Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1915-01-19
MARINE MEN DENY
FAILURE OF WAR
RISK INSURANCE
at Washington
and Shipping Experts
Here Declare Report
Without F Foundation.

WASHINGTON, Jan. 19.-Reports that
the Governments experiment in war In
surance for American shipping had
proved a failure were received with sur
prise today, and were denied by officials
in n position to know the facts.
No authoritative statement as to the
success or failure of the insurance plan
has been forthcoming, and the depart
ment has been reluctant to give any de-
tailed information in regard to Its work
ing out. The reports, 1t was said, had
probably been based on insufficient or
unreliable data.
Marine underwriters, brokers, vessel
owners and shippers are amazed at the
report cmanating from Washington to the
effect that the Federal Governments war
risk insurance business was fallure'
None could explain why 1t should be.
In accordance with the orders of the
Secretary of the Treasury, nothing could
be learned of the business transactions or
the local branch OF the bureau in the Gus
tom House. 1t is believed, however, that
more than s5OO0,OOO worth of war risk
insurance has been written here since the
establishment of the bureau In Septem-
ber. Estimating the premiums at an aV-
erage, this. 1t is said would make the
amount taken in here about $4,000. The
expenses of the branch are very small
as the work is handled by a custom house
official assigned to the task.
The Governments entry into the war
risk business was heartily welcomed by
American vessel owners and shippers. 1t
gave them the opportunity of securing In
surance without having to pay exorbi-
tant rates and had a tendency to keep the
rates OF private underwriters down.
AT the outbreak OF the war, according
to shippers and vessel owners war risk
rates in private concerns went soaring as
high as 80 per cent. and remained high
until conditions were adjusted. The
American Governments entry into the
field of underwriters was considered one
of the strongest factors in rapidly adjust
Ing the abnormal conditions. 1t also per-
mitted American vessels and their car
goes which had been held up because the
owners hesitated to pay the rates asked
by American underwriters.
The underwriters were not greatly af-
fected by the advent of the Government
In their fields. The act making the war
risk bureau possible confined Its activities
TO American ships and their cargoes and
did not permit 1t to write general marine
risk policies, AS the number of ves-
sells flying the American flag trading to
foreign ports was SO few. the business
taken from the private underwriters did
not amount to much. and in some cases
tho Government accepted risks which the
American underwriters feared to handle.
Insurance brokers did not look with
favor on the Federal bureau at first, as
they were not permitted commissions for
placing business with the Governments
bureau But they were compelled TO make
use of the bureau because their clients
demanded the lowest rates. Later the
brokers found that they obtained a
greater amount of marine risk business
by being able to get the Governments low
rates on war risks.
Underwriters are now quoting lower
rates In the war risk business than those
OF the Government and are getting
greater amount OF the business, This Is
due TO the fact, one prominent under
writer said today, that England's atti-
tude toward American shipping is well
defined. What effect this will have on
the Governments insurance business Is
said to be mere conjecture. 1t was hoped
that the cotton shipments to Germany
would stimulate the Federal business.