so strong that temporary profit fluctuations may be disregarded, and in many cases present dividends could be maintained even if the companies undertook no more business whatever." English companies are to-day our main competitors, but companies of other countries, notably German and Canadian, are entering the ranks against us. Even on the Pacific coast some nineteen foreign companies are doing business, representing England, Germany, France, Italy, Switzerland, China, and Japan.

The American Business of Domestic and Foreign Companies Compared.-The extent to which foreign companies have acquired control of marine insurance in the United > States becomes clear if one examines the annual financial reports of the various companies. A few years ago the author made a compilation of the statistics found in these reports for the year 1903; and, since conditions have not changed materially, the results are here presented. This study showed that the total net marine risks assumed by all foreign and domestic companies operating in the United States aggregated approximately $6,877,000,000. The net premiums were nearly $18,000,000, and the admitted assets $112,912,000. Of these amounts the American branches of the twenty leading foreign companies (to say nothing of the large number of foreign companies operating on the Pacific coast) wrote $3,723,000,000 of the risks, or 54 per cent of the total, received $7,160,335 of net premiums, but possessed only $21,733,958, or less than one quarter of the estimated assets. Most of these foreign companies also confine themselves solely to the writing of marine risks, only six of the above twenty companies transacting a fire business in addition to their marine business.

Unlike the foreign companies operating in the United States, the domestic companies depend much more largely on a fire-insurance business carried on in conjunction with their marine business. Only five of the thirty-one domestic

companies in 1903 devoted themselves exclusively to marine insurance, and of these five companies only two could be classed as important. All the other companies combined a fire-insurance business with the marine business, and almost without exception placed much greater emphasis upon the former than upon the latter. Combining the business of all the domestic marine and fire-marine companies, it appears that they carry nearly three times as much fire risk as marine and inland risks, and receive nearly four times as much in premiums from their fire as from their marine and inland business. Moreover, upon inquiry it was learned from a considerable number of companies that their marine business has been and is decreasing in volume, owing to the fact that large foreign marine companies insure entire ship cargoes, leaving only small amounts to be picked up by the smaller companies. Other companies continue to carry each year a small amount of insurance of from several hundred to a few thousand dollars in premiums, for the sole purpose of keeping alive that part of their charter which permits them to write marine insurance.

It appears furthermore that the business of the foreign companies operating in the United States is by no means limited to any particular section of the country. Domestic companies seem entirely unable to meet American requirements. On the Eastern coast foreign companies claim nearly one half of the business. The same is true to an even greater extent in the Lake region; while in the Gulf states and on the Pacific coast approximately four fifths of the business is controlled by foreign capital. Even in our coastwise trade, the one branch of our commerce from which foreigners have been excluded by statute for nearly a century, the largest buyers of insurance place it almost half and half between domestic and foreign companies. Evidence before the United States Industrial Commission shows that the home market soon becomes exhausted, and that it is the

practice of the principal shipping companies to take all the American insurance they can obtain, and to depend upon foreign underwriters for the rest.

Recently there has also been a marked tendency toward self-insurance. The International Mercantile Marine Company, for example, embracing some of the largest steamship lines leaving the port of New York, announced in its report of December 31, 1903, that "the company has inaugurated a system of insuring its own ships to a large extent, it being deemed that this could be done advantageously and safely with such a large fleet as the company commands" (138 ships).

While this is the most notable recent example of selfinsurance, it should be remembered that this method was practiced on a large scale many years ago. As early as 1867 we are informed by Mr. Hopkins, in his work on Marine Insurance of that date, that the Peninsular and Oriental Steamship Company possessed not only an insurance system for its fifty-three large steamships, but also insured its passengers, baggage, and effects, and issued policies on goods. Information from the managers and officers of the largest steamship lines shows that self-insurance is practiced extensively by their companies in one form or another. While the coastwise lines and the smaller transoceanic lines depend almost entirely upon marine-insurance companies for their insurance, it appears that in the case of such lines as the great German steamship companies, nearly all the insurance is carried by the companies themselves. It is the general rule, however, followed by the German lines as well as the International Mercantile Marine Company, that they refrain from insuring the cargo, and permit this risk to be covered by marine-insurance companies.

CHAPTER XXIII

THE ORGANIZATION AND PURPOSES OF LLOYD'S

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 tc 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 refer