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1902.] MARINE REVIEW AND MARINE RECORD. wm business. Why the intervention of a broker is necessary, has not been properly explained. The most probable reason is that it is a custom of long standing, and old customs "die hard" in England. Of course the broker is not necessary in all cases. Large insurance companies do an immense amount of business in which the brokers do not figure at all. Competition amongst underwriters prevents premiums from becoming extravagantly high, and at the same time it compels the acceptance of risks which might be objected to if there were an insurance trust. In underwriting, as in other matters, the great teacher is*experience. Certain ships in the tea trade with China brought so many claims on the members cf Lloyd's that they eventually became practically uninsurable. On the other hand, experience was wanting as regards iron and steel ships when they were first introduced, and insurances upon them were difficult to place. Once their strength and durability were known, the tide turned. As has already been mentioned, underwriters seldom object to paying what they have agreed to pay, provided satisfactory preof of liability is produced. A loss may seem open to objection, but grumbling would injure business. Experi- ence, even when bought by a financial loss, aids in the avoidance of a similar risk in the future. If shipping casualties were un- known, then the underwriters occupation would be gone. A few losses really assist the great body of underwriters, because they make evident the necessity for insurance. The premium charged by any underwriter varies to a larg: extent with the reputation enjoyed by the firm to which a ship belongs. 'This is one of the first considerations following the sea- worthiness of the ship. An Atlantic liner, for example, is in- sured for twelve months at from £4 to £5 per cent., whereas, a "tramp" may have to pay from £7 to £10 per cent. Freight of all kinds is differentiated in the same way. Goods that are insurec for about $1.50 per cent. when on a steamer belonging to a first- class line have to pay from double that amount in summer to four times the sum in winter if carried on a "tramp." Inasmuch as these steamers, whether liners or "tramps," were built to the highest class, the cause for this difference in rates is not to be found in the original construction of the ship, but rather in the reputation of the owners, the captains, the route--and possibly the age of vessel. Moreover, underwriters have fewer claims from ships engaged in regular trades, managed by firms of long standing in the commercial world, than they have from vessels of much the same size and type trading from New York to Eng- land on one voyage, from England to India on another, and owned by a large number of small stockholders, the manager per- haps being a person unacquainted with ships and shipping. Captains are always encouraged by underwriters to do their utmost when danger of loss is threatened. A_ skillful captain, ably backed by a competent crew, may save the underwriters many thousands cf dollars. Some of the repairs carried out at sea are amazing. Meritorious actions on the part of captains are very seldom overlooked by underwriters. A couple of years since a four-masted sailing ship, the Liverpool, was_almost swamped by a sea while running before a gale. Her charts, chronometers, -- and her nautical instruments were washed overboard. For some days her men were engaged in baling out water which had got into the hold through the smashed hatches. Fortunately, one small compass was saved when every other instrument was lost, | and by the aid of this, with the use of the log, the captain brought the ship to within four days' sail of Calcutta (India). Then he obtained the exact geographical position from a Norwegian bark. and proceeded to his destination. 'The underwriters concerned subsequently presented him with a substantial sum of money.' A wel! known steamship in the New Zealand trade, the Tokomaru, 'of the Shaw-Savill & Albion Line, broke her shaft when 500 miles from Rio Janeiro, on her way to England. After eight days and nights of incessant work, her crew succeeded in repairing the damage, and she returned to Rio under her own steam. Had the propeller fallen off while the men were at work in the confined space of the shaft tunnel, drowning was certain. The value at stake was $1,000,000. The assistance of other steamers which offered to tow the Tokomaru into port was declined, and the underwriters were thus saved a payment of at least $25,000 for salvage services. 'The captain and chief engineer were rewarded with presents of money, and $2,500 was divided between the other officers and crew. : Delay caused by quarantine is vexatious and expensive. Un- derwriters have, at various times, covered this risk at about $10 on each $500, on the understanding that in the event of a ship be- ing thus detained they would pay $150 per day for a fixed numbe1 of days. Under the French tariff law, adopted in 1891, ships bound from Pacific ports of this country to France were a source of anxiety. A few hours even might make a difference of thou- sands of dollars to those interested in various kinds of goods Many underwriters accepted the risk. In some cases they con- tracted to pay $450 on each $500 (£00 per cent.), and in other cases as though the ship were actually a total loss if she did not arrive before midnight on a specified day. This is unquestionably a form of gambling, but it is sometimes urged that all insurance-- marine, life and fire--is of a speculative character as far as th underwriters are concerned. Such a risk as the one just referred to is probably an "honor" policy--one on which the person insur- ing must rely solely on the honor of the underwriter who accepts the risk, inasmuch as such a claim could not be enforced in a law court. Last year a person obtained an insurance of this description on a steamer, and the underwriter, after a claim had been made, refused to pay. The ship was to paid upon as a total] loss in case she did not reach Japan on or before a certain date. The final result of the controversy was never made public, but the case did not come before a law court, and even if it had done so, the judge would not have allowed it to go to a jury. Rumors of war have a marked influence upon the rates of premiums. When the so-called Fashoda incident (between Great Britain and France) was approaching a satisfactory settlement the rate of insurance against risk of war dropped from £25 per cent. to £10--that is from $125 on $500 to $50. 'The war between this country and Spain made business brisk for the insurers of ships,. all of whom refused to pay on the steamship Restormel, captured by the St. Paul, and afterwards released by the prize court. She was insured for $75,000 against total loss, and her owners abandoned her to the underwriters, who declined to carry out their contract on the ground that she was not a total loss, and also because the contraband nature of her cargo had been con- cealed from them. A settlement was finally reached under which the underwriters paid $22,500 and some law costs. Underwriting, whether done by an insurance company or b; some institution like Lloyd's, is a business requiring a knowledge of ships, of human nature--and ordinary discretion. Small losses from minor frauds which could not be foreseen may occur in un- derwriting as in any other business. Almost all underwriters know the average time occupied by a ship in making a voyage be- tween any two given ports. Should a vessel exceed this average, every cautious underwriter is sure to consider his position. He may re-insure at a slightly increased rate, or he may prefer ta abide the result. If the time increases without the arrival of the vessel, the rate rises. Occasionally from 80 to 90 per cent. has to be paid for re-insurance, only to learn later of the safe arrival in port of the ship. -After many days have elapsed without any news of a vessel, varying, of course, with the voyage on which she is en- gaged the ship is regarded as overdue. Some time later, no news of her having been received during the interval, she is posted at Lloyd's as missing, and the underwriters generally pay without a murmur. Underwriters who accept exceptional risks are known at Lloyd's as "doctors." At times they have very exciting experi- ences. In 1897, sixteen vessels arrived at their destination on which £50 or more per cent. had been paid for re-insurance, three of them being sailing vessels. An American ship the T. F. Oakes, was 259 days making the passage from Hong Kong to New York, a voyage accomplished in 1895 by the Alcides in eighty-three days. Underwriters who paid £90 on each £100 insured to get rid of the risk on this vessel had the luck against them. Nevertheless, a comparison of the two ships' passages was sufficient to justify anxiety. The name of the T. F. Oakes was changed, but she be- came a total loss on her next voyage. The Mantauna, a British sailing ship, also afforded scope for speculation a few years ago. She took 225 days to sail from London to San Francisco, or about twice as long as the average passage. Eighty pounds per cent. was paid on her just prior to her arrival. Underwriters who took the trouble to study the career of this ship would have found her credited with several abnormally protracted voyages. Taking the' year 1898--the latest at hand--of the eighteen overdue ships which arrived after long delay, only three were steamers. One sailing vessel, the Ravenscrag, was absolutely un- insurable when she reached Callao (Peru) after a passage of 185 days from Puget Sound. Had another week passed without news of her, the underwriters would have paid the insurance, and she would have been posted as missing. Nevertheless, her voyage was almost equalled in 1886 by the Premier, a vessel that took 15¢ days to get from Puget Sound to Iquique (Chile). A few years since £93 per cent. was paid to insure the German bark Matadore, but she reached Valparaiso (Chile), after a voyage of 163 days from England. A similar vessel, the Henry, occupied 232 days between Corinto (Nicaragua) and Queenstown (Ireland). She happened to be spoken off Cape Horn at about the time she ought to have been entering Queenstown harbor, so that the fears of the underwriters were allayed, and the rate of re-insurance did not become very high. Underwriters sometimes forget two very important points which seriously influence the speed of ships, namely, that some kinds of cargo shift on very slight provoca- tion and that an iron ship's bottom becomes covered with barna- cles very quickly. Insurance institutions perform a necessary function in the shipping world, but it must be admitted that competition hag... tended to lower the standard of the business, and reforms are necessary in this country as well as in Europe. The subject has not yet received the attention to which it is justly entitled. There might be great difficulties in the way of compelling an owner to take a specified share of the risk of loss of his ship, yet such a plan would have many advantages. The monitor Florida, built at the Crescent ship yard, Eliza- bethport, N. J., had her preliminary trial this week and exceeded all expectations. The run was made up the Hudson as far 1s Tarrytown. The Florida attained a speed of 12 knots, 11% knots being required of her. Naval Constructor Smith said he was never on a warship on its first trial which gave better sat- isfaction.