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THE great importance of Lloyd’s in marine insurance from an international standpoint justifies an explanation of its organization and purposes. Until 1871, Lloyd’s was an unincorporated body where underwriters assembled and transacted business at will, subject to few regulations. In the year 1871, however, Lloyd’s became an incorporated body; and, according to the act of incorporation, exists for the threefold purpose of conducting an insurance business, of protecting the commercial and maritime interests of its members, and of collecting and disseminating information pertaining to shipping.

To obtain a clear view of how this threefold purpose is realized it is essential to study the institution of Lloyd's from two points of view, namely, the Intelligence Department and the Corporation of Underwriters. For the sake of convenience we may consider the Intelligence Department first, since the collection and diffusion of maritime information is a prime prerequisite to successful underwriting. Briefly described, this department consists of numerous agents situated in nearly every part of the world, whose position is considered one of honor, and whose duty it is to promptly forward information to headquarters concerning the arrival and departure of vessels, the occurrence of wrecks and accidents, or any other events which vitally affect shipping. As representatives of Lloyd's, these agents are also required to render aid to masters of vessels in distress, to take charge of a wrecked vessel’s stores and materials in order to avoid unnecessary loss, to adopt precautionary measures against dishonesty when it becomes necessary to repair ships, and, in a general way, to protect the interests of the marine underwriters. To supplement the efforts of these agents, Lloyd’s also desires the masters of vessels to report to the nearest Lloyd’s agent any information of interest concerning other ships which they may have seen or spoken with while on their voyage. All the information thus obtained by Lloyd’s from agents and shipmasters from all parts of the globe is then analyzed and distributed for the benefit of underwriters and subscribers. This brings us to the next important feature of Lloyd's, namely, the publications. These are five in number, namely: 1. Lloyd’s List.—The official daily publication of the corporation containing all shipping news as currently received, and generally recognized as the most reliable among the various sources of maritime intelligence. 2. Lloyd’s Register of British and Foreign Shipping.— An annual publication, founded in 1834, and designed to indicate the general character of all vessels in the British Marine of not less than one hundred tons, besides numerous vessels in foreign fleets. Among other items this publication states the name, materials of construction, and state of repairs of the ship, its dimensions, registered tonnage, and general equipment, the date and place of construction and by whom constructed, the name of the owners, the port to which the vessel belongs, the date of the last survey, and, finally, the name of the master, and the date of his appointment. To keep the shipping world informed of any variation which may occur, supplementary lists are published monthly in connection with the annual edition of the Register. In other words, this annual Register may be likened to a catalogue of nearly all the important vessels of the world, from which the underwriter may ascertain, by a hurried reference, the general fitness of a specified vessel to make a given voyage or carry a certain cargo. To render such reference on the part of the underwriter still easier, both iron and wooden vessels are divided into separate classes, and these classes into grades, each grade being designated by a conventional symbol. Lloyd's Register is thus the handbook of the underwriter; but it should always be kept in mind that while it is of the greatest service to those who accept marine risks, it is controlled by authorities of its own, and is an institution entirely distinct in organization from the corporation of underwriters. Since the classification of vessels is fundamental in the shipping and insurance business, the importance of a publication like Lloyd’s Register cannot well be overestimated. Its influence became so potent a factor in British shipping that other nations were obliged to adopt a similar system; until to-day Lloyd’s Register constitutes the standard after which other maritime nations have modeled their own Registers. To such an extent has the classification of vessels become a necessary adjunct to the shipping industry that practically no vessel of importance in any nation is without a regular classification in some standard register. Chief among the registers now published in addition to Lloyd's are the Register of American Shipping and the American Lloyds of the United States, the Bureau Veritas of France, the Germanische Lloyd, and the Stettiner Register of Germany, the Austro-Ungarian Veritas of Austria, the Nederlandische-Wereinigung of Holland, the Norske Veritas of Scandinavia, and the Veritus Hellenique of Greece."

*In the modern system of classification, as Professor Gambaro explains, “Ships are divided into three classes, according to the degree of confidence to be placed in their seaworthiness. A vessel recently and strongly built, well-rigged and equipped, is assigned for a number of years to the first class, and may, therefore, during such period, be employed with full confidence in any voyage for


3. The Indea.—A list of all British mercantile vessels, together with numerous foreign ships showing their condition and location according to the latest reports. This publication is not only open to inspection at Lloyd's, but members and subscribers, wherever situated, may, upon request, obtain the latest news concerning any particular vessel. 4. A Register of Captains.—A biographical dictionary containing a record of the service, proficiency, and character of the twenty-five thousand or more certified commanders of the British marine, and 5. A Record of Losses.—Frequently called the “Black Book.” Turning now to the corporation of Underwriters as distinct from the Intelligence Department, it must be noted that its membership consists of two classes: (1) The underwriting members who write insurance for their own profit, subject, of course, to the rules and requirements imposed by the managing committee of Lloyd's, and (2) the nonunderwriting members, who, as brokers and merchants, transact business with the underwriting members, either for themselves or others. In addition to these two classes there are also numerous subscribers to Lloyd’s for the information received at the Royal Exchange, many of whom are British and foreign insurance companies. Nearly all the great marine-insurance companies of the United Kingdom, even though their marine business in the aggregate far exceeds that of Lloyd's, are nevertheless represented on its floor, and necessarily and continually receive the assistance of that organization in the prosecution of their business. As a corporation Lloyd's resembles our stock exchanges in many particulars. It assumes no responsibility whatever for the solvency of its members. It seeks only to provide proper facilities to its members for the conduct of their business, and to limit admission to men of recognized honesty and financial standing. As a guarantee for the fulfilment of contracts, each underwriting member is required to deposit with the committee of Lloyd's securities to the value of £5,000. Aside from this requirement the corporation does not concern itself as to the nature or the volume of the. business transacted by its members. They are free to do as much underwriting as they like, and may pursue any kind of insurance they choose, only they must act honestly. As a consequence, Lloyd's, although marine insurance and the furnishing of maritime intelligence is the fundamental character of its business, is a place where one may insure against a large variety of contingencies—fire, epidemics, sickness, and all sorts of accidents, against the risks of journeys and business ventures, against the loss of works of art and valuable possessions, or against loss in gate receipts from the unforeseen stoppage of games and races, or to meet contemplated changes in foreign tariffs, or to provide against the risks of war during periods of political excitements, and a hundred and one other contingencies of every conceivable kind. Combining all these different forms of indemnity with the marine business, authorities place the total amount of risks carried at Lloyd’s at approximately $3,000,000,000, while the total deposits paid in by members as a guarantee

the conveyance of any kind of merchandise; provided, of course, that she suffer no deterioration or damage such as may render her unserviceable, and be maintained in good state of repair, which is ascertained by periodical surveys. A second term of the same class is often granted to ships proving still strong and in a good state of preservation after the first period. A special distinction over and above the highest classification may be obtained for a ship provided such materials be used in her build as directed by the committee. Wessels which have gone through this first class term are assigned to the second, and, lastly, to the third class, the latter embracing vessels in very poor condition, considered fit only for short and easy voyages and to carry cargoes not to be damaged by sea water, such as timber, salt, etc.”—Gambaro’s “Lessons in Commerce,” p. 137.

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