Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1917-06-09
UNCLE SAM AN
INSURANCE AGENT
War Risk Bureau Capital Jumps
From S5,OOO,O00 to $780,
OO,00O-Sidelight on
War Losses

WASHINGTON. June o.

lstence OF this new Government-ownershi
proposition and fewer are Interested In It's
actual operation. II is another OF our war
emergency" agencies and. like most others.
| II has not hesltatod TO make known It's de-
| sire for more money and wider authority,
| which. as In other instances, seems 70 be
| gratlhed by the Administration and by
! Congress.
| The war Risk Bureau Is attached 70 the
| Treasury Department, and In said to be
doing a very useful work. II came into
| being at the request Of the President on
| September 2, 1914 less than three years
ago. Many prominent captains OF Indus
| try" had previously urged the President TO
| establish n war-rlsk bureau to safeguard
! shipping from war perils at sea. lhey
| contended that marine insurance company
| rates were too high and that the inde-
pendent service was too restricted. The
| President listened to those large business in
terests and recommended to Congress the
| creation Of the existing bureau, to be capI'
| talized at S5,O0O,OOO Then the bureau
| guided by certain New York experts began
| business
Early Losses Appear
II was announced at first that the Gov
crnment would not insure cargoes OF con-
traband, and It was said to have established
limitations as to danger zones which insured
ships were not to enter Congress dld not
get much information about tho ownership
of insured vessels nor has any general IN
formation as to the kind of cargo insured
been submitted in the reports. All Congress
knows is that the business started with
rush--this was long before the American
war with Gcrmany--and that the bureau
was piling up a big fund Of premiums which
was supposed TO be velvet But that
which is Inevitable with insurance COM
panies happened to the bureau In 1919.
Two ships Of American registry, the Evelyn
and the Carb, although originally foreign
built, carrying government insurance, went
down In the English Channel; sunk, as was
reported at the time, by mines. These TWO
vessels were known to the Philadelphia
shipping trade. having been rebuilt for the
gulf service and sold subsequently at sac
riflce. When the facts of the sinking be-
came known, II appeared that these old
hulka were carrying cotton, and that the
insurance allowed upon hulls and cargoes
netted the Government n loss of $65S,1O3.
Then came the Greenbrier, loss on hull S5O,-
600 the sloop VIM. p. Frye, loss on hun
S1l,550; the steamship Navajo, loss on cargo
5S,3OS.34, and the steamship Seguranca,
general average loss $235.73. These were
all tho losses reported for 1915. During
1916 there was but one loss, total of S62'
.03 on the steamship Carolyn. That year
the Germans We're cary careful about sink
ing American ships, and the War RISK
Bureau proftrd on premiums collected, ana
Congress at the request Of the AdmlniStra-
ton extended the terms of it's existence.
with the 1917 submarine campaign
against vessels carrying ammunition and
supplies to the Allies tho War Risk Bureau
began to suffer new losses. IL was still
maintained at the department that contra
band was not being insured, although cot
ton, oil and grain were included in the
shipments obtaining insurance, Tho situa-
tiOn had become so acute, however and the
War Risk Bureau was 50 mportuned 10 as
sumo responsibility for Ale safe conduct of
FI.,fV fsHNy Ion
sought n longer life and an increased ap-
preparation for the bureau. on March 3,
1871 the President signed an act raising
the appropriation from S5,0O0,000 to Sl5,-
100000 and making tho premiums and
savages available for the payment Of losses
This was to put the bureau In position TO
extend its business while Congress was not
in session. and also to regulate the rates of
Independent insurance companies. Then
followed the extra session Of Congress and
the declaration Of war against the Imperial
Government OF Germany.
Effects of Submarine Warfare
The next chapter tells of more losses,
wider powers and greater appropriations
In addition, 1t throws n side light on the
whole submarine problem. In 1917 and
since the declaration of war our losses have
been increasing. The War Risk Bureau, in
supporting a bill TO increase the capitaliza-
ton of the war risk fund from SIS, 900 900
to $4,000, 600, now makes that admission to
the Committee on Interstate and Foreign
Commerce. II conceded these new losses
up to May 4 Steamship Missourian (hulD,
$1,000 900; schooner Edwin r. Hunt (hulD.
$4,000; steamship Healdton (hull and
cargo), $499,OO0; steamship Illinois (hulD,
$3.50 900; steamship Vacuum (hul), $1,000
900 +; schooner Percy Birdsal (hulD, $685.
600; steamship Rockingham (hull and
cargo), S1,298,10S. The total known losses
1 n = y q
Receipts of premiums to April 30, 1917 were
$7,793,4 ,42s.93, so that the bureau claimed to
be making money, although, despite its
losses the amount of risk outstanding on
that date was upward of $3.50, 900, 900. After
the committee hearing and when the bill
was called up in the House last week It was
admitted that the losses had crept up TO
about S6,000,000 1t was asserted, however,
that tho amount OF risk had been greatly
reduced
Because the Administration declared It
to be n war necessity Congress finally
passed the new S5O,OOOOOO bill. A mere
$50 100000 appropriation has become so
inConsequential a matter in Washington
that tho newspapers barely mentioned it,
and yet that bill contained some very un-
usual provisions. It Te-established n $4,000
| manager with a small office force in charge
| of war risk insurance fund increased to
| $50 100000 to take risks on American YES
| sells engaged in the foreign trade, TO the
prejudice Of the coastwise trade of the
| United States, as was charged and In addi-
| tion TO insure the lives of the officers and
| crews, to afford them accident insurance
| and to insure their clothing and effects. This
| insurance was to extend TO alien officers and
| seamen as well to American citizens.
| Critics of the bill suggested that no insur-
| ance was given to soldiers sailors of the
| United States who were going into battle
| at the risk of their lives but the sponsors
| of the bill contended that special Induce
| ments were necessary to secure men for the
| merchant marine. regardless Of their nation
| ality. They also contended that the United
| States should apply its insurance fund to
| the making Of reciprocal reinsurance ar
| rangements with foreign governments at
| war with Germany, and this provision also
| went into the bill. All these new features,
It was declared, would create business con-
| dtions that would make IL advisable to
| continue the War Risk Bureau for another
two years And so 1t was enacted
| Meanwhile private concerns have been en-
| gagged in the marine insurance business and
| though they are now confronted with a
! powerful competitor in the United States
| Government, they may be comforted by the
| assurance of the Government MANAGEMENT
| that II does not insure vessels or cargoes at
L.. .N,NA. ,9nts NHnN