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SIR HUBERT LLEWELLYN SMITH thought so in some cases. If, however, they could insure their vessels for less, they would naturally not come to the Government. Some much higher rates were stated to have been paid in the Russo- Japanese war in the evidence tendered to Mr. Austen Chamberlain's Committee (Report, paragraph 73). These were of course mostly vessels carrying contraband to ports which were practically blockaded. By retaining the power to refuse insurance on any route barred by the Admiralty risks which largely exceeded 10 per cent, could be eliminated.

MR. RUNCIMAN said that so far as he understood it the scheme now put forward by Sir Hubert Llewellyn Smith differed very little from that put forward by Mr. Wilding in his evidence before the Royal Commission on food supplies in time of war (1905). This scheme was brought to the notice of Mr. Austen Chamberlain's Committee (Report, paragraph 118), but met with the same fate as all the others. Its effect would be that all the worst risks would be brought to the State and the safe ones to the underwriters. He thought that the proposal that the State should take the marine risks as well as the war risks was very dangerous. Marine insurance was a very delicate business. Valuation was very difficult and highly technical, and the danger of fraud was very great. Underwriters, with all their experience, had never yet been able to stop it, and their only remedy in practice was to decline to do business with anyone whom they were not sure about. The State could not do work of this kind. Again, this scheme did not meet the requirements of those Companies or Associations who undertook their own insurance. Since 1908 a large mutual insurance association in the north of England had undertaken to safeguard its members permanently against war risks. The vessels therein included were only covered against an outbreak of war taking place after they had sailed. Further than that it was impossible to go, as the Association was unable to devise any adequate safeguard against abuse.

He understood that the view of the Admiralty that war risks would be uninsurable applied only on the outbreak of war.

MR. CHURCHILL dissented.

MR. RUNCIMAN, continuing, said that at any rate it was admitted that after the actual outbreak of war the reality of the risk would very soon be ascertainable.

MR. CHURCHILL said that the danger would of course be greatest at the outset, and would diminish as the war went on and the enemy's ships were captured or destroyed.

MR. RUNCIMAN said that they could agree that ultimately the extent of the war risk could be measured in terms of the premium, and that this might even be a matter of a few weeks. If vessels would not put to sea during this period, there might possibly be a serious effect on the export trade. But it would not affect the import trade for a considerable time, as the homeward bound vessels. would be already on their way, and as no one anticipated that the actual number of captures would be large, a steady stream of arrivals might be anticipated for some weeks, by which time panic would have subsided. The mail steamers might fly for safety to neutral ports, but nine-tenths of the British mercantile marine consisted of tramp steamers. It was these vessels, and not the big liners, which brought the cargoes of foodstuffs and raw materials. He doubted very much the tramp vessels taking refuge in neutral ports, and he thought that they would carry on their trade if freights were remunerative. The rise in prices was not likely to be anything like so great as was anticipated. A rate of insurance of 10 per cent. for war risks did not mean so much as a rise of ld. on the 4-lb. loaf, and that was a variation which occurred in normal circumstances. He entirely agreed with the conclusions of Mr. Austen Chamberlain's Committee (paragraph 213), that "these apprehensions, and the efficacy of the suggested remedy, are exaggerated." And, again (paragraph 216), that “such a guarantee

could not of itself secure the

"safe arrival of ships and cargoes. That is the work of the Navy, and the Navy "alone, and it is important that nothing should be allowed to obscure this vital

portion of its duty.”

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• Mr. Runciman desires it to be placed on record that the note taken of what he said on this subject should not be understood to be a full statement of all or nearly all the arguments against the proposals of the Board of Trade and the Admiralty.-M. P. A. H.

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