Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1916-06-03
Federal Insurance
BY Frederic ]. Haskin

per cent---a cargo valued at 100000
thus paying 100000 In insurance to
cover the war hazards Of the brief voy-
age. Rates to the far east went as
high as 20 per cent, and even rates to
South American neutral ports reached
10 per cent-$10,000 on a 100000
cargo.
The situation called for prompt ac-
ton. The marine insurance problem
was rated among the most serious
brought up by the war. A special
conference of business men called to-
gether by the secretary Of the treas
ury decided unanimously that the
three things demanding immediate
government attention were the needs
for a merchant marine. for facilities
for financing foreign trade, and for
handling war risk insurance. The in
surance feature was acted on at once.
A bill was passed through congress
within two weeks, in spite of some
opposition in the house. American
business interests favored the measure
almost unanimously, as the private
underwriters were obviously embar-
raised by the situation.
The bill provided for the establish
mont of a bureau of war risk insur-
ance in the treasury department, and
the day after tho president signed the
measure, the bureau opened for busi-
ness. It was accepting risks two
weeks before it could set them forth
on it's regular form policies, because
the policies weren't printed vet. 1t
has issued 1,444 policies to date, an
average Of eighty a month. The poll
cies are no small ones. The aggre-
gate of the risks is over one hundred
and twenty million dollars.
The immediate effect OF the estab-
tlishment Of the bureau was the stand
ardtzing and lowering Of the rates. Be
tween acknowledgement ports in the
western hemisphere the rate went
down to 81 cents on the 500, where
in the early days of the war it had
been in some cases as high as $40.
Rates to the far east sank to one dol
lar on the 800, the panic rates having
been as high as SIS or $40 In some
cases. On large and valuable cargoes
such differences soon total Immense
sums. The rates OF course would
have come down in any case, but the
bureau caused them to come down
promptly and to the lowest practicable
level. Today rates are still lower
owing to the fact that commerce des-
troyers have been practically swept
from the seas.
So accustomed has the world be-
come to war conditions that all these
rates for war risk insurance have
been tabulated and published. Only
in the case of certain special ports,
notably those In the United Kingdom
and the belligerent countries of
Europe, the bureau considers each
application for insurance individually
and makes special rate based on the
war situation and the nature of the
Vessel and its cargo. 80
The making of rates is plainly the
bureaus most important and delicate
task. The Office is organized accord
iingly. The regular staff consists OF
only a dire ctor, an assistant director
three clerks and a messenger
pretty small force for concern doing
| a two million dollar business. In
addition however, there is an advis.
ory board composed of three expert
insurance men, who do not serve regu
larly but only as they are needed
While they are on the active list each
of them draws $25 day. The whole
expense of running and organizing the
bureau only totaled about $4,000 last
lyear II the war should stop tomor.
row, this venture into the insurance
business would have proved one Of the
most profitable the government has
ever made It is of course impossible
to forecast what losses any day may
bring forth.