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U. S. IN INSURANCE BUSINESS WRITES WAR
RISKS ON SHIPPING MAKES MONEY
BY GILSON GARPNER
,'Washington, Aug. 22. The finest
piece of business pulled off in the last
two years was transacted by Uncle
Sam in the line of insurance. Your
uncle never was in the insurance
business before, but when the war
broke out he plunged. Nobody else
wanted to take the risks. Ships were
tied up to the docks at all American
ports because they could not get
anybody to write insurance against
being destroyed by ships of war. Pri
vate capital was timid, so congress
passed an act saying: "Let Uncle
Sam do it"
Five million dollars were handed
Uncle Sam as capital and he was
given a little 12 by 9 room in the
basement of the Treasury bldg. as
his insurance office. With this be
ginning the War Risk Lnsurance bu
reau for so it was called has done
a business which shows on the profit
ledger a figure that would make- a
private business man sit up and take
some considerable notice. First look
at the cost The bureau has been, in
operation two years and the total
cost for salaries, rent, soliciting
(there is none), printing, bookkeep
4ng, rubber stamps, office boy, etc.,
is $30,594. The total amount of in
surance written was $127,408,991.
The total premiums received were
$2,727,091. The losses to date all
paid have been $744,363. There
has been salvage to the amount of
$49,782. The net losses therefore
were $694tf81. The amount on hand
is $2,032,509. That is profit! Over
a million a year; and never touched
his capital.
The risks which were out Aug.
1916, amounted to $11,802,645. From
these there are possible losses, but if
things go as they have been doing
during the past two years chances
are that the losses will be small com
pared to the amount of premiums al
ready accumulated.
There are several obvious advan
tages in a government-run business.
There are no great expenses. The
government does not go out and so
licit insurance, it does not compete
with any other insurance company,
it does not pay fancy salaries to non
working presidents, vice presidents,
stockholders or directors, it does not
pay for show window offices or fancy
furniture, and it pays no profits to
anybody except the people.
Uncle Sam's marine insurance
business will be two years old Sept
2, 1916. When it was created there
was considerable reluctance on part
of the conservative members of con
gress to have the government go into
any kind of business ordinarily con
ducted by private interests. It was
pointed out, however, that private
capital was unwilling to carry on this
business in view of the hazards of
war and their failure to do so had
brought commerce to a standstill.
President Wilson and Sec'y McAdoo
urged upon congress the immediate
enactment of this measure, and this,
together with the bill permitting for- '
eign-built ships to take American
registry, undoubtedly saved, the
country from a serious crisis.
The law was drawn so as to limit
the operation of the bureau to two
years, and" the president was given
power at any time to terminate it.
This was to provide for the resump
tion of this business by private cap
ital "in case the war should Suddenly
end. The provisions removed oppo
sition from private sources and the
government was permitted to go
ahead. Now the shipping and mer-
cantile interests of the country are
very anxious that the government's
insurance bureau shall be continued,
and the house has passed a bill for
the extension of the act of Sept 4,
1914. Among the commercial or
ganizations urging, this extension
are the Chamber of Commerce of the
city of New York, the National For
eign, trade council, the Maritime Ex
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