V. MARINE BUSINESS. TN" THE meanwhile, the business of the Company had grown rapidly, unaffected by the want of early suc- cess in obtaining a charter. The stated committees of the Board sat regularly to pass upon all applications. Mr. Hazard had opened the books and wrote the first policies, and in a few days a clerk was voted him, Mr. William Coulthard being appointed at five hundred dollars per annum. A porter was engaged, John Valentine Cline, for " £6 per month and an hint of a douceur at Christ- mas." And before the month was out another clerk, John Cook, was appointed. In the following March, Samuel Young was appointed Surveyor. The first policy was issued to Convno'ham, l^esbitt & j. «, ' */ c-* / Co., on the ship America, James Ewing, Master, from Philadelphia to Londonderry, for $5,333.33, at 2^ per cent.; and the second on goods in same ship, for $3,200. Policy Xo. 3 was to John Leamy on goods on board the brig Margarita, Anthony Arnaud, Master, from Philadelphia to Xew Orleans, with liberty to touch aud trade at Cape Francois, for i;?l,500, at 3 per cent. Policy ]STo. 10 on tlic 15th was to the President, Directors and Company of the Bank of the United States, on cash laden after the 10th insfc. on board any vessel, any Master, from Charleston, 48 A HISTORY OF THE South Carolina to Philadelphia or :N"ew York, for $20,000, at 1 per cent. The form of policy employed was that in use by the local underwriters at the time, Mr. Hazard writing at the head in the usual blank, the name of the underwriter: " The Afsurance Company of North America." The Committee on Policy reported later a recommendation to delay printing their own until the result was known of their application for a charter. The first six months showed the premiums received $62,114.33, and premiums determined $8,910.19. The first loss was the ship In- dustry^ amounting to $4,000, which was paid 10 June, and a few days later their second claim was met, $515 74, on the sloop Betsey. The interest account amounted to $3,276.20, and early in July the first dividend was declared and paid to stockholders, being six per cent. on the first and second instalments of the paid capital, and which amounted to $7,975.28. The second six months' premium receipts were $151,350.98, and the determined premiums, $69,184.21; interest was $3,574.41, and the losses amounted to $19,474.64. The second dividend was realized to the stockholders in January, 1794, being six per cent. on the first, second and third instalments of the paid capital, amounting to $14,400. With these satisfactory returns to the stockholders, the motive for the change of base of the opponents of the company's incorporation can be seen; and as the profits of an organized business of under- writing were so manifest, these opponents were now only too eager to share in them, and instead of thwarting the INSURANCE COMPANY OF NORTH AMERICA. 49 desired incorporation, only asked that they also might he incorporated. A form of marine policy for their owr- use appears to have been considered on 27 March, 1793, and was submitted to Messrs. Jared Ingersoll and William Tilghman, two gentlemen learned in the law, for their opinion whether it would secure the property of the individual members (other than their interest in the company's funds) from legal claims for losses; but conclusions on this do not appear to have been reached until after incorporation, as a form for the company's policy was only -finally agreed to on 9 May, 1794, and at the same meeting "the Draft of a Device for Seal, presented by Mr. Blodget, was approved of." This seal remains unchanged to this time. It had not been long before the brokers found their clients preferred the solidity of a wealthy association preferable to the credit of an individual underwriter, and brought their applications to the company claiming a commission thereon; but the board on 27 March, 1793, declined to "write for the private offices and allow the brokers two and a half per cent., they guarantying the premiums"; and realizing its strength, made public advertisement of their rules, and invited orders to be addressed directly to the company. The following were adopted at the same meeting when the form of policy was adopted, as the "rules to be observed in transacting business with the Insurance Company of yorth America'1': "1. All orders for Insurance must be given in writing, signed by the Applicant; and as minute a Description of the 50 A HISTORY OF THE Vessel is expected as the person ordering the Insurance can give, respecting her Age, Build, how found and fitted, and whether double or single decked. "2. All Policies will be ready for Delivery in Twenty-four hours after the order for Insurance is accepted at the office, and the Policy must be taken up in Ten Days. "3. Notes with an approved Endorser for all Premiums must be given in Ten Days, payable as follows: "For American and West Indian Bisques, in Three Months after the Date of Policy. " For European Risques, in Six Months. " For Indian and China Risques, in Twelve Months. " For Risques by the Year, in Eight Months. "For Risques for any lesser Time, in Three Months. "4. Losses will be paid in Ten Days after Proof and Adjustment; but if the Note given for the Premium shall not have become due within that Time, the amount of it shall nevertheless be deducted from the Loss to be paid." Their advertisement gave "notice to all whom it may concern, that agreeably to "the above rules they are ready to receive all orders for Insurance which may be addressed to them, accompanied with Directions to some responsible House in Philadelphia, for the payment of the Premiums within the time limited. In case the Risques offered shall be approved, the Insurance shall be immediately effected, otherwise notice shall be given either by answer to the Person applying, or his agent in Philadelphia, as may be ordered." By the Prefident and Directors ofthelnfurance Company of North America. INSURANCE COMPANY OF NORTH AMERICA. 51 On 8 July it was "Agreed, That Notes be received for Premiums to New Orleans, payable in Four and an half months." On 20 January, 1794, finding that policies were not always paid for promptly, the board ordered "in order the more certainly to enforce the payment of Premiums in due Season, no Policy be subscribed by the President until the Premium is paid, or a note given for the same in the accustomed manner." And with the precision of banking rules on discounts, they ordered "That all Inquiries for In- surances left at this office before 12 o'clock in the mornino- 0 shall be answered at or before three o'clock on the same Day, and all Inquiries left after Three o'clock and before Six o'clock, shall receive an answer at or before Ten o'clock on the succeeding Day." The matter of office hours was considered on 15 January, 1795, and it was resolved, "That the office shall be open for the Transaction of Business from Nine O'clock in the morning to Two in the Afternoon; and from Four in the Afternoon til Eight in the Evening. That the attendance of the Secretary be required from Ten to Two, and from Four to Eight in the afternoon. That it shall be the Duty of the President to attend this office every Day from Eleven O'clock in the Forenoon until Two o'clock in the afternoon, and from Five o'clock in the afternoon until Eight o'clock. And that it shall be the Duty of the Committee of the Week to attend every day from Twelve o'clock until Two in the afternoon, and from Six till Eight o'clock." And in regard to applications for insurance the rules of the previous January were affirmed. 52 A HISTORY OF THE On 2 March, 1795, "on the question shall so large a Sum as $35,000 be taken in future on "Risques of the first Dignity, it was unanimously agreed in the affirmative"; showing the extent to which the policies of the company were sought by the large shippers of the country. On 8 May, 1809, the lines had been increased to $40,000. The difficulty of investing the accumulating funds of the company led to the question of loaning on Respondentia, which was reported favorably upon by a committee on 17 November, 1794; and on 16 March following, on receipt of an application for such a loan from Captain Tingey, the board decided unanimously to make such loans, and on the 30th "it was agreed that five thousand dollars should be lent to Capt. Tingey on Respondentia, at Eighteen Months' credit, at twenty-five per cent. (including premium of in- surance) for the eighteen months." A form for Responden- tia Bond was approved 13 April. On 21 May the President and Committee of the Week were authorized "to write open policies in cases in which they may judge it expedient, and at such a premium as they shall think adequate to the risk." By the minutes of 8 May, 1809, the loans on Respondentia were limited to $20,000. The amount of this business was not large in the course of years, and proved unprofitable in the aggregate, and was finally declined altogether. The success of the company during its early years was certainly remarkable considering the period, for its begin- ning was during the time of bitter warfare between Great Britain and France, when both parties made free on the high seas with any property afloat upon which they could make any claim. "Our vessels began to be boarded and captured INSURANCE COMPANY OF NORTH AMERICA. 53 by the various parties engaged in the great European struggle, and most of all by France, who mindless of her Treaty of Alliance with us [6 February, 1778], as well as of the Treaty of Amity and Commerce, which was con- cluded upon the same da}7, entered upon a systematic course of capture and confiscation." * General Washington's pro- clamation of neutrality of 22 April, 1793, was the inciting cause to the depredations of the French on our commerce as they claimed our neutrality was in violation of the treaty of 1778. So severe losses had already been experienced by our shippers, that in less than a year, on 27 August, 1793, they were invited by the Secretary of State, to throw their claims in the hands of the government, and trust to it for redress. The drain on the company's resources became heavy from these causes, yet they continued to take the increased hazards, hoping an end might be reached to the struggle. In those days of slow communications, they were earning heavy losses by both British and French cruisers, and many months would elapse before the tidino-s reached the office, and in the meanwhile they were issuing policies which in turn might realize to them accumulating losses. The alarm of the board first finds expression on 12 October, 1795, when it was "resolved, that Messrs. Ealston, Fry and Smith wait on the Secretary of State and inform him that a Report, prevails that the French cruisers have orders to Capture all vessels bound to British Ports and request him to apply to the French minister to know whether this is so or not." On the 29 February following, * Address prepared by .Messrs. Wallis, Macaleater and Hilton by order of the Convention of Claimants, held in New York, 13 October, 1856. 54 A HISTORY OF THE Messrs. Ball, Fry and Ralston were appointed a "Com- mittee to arrange and state the claims of this company against the Government of Great Britain, and the Captor or others, into whose hands the Property may have came, in cases of Capture and Depredation in the American Trade, so far as concerns this Company, to consult Counsel thereon if they find it expedient, and devise the proper mode of prosecuting our claims arising thereon, either through the Intervention of the Government of the United States or otherwise." On 16 April a committee was appointed to confer with the Insurance Company of the State of Pennsylvania and the private underwriters who had appointed committees to meet and consider what steps are necessary to be taken in the present state of affairs; and at a meeting the following day the board adopted the recommendation of the conference to- decline underwriting any marine risk, peace risks excepted, "conditioned that it be adopted by the other Insurers in Philadelphia." But this action was repealed on 12 September, as the recom- mendation had not been carried into execution at the other offices. On 8 October another committee was raised to "wait on the Secretary of State to obtain such further information as he can furnish" on the order given by France to capture neutral vessels in order to distress the commerce of Great Britain, tidings of which had reached them "through the Newspapers and in private letters from England." On 20 January, 1797, a committee was appointed to form some rules for the Rates of Premiums in view of "the late alarming intelligence concerning Cap- tors and Seizures of American Vessels by French Cruizers." INSURANCE COMPANY OF NORTH AMERICA. 55 On 19 June, 1798, it was "agreed not to insure to French ports unless with a warranty against capture and seizure by the French." The United States sought in various ways redress from the French government for these spoliations by the latter upon the commerce of its people; but the French held the United States to the stipulation of the treaty of 1778, in its eleventh article, that the latter should guaranty to the for- mer forever, against all other powers, its then possessions in America. This the United States could not now do without certain collision with Great Britain, and this the country was not in a condition to encounter. France claimed that the United States had proved faithless herein, and pressed the claim against any redress for the spoliations. The United States had in various ways sought release from this guaranty, even offering a money equivalent for it, but France would not forego the letter of the article. Finally, agreement was reached by the convention of 30 September, 1800, the result of which was the two nations renounced their mutual pretensions, our government surrendering the claims of her citizens in consideration of being released by France from her guaranty. " Thus did our government, after long years of negotiation and angry contention on behalf of the claimants, after having instructed its ministers strenuously to insist upon indemnity for their wrongs, and after having secured every acknowledgment of its justice from tlie nation by whom it was due—by one act overthrow the whole train which was in operation for their relief— negotiate away their interests to secure public benefit, and leave them helpless and defenceless." 56 A HISTORY OF THE The claimants became alarmed at this turn of affairs and promptly took steps looking to the United States for redress. On 12 February, 1801, the directors "ordered that an account of all illegal Captures made by the British and French be made out for the purpose of representing the same to the Government of the United States, and that the President, if he should find it necessary, be empowered to employ a person for that purpose." On 6 March scales of rates were adopted to meet these piratical hazards, as such in fact they were, for the convention of September, 1800, only referred to past and brought no exemption from future spoliations'; after an effort to agree upon some uniform action with the other local underwriters had failed, the only point of agreement between them being " that the risque of seizure in Port ought not to be borne by the Assurers." On 26 May a committee reported to the board that "the number and amount of the Companies' claims on the British Government for Spoliations on Property which they think that nation ought to refund is about $981,355; other losses occasioned to this office by Capture of the British and for which there is no expectation of reimbursement is about $78,800. With respect to the Captures made by the French, your Committee can only state that they amount to about $1,952,730, and that they deem it much the Interest of the Company to have them correctly arranged with all their Proofs as soon as possible, in order to demand resti- tution when such restitution may be expected." On 14 December, 1802, the president reports his correspondence with Mr. Hollins, president of the Maryland Insurance Company, relating to the employment of "able Counsel to
INSURANCE COMPANY OF NORTH AMERICA. 57 write in support of the claim which the sufferers by French spoliations have upon tine G-overnment of the United States in consequence of the late Treaty with France which pro- hibits them from claiming from the French Government." On 21 May following, the president was authorized to confer with the presidents of other insurance companies, as well as with private claimants, to take order respecting applications to Congress on account of the. spoliations. But it is not needed to recite the various minutes of the board in this grievance against the rational government, nor the various steps taken by counsel and in memorial, to seek redress from vear to vear, and how twice on the eve / V ' of success, a presidential veto. on ba-seless arguments, had thrown the claimants back. Between the years 1827 and 1846, twenty-two reports of committees, all in favor of the claimants had been made in the two houses of Congress, each by a bill, and for five millions dollars indemnity. In the first session of the Congress of 1840, both houses united on a bill, which was vetoed by President Polk on 10 August, then on the eve of his war with Mexico. The claimants, however, returned to the matter in the following session, and in January, 1855, both houses united on the bill, which was in its turn vetoed by President Pierce on 17 February. Each of the following Congresses witnessed the introduction of measures of restoration, but tlie war of 1861 to 1865 prevented further consideration of the matter, until in tlic XLV1I Congress a bill was introduced by Senator Hoar, providing for a reference of these to the Court of Claims, which passed 15 December, 1882, but did not reach consideration in the House. In the following 58 A HISTORY OF THE Congress the same bill was presented by Senator Frye and passed the Senate, and reaching its passage in the House 14 January, 1885, it met the approval of President Arthur. The Directors can now look forward to a period when the corporation can secure some restitution for the heavy losses of its early years. The claims for losses by British cruisers were met under Mr. Jay's treaty, which was ratified in 1796, by which that government "paid to the merchants of the United States for captured vessels an indemnity amounting to $11,650,000." The losses by Spanish cruisers, and those for which Spain was responsible in harboring the prizes taken by the French, were eventually settled by the treaty which secured 7 %/ / */ to us the possession of Florida; and the directors in July, 1824, were enabled from this payment to make a dividend of sixty per cent. to their stockholders; dividing $300,000, when their surplus did not exceed $20,000. The marine business of the Company exhibited some remarkable fluctuations; and as the directors of those early days had not learned the lesson of a solid surplus, they divided the profits to the stockholders, not forecasting the storms which would come, and their want of thought in this respect, more than once brought the corporation to the brink of ruin. The marine premiums written to the close of the year 1793 amounted to $213,465.31, and the losses paid, to $38,484.16. In 1794 the premiums were $290,656.83, and they increased to $1,304,208.91 in 1798, when they began to decrease, and in 1802 they were but $103,902.26. This first decade showed premiums written $6,037,456.71, and losses paid, $5,500,887.57. Tlie premiums of 1802 were INSURANCE COMPANY OF NORTH AMERICA. 59 trebled by 1805, and again in 1806; but in 1808 the premiums were but $5,843.55, and the losses, $108,568.93; and the years 1809 to 1812 inclusive, showed an annual average of but $45,449. This second decade g-ave premiums $1,364,637.48, and losses paid, $1,583,836.47. It will be seen further on how different were the results during the same periods of the fire business, though in magnitude of premiums it seemed but a modest department of the com- pany. From 1813 to 1822 inclusive, the third decade, the premiums written were but $276,764.30, while the losses paid were $335,554.06. The succeeding decade, 1823 to 1832 was yet more discouraging, for the premiums were $160,138.70, and losses $227,954.57. The years 1833 to 1842 noted the upward tendency, the premiums being $428,584.16, and the losses only $358,332.78. The decade succeeding, gave the premium account, $2,855,189.98, and the losses, $2,153,679.96. The company began its operations at a period in the commerce of Philadelphia when its supremacy was acknowl- edged, and when its capitalists and shippers had their ventures in all quarters of the globe. This sceptre gradually passed from Philadelphia to its older neighbor ~New York, and with the enlarging number of companies at home and in other cities, and a reduction of rates, the lessening business of the company can be explained. Of their active associates in the business in the city during the first third of a century of their existence, the Phoenix (1803), Philadelphia (1804), Delaware (1804), Marine (1809), United States (1810) and Atlantic (1825), each in its time closed its business, evidencing the severe trials which marine underwriting in 60 A HISTORY OF THE particular underwent at that period; and the State of Penn- sylvania and the Union (1804) alone survive to testify to the struggles of those days. Of the J^ew York companies who were contemporary with these, the Knickerbocker, as the successor of the old Mutual Assurance Company (1787) and the Eagle (1806) alone survive, and the remainder, namely, the ^N"ew York (1796), Associated Underwriters (1797), United (1797), Columbian (1801),Washington Mutual (1802), Marine (1802), Commercial (1804), Phoenix (1807), Firemen's (1810), Ocean (1810), have all passed away. The oldest company in ~New York issuing marine policies is the Sun Mutual, organized in 1841. The oldest company in Boston so writing is the American, organized in 1818.