(The statement above referred to is as follows:)

Mr. KIRSCH. The estimate of $150,000 is based on maximum additional help of possibly 25 employees to be added to the present number. We estimate about $75,000 for salaries, and there is an additional estimate for communication service and travel of about $30,000, and $15,000 for miscellaneous expenses. To that is added approximately $30,000 representing the proportion of the present Insurance Division expenses that will be allocated to the administration of this law.

Mr. WOODRUM. What type of people are these to be?

Mr. KIRSCH. There will probably be three or four top claim adjusters. There will be some assistant adjusters and some clerks in grade 4 and grade 5 who will write policies and keep statistical records; and there will also be some stenographers and typists.

Mr. WIGGLESWORTH. Do you know how many people there will be? Mr. KIRSCH. Mr. Ogden has been going over that list. It depends on the number of policies that may be written.

Mr. WIGGLESWORTH. Can you not give us a break-down for the record showing what this figure is based on?

Admiral LAND. We can give you that, but we have not the slightest idea how many there will be because we do not know what will happen. We want to have a nucleus.

Mr. WOODRUM. You must have had some idea to enable you to arrive at the amount of $150,000.

Mr. OGDEN. That is what Mr. Kirsch explained.

Mr. WOODRUM. A good many of the people you have spoken of would be provided for outside of the $150,000, would they not?

Mr. KIRSCH. Not those I have spoken of; they would be employees of the Commission.

Mr. WOODRUM. They would not come under the heading of "Experts in marine insurance, including attorneys, in connection with the investigation and settlement of claims"? Would they not be investigators?

Mr. KIRSCH. We would have investigators on the outside. We have people who review claims and adjusters in the administrative office.

Mr. LUDLOW. This personnel comes through the Civil Service? Mr. OGDEN. Yes; except a few authorized by the act; there will be two or three exempt positions.

Mr. WOODRUM. You do not get your attorneys through the Civil Service, do you?

Mr. OGDEN. There may be some.

Mr. WIGGLESWORTH. It seems to me that this proviso as temporary employment leaves the door wide open for as many additional temporary personnel as you might want to employ.

Admiral LAND. We are not going to employ anybody we do not need. We simply have to fall back on your confidence in the Commission's administrative ability not to employ people who are not necessary. This would be a very small progressive increment. It might be smaller than what is here suggested. We have to attempt to visualize what might happen. We will not take on employees unless they are necessary to meet the exigencies which happen, and the country demands it, and we would take them on in accordance with the exigencies, and not otherwise. We do not want to build up this organization.

Mr. KIRSCH. During the last war there were 27,000 policies written in war-risk insurance, and there were $2,000,000,000 of insurance carried. What the personnel was I do not know, but I am reasonably sure it exceeded by far what we propose here.

Mr. WOODRUM. You will hold it down as low as you can?
Mr. OGDEN. Yes.

VESSELS FOR WHICH SUFFICIENT INSURANCE IS NOT AVAILABLE

Mr. WIGGLESWORTH. You have given us a list of the ships for which there is no insurance available.

Admiral LAND. That there is not sufficient insurance available for, that you cannot cover in the American market.

Mr. WIGGLESWORTH. Why is that?

Admiral LAND. Because they will not insure over a certain amount. If you have an $18,000,000 American ship, all you can get is about $4,000,000.

Mr. LUDLOW. Is that on a fixed percentage basis?

Admiral LAND. It is based on the resources and on their policy what they will do and what they will not do. They will say, "We will put $4,000,000 insurance on an $18,000,000 ship.”

Mr. LUDLOW. What would Lloyds add on that?

Mr. OGDEN. Lloyds would probably put a million or a million and a half on the ship. The rest of the English market would probably take $4,000,000.

Mr. TABER. American underwriters do not take more than Lloyds? Admiral LAND. More than Lloyds-individually.

Mr. WOODRUM. What would you do, so far as an $18,000,000 ship is concerned?

Admiral LAND. We have to take the rest. If we can get proper rates in the American market we will take that. If we can get proper rates in foreign markets we will take what we can there, and what is left we will have to take ourselves. We have been doing this on this evacuation shipping business right along, doing it on that very basis.

Mr. JOHNSON of West Virginia. Do you insure individuals?

Admiral LAND. No, sir.

Mr. WOODRUM. Admiral, are you in a hurry for this?

Admiral LAND. We are in a hurry, in that we are helpless to do anything to protect ourselves without it.

Mr. WOODRUM. Does it matter when there is a question of days or weeks?

Admiral LAND. I think it does matter, if it is a question of weeks. I would like to see it go through as quickly as possible because I think it is absolutely justified. I do not think any criticism could be found against it, because the law which has been passed and approved is ineffective without an appropriation.

Mr. WOODRUM. Are there any ships now safling that are inadequately insured?

Admiral LAND. Not for war risk. But we do not know what is going to happen later.

Mr. LUDLOW. How many ships would come under this legislation? Admiral LAND. There are 15 at the present time, and there will be others before very long. So far as absolute necessity is concerned, there would be 15 or 20, but the bill covers some ships which would only be covered when they were sent on that kind of a voyage, and they would only be sent under the policies of the Congress.

Mr. WIGGLESWORTH. When you say that on an $18,000,000 ship you can only get $4,000,000 insurance, does that mean at any price? Admiral LAND. That they would take at any price.

Mr. WIGGLESWORTH. What charges do you make for this insurance that you are going to make available?

Admiral LAND. So far as what we have done heretofore is concerned, we have charged the market rate, or a little less. If the market rate is lower we would use that.

Mr. WIGGLESWORTH. I thought you said if private rates got too high that you would step in to keep the rates down.

Mr. OGDEN. That would be the intention under the war-risk bill. Mr. WIGGLESWORTH. There are not rates fixed by the statute to charge for this insurance?

Mr. OGDEN. They change every day.

Mr. WIGGLESWORTH. That is left to the discretion of the Commission?

Mr. OGDEN. That is left to the discretion of the Commission.

SIZE OF PRESENT INSURANCE DIVISION

Mr. WIGGLESWORTH. What, if anything, have we in the way of an insurance division now?

Admiral LAND. We have a small insurance division in the Commission, and always have had since 1920.

Mr. WIGGLESWORTH. How big is that? ·

Mr. OGDEN. About 18.

Mr. WIGGLESWORTH. Eighteen people?

Mr. OGDEN. Eighteen, and that will serve as a nucleus on which to build any additional personnel.

MAXIMUM AMOUNT OF INSURANCE REQUIRED FOR ALL SHIPS

Mr. TABER. How much gross insurance do you anticipate you will be writing in this thing, if you had to insure all the ships?

Admiral LAND. That is in my memorandum here-a possible maximum risk of $1,570.000.000, divided $470,000,000 hull; $1,000,000,000

for cargo, and $100,000,000 for seamen. Now, we put that in here because I anticipated some such question; but I would not attempt to justify that, because it is merely an estimate. But it is a possible answer and is the best answer I can give as to the maximum.

Mr. TABER. How much insurance do you think Lloyds have outstanding currently, of that type of insurance?

Admiral LAND. I cannot answer that, because the Government has done, in Great Britain, what we are aiming at here. Maybe Mr. Ogden could answer that; but the Government has taken care of this war-risk insurance over there, and how much they have I do not know; but I would imagine the amount would far exceed this amount, because we are covering 1,000 ships, and they have at least four times as many ships as we have. In other words, they have 21,000,000 tons of shipping, without counting any they have taken over, or without deducting losses, which would reduce it 1,000,000 tons, say; but they have also added to their merchant marine, as you know, a great many ships of the so-called technical enemies. But that would at least run into a comparable figure, I should say, of six, seven, or eight billion dollars.

Mr. LUDLOW. Would you place any of this insurance in foreign companies except Lloyd's?

Admiral LAND. Not unless they had some kind of trust fund.
Mr. LUDLOW. Similar to Lloyd's?

Admiral LAND. Similar to Lloyd's, or the other British firms that either have or are considering having an indenture trust fund.

Mr. LUDLOW. In the case of companies of nonbelligerent countries, would you require this trust fund-or are there any such companies? Mr. ÖGDEN. There are not any such companies.

Admiral LAND. I was going to say, unless you go to Japan, and we would not have much necessity of insuring with a Japanese company. We never have.

Mr. TABER. How much would you figure the British had put up in a fund similar to this, for their operations?

Admiral LAND. I do not know, Mr. Taber; I cannot answer that. Mr. TABER. Can anyone else?

Admiral LAND. We won't know until after the war.

Mr. TABER. Can you tell us?

Mr. OGDEN. No; I cannot.

GROSS AMOUNT OF INSURANCE WRITTEN UP TO 1919

Mr. TABER. How much did we put up in the World War for this type of insurance?

Mr. OGDEN. Finally, $50,000,000.

Mr. TABER. And how much insurance were we carrying at that time?

Mr. OGDEN. At one specific day we know about, there was $115,000,000.

Mr. TABER. That was the maximum?

Mr. OGDEN. Yes.

Mr. TABER. How much would you anticipate you would get in the next 2 or 3 months, say?

Mr. OGDEN. If the market remains stable and it will take care of the business, we anticipate the Maritime Commission would not write

any insurance. It is only when the market breaks down, either for lack of capacity or lack of what we would consider adequate rates, that we would step in.

Mr. TABER. If we put up $25,000,000, we would be putting up enough to cover that situation?

Admiral LAND. I do not think so; because we have three times the commerce that we had in 1914-17.

Mr. WIGGLESWORTH. Suppose this act had been on the books 6 months ago, how much would we have actually used for insurance? Admiral LAND. I doubt if we would have used any, because we did not have the conditions 6 months ago that obtain now, and we did not have the ships.

Mr. JOHNSON of West Virginia. Again, let me ask you this question: You are not going to use this money unless you have to? Admiral LAND. That is right.

Mr. JOHNSON of West Virginia. And it is not going to cost the Government anything, whether we give you $50,000,000 or $25,000,000, unless you have to have it?

Admiral LAND. That is absolutely right.

Mr. JOHNSON of West Virginia. And this is a matter of precaution?

Admiral LAND. That is right.

Mr. JOHNSON of West Virginia. Closing the door before the horse is stolen?

Admiral LAND. That is right. It is just part of preparedness. Mr. KIRSCH. Mr. Tabor, I possibly can give you some figures that you inquired about. These are figures taken from reports by the former Bureau of War Risk Insurance, during the last war. They began writing policies in September 1914. By November of 1915, before we got into the war, they had written 1,283 policies, for a total amount of insurance of $90,000,000. By November 1916 that increased to $163,000,000; by October 31, 1917, when this country was in the war, that had increased to $856,000,000 and, by June 30, 1919, there had been 27,000 policies issued, with the amount insured of $2,000,000,000. That is without the seamen's risk.

Mr. TABER. You mean $2,000,000,000 was the maximum amount that was outstanding at one time?

Mr. KIRSCH. No, sir.

Mr. TABER. Or was the gross amount?

Mr. KIRSCH. That was the gross amount written up to 1919.

Mr. TABER. And could you give us what was the maximum amount outstanding at any one time?

Mr. KIRSCH. Well, the first year there was written $90,000,000 of insurance. For the amount outstanding at any one time, June 30, 1918, furnishes a good figure. There was then outstanding $115,000,000.

Mr. TABER. $115,000,000?

Mr. KIRSCH. Yes, sir. That is without seamen's risk. The seamen's risk piled up during the 4-year period to over $300,000,000. Mr. TABER. What is "seamen's risk"?

Mr. KIRSCH. That is personal injury of seamen, masters, and crew, and it covers detention of masters and crew.

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