INSURANCE: Joe’s Blow

The fire insurance industry had made a well-heeled attempt to lobby Congress into legislating it out from under a Federal antitrust action now before the Supreme Court (TIME, Nov. 29). The attempt blew up in its face last week. The man who planted the mine was Wyoming’s conscientious antimonopolist, Democratic Senator Joseph O’Mahoney.

Senator O’Mahoney asked the Senate Judiciary Committee a long list of pertinent questions about the Bailey-Van Nuys bill to exempt insurance from the Sherman and Clayton Acts. Instead of popping the bill through quickly and quietly, as had been expected—and as the House Committee had already done with an identical bill—the Senators hastily slapped it back on a subcommittee desk, and now called for a full-dress investigation. O’Mahoney’s fight was bolstered by sensational feature stories in the Chicago Sun and New York City’s leftish PM telling in great detail about slush funds, special pressures on Congressmen’s home-town law firms, and a flood of almost identical letters to legislators.

First witness to come before the Committee with the industry’s plea that it be regulated solely by the States was the Insurance Executive Association’s president and chief spokesman, Edward L. Williams. Lawyer Williams, whose 25 years of Manhattan practice have not dented his Carolina drawl, was all set to sound off about ”smear campaigns” and “lies.”* But shrewd Joe O’Mahoney snapped him off when he had no more than shouted “They is none” in answer to a query about the slush fund. The Senator was more interested in other facts. Some of the facts he was after:

>Why do premium rates on fire insurance vary widely from State to State, with some of the highest rates in the States with the lowest fire losses?

>By what process are rates fixed nationally? How does the underwriters’ national setup operate and “from what public source did it receive its authority.”

>Why do the companies “remove so large a proportion of cases to the Federal courts” if they think States’ right to regulate them is so sacrosanct?

Senator O’Mahoney’s rock-bottom argument was that, even if the industry is lily-white today, the Bailey-Van Nuys bill would be “a charter from Congress to do what they please in the future.” Tongue in cheek, he also suggested two nullifying amendments to the bill, designed to make State regulation as effective as Federal antitrust procedure.

In the House a similar campaign against the industry’s bill was begun by Texas’ Sam Russell, who said he had been high-pressured by every insurance man in his district.

At week’s end Senator Van Nuys still hoped to get his bill out undamaged within the next week, and the fire underwriters still had a lot more to say on their side of the case. But the States’ Rights bugaboo was noticeably enfeebled. With all the new hullabaloo, final action may well be delayed until the Supreme Court—as well as Joe O’Mahoney and the Congress—gets a chance to weigh the real issues.

*He did not sound off on his earlier line that “This is not our bill.” O’Mahoney said that Williams himself went to Wyoming last summer to try to get him to sponsor it.