 
 In one it is 1.75%; 
 
 In two it is 1^/2% ; 
 
 In eleven it is 2% ; 
 
 In one it is 2y 2 % on the first $5,000 and 2% on the 
 excess ; 
 
 In one it is 2%%; 
 
 In six it is 2y 2 %; 
 
 And in one it is 3%. 
 
 Nineteen States and the District of Columbia levy a 
 tax upon premiums after certain deductions : 
 
 In four States and in the District of Columbia the 
 basis of the tax is premiums less dividends ; 
 
 .In nine States it is premiums less annual dividends; 
 
 In one State it is premiums less death losses; 
 
 In one State it is premiums less death losses not to 
 exceed 25% of the premiums; 
 
 In two States it is premiums less policy claims; 
 
 In one State it is premiums less death losses, endow- 
 ments and commissions ; 
 
 In one State it is premiums less re-insurance premiums 
 paid to domestic companies. 
 
 In two States only are premiums not taxed Nevada 
 and Massachusetts; but Massachusetts levies a tax upon 
 the reserves of Massachusetts policy-holders, which is 
 the most indefensible of all forms of life insurance 
 taxation. 
 
 Among the lesser taxes imposed are some of the fol- 
 lowing in every State: state license tax, state fees, state 
 and county license fees, city and county taxes, personal 
 property tax. 
 
 9 
 
Here are nineteen different rates of taxation, even if 
 licenses and fees were the same in every State which they 
 are not. And yet the United States are supposed to be 
 a nation in which the citizens of each State are ' ' entitled 
 to all privileges and immunities of citizens of the several 
 States", where commercial intercourse between the citi- 
 zens of the different states is free and untrammeled. 
 
 // any one of these rates of taxation is right, then 
 eighteen of them are wrong. 
 
 The absurdity and injustice of the present situation 
 will be illustrated if we assume that Congress were leg- 
 islating upon the subject and that nineteen different 
 rates of taxation were presented by representatives of 
 nineteen different States, and, as the sponsors of each 
 plan insisted upon their own, Congress should enact 
 them; all! 
 
 All this, notwithstanding the frequently repeated 
 statute which forbids any company to "make or permit 
 any discrimination between individuals of the same class 
 or of equal expectation of life, in the amount or payment 
 or return of premiums or rates charged for policies of 
 insurance, or in the dividends or other benefits payable 
 thereon, or in any of the terms and conditions of the pol- 
 icy ". The first to violate these statutes are the States 
 that have passed them. The companies could hardly have 
 any object in violating them, and, so far as I know, no 
 company ever voluntarily did. It would be difficult, how- 
 ever, to conceive of a greater travesty on justice in the 
 matter of taxation than a program by which the States 
 in one statute prohibit discriminations and in another en- 
 force a program which compels discriminations. 
 
 We are, in a word, faced by this anomalous condition : 
 Life insurance, using words in their ordinary significance, 
 is not an investment at all. The money that provides it 
 represents, substantially in its entirety, unselfish sacrifice ; 
 and yet, no capital going into any ordinary business en- 
 terprise is anywhere in this country taxed as heavily as 
 life insurance premiums are taxed. 
 
 Taxation is one of the oldest problems of government. 
 Indeed it lies at the foundation of all government. The 
 disposition on the part of the representatives of the people 
 
 10 
 
to get money for governmental purposes in the easiest, 
 rather than in the right, way is in part at least a product of 
 their resentment against the encroachment of organized 
 wealth, against the inhumanity of organized ability. Re- 
 sponsible life insurance companies have money ; they must 
 have it. But the people as a whole do not understand that 
 necessity, they do not appreciate its significance, and they 
 do not realize that that money is their money, that it 
 is beneficent and not malevolent in character, that it is 
 really the fine product of an ideal democracy. It is even 
 difficult for them to understand that the project itself 
 should be encouraged ; but that much they do faintly admit. 
 Broadly speaking, the man in the street will generally 
 say that life insurance is a good thing. Concretely speak- 
 ing, when he comes face to face with the fact that it has 
 great accumulations of money, he acts as though he 
 thought it were a bad thing. 
 
 And yet, I thoroughly believe that we are making 
 progress. There are two principal reasons why I think 
 so; the first is that the day of strike legislation is gone 
 and gone forever. This dates from the moral upheaval 
 which perhaps found its most definite form in the insur- 
 ance investigation in the State of New York in 1905-6. It 
 is easy to be wise after the event, easy now to condemn the 
 men who, in most instances at least, dickered with the 
 blackmailing legislator from the best of motives and 
 from a desire to protect the interests of their policy- 
 holders ; but that condition has passed, passed not only 
 for life insurance, but, as I see it, for all corporations. 
 The second reason is that when the Income Tax was 
 under discussion in Congress, genuine progress was 
 made. The case was presented as it probably was never 
 presented before to any legislative body in this country. 
 The result is that the tax exacted from life insurance 
 companies under the Corporation Tax law will be ma- 
 terially reduced under the existing Income Tax law. 
 That is progress ; but no inconsiderable progress has been 
 made by the several States as well. 
 
 Twelve States, within seven years, have reduced tax- 
 ation on life insurance by percentages varying from one- 
 tenth of one per cent, in Colorado, to one per cent, in 
 
 11 
 
Rhode Island. In the same period thirteen States have 
 increased taxation. While, therefore, the States, as a 
 whole, appear not to have made progress, as a matter of 
 fact they have, because prior to seven years ago no State 
 ever made any reduction under any circumstances. That 
 within seven years twelve States should have made re- 
 ductions is significant, and is rendered more significant 
 by the recent action of the Federal Congress. 
 
 But the misunderstanding still exists. That Con- 
 gressmen and Senators fail to understand the part that 
 life insurance plays in the economy of the state is shown 
 in the text of the Income Tax law as it now stands, and 
 was strikingly shown by the measure in its first draft. 
 It is hardly worth while now to discuss the provisions 
 of the bill as originally presented; it is enough to say 
 that into that first draft some enemy of responsible life 
 insurance had injected an unusual amount of venom. 
 Who that enemy was I do not know, although he prob- 
 ably was not a member of either House. But even now 
 the bill clearly shows this lack of understanding, this 
 fear of accumulated money, this disposition to put a 
 penalty upon success. 
 
 The bill, for example, exempts all fraternal, bene- 
 ficial and religious orders. Why? Ostensibly because 
 they are mutual. But is that the real reason? They 
 are no more mutual than certain well-known life 
 companies, and broadly speaking no more mutual than 
 the so-called stock companies. But they accumulate 
 little money, they present the plea of poverty; the 
 successful companies accumulate money and do not pre- 
 sent the plea of poverty. It is true that these orders are 
 unscientifically founded, that they are to a large degree 
 irresponsible, that their contracts cannot be depended 
 on, that their record through a period of time is one of 
 failure and financial default, social inefficiency and gen- 
 eral incompetence; but they have the seeming virtue of 
 poverty. On the other hand, it is true that the irresponsi- 
 ble life companies are dependable, that their contracts 
 are as certain as anything in human society, that what 
 they agree to do they do, and the extent of what they be- 
 neficently do is almost beyond calculation ; but in doing it 
 
 12 
 
and in order that they may do it, they commit the offence 
 or what is seemingly an offence of having large accumu- 
 lations of money. Moreover they never make the plea of 
 poverty. So the inefficient and the irresponsible go mi- 
 taxed; the efficient and the responsible are taxed. The 
 feeble attempt at democracy is encouraged; the effective 
 achievement of real democracy is discouraged. 
 
 And yet I insist that we have progressed. During the 
 recent discussion of the Income Tax law Congress really 
 responded to the plea of the companies. Most of us pre- 
 sented arguments; which arguments went home it is not 
 easy to say. That some of them went home is certain. 
 It may not be out of order for me to repeat in substance 
 some of the arguments which I used with the Chairman 
 of the Finance Committee of the Senate, and, so far as I 
 was allowed, with the Sub-Committee of that body. 
 
 I called the Committee's attention to the socially 
 inefficient, what we call the dependent class, and reviewed 
 some of the causes which constantly swell the ranks of that 
 class. That one of the great problems confronting every 
 statesman is how to provide through taxation for the sup- 
 port of this class was a matter that I did not need to 
 emphasize. My plea for life insurance was that beyond 
 every other organized force in human society it helps the 
 state and aids the statesman by keeping people out of the 
 dependent class; and if we can successfully establish a 
 social program which keeps people from becoming de- 
 pendent, a great problem in statecraft will speedily be- 
 come simplified. We pay to war pensioners over $165,- 
 000,000 a year, every dollar of which is raised by taxation. 
 The life companies pay twice that sum annually in cash to 
 beneficiaries and policy-holders, every dollar of which is 
 raised by private taxation. Pensions are remedial. Life 
 insurance is preventive. Pensions are the price the people 
 pay in order to soften the pitiful after effects of a con- 
 flict too hideous to be ameliorated when in progress. 
 The proceeds of life insurance are provided by the people 
 to protect the defenceless, to educate the young, to open 
 the door of opportunity. But it is a tax, and to tax it is 
 to commit the economic barbarism of levying a tax on 
 a tax. 
 
 13 
 
This was the argument which I sought to drive home. 
 It seems to me it is the consideration which must appeal to 
 every intelligent statesman. If that be a fact, if life in- 
 surance in the great interplay of the forces involved in 
 our sociology is direct, powerful and efficient in keeping 
 people out of the dependent class, should it, beyond the 
 cost of administration, be taxed at all! Should it not 
 rather be encouraged encouraged as an enterprise which 
 in the long run solves the problem of taxation by reducing 
 the burdens on society which ultimately find expression 
 in terms of taxation? 
 
 In knowledge of the economic meaning and value of 
 life insurance, we are far behind most of the enlightened 
 countries of the world. I happen to be associated with a 
 company which does business with substantially all the 
 civilized countries of the globe. In only a few are we 
 taxed in the same way that we are taxed in the United 
 States. I refrain from naming those countries because the 
 catalogue might appear invidious. In most of the great 
 countries of Europe, whenever a tax is laid upon pre- 
 miums it is assessed directly against the policy-holder and 
 turned over to the government. This has at least the 
 virtue of directness and the policy-holder knows what the 
 government is doing. A great objection to our system 
 is its indirection. Few policy-holders know that they are 
 being mulcted by the government. In France, Spain, 
 Denmark, Germany and Russia, the premium tax is for 
 the maintenance of the Insurance Department and sub- 
 stantially nothing more. In Great Britain the tax that the 
 company pays is about one-fourteenth of the average 
 rate in the United States. In Germany the rate is about 
 one-twentieth of the rate exacted in the United States. 
 
 But that is not the whole story. In Great Britain and 
 Germany the government not only refrains from laying 
 more than a nominal tax upon life insurance when volun- 
 tarily taken, but they compel certain classes to insure 
 against death, accidents and sickness, and provide at the 
 public charge for old age pensions. The cost of this is 
 assessed partly on the insured, partly upon the employer, 
 and partly upon public funds. The attitude of these gov- 
 ernments toward the idea of life insurance is so far in 
 
 14 
 
advance of the attitude maintained by our various legis- 
 latures that the contrast is painful. They have learned 
 what we must learn ; they have learned under autocratic 
 forms of government what we are learning very slowly 
 under a democratic form of government. 
 
 I have said that we are making progress. I wish I 
 could say that we shall ultimately get justice under the 
 supervision to which all insurance is now subjected. 
 What would the attainment of justice in taxation in- 
 volve? It would mean that forty-eight separate State 
 legislatures and the legislatures of all the Territories, as 
 well as the Congress of the United States, must reduce 
 taxation on insurance of all kinds to a basis which would 
 represent merely the cost of efficient state administration. 
 It would mean the surrender of over $16,000,000 in annual 
 revenue. Some of you may believe that can be done; I 
 am frank to say that I do not. 
 
 And yet I believe we shall ultimately get justice. 
 Europe has learned the lesson; but the people did not 
 learn the lesson and then enforce it; the lesson was first 
 learned by authority. The value of life insurance was 
 first appreciated in Europe and is being imposed on the 
 people, by authority. The one great authority in the 
 United States which can enforce justice is the Federal 
 Supreme Court. 
 
 That Court went wrong economically in 1869 in 
 the case of Paul vs. Virginia. It has generally been 
 assumed, in that case, and in some subsequent cases where 
 the doctrine of that case was reaffirmed, that the Court 
 irrevocably declared insurance in all its forms and how- 
 ever practiced not to be commerce. The language used 
 in some later decisions, however, implies that the de- 
 cision then made applied only to insurance as ordinarily 
 practiced, and later writers have repeatedly intimated 
 that in the case of Paul vs. Virginia the Supreme Court 
 has not disposed of the whole subject of insurance nor 
 settled the question as to whether or not it is commerce 
 as practiced now, especially in life insurance. The prac- 
 tical effect of that decision, however, was to leave the 
 whole matter to the tender mercies of the States and they 
 are taking out of insurance as a whole annually about 
 
 15 
 
$17,500,000. To expect the States voluntarily to give 
 that up is to expect too much. You might as well expect 
 the beneficiary of a monopoly voluntarily to come for- 
 ward and renounce his privileges. Human nature is 
 not made that way. 
 
 What the Supreme Court of the United States may do 
 when insurance and especially life insurance as it is now 
 practiced is fully presented and discussed, is another 
 matter. Good lawyers believe that if the Supreme Court 
 should enter a decree declaring that insurance and espe- 
 cially life insurance as now practiced is commerce, it 
 would simply be recognizing what has always been true, 
 and would not be reversing the controlling case of Paul 
 vs. Virginia. The effect of such an opinion would be 
 magical. I firmly believe that sooner or later such an 
 opinion must be rendered. 
 
 When that time comes not only will the great body of 
 this taxation fall away, but an opportunity will be created 
 for the expansion of a great democratic idea, one which 
 applies the principles of democracy to labor and the 
 products of labor, to society and the problems of society, 
 as effectually as manhood suffrage, in theory at least, en- 
 forces the rights of humanity in the processes of a demo- 
 cratic government. Through the expansion of that idea, 
 under the control of one central authority as against some 
 fifty authorities which now control, we shall hasten enor- 
 mously the time when the people will understand that 
 a life insurance company is indeed a pure democracy, 
 that it is a brother to all who have long sought some pro- 
 cess bv which the sovereignty of the individual may be 
 established, and at the same time the immeasurable 
 strength of men working together realized. 
 

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