Marine Insurance.
The Times, 1824-05-17T00:00:00

(Ad,cri--en.l tly Lord.-I believe it will be admitted that few periodsof our history exhibit a time when speculaMr of every description were more actively employed than at present, in devising schemes for their awn benefit; or that the considerations of legitimate commerce were more overpowered bythe allurements ofaspeeious theories, invented by persons who, seeking only their own immediate advantage, care lit- tle about the misery and distress they may inflict, or the ultimate success or failutre even of their own projects. Among the various propositions of the present day, is one to alter the mode of effecting 2farine Insurances, by transferring to joint-stoek companies what is now ione by individualc, for the purpose, as is avowed, of increasing competition; and if this could by any possibility be the consequence of such a transfer, there would be better ground to support an appli. cation to Parliament for that object, than can in truth beurged ; but, convinced that a great public evil would be created by such a mea- sure, injurlou.s to the commercial and manufacturing interests of the country, I am anxious to raise my hun-.ble voice, as well in defence oFthe public against combination, as in the cause of an institution of which I am proud to be a member. which will stand the test of inquiry, as it has done upon former occasions, and can never sink in pu lie opinion, by its conduct and its principles being rigidly and minutelv examined. Lievd's Coffee-l3ouse, as it is generally called, is an open mart for Marine Insurances, where every merchant antd trader in the kingdom may either attend himself, or by deputv, for the purpose of underwriting; it professes no exclusion to persons in any trade whatever conduct and character, with sufficient means, being the only qualifications required for admission, every merchant is enabled to engage in that banch of maritimne commerce, to such an extent as he mlay deem prudernt; and where the name of one person only of a partnership is engaged, it is generally the head of the house, rossess. ing the largest fortune, the whole of w.hich is liable to matee good the losses w hich may happen, and which it would be very easy to prove has afforded to the trade of the Unitedl Kingdom the greatest posible security. The establishment gf Lloyd's at present consists of about 1,500 subscribers, all of them in open and individual competition, which has lowered the rate of premiums much below what they have ever been known in the historyaof this nany other country. Notwithstanding the hesvy stamp duties upon marine insurances, amounting, in many case-, to a third of the premium, a large portion of foreign insur- ances are efFected 2t Llord's* and if those duties were lowered, a much larger amount would be done there, as the foreign companies could not, with this reduction, rival the individual competition in London alone;* and similar institutions have been established at Bristol, Liverpool, Afanchester, Hull, anm other commercial towns in Great Britain, all of which afford the same advantages and pro- teetion to maritime commerce. With the general feeling which at present existb in favour of a li- beral policy in all our political and commercidal arrangements, it cannot be supposed that his iMajesty's Ministers will allow them- selves to be deceived by the insidious representations of a few large caritelists, who seek to establish an extensive monopoly to tliem- selves, under the pretence of giving securityand facility to theforeign trade of the United Kingdom. The petition whicl it is reported is about to be presented to the House of Commons. to allow joint stock companies to insure mari- time risks, must, if it prayer be granted by the Legislature, destroy individual competition, as it now exists; the competition of several thousand persons, in various parts of the kingdom, will then be re- duced to that of a few companies. who, after destroving the present ,system, which has suecessfully wiThstood the rivalship of all foreign associations, even under the disadvantagcs of lheavy taxation, will leavea dlftlcutsy-to-remuneratWtn-hemsdvew for losses vhtich they mav incur in eflecting this destruction, by charging afterwards what- ever premiunis they niay think proper. So long as underwriting is continued by numerous individuals, the different persons engaged in it will have a predilection in favou- of different risks, which they best understand; and which circu.,i_ etance is favourable to the merchant, as it tends to keep down any unreasonable demand of premium upon anv one description of risk; but if the insurances are taken by a few companies, one uniferm sys- tem must govern their respective operations, the same maRaging director, or secretary, will fix thc premium upon everv class of risk that is ofFered, and the result is obvious to every man of prac- tical experience. Should our principal merchants he induced to send their regular insurances to the company of which they may be memibers, becausc they are to participate in the profits therefrom, the refuse of such insurances could never be taken by individuals, anti the property must go uninsured altorether. It is well known, that voods to a large amosint are, and always have been, insured at Loyd's, in smal sums, when sent by the spirit and enterprise of British merchants to seek a inarket in places little known, and exposed to great and un- defined perils ; the policies themselves akre often so extensive and unlimited in their clauses, that no person acting for a company could possibly accept the risk, nor would the individual underwriter be able to do so, even to a limited amrount, were lie not supported by the class of risks whicil are better known and nuderstood. It is by no means an unimportant consideration, that at present the merchant himself, or bv his broker, fills iip his own policies, and inserts every clause in them that will cover the risk which he intends to have insured; while with companies this can only be done by their clerks, according to general rules laid down for their guidance. As it respects security to merchants from the insolvency of under. writers, it is a fallacy to impute a want of it under the present sys- tenm; the extent of loss sustained bv this cause is capable of proof, anm will upon strict investigation be found trifling in the extreme, even small as it is if the cause is minutely examined into, it will be seen mainly to have resulted from the merchant refusing to give a remunerating premium demanded br experienced underwriters, and employing clerks, or brokers, to find out otbers, who with less expe- rience, or less credit, can be induced to write the poliev at the pre- mium offered. The underwriters, as a body, are known to possess a much larger capital than any insurance company, and their whok fortunes being liable for their engagements, they present the most ainple protection that capital can afford. inThe number ofopulent and respectablc underwriters, has increased in a greater proportion than the foreign trade of the country: so that it cannot in truth be contended that there is the smallest dificulty in effecting insurances of undoubted security with facility, to any amount, which the exigencies of the increased trade of the country may requiire; while at the same time the depreciated value of every species of merchandise, as compared with their prices during the war, has reduced in a very material degree the amount which is required to be insured. It is obvious that the application now about to be made to the House of Commons is tounded upon no grounds of public necessity or convenience, aled has no other object in view than the private and peculiar advantage of the company which is sought to be erected upon the ruin of private establshments which have grown up with the trade of the country, and which, in London alone, employ, with substitutes and clerks, at last 4.000 persons. By far the greater part of the merchants in London do not carry on trade upon their own account; their business is principaUy that of agency to British manufacturers, ship-owners at the out-ports, planters, and residents in the colonies, and to foreign merchants; so that by uniting them- selyts in joint stock companies for the purpose of effecting marine insurances, they wiU have a direct interest in increasing the rate of premiums for tfieir own benefit, and which the present system of in- dividual competition entirely prevents. The establisnhment of Lloyd's includes among its subscribers persons connected with every branch of the manufactures and com- merce of the United Kingdom. Upwards of 300 agents have been ap- pointed iu different parts of the world, from whom is regularly re- ceived acomprehensive mrsas of nautical and commercial information, which is gratuitously made public, and daily transmitted by the in- dividual members of hloyd's from London to 3ll parts of tte king dom. These sources of information are not only benrticial to trade in general, but materially facilttate the settlement of losses upon in- surances: the underwriters being informed by their own agentG that such losses have happened, scarcely ever ask for the inspection of any correspondence: the protest, invoice, and bill of lading are usually deemned sufficient to establish the demand, and the merchant is sel- dom required to submit to that exposition of his affairm which the productlion of his letters would necessarily create. Losses, when claimed by persons of kaovn respectability, arc frequently settled at i,loyd's without even. the production of the Protest, or the examina- tion of a single documsent- and when the first underwriter upon a olicy has hooked over the papers, which may be produced, and has adjusted the claim upon his subscription, very few of the others are induced to read them, but accede to the adjustment as a mere mat- ter of course. Insurance is a natural part of mercautile adventure, and, fro,Ls local circumstances, will always, to a certain extent, be effected in the coantry where it is carried ont ; but the good fiaitl and respecta- bility generaly of British underwriters have established for them a character which brings numerous foreign insurances to Englpnd. This is a fact which was strongly exemplified in the early part of last year, when the French merchants(anticipating a war vitb Spain, and alarmed at tbe reports that Great Britain would support the Constitutional Governmsent of that countrv), not only sent their in- surances to a very large aaiount, to be cffected iu London, but thel insurance comnpaaies ef Paris transmitted many orders, to re-insure their outstanding risks at high premiums, although it was wel known that re-insuranceswere not legal contractsi's England.Notbiog quld be a strongEet proof of the, condidence they ylaced in the inte- ,I;rity and security of British uuderwriters ;and by which both indivi.. enis, and therevenue of this country, received a considerzble heneflt Sad a war actually tsken place between England and France, tbee high premiumns would have been contminued,-Ct the expense iof thte Fzencli conmamer, to the benefit of thte B3ritish- uuderwriter5 it being obviouS Lhat the lattr would always have demanded a re- munerating price for the risk be adopted. It is reported that one of the contemplated objects of the new company is to secure to themselves foreign insurancee by establish. ing authorized agents in various parts of the continent, to issue poli- cies for them and should this plan be carried into affect, the l?ia- rine su c Stamp Act of th,s country will be defeated to the extent tha such insurances may be efTected; and foreigners will have all the security and advantage of a BritiKh insurance, without paying any duty whatever: even British merchants may evade spch duty, by taking out their policies at Calais, or anv other convenient place where an agent may reside, instead of applying to the oflice in London. If fair competition could be established between coampanies and individuals, in respect of marine insurances, the latter would hare nothing to apprehend; but should the merchants through whom in. surances are ordered be permitted to combine for the purpose of putting the premiumns into their own Pockets, competition will neces- sarily be destroyed, and individual industry and talent rendered of no avail.-I am, with great and sincere respect, your Lordship's mostobedient h rnht, sv~, A MIEMBER OF LLOYD'S. Loudon, Mlay 16, 1824. - MARINE INSURAATCE. TO THE RIGHT HON. THE EARL OF LIVERPOtT.. &-r