CO885-24 — Page 334

PUBLIC RECORD OFFICE

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mwimmin C.O. 885

24 PUBLIC RECORD OFFICE, LONDON

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14 December 1914.]

OVERSEA PRIZE DISPOSAL COMMITTEE:

Mr. J. LOWREY.

441. (Chairman.) Yes, there may be. Really what I wanted to get at was what the saving would be if we did without a super-cargo. It would not be very much-1 cannot see what better a man from this side would do than a man at the port of destination.

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442. Nor can I?-And the sending of the man from this side would involve very considerable expense. 443. (Mr. Roper.) Practically all you want is clerk? -Yes, to deal with it at the destination, to supervise the delivery of the cargo, and if any super- vision is wanted, to assist the ship's officers in doing

that.

441. (Chairman.) Then with regard to the remain- ing insurance items there, are those all right—It is difficult to know. For instance, with regard to the rate which is put down for war risks, I should have thought that might be modified a little now.

445. I think that could be modified a great deal ?--- It seems to me the war risk in that quarter of the world is eliminated now, but that would be a question AB for quotation at the moment the ship was moving. regards these other items, the protection and indemnity, risk and insurance of the cargo. I suppose it is Absolutely necessary to have those done?

418. I hope we may get out of th insurance on the cargo. I have been trying to arrange with the con- signees that they should look after their own cargo ?— One difficulty that struck me was to get into touch with all the consignees. I saw in one of these doen. ments a mention of 600 bills of lading; that of course means a very great difficulty in getting the instructions of all the parties.

447. I know. We are trying to get the Australian Government to get the insurance agents over there to get into touch with the consignees na far as they can. and try to arrange that the current policies should cover them ?--In the ordinary way that is what would be arranged. We would ordinarily arrange that the underwriter, who is on the risk, should continue the risk notwithstanding the delay. The difficulty in these cases is, of course, that there are a large number of people concerned, and your inability to get into touch with all the parties.

448. I know. That is the difficulty. Still there is not very much risk about it anyhow?—No.

449. If we can cut that out of course it me as a large saving?--Yes, that is a substantial item. but not so large as the amount in some of the other items, perhaps.

450, Well, it is 2.0007. ?-Yes.

41. Then the insurance on disbursements?-Yos that is insurance which is ordinarily effected to cover the money that has been spent at a port of distress, and unless it is represented by repairs of the ship it is in addition to the ordinary insurance. I suppose anyone arranging this would want to have that covered for their protection-the expense of sending out the crew and all that sort of thing, which would be a total loss if the ship were a total loss.

452. (Mr. Holl.) And a percentage of 1 per cent. in case of loss --The brokerage commission is 1 per cent. in case of loss.

453. (Chairman.) 1 per cent. would have to be paid for collection if she was lost. That covers all that ?--Yes.

454. (Mr. Holl.) Any disbursements?—Yes.

455. (Chairman.) The war risk need not interfere with that probably. Then what do you say with regard to the port charges and steredoring?-On those they seemed to have compared a series of similar ships und then struck an average. It is the only way you But can do it, on the basis of an estimate, I think. my criticism of the whole thing was that if it is possible-of course I do not know whether you can do it or not-it seemed to be desirable in making arrange. vents for these vessels to go on, you should pay the actual expenses incurred.

456. That is exactly what I think --If you can get it on to that footing, it would be better, because there is a danger in any estimate being an over-estimate.

457. Quite so. Of course the trouble in all these cases, where, as is the case here, we have no machinery for doing that work, is to put it into the people's

[Continued.

bands who can do it at a reasonable price. I suppose it is possible to do it like that, is it not?—Well, I should think so. I had rather understood from what I was told by the solicitor that what this Committee wanted was to endeavour to turn the matter over by way of contract to somebody who would take all the risks in connection with the matter, and simply collect from the parties at the destination. It is difficult to do it on that basis, I think, without paying too much.

458. What one can do is this: one can get an estimate in order to know what to ask the consignees to put up as guarantee fund ?--Yes.

459. And then do it on an actual expenses basis plus a certain commission to whoever is looking after it? That I should think would be a fensible thing. The only thing is you cannot ask the consignees-or there would be, at any rate, a practical difficulty in asking the consignees to put up money until you are in a position to give them their cargo. That is, you have to spend your money before you can get it from the consignees.

460. The arrangements we have made with regard to other ships is that they put the money down?-Is that the case where you have such a very large number of consignees?

461. Yes, I think there are a very large number. The underwriters have got in touch with them, and they have put up a guarantee fund on behalf of the consignees If that could be done it would be good. The difficulty which struck me in connection with that was the very large number of people you have to deal with.

462. I know. That is one of the great difficulties? * -In the ordinary case-the cases we are dealing with everyday-when a vessel is in at a port of distress, it might be at Cape Town, by reason of some damage she has sustained, there there is no call on the con. signees of the cargo, although they have to come into contribution, until the vessel gets to her destination, and then against delivery of their cargo they either pay a deposit or give a guarantee. I do not know whether that would be feasible in this case, but it pre- supposes a paymaster of course.

463. It pre-supposes the money being found some- where in the first instance P-Yes.

464. That is where our difficulty lies, entirely. You see the Government will not put up money; there is no call on them to put up money at all. This is entirely a matter for the benefit of the consignees? -Yes.

445. And unless we can get a call of a matter of probably 10,0001. it is rather difficult to make a move? --Yes. The practical difficulty is the number of If you have half-a- people you have to deal with. dozen people-if this cargo had been in half-a-düzen hands-you could have got the parties together and I have a very large got them into agreement at once. number of these cases to deal with-in an entirely different way of course and I usually find that some- one has to take a very large risk where there is a general cargo. A large part of the people do not come forward.

466. Of course you have the security here that the consiguees cannot get their cargoes until they have pail up, and if they do not pay up, of course you have The cargo which you can sell?That is so; and you are protected in the meantime by the insurance.

467. Yes; we are protected in the meantime by the insurance?-Have you any means of knowing whether there are a limited number of people who represent the large proportion of the cargo?

(Chairman.) No.

Case.

(Mr. Tennyson.) We have not found that to be the (Chairman.) They are small consignees. (Witness.) Sometimes the lankers deal with a large proportion of it.

468. (Mr. Tennyson.) We made an attempt to get into touch with the Australian banks bcth here and in Australia, but after a great deal of deliberation in both countries, they said they were unable to do it. They would not undertake any responsibility P-We are dealing with a case at the present time-one of the ships

14 December 1914.]

MINUTES OF EVIDENCE.

Mr. J. LowREY.

which has taken refuge at Las Palmas, There we have a dozen people to deal with. There was a difficulty to do it, but we did it. But what you can do with a dozen people you cannot do with a larger number.

469. (Chairman.) Is this a sort of business you would be prepared to take up? We deal with this kind of thing arising out of casualties in the ordinary way, you know; that is, we represent the underwriters generally, and ure dealing with all kinds and casualties all over the world, and forwarding cargoes of all that kind of thing. But this is unusual, and the question of security comes in.

470. Naturally?—I do not know what steps you have taken in Australia. One does not even know where the cargo is insured. A large part of it is probably insured in this country, or in Australia, which is the same thing --in Australia they are only branches of companies in this country-but there may be a very large part insured in Germany.

471. I know. There probably is?—Yes. 472. (Mr. Tennyson.) Is that probable with the Birkenfels," which sails from the United States ---I should almost think so. The German Marine Insurance Companies have got rather wide ramifications, and they get hold of a good deal of cargo by German steamers. They have got hold of too much by English steamers. They do get hold of a lot of this cargo business.

473. (Chairman.) As I understand it, the Federal Company's position is, that they do the thing and take the risk The only documents I have seen are the two statements of figures and a covering letter from Messrs. Richards, in which they refer in a general way to taking the risks for a lump sum, but there is no indication of what the lump sum is. If they begin with a very full statement of expenses and then have to add on to that very full statement of expenses a considerable sum by way of remuneration for taking the risks, it runs to very large figures The impression I have formed is, that if the Government-the English or the Colonial Goverment—could step into the breach and say: "We will do this thing and charge the parties with the cost of doing it." That would be the cheapest way of doing it.

474. I think it would be, too?—And there in less risk in that contingency of some cantankerous person at the other end saying: “I object to that; I am going to start an action against you."

$75. Of course, you protect yourself in a sense in that way by the Government doing it. They cannot throw stones at them quite so easily?—That is the feeling I have, that they might throw stones at some- one and start proceedings, irritating proceedings, against someone other than the Government, but the Government, acting in its discretion at any time of emergency, would be practically immune, I think. Of course, you could put someone in the position of being contractors for the Government, and make the thing right in that way.

476. Suppose we took it over we could ask the Federal Company to contract for the Government?— Yes.

477. I think that is how it will work out. But however it is done they would have to take it up on a cost basis plus a commission, and the Government taking all the risks. I think that is probably how it would work out P-Yes. Would the Federal Company do it on the basis of actual cost, leaving the question of their remuneration or profit on it to be dealt with afterwards?

(Chairman.) I think they would.

(Mr. Tennyson.) They said they would do it, originally.

(Witness.) I think the important thing is, if you can do it, to begin your calculations at actual cost.

478. (Chairman.) That is what I tried to get by asking them for this estimate, but of course, one cau get at nothing unless you have a detailed estimate of this kind-No.

479, (Mr. Holt.) If the Association took it on you would charge cost price? Yes. Perhaps I ought to explain that we are a body not established for profit. We are really an underwriters body, dealing entirely with the casualty side of their business, and we charge

¡Continued.

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in our accounts to the underwriters the actual cost of whatever we do, whatever we pay to our men and so on, and in addition to that, a fee in proportion to the trouble involved, so as to cover our own working expenses. But we are not a dividend-paying concern or anything of that kind, and we are not getting com- missions on anything. We charge the actual cost for anything we do, and then a fee proportionate to the trouble. I should have thought if you could have got it on some such basis as that with the Federal Cóm- pany, or one of the shipping companies, that would be a satisfactory thing from your point of view,

480. (Chairman.) I think so. Of course one wants to do the thing in the most satisfactory way from the point of view of the cargo owners?—Yes.

481. They have already paid a certain sum for their freight, and a majority have paid their freight in advance, and therefore one does not want to do something which would put the cost up enormously -No.

482. As the thing stands here, with certain deduc- tions which I estimate might be made, I think it will work out to about 11. to 17. 10s. a ton extra. I hope it will come down to not more than 17. 5s., but I cannot Bay for certain.

Would you consider that a high extra charge to put on for this work -l do not think that could be considered to be excessive if the cargo can be got on at that cost. Obviously, you have to write off any beneficial interest there is ou the freight. because cirenmstances have occurred which have rendered that worthless, and anyone coming in now has the disadvantage of starting the ship on from an intermediate port. I should have thought if it could be done at anything like that as the ultimate cost, the parties concerned would feel perfectly satisfied.

483. (Mr. Holt.) If you had a guarantee would you take it on ?It is a little difficult because we are sup. posed by our constitution to act for underwriters and to be an underwriter's body. But the view that I take is that, if we are asked by a Government Department, or a body of representatives of the Government to assist in any matter, we are under an obligation to do it, and we ought to do it. I am anxious that we should not do anything to take it out of somebody else's hands so to speak. We are not looking for business.

484. (Chairman.) I will tell you what you might do, you might feel inclined, if we eventually decide to put this on the footing of out-of-pocket expenses, to look after the business side of it for us ?-I would put myself entirely at your disposal to assist in any way possible. If you found it necessary, perhaps we could arrange to attend to the matter of the carrying forward of the cargo. I am just putting now the difficulties which strike one, because these are questions with which I am dealing every day.

485. You are much more in touch with this sort of thing than we are?-But the thing I was anxious about was this. As soon as it was mentioned to me by the solicitor I said that the thing I was anxious about was that the Colonial Office should if possible get the thing down to bed-rock cost.

486. Very well. We will think it over, and I have no doubt we shall be very glad to have your help?—It there is anything I can do it is a duty, and one would be very pleased indeed to discharge it. If you find a difficulty in making other arrangements, and we could be reasonably protected in doing it as representing the Government, I would see whether we could not do it in that way. My difficulty is, as I have shown you, the large number of people with whom we urg dealing,

487. That is the whole difficulty right through → But that might to some extent be met.

Our agenta in Australia-we have agents all over the world—might possibly be able to get the local underwriters together, and get something in the way of cover that would protect the parties who are arranging the matter. If there is anything that we could do we would be very glad to do it.

488. (Mr. Roper.) 1 do not know if this is a fair question to ask you. In dealing with cases of this sort, you say that over and above the actual cost you charge so much for your expenses; can you give us

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