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enterprise, which, upon completion, will have cost the state more than $130,000,000, will need careful management in order to become a profitable enterprise. One of the important factors in such management will be the control over canal boat rates; the only agency available for the exercise of such regulative control is the public service commission, which is to-day helpless on account of lack of jurisdiction.
PART VIII.—ORGANIZATION FOR THE REGULATION OF BANKING AND INSURANCE
The present control over the banking and insurance companies of the state is effected through the agency of two independent departments: 1. The banking department.
2. The insurance department. Functions of the Banking Department
This department is charged with the general supervision of (a) banks, (b) trust companies (c) savings banks, (d) loan, mortgage and investment companies, (e) building, mutual loan and cooperative savings associations, and (f) credit unions, operating under the laws of the state of New York. The laws regulating the conduct of these institutions are enforced through periodic investigations by the examining staff of the department. The banking department also prepares an annual digest of the reports of the various financial institutions of the state and reports the same in summary form to the legislature. The organization and personnel of this department will be found on pages 101 to 107 inclusive of the report on organization and functions of the state government.
Functions of the Insurance Department
This department is charged with the execution of the laws of the state relating to insurance. The department has supervisory control over all insurance companies, brokers and agencies transacting business in the state. It has custody of the securities of life and casualty companies of this state and of other countries and of fire and marine insurance companies of foreign governments deposited with it for the protection of policy holders residing in the United States; examines into the affairs of corporations, associations, societies and orders, transacting, controlling or organizing an insurance business in the state; receives reports under oath at regular intervals from such corporations, etc., abstracts of which are to be included in the annual reports to the legislature; acts as attorney for insurance companies organized under the laws of other states or countries in order that process in any action or proceeding against such companies may be served promptly; values annually all outstanding policies, additions thereto, unpaid dividends and all other obligations of every insurance corporation doing business in the state. The department is empowered in certain cases, after due process of law,
to take possession of an insurance corporation and conduct its business as the exigencies of the case may demand. The department is empowered to refuse admission to any company, corporation or association applying for permission to transact insurance business in the state whenever such refusal to admit shall be for the best interests of the people of the
Defects in Organization for Purposes of Administration
The present departments of banking and insurance are subject to criticism not so much on account of inadequate internal organization as of their dissociation which prohibits securing certain advantages that would be made possible through amalgamation of the two departments.
The work of the staff auditors and examiners of the two departments is closely related, yet the complete dissociation of the two bodies, as the departments are now organized, necessitates certain duplication in force and effort and obviously narrows the perspective of both branches.
It is also a fact that certain trust companies throughout the state are, under the present practice, required to report to both the banking and the insurance departments and are, therefore, subject to the general supervision and discipline of two regulating departments. This is obviously unfair to the trust companies and causes a needless waste of public money.
From the standpoint of locating and enforcing executive responsibility without impairing the technical and professional service of the bureaus, the present organization is also subject to criticism. The administrative heads in direct supervision of the forces engaged in regulating banks and insurance companies should unquestionably be technical men of the highest order. The actuarial accounting and examining positions and the positions of supervision over actuarial accounting and examining staffs in these departments also require men of the very highest order and are positions which require continuity of service for effective administration.
Regulation of banking and insurance companies occupies a large place in public thinking and the administration of such regulations is closely related to the enforcement of policies for which the governor is hel responsible by public opinion, though not as a matter of constitutional and statute law. This would seem to demand that he have certain powers which will enable the legislature and the electorate to hold executives in general charge of this work to account for their stewardship. At the present time, however, the only method available for the governor to impress his official personality on the administration of these departments is to appoint men to the supervisory, technical and professional positions in them and make them parts of a system of irresponsible party politics.
THE CONTENT AND FORM OF THE CONSTITUTION
The word constitution came into use in England during the struggles for representative government that first found national expression in signing of Magna Charta. In England the word constitution came to mean the law governing the government. Only the agreement between king and barons and the statutes were written. Most of the rules of practice were in the nature of customs that were given the sanction of law; so that England is said to have an unwritten constitution. But so does England have its common or unwritten law.
The Notion that the Constitution is Fundamental
Frequently it is said that the constitution is the fundamental law. This means nothing; or more strictly speaking, it means anything that the person using the expression may wish. The law of private property is fundamental—the law of self-protection is fundamental, just as fundamental as the law determining the rights of the crown. There is only one sense in which the word fundamental distinguishes English constitutional law, and that is in the sense that government is fundamental to all law and consequently to all rights. Applying this idea of fundamental law to the constitution it means only that it is made up of the conventions or institutes by which the government is established and operated-the law governing the government, as distinguished from the law governing persons and property not of the government.
The American Notion of the Constitution
Although in constitutional discussions in the United States the same idea is commonly conveyed, there is no warrant for it. There is nothing in this country that distinguishes what we call constitutional law from statutory law except the method of enactment. Even this distinction was not made initially.
As a profound student of American state constitutions, Professor Dodd has said: "In 1776 and for some time thereafter a relatively slight difference existed between the forms of constitutional and statutory enactment.” The so-called first written constitution of the world," "the Fundamental Orders of Connecticut," drawn up in 1639, was not a constitution in the sense that it could be altered only by extraordinary process, because it was frequently changed by later legislative enactment. Three of the first state constitutions: Delaware (1776), South Carolina (1778), and Maryland (1776), permitted the legislature under certain restrictions. to alter the fundamental law. Delaware declared that some portions of
the constitution should never be changed, and added that "no other part of this constitution shall be altered, changed, or diminished without the consent of five parts in seven of the assembly and seven members [out of nine] of the legislative council." South Carolina provided that “no part of this constitution shall be altered without notice previously given of ninety days, nor shall any part of the same be changed without the consent of a majority of the members of the senate and house of representatives."
Maryland required the approval of two successive legislatures to vali date any alteration in the constitution. Six of the constitutions of the revolutionary period contained no provision at all for amendment.
No Difference in Sanction of Early Constitutions
Not only did some of the states provide for the enactment of constitutional law by the legislature (subject to certain restrictions) but other states in which no such provision existed frequently permitted legislative changes without extraordinary process. The convention which drafted the first Virginia constitution expressly conferred upon the governor powers in addition to those conferred by the constitution itself and the legislature of the state afterward renewed these powers by statutory enactment. The Maryland legislature in 1777 and 1778 increased the powers of the governor and council as defined by the constitution. In Rhode Island, where the colonial charter was continued as the fundamental law, it was the common practice of the legislature to make alterations at will. The sharp distinction between constitutional and statutory law was a matter of growth not an original principle everywhere accepted and followed in practice. One may say that it was not until more than a quarter of a century after the Declaration of Independence that the doctrine was well established. As Dr. Dodd remarks, towards the middle of the nineteenth century we have a well-defined notion that state constitutions should not be easily subject to change."
Difference in Sanction Later Introduced
Later each state established different methods of enacting constitutions and amendments from those organized for the enactment of statutory laws. The methods adopted were many, but in nearly all of them are these common characteristics, viz.:
1. What are called constitutions and amendments to constitutions at one time or another must be submitted to the people for a vote by the electorate.
2. The procedure of adoption and amendment is much more difficult and dilatory in operation than the procedure for the enactment of statute law.
The first of these differences is being gradually broken down in some of the states. Legislation on various subjects is often required to be submitted to the people, and in some of them any law may be so submitted. The only characteristic of what is called constitutional law that is general is the extraordinary difficulty of enactment and amendment and even this characteristic is abandoned in six states.
Recent Abandonment of Difference of Sanction for Statute and Constitutional Law by Some States'
Within recent years, however, there has been a gradual relaxation of the hard and fast methods of changing the written constitutions. Nearly all the states have made the procedure more simple. Eleven states now provide for constitutional amendment by popular initiative and referendum, and in this respect six of the states, California, Oregon, Nevada, Colorado, Missouri and Arkansas make no distinction between the adoption of amendments and the adoption of statutes. In other words, they provide that a constitutional amendment may be initiated by the same number of petitioners and adopted by the same majority as in the case of statutes. The difficulty of enacting constitutional law is thereby being broken down and any measure initiated by popular action may be called a constitutional amendment or a statute at the pleasure of the initiators. "It may be said," remarks Dr. Dodd, "that in about half of the states constitutions are easily amendable and that in a large and growing group of states the processes of amendment and of ordinary legislation are tending to become substantially the same. Both in content and form of enactment the distinction between the two types of law is tending to disappear."
The Idea of the Difference in the Nature of Constitutional and Statute Law Generally Abandoned
Although only six states in the Union have destroyed the distinction between constitutional and statutory law which is derived from the different manner of enactment, nearly all of the states have ignored the distinction between constitutional and statute law which flows from the nature of the law itself. It was in the nature of the law rather than in the solemn form of its enactment that the Fathers made the great distinction between the constitution and ordinary statutes. Reflecting English traditions and experience in their opinion and practice the early constitutions were short and covered only such rights as were essential to popular sovereignty, the establishment of government, and the protection of the people against usurpation, i. e., the rights of the people and the form of the government. The New Jersey constitution of 1776 occupies