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Rh of cargo. The marine insurance market continued actively in business, but underwriters had themselves realized that bad news or heavy losses could easily have the result of forcing up rates to levels that might be prohibitive for commerce. The Government office was intended to exercise a steadying influence. It was vital that essential goods should continue to be shipped, and, if the risks were greater than insurance companies or private underwriters could bear, it was for the nation to assume them. The first rate quoted by the Government was £5 5s. %. On Aug. 8 the rate was reduced to £4 4s., on Aug. 18 to £3 3s., and on Sept. 2 to £2 2s.

All the time underwriters in the market continued to write war risks. Their rates of premium were frequently below those of the Government, and there were many risks which the Government office would not accept. For instance, the Government office would not accept lines after a ship had left port. Merchants sometimes found that larger quantities of goods had been shipped than they had anticipated, or that the values were greater. Then insurances were effected in the open market. As Germany was no respecter of the rights of neutrals, insurances were also placed in the market on behalf of steamship owners abroad. Some underwriters of insurance companies and at Lloyd's wrote war risks freely from the outset. They took big risks and made large sums of money. The premium incomes of the insurance companies writing war risks were, in some cases, as much as five times the pre-war standard. This was due not only to the demand for insurance against war perils, but also to the great increase in values of commodities which set in as they became scarce.

The Government office was inaugurated under the auspices of the Board of Trade. The services of a number of leading underwriters were enlisted. On Aug. 5 1914, the office was opened at the Cannon Street hotel and the knowledge that there was a market for the risks undoubtedly had a very reassuring effect. While credit was due to several underwriters who gave their services in the working of this scheme, much of the organization fell upon Mr. W. E. Hargreaves, a leading member of Lloyd's, who worked in close coöperation with the Board of Trade.

There were thus in existence from the very beginning of the war facilities for the insurance of ships and cargoes against all the perils that then had to be faced. There was not the same mobilization of the shipping industry.

Immediately after the declaration of war, freights remained listless. A very few shipowners were able to see what was coming, and chartered neutral steamers for “time” at the low rates then ruling, and, in the event, found the transactions very profitable. Most shipowners, however, did not foresee the extremely heavy demands which would be made by the Government upon the industry for ships for direct war purposes. Cargo steamers were requisitioned to act as colliers to the fleet and were needed to carry supplies to the armies abroad. It was not until the end of 1914 that freight rates began to move upwards. Just before the outbreak of war the grain rate from Argentina which may be regarded as a representative rate, was 12s. 6d. per ton. By the end of the year this freight had advanced to 50s. per ton. It rose again sharply in the autumn of 1915, and its movements indicated the influence of the introduction of the Excess Profits duty. On Sept. 20 of that year, when Mr. McKenna, the then Chancellor of the Exchequer, introduced the tax, the Argentine grain freight stood at 57s. 6d. per ton. Within a month it had risen to 70s., by Nov. 20 it had advanced to 85s., and by Dec. 20 to 120s. In 1916 the rate advanced further. By Jan. 20 of that year it stood at 140s. and by Feb. 20 at 157s. 6d. The rate further advanced in 1916 to 183s. 6d. Similar increases took place in other shipping trades. These increases were clearly due, in the first place, to the diminution in the supply of shipping available for commerce, which, in turn, was caused by the ever-increasing requirements of the Government, and by the destruction of shipping by the enemy, and also to the incidence of the Excess Profits duty. This tax provided the argument that the nation got the benefit of the increases. The Treasury did, but not the country which had to pay for them in the increased cost of imported commodities. It represented a form of taxation, at

the best, imposed without the authority of Parliament, and the surplus remaining to the owners meant higher profits than, in pre-war years, could ever have been thought possible by them.

For nearly two and a half years the real responsibility for the shipping not requisitioned by the Admiralty rested with the Board of Trade, of which Mr. Walter Runciman was then President. The President of the Board of Trade, with his multitudinous duties of endeavouring to watch over the welfare of all industries, was obviously incapable of giving the close attention to shipping which all the circumstances demanded. The public gradually became keenly interested in the rise that was proceeding in freights and was irritated by it. As its interest developed, it grew into indignation. The matter was raised in Parliament, but the Government of the day showed complacency, regarding the movement apparently as inevitable. It is true that on Christmas Eve, 1915, when freights were still climbing, Mr. Arthur Balfour referred in the House of Commons to the “terrible level” of freights which, he admitted, increased the price, both of the necessities of life to the poor, and of many things which were essential to the Government in the proper conduct of the war. Yet the Government, when it was spurred into action, contented itself with adopting further piecemeal measures.

Government Measures.—One successful measure taken at the outset might have formed a model for a broader policy, and, two and a half years later, did so. This was the requisitioning by the Government of the whole of the refrigerated space in the meat-steamers trading between the United Kingdom and Australasia. This transaction was followed, a few weeks afterwards, by the requisitioning of similar space in the steamers trading with S. America. Arrangements were, at the same time, concluded by the Government with the meat companies for a proportion of their weekly production at fixed prices. Thus, not only were there ample supplies secured for the navy and army at reasonable cost, but supplies were available to maintain the civil population.

In the autumn of 1914 owners were asked to keep the Admiralty informed of the movements of their ships. It was a peculiar fact that very little, if any, information was then in the hands of any Government department of the services of the British shipping companies. Such information had to be sought from the companies themselves.

In the summer of 1916 a scheme was instituted, on behalf of the Indian Government, for buying in India, transporting to the United Kingdom and selling there the exportable surplus of the Indian wheat crop and, through the formation of a committee of brokers, the freight rates were kept on a comparatively moderate basis. In the autumn of that year the Imperial Government was forced into further action. A committee was appointed to consider the desirability of particular voyages and a system of licences was introduced. Another committee was formed for the requisitioning of vessels for the transport of foodstuffs, and a third, known as the Port and Transit Executive Committee, was formed to deal with the congestion at the ports of the United Kingdom, which, by then, had become a very serious matter. As from March 1 1916, licenses were required for all ships of over 500 tons gross trading to and from the United Kingdom.

Licences were granted for whole services or particular voyages. The system also enabled discrimination to be exercised between the different ports of the United Kingdom and so it was important in the relief of congestion.

The committee appointed to deal with the requisitioning of ships for foodstuffs followed the policy of directing owners to load their vessels where the need was most urgent and then to leave the owners to accept the full market rates of freight.

The first chairman of the Port and Transit Executive Committee was Lord Inchcape, and the Committee included representatives of the Admiralty, the War Office, shipping, railways and dock authorities. It was subsequently strengthened by the addition of Labour leaders. It owed responsibility, directly, to the Prime Minister and adopted such measures as would tend to relieve congestion at the ports. Its task was a formidable one and, while the Committee was able to bring about certain reforms, it could not entirely remove the troubles. These actually seemed to be