The situation of merchants and brokers was clearly impossible, No merchant could anticipate the cost Of shipment and no broker whether he was quoting his client the right rate. Towards the end of the week a meeting of brokers was held, and underwriters were asked to re-establish the rating committee, which had so hurriedly been abandoned, and to publish a scale of war rates which al underwriters would observe. It was hoped that this would get rid of the rate chaos and make it possible to arrange open covers by which a merchant would be able to look at least a few days ahead.
The underwriters on this request reconsidered—their position. The rating committee was restarted and scale of rates published; while at a brokers' meeting held at Lloyd's on Tuesday an arrangement was announced for the writing of open Covers on war risks. That arrangement, at the time of writing, stands. Let us take separately the two points—the rate scale and the plan for open covers.
The scale of rates varies from 2s.
6d. per cent. on shipments of specie to the Continent to 80s. per cent. on shipments of merchandise from is as follows—Warranted sailing within seven days of date of acceptance or beld covered.
The effect of the wording seems to be this. A merchant will declare a shipment to his underwriter. not more than seven days before the date on which the boat is expected to sail, and if she sails on the expected day he will pay premium at the rate current on the date of declaration. But if sailing is delayed and more than seven days elapse between the declaration and sailing, then the cargo is held covered but re-rated in accordance with the scale prevailing at some unmentioned date thereafter. Thus if the risk should be increased materially after declaration, cargo which does not get away within the seven days may pay double the rate charged on the day it was declared.
A deputation of Chambers of Commerce attended the Board of Trade io raise the question of war risks; and it is believed that one of the points which they were anxious to emphasise was the difficulty involved in this seven-day arrangement. There is no doubt about the difficulty, but underwriters consider two things imperative: (1) that the war risk shall be separated from the ordinary marine risk and (2) that they shall be able to adjust their rates as speedily as possible to changing conditions. From the underwriting standpoint both of these stipulations are necessary, and delay in shipment—whatever the difficulties involved—must be followed if necessary by a revision of rates.
Thus some greater degree of certainty seems to be emerging from the chaos of the beginning of the week. But to the insurance market, the trading community and the Government alike, the events of the past week should serve as a foretaste of the extent to which ordinary methods of doing business will have to go by the board in the event of war.
Text read from the printed page and cleaned; old type leaves the occasional error.