ductory No. 1), entitled “An act making an appropriation for the expenses of the extraordinary session of the Legislature called by proclamation of the Governor to convene on June twenty-first, nineteen hundred and five." GIVEN under my hand and the Privy Seal of the State at the Capitol in the city of Albany this twentieth day of July in the year of our Lord one thousand nine hundred and five. [L. S.] By the Governor: FRANK W. HIGGINS FRANK E. PERLEY Secretary to the Governor MESSAGE RECOMMENDING CONSIDERATION OF THE QUESTION OF THE APPOINTMENT STATE OF NEW YORK Executive Chamber TO THE LEGISLATURE: Albany, N. Y., July 20, 1905 I was led to convene the Legislature in this Extraordinary session by reason of an extraordinary condition existing at the close of the regular session. A Justice of the Supreme Court stood accused by the Judiciary Committee of the Assembly of unfitness to remain on the bench. No other provision could be made for the speedy constitutional determination of the question whether cause existed for his removal from office. The right of the people to an untainted judiciary and the right of the accused judge to be heard in his defense, alike imposed upon me the imperative duty of summoning you to dispose of the case. * * But The Constitution provides that the Governor "shall have power to convene the Legislature on extraordinary occasions" and that "at extraordinary sessions no subject shall be acted upon, except such as the Governor may recommend for consideration." Doubtless the Governor is the sole judge of what constitutes the extraordinary occasion which shall justify him in convening the Legislature in extraordinary session, and doubtless he may present any subject whatever to such a session, when convened, for its consideration. the clear distinction made by the Constitution between the functions of the Legislature in regular and in extraordinary session plainly indicates that an extraordinary session should be convened only in response to some emergent public demand and that such subjects alone should be recommended for consideration at such a session as are of general pressing and unusual importance. A matter so solemn and serious in its nature as a proceeding for the removal from office of a Justice of the Supreme Court should not be interrupted or complicated by the interjection therein of ordinary legislative business. Under our system of annual sessions of the Legislature, emergencies that call for consideration at an extraordinary session must necessarily be rare. I have accordingly refrained from recommending any subject of legislation for your consideration pending the hearing in Justice Hooker's case, and I now refrain from submitting to you not only important matters which were before you at your regular session, but also new matters of minor or local importance. One subject in my judgment should be submitted to you for your consideration. The unfortunate scandals recently made public by the internal dissensions in the Equitable Life Assurance Society and by the investigation of its affairs by the Superintendent of Insurance have, not without just cause, aroused a feeling of intense alarm in the breasts of the thousands of our citizens who have invested their money in policies of life insurance, and of the thousands of nonresidents who have been taught to respect the New York companies as safe and secure. While the business of life insurance, as at present conducted, is subject to State supervision and regulation for the purpose of guaranteeing solvency and the fulfillment of contracts on the part of the companies, it is evident that evils and abuses may exist under our law, that earnings which should be credited to the policy holders may be diverted to other purposes, that expenses of operation may be extravagant and wasteful, that unwise investments may be legally made and that trustees may deal indirectly with the trust funds for their personal advantage. That such a condition of affairs can exist reflects discredit upon the State. Legislation is no panacea for those ills of the body politic which arise from a disordered moral sense. The multiplication of penal statutes does not diminish the spirit of lawlessness but is rather a symptom of its growth. But it is apparent that our insurance law is in some particulars obsolescent and inadequate, and that the management of the funds of these great companies is not sufficiently safeguarded. The State owes a duty to policy holders and beneficiaries beyond that of comparing assets with liabilities and permitting the companies to justify their existence by the exhibition of a satisfactory balance sheet and the prompt payment of losses. Investments must be restricted, salaries must be limited to amounts bearing a closer relation to the commercial value of the services rendered, trustees must be held to a stricter accountability, and the policy holders must be given a more effective share in the government of the companies. It may well be that the harsh and arbitrary remedy of dissolution and receivership should be made not only a penalty for insolvency but also a summary check upon a solvent company when it becomes irredeemably the plaything of lawless greed. The State cannot permit the subjects of its supervision to exist as licensed prodigals of other people's money without becoming an accomplice to the offense. We cannot judge all life insurance companies by the sins of one. We should not destroy the edifice to rid ourselves of the vermin that infest it, nor should we kill the patient to stop the progress of the disease. A revision of our insurance law is necessary, but it should be made with calmness, deliberation and intelligence and after careful study and investigation. The Superintendent of Insurance is authorized by law to "examine under oath the officers and agents of any such corporation and its books with reference to its business." Within the scope of his authority and the limits of his time the Superintendent has performed his duty with impartial thoroughness. Although he has informed me that, by reason of the statutory limitations upon his inquisitorial powers, and by reason of the magnitude of the task imposed upon him he would welcome the aid of a legislative investigating committee, I have been of the opinion that he, with his staff of experts and with the authority vested in him to conduct investigations at the expense of the companies examined, was well qualified to collect all necessary evidence upon which to base new legislation and that no other investigation outside the courts of justice, was necessary or desirable, pending the investigation now being conducted by him. It is, however, of the highest importance that a revision of the Insurance Law should be enacted as promptly as is consistent with a thorough knowledge of the subject. It is proper and necessary that the Legislature should determine for itself how the information upon which to base such a revision may best be obtained. If in its judgment an investigation conducted by its own members is calculated to produce the most satisfactory results such an investigation cannot too speedily be begun. In order that you may be free to consider and act upon the subject at this session, I therefore, pursuant to the Constitution, do hereby recommend for your consideration the question of the appointment of a joint committee of the Senate and Assembly with the usual powers of such committees, to investigate, after your adjournment, the operations of life insurance companies doing business in the State, for the purpose of preparing and recommending to the next regular session of the Legislature such proposed legislation as may be adequate and proper to restore public confidence and to compel life insurance companies to conduct a safe, honest and open business for the benefit of their policy holders. FRANK W. HIGGINS |