The Insurance oe Hulls. 
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Secondly, premiums will be charged for these insurances. These premiums writ ’be 
collected by the Associations when issuing their policies, and 80 per cent, of them will 
be accounted for to the State in consideration of its taking 80 per cent, of the risks 
insured under the Club policies. Thirdly, a warranty will have to be inserted that 
ships will not sail when ordered by His Majesty’s Government not to do so. 
30. We propose that the rates of premium for new voyages commencing after the 
outbreak of war shall be fixed by the State, which shall have power to vary them from 
time to time. It will in our opinion he necessary to have different rates of premium for 
different zones, and it may also be found advisable during the course of the war to 
change the rates for certain of these zones. But we are strongly of opinion that the 
different rates should be as few as possible, and also that the changes in these rates 
should be as infrequent as possible. It is admitted that the State is not undertaking 
this business with a view to making a profit out of it, but solely with the object of 
preventing the interruption of our oversea commerce in time of war owing to inability 
to insure against war risks through the usual channels. The rates charged by the 
State must not, therefore, be so low as to compete with the rates that the insurance 
market may be willing to quote, nor must they be so high as to be prohibitive, or 
materially to affect the cost of the food or other merchandise being brought to or carried 
from these shores. At the same time it would be obviously unfair to the State’s 
partners in this business—the individual shipowners in the Clubs—that they should be 
called upon either to pay premiums out of all proportion to the risks of the voyages 
undertaken, or to bear their share of losses in respect of voyages insured at much too 
low a premium. It is for this reason that we recommend that the premiums charged 
should to some extent depend on the risks involved. But we should like to suggest 
that the maximum rate for any voyage should be 5 per cent., and the minimum rate 
1 per cent., and that any rate accepted for a particular voyage shall hold good, provided 
that the ship starts within fourteen days after acceptance of the risk. 
31. It is in our view impossible to lay down beforehand what would be the proper 
premiums to charge for any particular voyages, as these will vary with the enemy we 
are at war with. It is obvious, for example, that if we were at war with an Eastern 
Power the risks of many voyages would be very different to what they would be if we 
were at war with a European Power. 
32. W e suggest that the State should appoint a Board-of Experts to advise on the 
question of rates and variations of premiums, and we are assured that the members of 
Lloyd’s and other institutions would willingly place their ser vices at the disposal of the 
State for this purpose. The State would no doubt have one or two representatives of 
their own on this Board. 
33. We recommend that any shipowner who has insured his vessel under this 
scheme for a certain voyage should have the right to cancel the policy and receive back 
the premium paid, if the voyage in question is prohibited by the Admiralty before 
his vessel has started. Such a proposition as this would not of course be acceptable or 
possible in the case of the insurance market, whose members are engaged in the 
business for the purpose of profit. But, as we have already said, the State is not 
expecting to make a profit out of this business, and it should therefore be quite 
willing to refund the premium, provided it is relieved of the liability. Besides, such 
action on the part of the State might very conceivably be furthering the main object it 
has in view—namely, to prevent the laying up of shipping during war time. For 
instance, a particular voyage is prohibited by the Admiralty, and a shipowner who has 
fixed his vessel for this voyage is able to cancel his contract and enter into another for 
a voyage which is not prohibited. It must surely be in the interests of the community 
at large that he should be able to do this. 
The 'possible Liability of the State for Losses on Voyages commenced after the 
Outbreak of War. 
♦ 
34. We found it impossible to give any estimate of what the State’s losses would 
‘ e JU , r qH' ai( to vessels on voyages current at the outbreak of war. We find it equally 
impossible to give any estimate in regard to voyages commencing after the outbreak of 
war. or the purposes of illustration, we assumed (paragraphs 25 to 27) a loss of 
pei cent on all British vessels at sea or in ports of the enemy at the outbreak 
war, and showed that the value of the vessels so lost would be 4,325,000L The 
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