ceeds to do business in 47 States but not in Illinois. That is the point; that is where the fraudulent practice comes in. Mr. ASHBROOK. The suggestion I made was that the company would do business within the State that it was incorporated and comply with the law but would have no regard whatever after it went outside the State borders. Mr. REDMOND. I really think that the activities of such a duly authorized and licensed company, for instance, in Illinois would be under the control of the insurance commissioner there under our new code. I know that several of them are copying the new Illinois Code, and several of the rest could do likewise, and it strikes me that it is a case of defining what constitutes doing business. It may not be entirely according to Hoyle in a legal way, but it seems to me that that is the test, defining what constitutes doing business. Mr. HARTLEY. Do you think that if the rest of the States in the United States, particularly those that have not adequate insurance protection, adopted the policy that you have observed in Illinois, the evils sought to be corrected in this bill would not exist? Mr. REDMOND. That is right. I am interested in the bill, particularly that part referring to the exclusion of newspapers. There is no reason why newspapers are mentioned in the same breath with reinsurance, but I really think it is because they do carry great weight, but all of the larger ones are engaged in the sale of insurance. I might say in closing that, if this bill should become a law, I do not see what Mr. Hobbs' constitutents in Alabama, in the mining business, would do for protection. I thank you, gentlemen. Mr. ASHBROOK. This committee will stand adjourned until 1 week from Thursday morning, at 10:30, and I should like any of you gentlemen who wish to appear before the committee at that time to be prepared and to be present, because we hope then in a day or two to conclude the hearings on this bill. (Thereupon, at 1 p. m., the subcommittee adjourned to Thursday morning, March 28, 1935, at 10:30 a. m.) REGULATING THE USE OF THE MAILS WITH RESPECT TO INSURANCE CONTRACTS THURSDAY, MARCH 28, 1935 HOUSE OF REPRESENTATIVES, Washington, D. C. The subcommittee met at 10:30 a. m., Hon. William A. Ashbrook presiding. Mr. ASHBROOK. Now, gentlemen, we will continue the hearings on the Hobbs bill. I have no desire to cumber the record with needless letters or telegrams, nor have I any desire to cut anyone out from proper recognition. I will hand the stenographer a list of those who have wired or written me approving of the Hobbs bill, which I will say is very slight indeed in comparison to those who oppose it: HOUSE OF REPRESENTATIVES, Washington, D. C., March 28, 1935. I have received letters and telegrams favoring the Hobbs bill from the following: Ranson & Co., of Cleveland, Ohio; Columbia County Association of Insurance Agents of Lisbon, Ohio; Hancock County Insurance Agents Association of Findlay, Ohio; Marion County Association of Insurance Agents of Marion, Ohio; Trumbull County Insurance Board of Warren, Ohio; Insurance Club of Canton, Ohio. I believe these are the only wires and letters I have received favoring the bill. I wish to submit the following letters and telegrams in opposition to the bill. I will also present to the stenographer some letters that were written to Chairman Mead, which I would like to have inserted in the record. (The letters referred to will be found as part of the appendix to today's hearing.) Here are some of the more important letters and telegrams which I have received, which I will hand to the stenographer to be incorporated in the record, and I suggest, if other members of the committee present wires or letters from the same party, that only one be included in the record. Now may I inquire whether there are any Members of Congress present who wish to be heard? Mr. EKWALL. Mr. Chairman, I would like to say just a word or two a little later, but first I would like to hear a little of the trend of the hearing. Mr. ASHBROOK. We will be very glad to have you remain and, whenever you wish to be heard, we will give you the opportunity. Now we will hear Mr. Trevvett, of the Commercial Travelers. 79 STATEMENT OF E. H. TREVVETT, TREASURER COMMERCIAL TRAVELERS' MUTUAL ACCIDENT ASSOCIATION OF AMERICA, UTICA, N. Y. Mr. TREVVETT. Mr. Chairman and gentlemen, I wish to speak to you on this bill mostly from a human standpoint. If this bill is passed, it would vitally injure an insurance company association such as ours and sister organizations that are here represented and, in my remarks, which will be very brief, I will cite our stand in the matter and it will also include, I think, that of our sister organizations scattered throughout the United States, of which there are about nine others. In the first place, I just wish to call your attention to the fact that the Commercial Travelers, of Utica, was organized in the year 1883 by my father to give accident insurance to its members at as near cost as possible, consistent with good business principles. We have continued to prosper during that period of 52 years, have built up an excellent organization with memberships scattered throughout the United States, Canada, and, in fact, a few in all of the principal cities of the world. Of course, they have moved from their places in the United States to their present locations in the different parts of the world. For instance, we have a commercial traveler who was sent from Pittsburgh to represent the Pittsburgh Glass Co. in Australia, and he has been a member ever since he has been in Australia, which has been a number of years. Now, as I say, we started 52 years ago and, during that time, we have paid many millions of dollars to our members for accident injuries. It is all done by mail. We get our members through the mails, through our members, and, during that period, as I say, from the human standpoint, we have benefited many widows and orphans who, if they had not received our money for their husband's accidental death, would have been practically penniless. Our first death claim was in 1883. We then only had a few members and at that time we could only pay a death claim by making an assessment of $2 on each member and that went to the widow. That death claim was caused by the Brooklyn Bridge stampede, when the Brooklyn Bridge was first opened. They had a stampede there where many people were killed and many injured, and we had our first death loss in that terrible disaster. I will cite a few of the disasters that we have met and paid promptly. Among them was the recent terrible disaster of the Morro Castle ship, which was burned. We lost four members in that fire, which cost the association $40,000. Our next disaster of recent date was the hotel fire in Michigan, where we lost two of our members. In the Titanic wreck of many years ago we lost five of our members. In the Lusitania wreck during the war, I think it was, we lost five of our members. In the Brooklyn Rapid Transit wreck of a number of years ago we lost nine of our members. In the Wall Street explosion we lost three of our members. In the New York Central tunnel wreck we lost, I think, two members. That was a number of years ago and, through that wreck the New York Central electrified its system in the city of New York. In all of these wrecks, this money that was sent to the widows, orphans, and children was sent to them in different States, in different parts of the United States, and of course their check had to go to them through the mail, and we know, as you probably will be told this morning, that we have done a humanitarian act. We have given to our members and we have paid out millions of dollars, as I say, to our members for accidental injuries. Recently we had a case in China, in Shanghai, where one of our members, representing the Ford Automobile Co. over there, a young chap just married, took his wife over there; and he had not been there very long until he met with a sad death in an automobile; and we paid his widow the $10,000, which was certainly a godsend to her, she wrote. Our record will show we are examined periodically by the Insurance Department of the State of New York. There are no better nor more rigid laws for insurance companies than those in the State of New York. Many of their employees, men, are members of our association; and that applies also, as I say, to our sister organizations which are represented here this morning. Therefore I just wish to place before your honorable body here that we feel this bill, if passed by you, would work a terrible hardship and injustice to our organization. During the war 10,000 of our members enlisted and were drafted in the war. Many of them were killed. Those who returned from the war, if they were in good physical condition, we took them back as members without cost; that is, they did not have to make a new application to become members. And some of them asked for reinstatement where they had some permanent, bad injury, and we took them back on account of their serving their country. During the war, too, Mr. Hoover called all of the secretaries of the different organizations to Washington to aid to conserve on food, and we all went back and circularized our members, which were mostly commercial travelers. Sixty percent of all of our members are commercial travelers, who go away from their places of residence, or their home, to secure trade. Mr. ROMJUE. Now, Mr. Trevvett, there are a number of men here who want to be heard. Mr. TREVVETT. Yes, sir. Mr. ROMJUE. And what I want to know is what injury this bill will do, or where it should be corrected, or how it should be corrected; position and I would appreciate it if you would give us that. Mr. TREVVETT. Well, I am not a lawyer and am not much in a position to state that. I think our attorneys will state that. Mr. ROMJUE. What we are interested in is the effect of this bill. of course, we are interested in insurance Mr. TREVVETT. I know; I just wanted to give you the human side of our situation. Mr. ROмJUE. But there are so many people present, and if you go into the details about the insurance you have, and all that, it is just simply taking up the time. Mr. TREVVETT. Yes, sir; I know it. Mr. ROMJUE. Now what we want to do-we do not want to injure any legitimate business, but we want to find out, if there is any improper insurance business going on, how we can remedy the situation. Mr. TREVVETT. I appreciate that. Mr. ROмJUE. And I will appreciate it if you will keep your remarks to the effect of the legislation itself. Mr. TREVVETT. I will stop now; if there are any questions I can answer, I will be glad to do so. Mr. ASHBROOK. I think you have made a very good presentation of your case. Mr. GOODWIN. I would like to ask you a question, just to show the size of the organization of which you are the head. How many policies have you? Mr. TREVVETT. In force now? Mr. GOODWIN. Yes. Mr. TREVVETT. About 210,000. Mr. GOODWIN. Two hundred and ten thousand policies in effect. now? Mr. TREVVETT. Two hundred and ten thousand policies that my association has. Mr. GOODWIN. And your benefits extend beyond commercial travelers and apply even to special classes of employees? Mr. TREVVETT. What we call the "preferred class." We take ministers, lawyers, merchants, and insurance agents. We have many of them. Mr. GOODWIN. I further wish to ask-you handle not only death benefits but you handle accident weekly indemnities? Mr. TREVVETT. Yes, sir. We pay $25 a week for 2 years and $50 a week for 2 years, according to the policy that they hold. Mr. GOODWIN. I just wanted to get into the record the size of your company. Mr. TREVVETT. Well, ours is 210,000. The combined membership would reach probably between seven and eight hundred thousandthe combined membership of the organizations. I thank you gentlemen very much. Mr. ASHBROOK. Now may I suggest to the gentlemen who wish to be heard here this morning that you will understand and appreciate our time is limited. We wish to be courteous and to give you every possible consideration, but we would appreciate it very much if you will condense and boil down whatever you have to say to this committee. Mr. TREVVETT. May I just say, Mr. Chairman-which I thought I did say that we also furnish protection at actual cost. Mr. ASHBROOK. We will now give Mr. Zimmerman an opportunity to be heard. STATEMENT OF EDWARD A. ZIMMERMAN, OF THE FIRM OF ZANE, MORSE, ZIMMERMAN & NORMAN, CHICAGO, ILL. Mr. ZIMMERMAN. Mr. Chairman and members of the committee, I represent substantially 2,600 subscribers composing a rural group of self-insurers and marine reciprocal insurance that are engaged in the canning business or food-manufacturing business. You gentlemen all know what your small canneries are around through the country; you know they must sometimes, in their business enterprises, have insurance protection. You know in the stress of these times they must buy it; and, in order to eliminate from the premium or, rather, from the deposit, everything except protection, they protect one another through this system. |