but in the eyes of the law trustees required to adhere to the strictest fiduciary standards, and appropriate civil and criminal penalties should be provided.

4. It is recommended that an appropriate committee of Congress or some designated agency of the Federal Government be directed to conduct a thorough investigation of all forms of fire, casualty, and marine insurance.

[Approved without objection.]

PERSONAL STATEMENT OF COMMISSIONER SUMNER T. PIKE, SECURITIES AND EXCHANGE COMMISSION

I recommend the following:

1. A designated Federal agency should be enabled to obtain adequate information concerning the operations of life insurance companies, so that it may assemble detailed reports and information which it would have authority to disseminate for the benefit of companies, policyholders, and State and National officials. This can be done without inconvenience or material expense to the companies, and in a manner which will encourage a reappraisal and improvement of the present systems for life insurance accounting and reporting, which are admittedly inadequate in many respects.

2. A designated Federal agency should be empowered, with the approval of the President, to prohibit insurance companies from paying surrender values of the policy benefits during a limited period, not to exceed 90 days, or to place restrictions on such payments. This moratorium power should be exercised only in times of serious economic stress resulting in dislocations of the entire banking and financial structure.

3. A designated Federal agency should be given reasonable and clearly defined visitorial powers over all interstate life insurance companies, to the end that it may effectively coordinate and advise on insurance problems and assist States other than the State of domicile in the examination of interstate companies.

4. An Insurance Advisory Council, whose duties should be to advise the Congress and the appropriate State authorities, should be created to function in close cooperation with a designated Federal agency. The council should consist of representatives of State insurance commissioners, company officials, policyholders, and a designated Federal agency. In addition to its advisory duties, the council should be required to submit a written annual report to the Congress on the state of the insurance business, and to assist the States whenever possible in strengthening their own regulatory activities.

[Concurring: O'Connell and Hinrichs.]

45

PERSONAL STATEMENT OF SENATOR JOSEPH C. O'MAHONEY, CHAIRMAN OF THE TEMPORARY NATIONAL ECONOMIC COMMITTEE, ON A NATIONAL CONFERENCE TO DEVELOP NATIONAL STANDARDS FOR NATIONAL ECONOMIC ORGANIZATIONS

It is a fundamental rule of democratic society, as already pointed out in this report, that authority over the society proceeds from the whole and not from any part of it. It follows from this that the organizations which affect the whole should be amenable to the whole and should derive their authority from the whole. Organizations, which from their very nature must of necessity influence the political or economic life of a democracy, must be of a character to reflect the will of the members rather than the will of the leaders.

Democratic society is willing to permit the individual to exercise the utmost freedom because no individual acting alone can so injure the entire community (except in the case of crime) as to justify the withdrawal of individual liberty. This is not the case, however, when organizations become so large and powerful that by weight of numbers, by wealth or power they threaten or affect the public welfare. In such instances the public has the right to define the nature and the form of the organization, not for the purpose of "regimenting" it but for the sole purpose of making certain that the organization shall operate in the public interest.

For this reason, since it appears that as a result of economic concentration there are not only huge corporate business and industrial organizations which intimately affect the entire national economy, but also trade associations, agricultural associations, consumers' organizations and labor unions, as well as pressure groups of various kinds, all of which are beyond the jurisdiction of local political subdivisions, I am personally of the opinion that the Congress, which represents all the people, should, by legislation, lay down definite standards of organization and activity for all such groups. This would be no easy task, but it seems to be preeminently a necessary one, for if the people of America in order to make the defense of democracy effective have found themselves obliged to coordinate all their forces and resources for the purposes of war, it seems clear that a similar coordination must be made effective if we are to establish the coming peace upon an unassailably democratic basis.

The mark of our economy has been largely one of restricting production for the purpose of maintaining price. That policy is to be found everywhere, but the defense crisis teaches us that stimulated production, not restricted production, is our great need. If, under the impetus of war, we are eliminating all restriction on production surely the demonstrated economic needs of millions teach us that we should have the same policy in peace. Only thus can we hope to distribute equitably among all the people the abundance nature provides.