Cleveland daily leader. [volume] ([Cleveland, Ohio]) 1865-1873, 1866-02-13
Insurance as a Game OF S~hance-The
Case of the Columbian Marine, at
New York.
LION the PhiladeIphla Inquirer.

Insurance rs a Game OF ~ShRnee-The
Case of the Columbian Marine, AT
New York.
[From the Philadelphia Inquirer.
The case of the Columbian Marine In
surance Company, of New York, which
has recently failed, is one which has its
lessons, which it is the duty of all bust
ness men to improve to their own sdvan-
tage. Insurance, We are told, is a science,
a science Of chances, which by long ex-
perience has been reduced to mathematical
certainty. Mathematicians are said to
have amused themselves before to-day by
calculating that if a cannon ball went
through a certain part of a ship how many
thousand chances there were that another
cannon ball would not 60 through the
same hole, and yet the annals Of naval
battles tell us of occasional instances
where the chances have been vanQuished
in a very few minutes after the first shot,
thus removing entirely from science all
the advantages Of nicely computed cal
culations. So it may be with insurance.
Under prudent management and caution
in taking risks the per centage of losses
to receipts may leave a handsome profit,
but if d wild, reckless business is done,
for the sake of business, bad luck will be
very apt to play havoc with the certain
ties" of the science of insurance. This
has been illustrated by the Columbian In
surance Company. 1t had a large capital,
three millions of dollars; it was ambitious
to do a great business, and it therefore dis
carded prudence in accepting risks, and
insured vessels of all sorts, from A No. l
down to third and fourth class, and craft
which, if properly examined, would have
been condemned as unseaworthy.
Under this system, the receipts were
very large, being nearly five millions and
a half of dollars in 1865. But the losses
we're also large, and they have proved to
be so heavy within tho last two years
that to pay them has required the capital,
receipts and profits, leaving the stock
holders just nothing at all. When the
company first stopped payment the Off
GERS assured the stockholders that there
were q million dollar assets, or Whereabouts.
There were also about two millions of
premiums on risks not yet determined,
and which might nearly all turn out to be
profit. Under those suggestions, the
stockholders believed that it would be q
a wise thing to assess themselves for a
contribution of so much per share to re-
new a portion of the capital and go On
with business. But when a committee
came to examine into the character of the
so-called assets they found that they
were not tangible. The stock of the com
ANY, worth nothing if the company was
~insolvent, represented three hundred and
foaty-two thousand five hundred dollars
of the amount, and "claims against Great
Britain for losses arising out Of the dep
relations Of rebel cruisers" represented
six hundred and thirteen thousand dollars
Of the remainder.
These claims are at present repudiated,
and would bring nothing in the market.
They may or may not be paid hereafter,
or the United States will obtain satisfac-
ton for them by war. At all events they
are not assets nOwupon the faith of which
any would care to pay premium for iu-
surance, and may be classed in the cate
CORY of doubtful debts The stock
holders themselves, upon hearing this
mournful story, concluded that there was
no hope for them. and the company is to
be put down permanently ameng the
d" failed"
The fearful manner in which this COM
pany suffered is shown by the fact hat in
1865 the amount of "losses paid and
allowances for bad debts was four
millions nipe hundred and ten thous-
and five hundred and seyenty-fve dol
lars, and the losses ascerfained but I'M
adjusted were one million one hundred
and fourteen thousand and ten dollars,
making a total Of disasters, of six millions
and twenty-four thousand five hundred
and eighty dollars, in twelve monhs, with
out reference to the run of luck in pre-
yious years. There certainly could not
have been good management about a state
alters which produced such inauspic-
ious results. The stockholders blamed the
directors, and at the last meeting they
were called for loudly, but did not appear.
If there is any truth in the science of
insurance, the affairs of this company
were managed unscientiically. The great
object of the managers seems 10 have been
10 take a large amount of premiums and
make big dividends. To the latter part Of
these duties they faithfully attended, and
no persons were more astounded
the failure of the Columbian Insurance
Company than the holders of the stock,
whose participations in the "profts" was
o such a gratifying extent as plead them
% suppose they were favorable possessors
If a lucrative and highly successful con-
,ern,