The Insurance or Hulls. 
j 
Mutual Associations who appeared before us—that as the State, under the arrange 
ments suggested, would be taking such a large proportion of the risks after the 
outbreak of a war in which we were a belligerent, the movements of all ships thus 
insured should be subject to the control of the Admiralty. It was therefore agreed 
that words should be introduced into the new policies providing a warranty that 
after the outbreak of war every ship shall, so far as possible, carry out any orders 
that the Admiralty may give in regard to their routes, ports of call, and stoppages. 
If, however, they fail to carry out these orders, they will not lose the benefit of 
insurance, provided the assured can satisfy the Committee of the Club that the breach 
of orders happened without the fault or privity of the assured and of the owners and of 
the managers of the ship. But, even then, we think the shipowner should be liable to 
some penalty, and we suggest that the State should require that the rules of every 
approved Club contain provision for an appropriate penalty. This might take the form 
of the levy of an extra premium payable by the Member to the Club on the insured 
value of the ship in which the breach has taken place, or it might take the form of a 
deduction in the settlement of a claim of an amount to be fixed, within reasonable 
limits, by the Committee of the Club, or, in extreme cases, the Committee might have 
the power of expelling a Member from the Club. 
It would not be possible for the Club to impose penalties upon the Master of the 
ship who deliberately disobeys the orders of the Admiralty, but we are of opinion that 
this might be made an offence with an appropriate penalty, under the Act sanctioning 
the scheme. 
Shipowners' Contributions. 
21. We have already mentioned the reasons given us why shipowners cannot pay 
a premium to cover the risks incident to the completion of voyages current when war 
breaks out. Nor do we see how the collection of such a premium would be possi e, 
if our suggestion is adopted that the standard form of annual policy issued by ie 
Clubs should be extended to cover the additional risks involved. It would, of course, 
be possible to deduct such premiums from the amount paid in settlement of a oss , 
but it would be extremely difficult, if not impossible, to collect the premiums m tne 
case of those vessels (and we hope that they would form a very large proportion of t e 
total) which arrived safely at their destination. . . , , 
22. It may then be asked how we reconcile this absence of premium wi 16 
conditions laid down in our terms of reference “that any scheme prepared must re on 
“the basis of reasonable contributions being paid by the owners of sups • • • • 
“towards the cost of insurance.” Our answer is in the first place that we are on y 
now dealing with one portion of the scheme, viz., that relating to ships afloat at re 
time of the outbreak of war. In the case of voyages begun after the outbreak o 
war we recommend the charge of premiums (see below, paragraph 29). in ie secon 
place we consider that the fact that the Clubs, and through them t e s lpowners, 
retain 20 per cent, of the risks involved, and will pay the whole cost of administration 
may be looked upon as a “reasonable contribution towards the cost of insurance 
may be added that the managers of the Clubs whom we consulted assure us 1a i 
arrangement for the completion of current voyages without payment o piemium 
would probably be necessary as an inducement to the members of the u rs to nccep 
our proposals for covering the insurance of vessels starting after the ou >iea o vuu - 
An offer; made whilst the area which will be affected by our next war 1S a nl ‘ 
of pure coni ecture, to cover the King’s enemy risks incident to the comp e ion 
current voyages, is apparently the only inducement that can be offere °S e 
members of the Club to agree to share the risks of those members w rose v y & 
will be specially affected by the war. 
The possible Liability of the State for Losses on Voyages current at the 
Outbreak of War. 
1 23. It may be pertinent here to try and form some rough estimate of what the 
sses on current voyages may be. Sir Henry Hozier submitted to Mr. Austen 
lam er <ain s Committee a statement showing the net registered tonnage and position 
° a ocean-going British steamers on the 26th March, 1903. Taking this statement 
as d asis, and applying it to the number and net registered tonnage of British 
eameis employed in foreign trade in voyages to and from ports in the United