Page:Encyclopædia Britannica, Ninth Edition, v. 13.djvu/179

FIRE.] INSURANCE heighten the risk by lessening the motives to carefulness. It is difficult to form an estimate of the average rate of premium paid for property in the United Kingdom, but it is probably not much above or below 4s. or -2 per cent, yearly. When insurance companies were first established, and for a long time afterwards, they undertook not only to reimburse the insured for losses, but to extinguish fires. In one of the earliest prospectuses put forth (in 1684), there is the promise that " watermen and other labourers are to be employed at the charge of the undertakers to assist at the quenching of fires." A writer in 1690, describing the ingenious and useful invention of a fire insurance office, says, " They have a great many servants in livery with badges, who are watermen, and other lusty persons dwelling in several parts of the city, who are always to be ready when any sudden fires happen, which they are very laborious in and dexterous at quenching "; and De Foe, in an essay published in 1697, refers to the same subject. In 1708 when the Sun Fire Office was first projected, it was proposed that all persons insured with it should have a mark representing the sun nailed up against their houses, that the men whom it employed to extinguish fires and save property might direct their efforts specially for the benefit of the houses so distinguished. Marks of this sort were afterwards generally adopted by the offices, and are often to be seen even at the present day, though they no longer serve their original purpose. For more than a century and a half the insurance offices provided and kept up fire-engines at their own expense, not only in London but in many provincial towns, where frequently no other means of extinguishing fires were available. At first each office provided its own engine, and much rivalry prevailed among the several brigades ; but in London ultimately the offices combined to support in common a very effective and very costly fire brigade. This arrange ment, however, came to be regarded as objectionable from public points of view, as it had long been distasteful to the offices themselves; and in 1866 the offices handed over their whole establishment to the Metropolitan Board of Works, by whom it has been greatly enlarged and extended, the cost being provided for partly by a contribu tion from the offices, partly out of the Consolidated Fund, and partly by the rates. The views of the insurance offices on this subject have undergone a material change, and they have ceased to regard it as any part of their duty to extinguish fires, or to bear the cost of extinguishing them. That ought to be undertaken by the public through municipal or other local authorities, and it is understood that the law regards it as their duty to do so. Parliament is always ready to confer the necessary power of assessment ; but there is a disposi tion on the part of municipal bodies to exact from the insurance offices, directly or indirectly, as much of the expense as they can. Considerable contributions are in this way levied in Liverpool, Manchester, Glasgow, and other towns, but the system is eminently to the disadvan tage of the public. Whatever the offices are compelled to pay forms a portion of their general expenditure, which they must recover from the public, at least the insuring part of it, in the form of premiums. The amount would be more equitably levied by means of a general assessment, and would be more likely to be advantageously expended. The business of fire insurance is to meet the losses which happen by fire, not to prevent them ; if losses are heavy, the rates of premium must follow ; if by care and well- organized appliances losses are diminished, the competition among the offices will inevitably reduce the rates of premium. In other words, if the public themselves bear the cost of these appliances, they obtain the benefit of it in a reduced cost of insurance ; if they transfer the burden to the offices, they have in the end to bear it themselves in the form of increased insurance rates. If there were, as there ought to be, an efficient fire brigade in every town and village, it is obvious that the insurance offices could neither bear the cost nor undertake the care of them, and the best arrangement would be that they should be wholly under local management and wholly at local expense. But, while it is the business of the public authorities to extinguish fires, the insurance offices regard it as within their province to promote in other ways the safety of the property endangered, and accordingly in London, Liver pool, Glasgow, and other cities they have established at their own expense salvage corps, which act in alliance with the fire brigades, but whose special duty it is, not so much to quench a fire, as to diminish as far as they can the damage which may be occasioned to the property whether by the fire or by the water used to extinguish it. It only remains to add, with reference to fire insurance in the United Kingdom, that public attention has from time to time been directed to the serious question of how far the crime of arson may be regarded as a consequence of the in surance system, and what can be done to prevent it. There can be no doubt that wilful fire-raising, with a view to de fraud insurance offices, is not only a very common offence, but is probably on the increase. In 1867 the subject was inquired into by a committee of the House of Commons, and evidence was submitted to show that between 1852 and 1866 the proportion of fires which were suspicious, doubtful, and unaccounted for had gradually increased from 34| to 52^ per cent., while well-informed persons testified that the number of fires in insured property is greater in proportion than in uninsured. There is a general agreement that in the interests of the public the origin of all fires should be made the subject of organized inquiry, but there is a difference of opinion as to the proper machinery and as to the incidence of the expense. Of existing functionaries the coroner in England and the procurator-fiscal in Scotland seem the natural persons to conduct the needful investigations, but in neither case is the subject free from difficulties, which in England are enhanced by the want of a public prosecutor. Several attempts have been made to legislate on the subject, but hitherto without success, nor is the public feeling suffi ciently strong to give the required impulse. Other crimes than arson thrust themselves on public notice, and all men see the necessity for inquiry and detection. This crime, when successful, too often destroys, not merely the evidence which would go to prove it, but the very circumstances which would indicate that a crime has been committed. The immediate sufferer, too, is probably some wealthy insurance company, whose case naturally excites little sympathy ; it is seldom prudent and sometimes scarcely safe for the sufferer to insist on exceptional inquiries, and there is a general disposition rather to put up with a loss than to raise disagreeable questions likely to lead to nothing. But, as the honest portion of the community pay for all dishonest claims, it may be hoped that a due inquiry into the causes of fires will some day come to be regarded as a matter of grave public interest. The general principles and practice of fire insurance are, in their main features, the same in most parts of the world. In the United States the business has been pursued with characteristic energy, and with some peculiarities of law and practice. As already stated, the earliest American fire insurance company was organized in 1752, and its policies during the first year covered a sum of $108,360 at an average rate of 1 17 per cent. At the present time there are within the State of New York alone upwards of eighty fire offices, having assets amounting to about 54 millions