that moment its circumstances are constantly changing in directions then
unforeseen, and the expectation that such changes will occur is the
motive for insuring. To treat them singly as unchanged in value at any
later time is as illogical as it would be after some have matured. The
actual value of any one risk borne by a company is indeterminate. It may
become a claim to-morrow, or not for a generation to come. In the former
case the company must now hold funds to pay in full; in the latter, the
future premiums will perhaps more than suffice, so that no present
reserve is needed. An entire reserve for the whole body of risks is
essential, and its amount is definite, upon the reasonable assumption
that the general average remains undisturbed by individual changes. A
distinct reserve for a single policy is inconceivable. To recognize it
is to deny the first principle of insurance. The average amount by which
the reserve of a company must be increased, because of the existence of
policies of a given class, is to the actuary an important fact, and is
commonly accepted as his best guide in the distribution of surplus. But
a popular theory has seized upon the assignment of this average sum to
each policy, in the technical shorthand of the actuary, and holds that
it is in each case the special property of the owner of that policy. The
practical consequences are serious when, as often, many of the insured
cease to pay premiums, and each demands the amount of the supposed
individual reserve. His right to claim it is countenanced by a
widespread public opinion, which has inspired statutes in Massachusetts
and some other states, requiring companies to redeem all policies
lapsing after the first two or three years of insurance at a price
founded on the technical reserve. Yet, in by far the majority of
instances, the lapse of policies is of itself a loss to the company. It
is deprived of business secured at much expense before it has derived
any of the advantage expected from the accession. It is compelled to pay
numbers of its profitable contributors for ceasing to contribute. The
burden falls in a mutual company upon the insured who fulfil their
contracts. Such laws favour those who withdraw after few payments at the
cost of those who maintain their insurance to the end, or for many
years. The American companies formerly yielded to the pressure of a
mistaken public sentiment, and competed for favour by promising
excessive values in case of surrender.[2] Similar conditions exist in
Switzerland, Austria, and other countries in which the business is
minutely regulated by government bureaus. But in Great Britain the
companies are largely free from such influences, while an open market
exists for policies which have a commercial value, with results on the
whole more satisfactory to all parties interested than any rule of
compulsory purchase which could be enforced on the companies.

  Industrial Insurance.

A special form of life insurance, which has wonderfully developed, is
the family insurance of the labouring people by the so-called industrial
companies. Until recently this class of people had no satisfactory share
in the benefits of insurance, although the friendly societies in Great
Britain, and many forms of beneficial associations in the United States,
were attempts, often in part successful, to provide for special wants,
mainly for maintenance of the sick and for the costs of burial. Most of
them, however, lacked a scientific basis and an efficient and permanent
organization, while thousands of them were grossly mismanaged. In
Germany an elaborate scheme of compulsory insurance for labourers was
established by a law of the empire in 1883, and extended in subsequent
years; and similar legislation has been enacted in several other
countries, most thoroughly in Switzerland and Austria. The ultimate
value of this great social experiment cannot yet be determined. That it
relieves much want and does a great service in preventing pauperism is
not disputed; but that it also undermines the independent spirit of the
people, and that it imposes a burden upon the national industry, which
not only hampers it in the world's competition, but reacts with special
injury upon the class it aims to benefit, are criticisms not
satisfactorily answered. No scheme of government insurance, certainly,
is adapted to a people impatient of paternalism in its rulers and
thoroughly habituated to voluntary association for all common interests.
The solution of the great problem, how to apply the insurance principle
to the most pressing needs for protection of the class supported by the
wages of labour, is now sought in Great Britain and America mainly in
the universal offer to them of industrial insurance. The Prudential
Assurance Company of London was the pioneer in this work, beginning it
experimentally in 1848, but gradually adapting its methods to the new
field, until a generation later they showed themselves so efficient that
an extraordinary growth resulted, and has continued without
interruption. This company and others upon a similar plan insure whole
households together for burial expenses in case of death, and a small
provision for dependants or for old age, charging as premiums small
fractions of a day's wages, which must be collected weekly. The great
difficulties encountered were the cost of small and frequent
collections, and the high rate of mortality, which is from 40 to 90%
more than that in the experience of the older companies. This high
death-rate is due not so much to the fact that life is shorter in the
labouring class as to the lack of efficient medical selection, which
would be too costly. The premiums, at best, must be made higher than in
offices insuring for annual payments, but the demand for insurance
extended as rapidly as the system could be explained, and the Prudential
is said to have now in force some 12,000,000 policies, with an average
premium of twopence a week, secured by an accumulated insurance fund of
£17,000,000. It has superseded a host of petty assessment societies of
various classes without scientific basis or business responsibility,
which deluded and disappointed the poor. The British government in 1864
undertook to administer a plan for the insurance of working men, but in
thirty years accomplished less than the work of one private company in a
year. In addition to the many insurance companies which transact
industrial business in the United Kingdom, a large number of friendly
societies have adopted similar plans.

  The system of industrial insurance was introduced into the United
  States in 1876. Its growth, though much more rapid than in Great
  Britain, was at first slow compared with that of later years. The
  following table, condensed from the Insurance Year-Book for 1900, is
  an interesting exhibit of the character as well as of the extent of
  this form of insurance among working men:--

    _Industrial Insurance in the United States._

    +------+------+-------------+------------+--------------+------------+------------+
    |      |      |             | Policies in| Insurance in |            |            |
    | Year.|No. of|  Insurance  | force 31st |  force 31st  |  Premiums  |   Losses   |
    |      | Cos. |   written.  |  December. |   December.  |  received. |    paid.   |
    +------+------+-------------+------------+--------------+------------+------------+
    | 1876 |   1  |    $400,000 |      2,500 |     $248,342 |    $14,495 |     $1,958 |
    | 1880 |   3  |  34,212,131 |    228,357 |   19,590,780 |  1,155,360 |    430,631 |
    | 1884 |   3  |  89,150,302 |  1,076,422 |  108,451,099 |  4,486,612 |  1,499,432 |
    | 1888 |   7  | 161,260,335 |  2,788,000 |  302,033,066 | 11,939,540 |  4,162,745 |
    | 1892 |  11  | 276,893,923 |  5,118,897 |  582,710,309 | 24,352,900 |  8,847,322 |
    | 1896 |  11  | 360,852,458 |  7,375,688 |  886,484,869 | 40,058,701 | 13,420,336 |
    | 1899 |  16  | 519,789,085 | 10,048,625 |1,292,805,402 | 56,159,889 | 17,023,485 |
    +------+------+-------------+------------+--------------+------------+------------+

  It is remarkable that the average weekly premium in the United States
  appears to be about 10 cents, or two and a half times as high as in
  Great Britain. The average policy is also proportionally larger, and
  the progressive increase in its amount deserves notice. At the rate at
  which the practice of insurance is extending among working men, it
  would require but few years for it to become as universal in these
  countries as any paternal government has aimed to make it by
  compulsion.

  Division of surplus.

There are various sources from which a surplus of funds may arise in an
insurance company: (1) from the rate of interest actually earned being
higher than that anticipated in the calculations; (2) from the
death-rate among the insured being lower than that provided for by the
mortality tables; (3) from the expenses and contingent outlay being less
than the "loading" provided to meet them; and (4) from miscellaneous
sources, such as profitable investments, the cancelment of policies, &c.

Supposing a valuation to have been made on sound data and by a proper
method, and to have resulted in showing that the funds in hand exceed
the liabilities, the surplus thus ascertained may be regarded as
_profit_, and either its amount may be withdrawn from the assets of the
office or the liabilities may be increased in a corresponding degree.

  Bonuses.

Various methods are employed by insurance companies in distributing
their surplus funds among the insured. In some offices the share or
"bonus" falling to each policyholder is paid to him in cash; in others
it is applied in providing a reversionary sum which is added to the
amount assured by the policy; in others it goes to reduce the annual
contributions payable by the policyholder. A method of more recent
introduction is to apply the earlier bonuses on a policy to limit the
term for which premiums may be payable, thus relieving the policyholder
of his annual payments after a certain period. Another method is to
apply the bonuses towards making the sum insured payable in the lifetime
of the policyholder. The plan of reversionary bonus additions is most
common, and when it is followed the option is usually given of
exchanging the bonuses for their value in cash or of having them applied
in the reduction of premiums.

Not only are there different modes of applying surplus, but the basis on
which it is divided among the insured also varies in different offices.
In some the reversionary bonus is calculated as an equal percentage per
annum of the sum insured, reckoning back either to the commencement of
the policy in every case, or (more commonly) to the preceding division
of profits. In others the rate is calculated, not only on the original
sums insured, but also on previous bonus additions. In others the ratio
of distribution is applied to the cash surplus, and the share allotted
to each policy is dealt with in one or other of the ways above
indicated. The following are some of the ratios employed by different
offices in the allocation of profits: (1) in proportion to the amount of
premiums paid (with or without accumulated interest) since the last
preceding valuation; (2) in proportion to the accumulated "loading" of
the premiums so paid; (3) in proportion to the reserve values of the
policies; (4) in proportion to the difference between the accumulated
premiums and the reserve value of the policy in each case.

Some offices have a special system of dealing with surplus, reserving it
for those policyholders who survive the ordinary "expectation of life,"
or whose premiums paid, with accumulated interest, amount to the sums
insured by their policies. This system is usually connected with
specially low rates of premium.

  In the United States the so-called "contribution plan" has been
  accepted in theory by many companies, though carried out with many
  variations in detail by different actuaries. The principle is, that
  since each of the insured is charged in his premium a safe margin
  above all probable outlays, when the necessary amount under each head
  becomes determinate the several excesses should be returned to him. It
  is therefore sought to calculate what each member would have been
  charged for net premium and loading had the mortality, rate of
  interest, and expenses been precisely known beforehand, and to credit
  him with the balance of his payments. As a corollary of the theory of
  net valuations, which regards every life insured as an average life
  until its end, and assumes the rigid accuracy and equity of all the
  formulas employed to represent business facts, it is consistent and
  complete. But many minds find it more curious than practical, and
  prefer to seek equity in faithfulness to contract rights rather than
  in adjustments which they deem too refined, if not fanciful. The plan
  has met with little favour in England, where surplus is more commonly
  distributed on general business principles. Enormous bonuses were
  saved by the British offices out of the excessive premiums at first
  collected, and by the American companies during the epoch of high
  interest rates. But the use of more accurate tables, the decline in
  interest, and the increased expenses of later years, have vastly
  reduced the apparent profits. Former methods of distributing surplus,
  when ascertained, have largely given way in America to novel and more
  complex plans. The Tontine idea, historically familiar, was for many
  years imitated by some offices in their insurance contracts. All
  premiums above outlay, in a company or a class of policies, were
  accumulated, only stipulated amounts being paid on death claims
  meanwhile maturing, with no compensation to its members withdrawing,
  until the end of a fixed term, when the whole fund was apportioned to
  the survivors. Large returns were sometimes made, but many who could
  not maintain their policies were dissatisfied. "Semi-tontines"
  followed, partly meeting the difficulty by pooling only the surplus,
  and allowing some return in case of withdrawal. But these cruder forms
  of contract are now largely superseded by various "reserve-dividend,"
  "accumulation," "bond," and "investment" policies, with options at
  stated periods between cash withdrawals and continued insurance, the
  simple inducement to provide against death being more or less merged
  in that of making a profitable investment of capital.

  Surrender values.

In those branches of insurance where the contract is one of indemnity
against loss, the risk remaining the same from year to year--and where
the consent of both parties, insurer and insured, is required at each
periodical renewal--no question of allowance in respect of past payments
can arise when one party or the other determines to drop the contract.
It is quite recognized that the premiums are simply an equivalent for
the risk undertaken during the period to which they apply, with a
certain margin for expenses and for profit to the insurer, and that
therefore a favourable issue of the particular contract supplies no
argument for a return of any part of the sums paid. In life insurance,
however, we have shown that the premiums contain a third element,
namely, the portion that is set aside and accumulated to meet the risk
of the insurance when the premium payable is no longer sufficient of
itself for that purpose.

When a policyholder withdraws from his contract with a life insurance
office, the provision made for the future in respect of his particular
insurance is no longer required, and out of it a surrender value may be
allowed him for giving up his right to the policy. If there were no
reasons to the contrary, the office might hand over the whole of this
provision, which is in fact the reserve value of the policy. No more
could be given without encroaching upon the provision necessary for the
remaining policies. But the policyholder in withdrawing is exercising a
power which circumstances give to him only and not to the other party in
the contract. The office is bound by the policy so long as the premiums
are duly paid and the other conditions of insurance are not infringed.
It has no opportunity of reviewing its position and withdrawing from the
bargain should that appear likely to be a losing one. The policyholder,
however, is free to continue or to drop the insurance as he pleases, and
it may fairly be presumed that he will take whichever course will best
serve his own interest. The tendency obviously is that policies on
deteriorated and unhealthy lives are kept in force, while those on lives
having good prospects of longevity are more readily given up. Again, the
retiring policyholder, by withdrawing his annual contribution, not only
diminishes the fund from which expenses are met, but lessens the area
over which these are spread, and so increases the burden for those who
remain. Considerations like these point to the conclusion that, in
fairness to the remaining constituents of the office, the surrender
value to be allowed for a policy which is to be given up should be less
than the reserve value. The common practice is to allow a proportion
only of the reserve value. Some offices have adopted the plan of
allowing a specified proportion of the amount of premiums paid. This
plan is not defended on any ground of principle, but is followed for its
simplicity and as a concession to a popular demand for fixed surrender
values.

  Non-forfeiture system.

Another mode of securing to retiring policyholders the benefit of the
reserve values of their insurances is that known as the _non-forfeiture
system_. This system was first introduced in America, whence it found
its way to the United Kingdom, where it was gradually adopted by a large
proportion of the insurance companies. In its original form it was known
as the "ten years non-forfeiture plan." The policies were effected by
premiums payable during ten years only, the rates being of course
correspondingly high. If during those ten years the policyholder wished
to discontinue his payments, he was entitled to a free "paid-up policy"
for as many tenth parts of the original sum insured as he had paid
premiums. The system, once introduced, was gradually extended first to
insurances effected by premiums payable during longer fixed periods, and
ultimately, by some offices, to insurances bearing annual premiums
during the whole of life. The methods of fixing the amount of paid-up
policy in the last-mentioned class of cases vary in different offices,
but the principle underlying them all is that of applying the reserve
value to the purchase of a new insurance of reduced amount.

  Conditions of insurance.

An office, in entering on a contract of life insurance, does so in the
faith that all circumstances material to be known in order to a proper
estimate of the risk have been disclosed. These circumstances are beyond
its own knowledge, and as the office for the most part (except as
regards the result of the medical examination, which may reveal features
of the case unknown to the proposer himself) is dependent on the
information furnished by the party seeking to effect the insurance, it
is proper that the latter be made responsible for the correctness of
such information. Accordingly it is made a stipulation, preliminary to
the issue of every policy, that all the required information bearing
upon the risk shall have been truly and fairly stated, and that in case
of any misrepresentation, or any concealment of material facts, the
insurance shall be forfeited. In practice, however, this forfeiture is
rarely insisted on unless there has been an evident intention to
deceive. Other systems and conditions of life insurance policies may be
shortly noticed.

The usual division of policies is into "non-participating" and
"participating." Non-participating policies are contracts for the
payment on death of a certain fixed sum in consideration of a given
premium, and these amounts are not affected by the profit made by the
company. Participating policies entitle the holders to a share in the
profits of the company. These profits are applied in various ways, as
described above. A policy may be a whole life one, that is, the
policyholder may pay a periodical premium throughout life, or it may be
a limited payment one (the holder paying a premium for a limited number
of years), or an endowment policy, under which the insurer receives the
amount he has insured for at a given age, say fifty-five or sixty; or if
death occur previously, the sum is paid to his representatives. There
are also endowment policies for children, under which parents or others
receive a specified sum on a child attaining a given age, the premiums
being returnable if the child dies before the specified age.

  _As to Payment of Premiums._--A certain period of grace is allowed,
  most commonly thirty days, after each premium falls due. If payment is
  not made within that time, the presumption is that the policyholder
  intends to drop the contract, and the risk of the office comes to an
  end. It may, however, be revived on certain conditions, usually the
  production of evidence of health and payment of a fine in addition to
  the premium. An impression used to prevail among the public that the
  offices were interested in encouraging the forfeiture of policies. If
  any such impression was ever shared by the offices themselves it must
  have long since passed away, every reasonable effort being now made on
  their part, not only to secure insurances but to retain them, and to
  afford all the facilities that can be extended to policyholders with
  that object.

  _As to Foreign Travel and Residence, and as to Hazardous
  Occupations._--When Babbage wrote his _Comparative View of Assurance
  Institutions_ in 1826, voyaging abroad was scarcely permitted under a
  British life policy. The Elbe and the Garonne, Texel and Havre, Texel
  and Brest, the Elbe and Brest were the limits prescribed by most of
  the English offices. Even at a much later period the extra premiums
  charged for leave to travel or reside abroad were very heavy. But
  improved means of conveyance--in some places better sanitary
  appliances, and habits of living more suited to the climatic
  conditions--and, more than all perhaps, the knowledge that has been
  gained by experience as to the extent of the extra risks involved and
  the relative salubrity of foreign climates--have enabled the offices
  to modify their terms very considerably. The limits of free residence
  and travel have been greatly widened, and where extra premiums are
  still required these are, as a rule, much lower than formerly. The
  assured are now commonly permitted to reside anywhere within such
  limits as north of 35° N. lat. (except in Asia) or south of 30° S.
  lat., and to travel to and from any places within those limits,
  without extra premium.

  Military men (when on active service) and seafaring men are usually
  charged extra rates, as are also persons following specially dangerous
  or unhealthy occupations at home.

  _As to Suicide._--The policies of most companies used to contain a
  proviso that the insurance shall be void in case the person whose life
  is insured dies by his own hand, but it is now seldom inserted. Some
  offices, acting on a sound principle, limit its operation to a fixed
  period, the extent of which varies in different offices from six
  months to seven years from the date of issue of the policy.

  The practice of rendering policies _indisputable_ and free from
  restriction as to foreign travel or residence, after a certain period,
  has tended greatly to simplify the contract between the office and the
  insured. A declaration of indisputability covers any inaccuracies in
  the original documents on which a policy was granted, unless these
  inaccuracies amount to fraud, which the law will not condone under any
  circumstances.

  A remarkable difference in the development of life insurance between
  Great Britain and the United States is, that among the British
  companies only one-third of the insurances in force is in purely
  mutual institutions, while in America the proportion exceeds
  four-fifths. In both countries there are also "mixed" companies, in
  which policyholders receive a fixed percentage of the realized
  surplus, often from three-fourths to nine-tenths of the whole, but the
  control and management are in the hands of shareholders. These form
  the great majority of the proprietary offices in the United Kingdom,
  and the profits of the business have been large. The amount of capital
  paid in by shareholders of forty-one joint-stock companies was
  £5,931,000, but the capital authorized and subscribed was much more,
  and the subscriptions have often been paid, wholly or in part, by
  credits from surplus. The shares of these companies, at market prices,
  represent a value of at least £50,000,000, but the dividends upon
  these shares are drawn largely from other business, many of the
  largest and most prosperous corporations conducting also fire
  insurance, and some of them marine or casualty insurance.

No branch of social statistics has been more diligently studied than
life insurance, and several governments publish classified accounts of
corporations insuring lives within their jurisdiction. But the reports
are not uniform in method and in periods covered, and aggregates derived
from them must be used with reserve. By the Life Assurance Companies Act
1870, and amendments made in later years, each company issuing policies
in the United Kingdom must deposit with the Board of Trade every year
its revenue account and balance-sheet for the preceding year, and must
at fixed intervals cause an investigation of its financial condition to
be made by an actuary, and furnish the public through the Board of Trade
with the detailed results, in forms prescribed by the act. Thus these
returns are the highest authority for the conditions and operations of
the offices, which often supplement or anticipate them by voluntary
publications. In the United States the laws exact still more minute and
much prompter reports to the insurance departments of the states; and
every annual statement is required to show the results of an actuarial
investigation. All these facts are collected, classified and compared by
statisticians for several standard annuals in both countries, especially
the _Post Magazine Almanack_, _Bourne's Directory_ and _Manual_ and the
_Insurance Blue Book_ in London, and _The Insurance Year-Book_ of the
Spectator Company in New York.

  The reports of the insurance department of New York cover more
  companies than those of any other state. The institutions not included
  in them are about thirty-five in number, mostly small and local. The
  New York reports represent very nearly 95% of the entire business of
  the United States. While the amount of life assurance done by British
  and other foreign offices in the United States is insignificant,
  fourteen companies of the United States have agencies in Canada (ten
  for new business), and four transact business in Europe and in other
  parts of the world. The home business of the American companies is in
  the aggregate about 87½% of the whole.

  In the principal countries of continental Europe life assurance is
  offered by the chief international institutions of Great Britain and
  the United States, and their policies are in force probably to the
  aggregate amount of £140,000,000. The domestic companies have been
  stimulated to increased activity by the aggressive canvassing of the
  foreign agencies, and the business in recent years has grown rapidly,
  until now the total sum insured upon lives on the continent of Europe
  is little less than a milliard of pounds sterling. Much information
  about life assurance in the different countries of Europe will be
  found in Ehrenzweig's _Assekuranzjahrbuch_ (Vienna).
       (C. T. L.; T. A. I.)

V. BRITISH POST OFFICE INSURANCE

In 1864 Mr Gladstone, then chancellor of the exchequer, advocated the
extension of life insurance amongst persons of small means, and,
encouraged by the remarkable success of the Post Office Savings Bank,
then recently established, proposed that the services of the
postmaster-general should be enlisted in the promotion of insurance. The
result was the passing of the Government Annuities Act 1864. This act
authorized the commissioners for the reduction of the national debt, for
the first time, to insure a life without granting an annuity upon it,
and enabled the postmaster-general to act as the agent of the
commissioners in the issue of life policies and the grant of annuities.
The limits of insurance were fixed at £20 and £100, and of annuities at
£4 and £50; and the purchase of deferred annuities or old-age pay, by
monthly, or even more frequent instalments, was sanctioned. The work was
eagerly accepted by Lord Stanley of Alderley, the postmaster-general of
the day, and the machinery for putting the act in action was elaborated
by Frank Ives Scudamore of the Post Office and Sir Alexander Spearman of
the National Debt office. The business was commenced on the 17th of
April 1865. By the end of the year 560 policies of insurance had been
issued, and 94 immediate and 54 deferred annuities granted. In the first
twelve months these figures had increased to 809 policies and 230
annuities. The opportunity thus given of insuring through the Post
Office with government security was not, however, embraced with the
warmth which had been anticipated. In 1882, when Mr Henry Fawcett, then
in office, examined the subject, he found that the average number of
policies of insurance granted annually during the seventeen years which
had elapsed was under 400--less, in fact, than during the first twelve
months of the system. The purchase of annuities had increased slightly,
but the business was transacted chiefly in immediate annuities, and
hardly indicated any progress in provision for old age by means of early
savings. Mr Fawcett procured a Select Committee of the House of Commons
on the subject. Before this committee Mr James Cardin, then assistant
receiver and accountant-general of the Post Office, propounded a scheme
for combining the annuity and insurance business of the Post Office with
that of the savings bank. The Committee recommended the adoption of this
scheme, together with some enlargement of range and some relaxation of
conditions. The recommendations of the Committee were embodied in the
Government Annuities Act 1882, which came into operation on the 3rd of
June 1884, and which forms the basis of the present system.

  Any person between 14 and 65 can now insure through the medium of the
  Post Office Savings Bank for any amount from £5 to £100; and the life
  of a young person between 8 and 14 can be insured for £5. Through the
  same channel can be purchased annuities, immediate or deferred, from
  £1 to £100, on the life of any person from 5 years old upwards.
  Old-age policies, that is, policies securing payment of a specific sum
  either at the expiration of a fixed period (varying from 10 to 40
  years), or upon the attainment of a certain age, or sooner in case of
  death, can also be obtained. Policies for a fixed period can only be
  purchased by a single payment, but in all other cases the purchase can
  be effected by payment either of a lump sum or of annual instalments.
  Further, all purchases are effected through the Post Office Savings
  Bank. As soon as a contract is completed, the purchaser is required to
  pay the first instalment to his account in the bank, or, if he has no
  account already, to open an account for the purpose. This and all
  further instalments are then transferred by the postmaster-general, as
  they become due, to the credit of the National Debt Commissioners; all
  the purchaser has to do is to keep his banking account in funds; he
  can pay his savings into the bank when and as he pleases. So, also,
  when old-age pay, secured either by a deferred annuity or an endowment
  policy, becomes due, it is paid to the account of the purchaser; and,
  if it does not cause the sum standing to his credit to exceed the
  statutory limits, it can remain there earning interest, and be drawn
  out in such amounts as may be convenient from time to time. The
  purchaser has also the advantage of the ubiquity of the Post Office
  Savings Bank. He can make his deposits, and can draw out his old-age
  pay when it becomes due, at any one of the 13,000 odd post offices
  where savings bank business is transacted. He can even, if his savings
  are made from day to day, use the penny stamp slips introduced by Mr
  Fawcett, affixing a stamp whenever he has a penny to spare, and paying
  in the slip when it is worth a shilling. In short, every advantage
  open to the ordinary depositor in the Savings Bank is placed at the
  service of the working man or woman who wishes to secure old-age pay,
  or to have a small sum to aid those who may suffer pecuniarily from
  his or her death. Even the reluctance of many persons to submit
  themselves to medical examination is tenderly regarded. A policy for
  any sum up to £25 may, if the information afforded is satisfactory,
  be obtained without a doctor's certificate, on condition that, if
  death happens during the first year, only the premium paid is
  returned, and if during the second year, only half the sum insured is
  paid. As regards old-age pay, a purchaser can, by adopting a slightly
  higher scale of payment, secure the return of his purchase money if at
  any time before the annuity falls in he repents of his bargain.
  Further, employers of labour and friendly societies can, on behalf of
  their workmen or members, make all the payments necessary to buy an
  insurance or annuity, and recoup themselves out of wages or members'
  contributions.

  The act of 1882 directed that the tables upon which annuities and
  policies of insurance are granted should be revised from time to time;
  and in February 1896 new tables reducing the rates of annual premiums,
  and giving greater facilities for old-age insurance, were issued. The
  rates are now but very slightly (less than 3%) higher than the average
  rates of the larger insurance offices. But the expense of small
  insurance business must necessarily be above the average, and it is
  fairer to compare the Post Office rates with those of the office which
  stands pre-eminent in the insurance of the working classes. Such a
  comparison shows that up to the age of 40 a life insurance can be
  effected with the Post Office at a cheaper rate than with the
  Prudential Insurance Company; between 40 and 60 the advantage is
  slightly on the side of the company.

  In 1885, the first complete year after Mr Fawcett's improvement took
  effect, 103 deferred annuities and 457 insurance policies were
  granted; in 1905, 158 deferred annuities and 741 policies. The
  increase of business, measured in percentages, is no doubt
  appreciable, but the figures themselves are so small as to make such a
  comparison trivial. If we compare the two periods, before and after Mr
  Fawcett's reforms, we find that between the 17th of April 1865 and the
  2nd of June 1884 (about nineteen years) 7064 policies of insurance,
  amounting to £557,625, were issued, and between the latter date and
  the end of 1905, 16,577 policies, amounting to £875,496. For the whole
  period the figures are 23,641 policies for £1,433,121. During the same
  time 3144 contracts for old-age pay, amounting in all to £64,378, were
  made. When we contrast with this sum total the fact that in 1905 alone
  1,435,329 new accounts were opened in the Post Office Savings Bank,
  and more than £42,000,000 deposited in the bank in the course of the
  year, it becomes apparent that, while the Savings Bank has reached the
  mass of the population, insurance against old age and death through
  the Post Office has not.

  In 1894 Mr C. D. Lang, the Controller of the Post Office Savings Bank,
  and Mr Cardin, giving evidence before the Commission on Old-Age
  Pensions, ascribed the small insurance and annuity business of the
  Post Office to the want of a personal canvass. They pointed out that
  there had been some temporary increase in insurance, through an appeal
  to the Post Office employés themselves, and they suggested that
  something might be done if the masters of the elementary schools could
  be induced to interest themselves in recommending to their scholars
  and the parents of their scholars the advantages offered by the Post
  Office. It was also pointed out that the friendly societies might, if
  they were so disposed, act as intermediaries between their members and
  the Post Office, and thereby, as it were, reinsure their risks with
  the government; but it was added that all overtures of this nature to
  the societies had failed, apparently from the fear--quite
  groundless--of introducing government control of the societies'
  affairs. There may, indeed, be another reason for the failure of the
  deferred annuity system. The insurance of old-age pay is not popular
  even amongst the members of friendly societies, or even in Germany,
  where it has been given to the workmen largely at the expense of other
  people. Insurance against death, sickness and accidents appeals to the
  young working man; but old age is too far off to be an object of
  solicitude, especially since the grant of old-age pensions by the
  state has made the future secure from destitution at least. However,
  if at any time opinion changes, the Post Office stands ready to make
  foresight or philanthropy easy. Though no great results have been
  achieved, a machinery has been established which works with perfect
  smoothness, and which may some day be of service to the nation.

VI. MARINE INSURANCE

  History.

Marine insurance long antedates the kindred businesses of fire and life
insurance. Villani, a 14th-century Florentine historian, speaks of
marine insurance as having originated in Lombardy in 1182. This proves,
at least, that in his day it was no novelty. It is mentioned in a Pisan
ordinance of 1318, and in Venetian public documents of the early years
of the 15th century. The earliest form of policy known is that given in
the Florentine statute of 1523. It is uncertain whether insurance was
introduced into England directly from Italy or by way of Flanders. The
earliest policies issued in England which have yet been discovered are
in Italian, but the subscriptions are in English ("Santa Maria di
Venetia," Cadiz to London, 1547, "Santa Maria de Porto Salvo," Hampton
to Messina, 1548).

  The earliest known policies in English are one of 1555 on the "Sancta
  Crux" "from any porte of the Isles of Indea of Calicut unto Lixborne,"
  and one of 1557 on the "Ele" from Velis Maliga to Antwerp. The
  authority for this statement is Mr R. G. Marsden, who edited for the
  Selden Society the records of the Admiralty Court; nothing earlier had
  been found at the Record Office down to May 1907. In the "Sancta Crux"
  policy there is no detailed statement of perils insured against, or of
  risks undertaken by the underwriter; the whole obligation of the
  underwriter to the assured is embodied in the following words: "We
  will that this assurans shall be so strong and good as the most ample
  writinge of assurans, which is used to be maid in the strete of
  London, or in the burse of Andwerp, or in any other forme that shulde
  have more force." This reference to Antwerp usage is 67 years before
  the date of C. Malynes' statement that all Antwerp policies contained
  a clause providing that they should in all things be the same as
  policies made in Lombard Street of London. The wording of the English
  policies written in Italian is very much simpler than the Florentine
  form of 1523, from which it almost seems that the wording used in
  England followed an earlier Italian form. But even the Italian
  policies in the two "Santa Marias" mention the uses and customs of
  "_questa strada Lombarda di Londra_" as the standard of the assurance
  they afford. The next most ancient policy we possess is dated 1613; it
  covers goods on the "Tiger" from London to "Zante, Petrasse and
  Saphalonia." The "Tiger" policy is interesting in another connexion.
  It recalls Shakespeare's _Macbeth_ I. iii. 7 (written about 1605):--

    "Her husband's to Aleppo gone, master of the 'Tiger.'"

  Clark & Wright's note (in the "Clarendon Press" series edition) cites
  Sir Kenelm Digby's journal of 1628 mentioning "the 'Tyger' of London
  going for Scanderone" (Alexandretta). Hakluyt (_Voyages_) gives
  letters and journals of a voyage of the "Tyger of London" to Tripolis
  in 1583. Shakespeare again mentions a ship called the "Tiger" in
  _Twelfth Night_, V. iii. 63:--

    "And this is he that did the 'Tiger' board."

  The policy by the "Tiger" is much more ample than any of those already
  mentioned; it details the perils insured against in words closely
  resembling the Florentine formula of 1523, and differing only slightly
  from the form adopted by Lloyd's at a general meeting held in 1779,
  and afterwards incorporated in the Sea Insurance Stamp Act of 1795,
  which is the stem form of all modern British and American marine
  insurance policies.

  While the form of the insurance policy was thus developing, there was
  a singular absence of legislation (and, as far as we can yet trace, of
  litigation) on the subject. Till 1601 differences seem to have been
  generally settled by arbitration. This accounts for the poverty of the
  British Admiralty records in matters of marine insurance. In 1601 a
  special tribunal was established by statute for summary trial of
  disputes arising on insurance policies; but, owing mainly to the
  opposition of the common-law judges, the new court languished, and by
  1720 it had fallen into utter disuse. J. A. Park states that not more
  than sixty insurance cases were reported between 1603 and 1756.
  Consequently, when Lord Mansfield came to the court of king's bench in
  the latter year, he found a clear field. He practically created the
  insurance law of England. He made use of all the continental
  ordinances and codes extant in his day, taking his legal principles
  largely from them; the customs of trade he learnt from mercantile
  special jurors. Subsequent legislation referred solely to the
  prohibiting of certain insurances (wager policies, &c.), the naming in
  the policy of parties interested therein, and the stamp duty levied on
  marine insurances. In 1894 Lord Herschell introduced his Marine
  Insurance Bill, which endeavoured "to reproduce as exactly as possible
  the existing law relating to marine insurance." After Lord Herschell's
  death, Lord Chancellor Halsbury took up the bill, introducing it in
  the House of Lords in 1899 and again in 1900; he appointed a committee
  on which underwriters, shipowners and average adjusters were
  represented, and, presiding himself, went through the bill with them
  clause by clause. The bill was then passed by the Lords, but was
  always blocked in the House of Commons till 1906, when it was taken up
  by Lord Chancellor Loreburn in conjunction with Lord Halsbury. After
  some amendment and modification it was finally passed by both Houses
  and became law on the 1st of January 1907 (6 Ed. VII., c. 41).[3] In
  America a less happy fate has attended the insurance code, forming
  part of the proposed civil code of New York, completed and published
  in 1865, of which a very slightly altered version was adopted in
  California and has been in effect there since the 1st of January 1873.
  On the continent of Europe legislation at first took the form of local
  ordinances of commercial cities, such as Barcelona (1434-1484),
  Florence (1523), Burgos (1538), Bilbao (1560), Middelburg (1600),
  Rotterdam (1604-1655). In the third quarter of the 16th century Rouen
  produced a handy guide to marine insurance, _Le Guidon de la mer_; and
  in 1656 Étienne Cleirac published there his _Us et coutumes de la
  mer_. This was followed in 1681 by the _Ordonnance de la marine_,
  which, through Lord Mansfield, had a great effect on English case law.
  In 1807 France produced the _Code de commerce_, on the model of which
  nearly every European nation has issued a similar code. Probably the
  "best considered" (Willes, J.) of these, and the most adequate as
  regards marine insurance, is that of the German empire; but Hamburg
  and Bremen still preserve many of their local conditions by special
  contract in their policies. In fact it is doubtful whether the German
  Code could have been produced without the previous elaboration of the
  Conditions of Hamburg and of Bremen. The Hamburg Conditions of 1847,
  revised 1867, constitute an admirable compendium of marine insurance
  as practised in that city.

    Conflict of laws.

  Marine insurance being peculiarly an international business, being a
  factor in 95% of the operations of oversea trade, it is natural that
  those engaged in this business or making use of marine insurance in
  their business should experience the difficulty and hardship arising
  from the differences between the marine insurance law of different
  states, and should attempt to find a remedy. Such an attempt was made
  at the Buffalo conference of the International Law Association in 1899
  to prepare a body of rules dealing with those parts of marine
  insurance on which the laws of maritime countries differ. This
  undertaking was of the same nature as the earlier efforts of the same
  association which resulted in the formulation of the York-Antwerp
  rules of general average. There are four important subjects on which
  great divergence prevails: (a) Constructive total loss; (b) Deductions
  from costs of repairs, new from old; (c) Effect of unseaworthiness and
  negligence; (d) Double insurance.

  (a) Constructive total loss results, according to the law of France,
  Italy, Spain, Belgium, Holland, in case of loss or deterioration of
  the things insured amounting to not less than three-quarters; in
  German law a ship is considered to be "unworthy of repair" when the
  cost of the repair, without deductions new for old, would amount to
  over three-fourths of the ship's former value (no similar provision
  seems to exist in Germany for goods); in the law of America a damage
  over 50% of the value of the vessel when repaired is a constructive
  total loss of the vessel, in case of the policy containing no express
  provision to the contrary. None of these varying systems appears to be
  so equitable to all concerned as the British rule, which was for this
  reason suggested to the Buffalo conference for international adoption.
  As regards the time when the test for constructive total loss should
  be applied, it was suggested to reject the British rule, prescribing
  that it shall be the time of commencing action against underwriters,
  and to adopt the continental and American rule referring to the facts
  as they existed at the time of abandonment. Then, as respects the
  effect of a valid abandonment on the rights in the property insured,
  the conference proposed to adopt the British and American rule of
  making the abandonment refer back to the time of the loss, as against
  the continental European system of making the transfer operative only
  from the date of the notice of abandonment. Finally, as to the freight
  of a properly-abandoned ship, it was proposed to follow for
  international purposes the American rule of dividing the freight of
  the voyage between shipowner and underwriter in the proportion of the
  distances run before the disaster and to be run thereafter, rejecting
  the British rule of complete transfer to the underwriter and the
  various continental rules of proportional division between shipowner
  and underwriter.

  (b) It was proposed to adopt the deductions set forth in the
  York-Antwerp rules as being suitable for international adoption in
  marine insurance contracts.

  (c) As regards unseaworthiness and its effect on insurances on ships
  and goods, it was proposed in the case of ships to reduce materially
  the obligations of the insured as required by English and American
  law; to diminish the requirement from the absolute attainment of
  seaworthiness to the mere exercise of all reasonable care to make the
  vessel seaworthy. Even this attenuation did not appear sufficient, as
  it was proposed to degrade the performance of the already minimized
  warranty from being a condition of the insurance, and its
  non-performance from invalidating the policy. As to goods, they were
  proposed to be exempted from any warranty of seaworthiness of ship.
  Concerning negligence, it was proposed to hold the underwriter liable
  (subject to the new seaworthiness warranty) for any loss caused
  proximately by a peril insured against, although wholly or partly the
  result of the neglect of the insured, or his servants or agents, or by
  the wilful act of his servants or agents, or the inherent nature or
  unsoundness of the article insured.

  (d) In case of double or multiple insurance, the conference proposed
  to adopt the British rule of making all the policies effectual,
  independently of the order in which they were effected, and of making
  all the underwriters entitled to contributions _inter se_. As regards
  the premium, it was proposed that no premium should be returnable,
  where the risk has attached.

  With the exception of those embodying the two suggestions named in
  par. (a), all the resolutions proposed were accepted by the
  conference. But it appears extremely unlikely that British and
  American underwriters will voluntarily consent to the practical
  annihilation of the seaworthiness warranty, and no less improbable
  that American and continental assured will voluntarily accept the
  stricter rule of constructive total loss embodied in English law, when
  their national law enforces on the underwriter terms more favourable
  to the assured. The fewness of the international insurance markets of
  the world diminishes the need for uniform international regulations in
  this matter. The matter may be one for adjustment by variation in the
  rate of premium, but this is not certain.

  The Glasgow conference of 1901 adopted the rules, after excepting time
  policies from the scope of the rule respecting seaworthiness. The
  rules are known as the Glasgow Marine Insurance Rules. The writer
  knows of no instance in which they have been adopted in practice.

  Returning to marine insurance in the United Kingdom, it is to be
  observed that the passing of the Marine Insurance Act of 1906 sharply
  marks an important change in the nature of the law of the subject.
  Till then it was based almost entirely on common law, only a few
  disconnected points having been dealt with by statute. The reported
  cases were thus of great importance, and being about 2000 in number
  (_teste_ Sir M. D. Chalmers) were not easy to master. No doubt many of
  them referred to commercial conditions no longer prevalent; still they
  could not be entirely ignored. But the original introducer of the bill
  described it as an endeavour "to reproduce as exactly as possible the
  existing law relating to marine insurance," and as by being made law
  the language of the act has become authoritative, insured and insurers
  have now no call to go behind the wording of the act in any matter
  with which it deals. It thus appears that the case law of the subject
  existing before the 1st of January 1907 may be left aside, unless,
  perhaps, for use as affording examples of the way in which the
  provisions of the act work.

  Definition.

A contract of marine insurance is a contract of indemnity whereby the
insurer undertakes to indemnify the insured, in the manner and to the
extent agreed, against marine losses, i.e. the losses incident to marine
adventure. The contract may by its express terms or by usage be extended
to cover risks on inland waters or land risks incidental to any sea
voyage. There is a "maritime adventure," where any ship, goods or other
movables are exposed to maritime perils, such property being termed
"insurable property"; also where the earning of any freight, hire or
other pecuniary profit or benefit, or the security for any loan or
expenditure, is endangered by the exposure of insurable property to
maritime perils; and where any liability to a third party may be
incurred by the person interested in or responsible for insurable
property by reason of its exposure to maritime perils. By "maritime
perils" are meant the perils consequent on or incidental to the
navigation of the sea, i.e. perils of the seas, fire, war perils,
pirates, rovers, thieves, captures, seizures and restraints, and
detainments of princes and peoples, jettisons, barratry, and any other
perils, either of the like kind or which may be designated by the
policy.

  The contract being one of indemnity against maritime perils, it is
  evident that no one can derive benefit from it who has not some
  interest exposed to these perils. Consequently while, subject to the
  provisions of the act, every lawful marine adventure may be insured,
  all contracts of marine insurance are void when (1) the assured has no
  insurable interest, and has entered into the contract without
  expectation of acquiring such interest; (2) when the policy is a
  "wager" policy, being made "interest or no interest," "without further
  proof of interest than the policy itself," "without benefit of salvage
  to the insurer," or subject to any similar terms. But if there is no
  possibility of salvage a policy "without benefit of salvage to the
  insurer" is legally valid. Wager policies are illegal only in the
  sense of being void to all legal purposes. They cannot be sued upon,
  hence they are known as "honour" policies. They are of frequent use,
  generally for the protection of interests which, though real, are not
  easily defined, or are of pecuniary value hard to determine. But they
  are ignored by the courts. The essential of insurable interest is the
  pecuniary advantage seen at the time of insurance as arising to the
  assured from the safety or due arrival of the adventure, or the
  pecuniary disadvantage similarly arising from its loss or
  deterioration. But such interest may lapse before arrival or
  destruction of the venture, and with the interest lapses the right of
  the assured to recover from the underwriter. Without interest at the
  time of the loss there is no right to recover from the underwriter.
  Should the assured simply transfer his interest to another, e.g. by
  sale, he can assign his policy to the party who acquires his
  interest--unless, of course, the policy contains terms expressly
  prohibiting assignment. The customary form of assignment is
  endorsement of the policy either in blank or to a specified party.
  Within the limits already named, interests are insurable whether
  complete or partial, defeasible or contingent; similarly loans on
  bottomry or respondentia, advance freight not repayable in case of
  loss, charges of insurance, also shipmaster's, officers' and seamen's
  wages.

  Value.

The owner of insurable property may insure its full value even though
some third party have agreed or become liable to indemnify him in case
of loss: a mortgagor has the same right of insuring to full value;
while a mortgagee may insure only up to the sum due or to become due to
him under the mortgage, unless the mortgagee is insuring for the benefit
of the mortgagor as well as for himself, in which case, even though he
insure in his own name only, he may insure up to the full value. A
consignee may insure in his own name the total amount of his interest
and that of others for whose benefit he insures. Where no special
contract is made between insured and underwriter, the insurable value of
certain matters of insurance is ascertained as follows:--_Ship_--Her
value at the commencement of the risk, including outfit, provisions,
stores, advances of wages, and any other outlays expended to make the
ship fit for the voyage or period of navigation covered, _plus_ cost of
insurance upon the whole. In the case of a steamship, the word "ship"
includes machinery, boilers, coals and engine stores. In the case of a
vessel engaged in a special trade, the word "ship" includes the ordinary
fittings necessary for that trade. _Freight_ (whether paid in advance or
not)--The gross amount of freight at the risk of the assured, _plus_
cost of insurance. _Goods_--The prime cost, _plus_ expenses of and
incidental to shipping and cost of insurance. _Other interests_--The
amount at the insured's risk when the policy attaches, _plus_ cost of
insurance.

  Policy.

To be admissible in evidence a contract of marine insurance must be
embodied in a document called a policy, which must specify the name of
the assured (or of his agent in the effecting of the policy), the
objects insured, and the risk insured against, the voyage or time (or
both) covered, the sum insured, the name of the assurers. The signature
of the assurer is necessary; it is found at the end of the policy, and
the assurer is often on this account called the _underwriter_. The
objects insured must be designated with reasonable certainty, regard
being had to customary usage. The undertaking to insure is usually
expressed by saying that the insured or his agent "doth make assurance
and cause himself to be insured." The risks are either the whole body of
maritime perils detailed above, or any one or set of these, or any other
named peril against which the assured desires protection. There is no
restriction by law of the length of voyage that may be insured, but time
policies are, subject to the Finance Act 1901, invalid if made for more
than one year; a voyage and a period of time may be covered on one
policy. Policies are classed as "time" or "voyage" policies. It is not
necessary to state in the policy the value of the objects insured, but
generally the value is given; policies are therefore classed as "valued"
or "unvalued," the latter being often called "open" policies. The values
of objects insured under open or unvalued policies are the insurable
values given above. As it frequently happens that merchants desire to
have all their shipments of whatever nature covered, by whatever vessel
they may come, they require insurance in general terms; such a policy is
termed a "floating" policy. It states the limits of voyage and value
covered by the underwriter, and the class of ships to be employed. The
particulars of each shipment are declared as the shipments occur, and in
the order of despatch or shipment, the declarations being usually
endorsed on the policy. All shipments within the terms of the policy
must be declared at their honest value, or in accordance with the
special provisions of the policy, if any. An omission or erroneous
declaration may be corrected even after loss or arrival, provided it was
made in good faith.

  The consideration paid by the insured to the underwriter in return for
  the protection granted by the latter is called the _premium_. Until
  payment be made or tendered the policy is not ordinarily issuable,
  i.e. unless otherwise agreed. When the insured effects insurance with
  an underwriter through a broker, then, unless otherwise agreed, the
  broker is liable for the premium to the underwriter, who is, however,
  directly responsible to the assured for losses or liabilities falling
  on the policy and for returnable premium. But the broker has a lien on
  the policy for the premium and for his brokerage, and in case he has
  had dealings as a principal with the insured, he has a lien on the
  policy for any balance due to himself in insurance transactions,
  unless he should have known that in these transactions the insured was
  merely an agent. Some policy forms state definitely that the premium
  has been paid; when such a form is used and no fraud is proved, this
  receipt is binding between assured and underwriter, but not between
  broker and underwriter. If an insurance is effected at a premium "to
  be arranged," and no arrangement is made, then a reasonable premium
  is payable. The same holds where additional premiums have to be
  charged at a rate to be arranged and no arrangement is made.

  It is evident that in nearly all the particulars of any adventure
  insured by an underwriter he is entirely dependent upon the insured
  for correct information. It is therefore the law that an insurance
  contract can be avoided and broken by either of the parties to it if
  the utmost good faith (_uberrima fides_) be not observed by the other.
  The obligation of perfect good faith is thus made reciprocal. Bad
  faith may show itself either in _concealment_ or in
  _misrepresentation_. It is therefore made essential to the stability
  of any insurance contract that the insured must disclose before
  conclusion of the contract every material circumstance known by him,
  failing which the underwriter may avoid the contract. The insured is
  deemed to know every circumstance which in the ordinary course of
  business ought to be known by him. Every circumstance is deemed
  material which would influence the underwriter in his decision as to
  acceptance of the risk or the fixing of the rate of premium.
  Consequently the insured is not bound, unless specially asked by the
  underwriter, to disclose the favourable features of the risk offered,
  or matters known or presumably known by the underwriter (matters which
  are of common knowledge, and such as an underwriter ought in his usual
  business to be aware of), or matters respecting which the underwriter
  waives or declines information, or which any express or implied
  warranty renders superfluous. An agent effecting an insurance must, in
  addition to his principal's material knowledge, disclose everything
  material known to _himself_, or that _he_ should know in the ordinary
  conduct of _his_ business. Every representation of material fact made
  to an underwriter before conclusion of a contract by the insured or
  his agent must be true, or the underwriter may avoid the contract.
  Every representation is material which would influence the underwriter
  in his decision as to acceptance of the risk or to fixing the rate of
  premium. A representation of fact is regarded as true if it be
  substantially correct; literal correctness is not essential. A
  representation of expectation or belief is true if it is made in good
  faith. A representation may be withdrawn or corrected before the
  contract is concluded. The contract is deemed to be concluded when the
  underwriter accepts the risk, whether the policy be then issued or
  not.

  Voyage insured.

It frequently happens that before a vessel has completed the venture on
which she is engaged arrangements have already been made for her future
employment. Where a vessel is insured on time, this is of no moment as
respects her insurance. It has likewise been decided that where any
insurable object is covered by a voyage policy "from" or "at and from" a
named place, the policy is not rendered invalid by her not being at that
place when the insurance is concluded; but, on the other hand, there is
an implied condition that she will begin the venture within a reasonable
time, and that if she fails in this the underwriter may avoid the
contract. If the delay springs from circumstances known to the
underwriter at the time of conclusion of the contract, or if the
underwriter then acquiesces in it, the implied condition is nullified.
If the insured abandons the venture insured, the contract expires; e.g.
if, before the risk commences, the vessel's destination is changed to
one not covered by the policy. Where the policy specifies a place of
departure, and the ship does not sail from that place, the risk does not
attach. If, however, the vessel actually starts from her intended port
of departure, and commences the venture, and thereafter it is decided to
change her destination, this decision constitutes a _change of voyage_.
In default of provision to the contrary, the underwriter may elect to
avoid his insurance from the time of that decision, although the ship be
still in the course she would have followed in her originally intended
venture.

  Should a ship depart from the proper course of the voyage she starts
  upon, and for which she is insured, such departure, when made without
  lawful excuse or justification, is termed _deviation_. From the moment
  it occurs, even though she subsequently return to her proper course
  without loss or injury, the underwriter may avoid his contract; but
  the mere intention to deviate is immaterial. Deviation occurs (1) when
  in a policy a course is definitely specified and the vessel departs
  from it; (2) when, in absence of such definite specification in the
  policy, the vessel departs from the course usually and customarily
  followed in the voyage insured. If a policy provides for several named
  ports of discharge, the vessel may, without committing deviation, omit
  to proceed to one or more; but whether she goes to all or to some she
  must (in absence of usage or sufficient cause to the contrary) take
  them in the order in which they appear in the policy, if not there is
  a deviation. If the policy provides for "ports of discharge" in a
  given district, then (in absence of usage or sufficient cause to the
  contrary) unless the vessel proceeds to them in their geographical
  order she makes a deviation. Similarly, in the case of a voyage
  policy, the want of reasonable despatch throughout, unless lawful
  excuse or justification exists, entitles the underwriter to avoid the
  contract from the time that the delay becomes unreasonable. As excuses
  for deviation or delay on the voyage contemplated by the policy, the
  following are regarded as valid: authorization by licence or other
  provision in the policy, _force majeure_, compliance with express or
  implied conditions of the policy (e.g. warranties, see below),
  reasonable steps taken for the safety of the ship or other objects
  insured, saving life, helping a ship in such distress that life may be
  in danger, or obtaining medical or surgical aid for some person on
  board. If barratry is insured against, delay arising from barratrous
  conduct of master or crew does not avoid the policy. A deviation
  ceases to be excusable unless the ship resumes her proper course and
  proceeds on her voyage with reasonable promptitude after the cause of
  the excusable deviation or delay ceases to be effective.

  Warranties.

In every contract of insurance there are certain conditions precedent to
the liability of the underwriter and incumbent on the insured, which
must be fully and literally complied with, whether material to the risk
or not. These conditions are known in insurance as _warranties_. The
name is unfortunate, as in every other branch of the law of contract it
bears another meaning; still it is convenient, and its insurance
signification is now firmly established. Failure on the part of the
insured to fulfil a warranty _literally_ entitles the underwriter to
avoid his contract as from the moment of breach,[4] but it does not
limit his obligation up to that moment. Breach of warranty is not
nullified by subsequent remedy of the breach, consequently loss
occurring after breach of warranty is not at the charge of the
underwriter, even although before the loss the insured has again
complied with the warranty. But breach of warranty may be waived by the
insurer. Breach of warranty is excused in two cases only: (a) when by
change of circumstances the warranty ceases to be applicable to the
contract, (b) when by subsequent legislation the warranty becomes
unlawful.

  Warranties are of two classes: (1) express (2) implied. Express
  warranties must be written or printed on the policy, or contained in
  some document explicitly referred to in the policy, and so regarded as
  incorporated in the contract. No special form of words is essential to
  the validity of a warranty if the intention to warrant can be
  inferred. Express warranties may refer to anything which the parties
  to the contract choose, e.g. the nationality of the vessel, her
  sailing on a named day, proceeding under convoy, being excluded from
  certain voyages or trades or the carriage of certain cargoes, being
  "well" or "in good safety" on a named day (in which case the warranty
  is fulfilled if she be safe at any time of that day). As regards
  _nationality_, if no express warranty be given there is no undertaking
  on the part of the insured that the vessel is of any particular
  nationality or that she will not change it while the risk lasts. The
  warranty of _neutrality_ in case of insurance of ship or goods means
  that at the beginning of the risk the property concerned is actually
  neutral, and that as far as the insured can control the matter it
  shall so continue during the whole course of the risk. It is also an
  implied condition of the ship being warranted neutral that to the
  utmost of the insured's power she must carry the papers necessary to
  establish her neutrality, must not falsify or suppress these papers,
  or use simulated papers; if this condition is broken the insurer can
  avoid the contract. The words of an express warranty are always to be
  taken in their commercial sense; within that sense they are to be
  strictly and literally taken. An "express" warranty does not exclude
  an "implied" warranty (see below) unless it be inconsistent therewith.

  In addition to these expressed conditions, there are also certain
  essential factors or conditions inherent in each and every contract of
  marine insurance without exception; these are _implied_ warranties,
  which are presumed from the very fact of the making of the insurance.
  They are (a) completion of the prescribed venture without _deviation_,
  (b) _legality_ of the venture (viz. that the adventure insured is a
  lawful one, and that, so far as the insured can control it, it shall
  be carried out in a lawful manner), (c) _seaworthiness_ of the ship.
  In a voyage policy it is an implied warranty that at the commencement
  of the voyage the ship shall be seaworthy for the particular venture
  insured. If the risk commences when the ship is in port, then she must
  in addition be reasonably fit to stand the ordinary dangers of the
  port. If the voyage insured is one in which different degrees of peril
  are to be encountered, or for which the ship needs different kinds of
  outfit at different stages, then she must be seaworthy for each stage
  at its commencement, and the warranty will be fulfilled if she is at
  the beginning of each stage seaworthy for that stage. The warranty of
  seaworthiness is held to be fulfilled when the ship is reasonably fit
  in every respect to meet the ordinary marine dangers of the venture
  insured; that is to say, the mere loss of a vessel by perils of the
  sea is not a proof of unseaworthiness in the sense of this warranty.
  The only ship policies not subject to the warranty of seaworthiness
  are policies on time (the reason given being that there is nothing to
  prevent a time policy lapsing and a new one commencing when the vessel
  is at sea beyond her owner's control as to seaworthiness); but where
  the insured knowingly sends a ship to sea in an unfit state and a loss
  is attributable to that unseaworthiness, the underwriter is not liable
  for such loss. It is not implied in a policy on goods or movables that
  these goods, &c., are seaworthy, but it is implied that at the
  beginning of the voyage the carrying vessel is not only seaworthy as a
  ship but reasonably fit to carry the goods to the destination named in
  the policy.

When the main points of the preceding particulars of the contract of
insurance are summarized it may be said that the transaction is (1) a
contract of indemnity reduced to written or printed words, (2) made in
good faith, (3) referring to a defined proportion or amount, (4) of a
genuine interest in a named object, (5) being against contingencies
definitely expressed, to which that object is actually exposed, and (6)
in return for a fixed and determined consideration.

  Multiple Insurance.

It may happen by accident or by design that an insurance object has been
covered twice or more times, and that in consequence the sum of the
insurance effected exceeds the value in the policy or the insurable
value, if an unvalued policy has been employed. This occurrence involves
a new set of relations between the insured and his various underwriters;
the underwriters themselves are brought into relation to one another. As
regards the insured, he may, in the absence of agreement to the
contrary, claim payment from whomsoever of the underwriters he may
select, but he is not entitled to receive in all more than his proper
indemnity. Each underwriter, whether his policy be valued or unvalued,
is entitled to receive credit for his proper proportion of the sum
obtained by the insured under any other policy. If the insured does
obtain any sum in excess of indemnity, he is regarded as holding it in
trust for his whole body of underwriters. It thus appears that in case
of multiple insurance each underwriter is bound, as between himself and
the other underwriters, to contribute to the loss rateably in proportion
to the amount of his liability under the policy; and if any one pays
more than his proper share, he is entitled to sue the rest for
contribution. Should the insured get any of his premium back? It would
not be equitable to enforce a return from any underwriter who has at any
time stood alone so as to be liable to the full extent of his policy;
but if overlapping policies were accidentally effected all at the same
time, the case is rather different. This leads to the general question
of _return of premium_. Such return may be claimed under the terms of
the policy, in which case the claim for return is simply the carrying
out of the agreement between the parties; it may refer to the whole or
to a part of the interest insured. But there are other circumstances in
which returns can legally be claimed. For instance, it may turn out that
interest insured by a particular vessel and for a particular voyage is
never shipped in that vessel for that voyage; the underwriter has in
this case run no risk, and therefore the consideration for which he
received the premium totally fails, and the premium is properly
returnable to the intending insured, unless there has been fraud or
illegality on the part of the insured. Similarly, in the case of part of
the interest insured on a policy, if that part is distinguishable in the
policy or by custom of trade. But the interest might have made the
voyage in the vessel, and the intending insured might yet remain without
insurable interest. In this case, in absence of fraud or illegality, and
if the policy is not merely a gaming or wagering contract, the insured
is entitled to return of his premium. Similarly, in the absence of fraud
or illegality, if the underwriter legally voids his policy from the
beginning of the risk; as he runs no risk, he receives no premium. The
only cases, except those of fraud and illegality, in which the
underwriter can retain his premium without running risk, are those of
risks underwritten "lost or not lost," and arrived safely without the
underwriter's knowledge, in which the underwriter takes his chance as to
the condition and situation of the ship when he assumes the risk. But
this is practically a case of agreement that there shall be no return.

When the insured has overinsured on an unvalued policy, a proportionate
part of the premium is returnable. But where double insurance has been
knowingly effected by the insured or any earlier policy has at any time
borne the entire risk or a claim has been paid on a policy in respect of
its full value, no premium is returnable.

The policy issued by the underwriter to the insured makes mention of
certain perils against which the insurance is granted, and unless the
policy otherwise provides, the underwriter is liable for any loss
proximately caused by any of these perils, but is not liable for any
loss not proximately caused by a peril insured against. He is not
responsible for any loss due to the wilful misconduct of the insured
but, unless the policy otherwise provides, he is liable for any loss
proximately caused by a peril insured against even though it would not
have happened but for the misconduct or negligence of master or crew.
Nor is he responsible for any loss caused by delay, although the delay
be caused by a peril insured against; nor for ordinary wear and tear,
ordinary leakage or breakage, inherent vice or character of objects
insured, loss from rats or vermin, or injury to machinery not
proximately caused by sea-perils.

    Total loss.

    Abandonment.

  Losses are divided into "total" and "partial." A "total" loss may be
  (1) actual, or (2) constructive; and an insurance against total loss
  covers the insured against both, unless a different intention appears
  from the terms of the policy. It is an "actual" total loss when the
  object insured is destroyed or damaged so as to cease to be of the
  denomination of goods to which it belonged when insured, or when the
  insured is irretrievably deprived of the property insured. In the case
  of an actual total loss no notice of abandonment need be given. In the
  case of a missing ship after the lapse of a reasonable time without
  news, an "actual" total loss may be presumed. There is a
  "constructive" total loss when the interest insured has been abandoned
  on account of what appears inevitable actual total loss, or because
  the cost of preventing such loss would exceed the value after such
  expenditure. E.g. if ship or merchandise is in such a position that
  recovery is unlikely or the cost of recovery would exceed the value
  recovered, there is constructive total loss; likewise in the case of a
  damaged ship, if the cost of repair would exceed the repaired value of
  the ship. (In making the estimate of cost of repairs no deduction is
  to be made for the share of them payable in general average by other
  interests, but account is to be taken of the cost of later salvage
  operations and of the ship's proportion of any later general
  averages.) Similarly for damaged goods, there is constructive total
  loss if the cost of repair and of forwarding to destination exceeds
  the arrived value. The insured may either treat constructive total
  loss as a partial loss or as an actual total loss, in which latter
  case he abandons his insured interest to the underwriter. If he
  decides to abandon he must give notice of abandonment, else he will
  recover only for a partial loss. This notice may be wholly or partly
  written or oral, and in any terms if only they indicate the intention
  to transfer unconditionally all interest to the underwriter. The
  refusal of abandonment by the underwriter does not prejudice the
  assured's rights. Abandonment may either be expressly accepted by the
  underwriter or may be implied from his conduct, but his mere silence
  does not imply acceptance. When notice is accepted, abandonment is
  irrevocable. Notice may be waived by the underwriter. Notice is
  unnecessary where, when the news reaches the insured, there would be
  no benefit to the underwriter if notice were given to him. On valid
  abandonment the underwriter adopts the interest of the insured in the
  subject insured, or what remains of it, and all incidental proprietary
  rights, e.g. in the case of a ship he is entitled to any freight in
  the course of being earned and which is earned by her subsequent to
  the accident causing the loss, less the expenses incurred after the
  accident; and if the cargo is on owner's account, the underwriter is
  entitled to reasonable freight from the place of casualty to
  destination.

    Partial loss.

    General average.

    Salvage charges.

    Particular average.

  Any loss other than a total loss, as defined and described above, is a
  "partial" loss. As such are classed general average, salvage charges,
  particular average, particular charges. "General average" is really an
  outlying branch of the law of affreightment (see AVERAGE and
  AFFREIGHTMENT): its connexion with insurance is merely secondary,
  arising out of the underwriter's contract to pay losses generally and
  this special liability in accordance with definite provisions of the
  policy. Any extraordinary sacrifice or expenditure voluntarily and
  reasonably made in a moment of peril in order to preserve all the
  property in the venture, is a general average act and the loss arising
  therefrom is a general average loss. The party on whom it falls is
  entitled to a rateable contribution from the others. These rateable
  contributions are repayable by the respective underwriters subject to
  the special provisions of their policies, unless the sacrifice or
  expenditure was made to avert a peril not covered by the policies,
  when there is no liability. The party originally incurring a general
  average sacrifice may recover from his underwriter the whole loss
  without having enforced his right of contribution from the others
  concerned in the venture. When ship, freight and cargo, or any two of
  them, belong to one person, the underwriter's liability is determined
  as if these interests were each owned by separate persons. "Salvage
  charges" are the charges recoverable under maritime law by a salvor
  independently of contract: if incurred in averting perils insured
  against, and if not otherwise provided in the policy, they are
  recovered as a loss from these perils. The cost of similar services of
  the insured or his agents or hired employees are recovered as a
  general average loss when the cost fulfils the character of general
  average expenditure, or in all other cases as "particular charges."
  Thus all expenses by or on behalf of the insured to save or preserve
  the interest insured are either general average, salvage charges or
  particular charges. Particular charges are not included in "particular
  average," which may now be defined as a partial loss of the subject
  insured, caused by a peril insured against, and not being a general
  average loss.

    Measure of indemnity.

    F.P.A. liabilities.

  The nature of the liability for loss of the underwriter having been
  determined, it remains to fix its extent, or in other words the
  "measure of indemnity"; each underwriter bears that proportion of the
  loss which his subscription bears in the case of a valued policy to
  the insured value, and in the case of an unvalued policy to the
  insurable value. In the case of a total loss, the measure of indemnity
  is the sum fixed by the policy if valued, or the insurable value of
  the object insured if the policy be unvalued. When the insured fails
  in an action for total loss, he is not precluded from recovering a
  partial loss if the policy insures him against partial loss. In the
  case of damage to a ship not amounting to a total loss the insured is,
  subject to the terms of his policy, entitled to recover the reasonable
  cost of repairs less customary deductions, but not exceeding for any
  one casualty the sum insured. If the repairs are only partial he is in
  addition entitled to an allowance for unrepaired damage, but the
  aggregate must not exceed the cost of complete repairs, less customary
  deductions. If the damaged ship has neither been repaired nor sold
  during the risk, the insured is entitled to reasonable depreciation
  but not exceeding the reasonable cost of repairs, less customary
  deductions. As regards freight, the underwriter's liability for
  partial loss is, subject to the terms of the policy, the proportion of
  the policy value, or (in case of an unvalued policy) of the insurable
  value, which the freight lost bears to the whole freight at risk of
  the insured under the policy. When there is liability under a policy
  for total loss of part of the goods insured its amount is determined
  as follows: on an unvalued policy, it is the insurable value of the
  portion lost, ascertained as in case of total loss; on a valued
  policy, it is the proportion of the sum insured which the insurable
  value of the portion lost bears to that of the whole. Subject to any
  express provision of the policy, when goods are delivered at
  destination damaged throughout or in part, the liability is for the
  same proportion of the sum insured (or, in an unvalued policy, of the
  insurable value) that the difference between gross sound and gross
  damaged values at destination bears to the gross sound value there.
  Gross sound value means the wholesale price including freight, landing
  charges and duty; gross damaged value means the actual price obtained
  at a sale when all charges on sale are paid by the sellers. In case of
  goods customarily sold in bond, the bonded price is taken to be the
  gross value. When different kinds of property are insured under a
  single valuation, that valuation is apportioned over them in
  proportion to the respective insurable values they would have on an
  unvalued policy, but when the prime cost cannot be ascertained the
  division is made over the net arrived sound values of the different
  kinds of property. The liability for general average contribution and
  salvage charges is, for anything insured for its full contributing
  value, the full amount of the contribution; but in case of insurance
  not attaining the full contributing value there is a reduction in
  proportion to the under insurance; and where a particular average is
  payable on the contributing goods, its amount must be deducted from
  the insured value when the underwriter's liability is being
  ascertained. On policies covering liabilities to third parties, the
  measure of indemnity, subject to the condition of the policy, is the
  amount paid or payable to the third party. When property is insured
  "free of particular average" (f.p.a.), then unless the policy is
  apportionable, as above, there is no liability for loss of part with
  exception of loss of part occasioned by a general average sacrifice,
  but there is liability for total loss of an apportionable part. The
  underwriter on f.p.a. terms is liable for salvage charges, particular
  charges and charges incurred under the "sue and labour" clause of the
  policy to avert a loss insured against. Unless otherwise provided in
  the policy when goods are insured f.p.a. under a certain named
  percentage, a general average loss cannot be added to a particular
  average loss to make up the specified percentage; nor may particular
  charges nor the expenses of ascertaining and proving the loss; in fact
  only the actual loss suffered by the object insured may be taken into
  account. The engagement evidenced by the "sue and labour" clause of a
  policy is regarded as supplementary to the contract of insurance, and
  the expenses incurred under it are recoverable from the underwriter,
  even if he has paid a total loss or has insured the goods f.p.a. with
  or without any franchise being specified. General average losses and
  contributions are not "sue and labour" expenses, nor are salvage
  charges, as defined above. The expenses of averting a loss not covered
  by the policy cannot be recovered under the "sue and labour" clause.
  The Marine Insurance Act specially declares that "It is the duty of
  the insured and his agents, in all cases, to take such measures as may
  be reasonable for the purpose of averting or minimizing a loss."

  Unless otherwise provided, and subject to the provisions of the law,
  the underwriter is liable for successive losses, even though their
  aggregate amount exceeds the sum insured. But where, under one policy,
  an unrepaired or uncompensated partial loss is followed by a total
  loss, the insured can only recover the total loss. These provisions do
  not affect the underwriter's liability under the "sue and labour"
  clause, for, as explained above, the "sue and labour" clause is a
  contract supplementary to the insurance contract contained in the
  policy.

    Subrogation.

  The payment of a total loss of the whole or of an apportionable
  portion of the object insured entitles the underwriter to take over
  the insured's interest in all that remains of the same, the
  underwriter becoming subrogated to all the rights and remedies of the
  insured in and regarding the interest insured as from the time of the
  accident occasioning the loss. The payment of a partial loss gives the
  underwriter a similar subrogation but only in so far as the insured
  has been indemnified in accordance with law by such payment for the
  loss.

    Coinsurance.

  In case of double (or multiple) insurance each underwriter is bound to
  contribute, as between himself and the other underwriters, rateably to
  loss in proportion to the amount for which his policy makes him
  liable; for any excess of this amount he may maintain action against
  the coinsurers and may obtain the same remedy as a surety who has paid
  more than his proportion of a debt.

  Where the object is insured for less than the insurable value, as
  defined above, the insured is deemed to be his own underwriter for the
  balance.

    Liabilities.

  Recent extensions of marine insurance in England have mostly been in
  the direction of giving to shipowners protection against liabilities
  to third parties. The first addition was the running down clause
  (r.d.c.) by which underwriters take burden of a proportion, usually
  three-quarters, of the damage inflicted on other vessels by collision
  for which the insured vessel is held to blame. The rapid increase in
  the use and size of steamships was accompanied by an equally rapid
  increase in the frequency of collisions at sea, tending to make the
  shipowner desirous of insuring himself against the balance of his
  collision liability, and against whatever other liabilities to third
  parties might be imposed upon him. There was a hesitation on the part
  of underwriters to meet these wants and the result is that in Great
  Britain most liability insurances are effected in mutual insurance
  societies. The insurance of such liabilities is perhaps simpler in
  Great Britain than in other countries, as the amount for which a
  shipowner can be liable is limited by law, although, of course, none
  but English tribunals are bound by that law. A new and extensive set
  of liabilities has been thrown on shipowners by the Workmen's
  Compensation Act of 1906; the liabilities in this case vary with the
  wages of the workmen concerned. Another interesting class of
  insurances has received much attention, namely, those against the
  risks of capture, seizure and detention by a hostile power, generally
  described briefly as _war risks_. But the difficulties connected with
  such risks probably lie more in determining the legal position of the
  owners of the property, and the obligations under which they lie, than
  in settling those of their underwriters. Such questions concern
  _blockade_, _contraband_, _domicile_, _nationality_, _neutrality_, &c.

    Course of business.

  The usual procedure in the offer and acceptance of a risk is as
  follows: The intending insured (principal or broker) offers the risk
  by showing to the underwriter a brief description of the venture in
  question, called in Great Britain a slip, in America an application.
  The underwriter signifies his acceptance of the whole or of a part of
  the value exposed to perils by signing or initialling the slip,
  putting down the amount for which he accepts liability. Or he may sign
  and issue to the insured (principal or broker) a similar document made
  out in his own office, called a covering note or insurance note. These
  documents are simply first sketches of the contract, _mémoires pour
  servir_, so imperfect that they can be explained only in conjunction
  with the contract in its completed form (the policy). In America it is
  not at all rare for insurances to be effected through applications
  alone without any policy existing. In Great Britain the existence of a
  policy is essential, slips and covering notes being merely provisional
  agreements, binding in honour only, to issue policies on certain terms
  and conditions on receipt of the necessary information. One reason for
  insisting on a policy being issued for every risk is that a means of
  raising revenue by stamp taxes is thus created. In Great Britain the
  stamp duties under the Stamp Act 1891 are as follows:--

    Where the premium does not exceed 1/8% of the amount
      insured                                               1d.

    Where the premium exceeds 1/8% of amount insured:--
      (a) On any voyage, per £100 or per any fractional
            part of £100                                    1d.
      (b) For any time not exceeding six months, per
            £100, &c., as above                             3d.
      (c) For any time exceeding six months, and not
            exceeding twelve months, per £100, &c., as
            above                                           6d.

  In consequence of this regulation, no time policy can be issued for a
  period exceeding twelve months. Policies or certificates of insurance
  coming from abroad are subject to the same duties, which should be
  paid within ten days after receipt in the United Kingdom. The
  shortness of the time allowed for stamping often prevents payment of
  the tax. These stamp regulations are very troublesome, and produce
  only a comparatively insignificant revenue. On small premium
  insurances the tax is so excessive that it drives business out of the
  country. A uniform tax per policy has been several times suggested,
  but these proposals have not yet been accepted by the Treasury.

  The documents required to establish a claim for total loss are: (1)
  Protest of master. (2) Set of bills of lading (endorsed if necessary,
  so as to be available to the underwriter). (3) Policy or certificate
  of insurance (endorsed if necessary). (4) In the United States:
  Statement of loss in detail. In the United States certified copies of
  Nos. (1), (2), and (3) are taken; but as none of these copy-documents
  can transfer possession to the underwriter, there is necessary for
  that purpose another document, viz. (5) Bill of sale and abandonment
  with subrogation to underwriter--that is, an assignment of all
  interest to the underwriter. In the absence of the _full_ set of bills
  of lading, a similar document should be taken in Great Britain,
  especially in all cases in which salvage operations are likely to be
  undertaken. Such a document handed to a salvage association or a
  manager of salvage (whether acting for shipowner or for underwriter)
  settles the ownership of salved goods, and ensures that any claim for
  salvage expenses will be sent directly to the underwriter. This is
  from the insured's point of view desirable, and it greatly simplifies
  the management of salvage cases. As a claim for total loss cannot
  extend beyond the full amount insured in the policy, it follows that
  the documents required to substantiate such a claim must be supplied
  to the underwriter free of charge.

  For the substantiation of a claim for particular average the following
  documents are required: (1) Protest of master or logbook. (2) Set of
  bills of lading (cargo claims). (3) Policy or certificate of insurance
  (endorsed if necessary). (4) Certified statements in detail of actual
  cash value at destination of goods in _damaged_ state, all charges
  paid. Certified statements in detail of sound value at destination of
  goods on same day, all charges paid. Or original vouchers of costs of
  repair of ship, all discounts, rebates, allowances and returns
  deducted. (5) In the United States, subrogation to underwriters of
  damaged goods.

  AUTHORITIES.--E. K. Allen, _Stamp Duties on Sea Insurances_ (2nd ed.,
  London, 1903); Th. Andresen, _Seeversicherung_ (Hamburg, 1888); Joseph
  Arnould, _Treatise on the Law of Marine Insurance and Average_ (2
  vols., 2nd edition, London, 1857); eighth edition by de Hart and Simey
  (London, 1909); Laurence R. Baily, _Perils of the Seas_ (London,
  1860); William Barber, _Principles of the Law of Insurance_ (San
  Francisco, 1887); W. G. Black, _Digest of Decisions in Scottish
  Shipping Cases, 1865-1890_ (Edinburgh, 1891); Sir M. D. Chalmers and
  Douglas Owen, _Marine Insurance Act 1906_ (London, 1906); Alfred de
  Courcy, _Commentaire des polices françaises d'assurances maritimes_
  (2nd edition, Paris, 1888); E. L. de Hart and R. I. Simey, _The Marine
  Insurance Act 1906_ (London, 1907); R. R. Douglas, _Index to Maritime
  Law Decisions_ (London, 1888); John Duer, _Law and Practice of Marine
  Insurance_ (2 vols., New York, 1845, 1846); William Gow, _Marine
  Insurance_ (3rd corrected edition, London, 1909); Victor Jacobs,
  _Étude sur les assurances maritimes et les avaries_ (Brussels, 1885);
  Richard Lowndes, _Practical Treatise on the Law of Marine Insurance_
  (2nd edition, London, 1885); _Law of General Average, English and
  Foreign_ (4th edition, London, 1888); Charles M'Arthur, _Contract of
  Marine Insurance_ (2nd edition, London, 1890); D. Maclachlan, _Arnould
  on the Law of Marine Insurance_ (2 vols., 6th edition, London, 1887);
  Reginald G. Marsden, _Admiralty Cases, 1648 to 1860_ (London, 1885);
  _Law of Collisions at Sea_ (5th edition, London, 1904), Douglas Owen,
  _Marine Insurance Notes and Clauses_ (3rd edition, 1890); Theophilus
  Parsons, _Law of Marine Insurance and General Average_ (2 vols.,
  Boston, 1868); G. G. Phillimore, "Marine Insurance" in _Encyclopaedia
  of the Laws of England_, vol. viii. (London, 1907); Willard Phillips,
  _Treatise on the Law of Insurance_ (2 vols., 5th edition, New York,
  1867); C. R. Tyser, _Law relating to Losses under a Policy of Marine
  Insurance_ (London, 1894); Rudolph Ulrich, _Grosse Haverei_ (2nd ed.,
  3 vols., Berlin, 1903, 1905, 1906); G. Denis Weil, _Des assurances
  maritimes et des avaries_ (Paris, 1879).     (W. Go.)

FOOTNOTES:

  [1] _On the Effects of Selection_, by Emory McClintock (New York,
    1892), p. 94.

  [2] As a result of investigation into the affairs of various American
    insurance companies in 1905 by a committee appointed by the state
    legislature of New York, a new law regulating life insurance down to
    the minutest details was passed in 1906 (ch. 326). The surrender
    value of a policy is to be the amount of insurance which the reserve,
    computed on the 4½% mortality table, standing to its credit, will
    purchase as a single premium. Other important features of the
    legislation are that no New York company may hold a contingency
    reserve beyond a fixed proportion of the net value of its policies;
    the limiting of types of policies permitted, the defining of the
    nature of investments permitted, and provisions for state
    supervision, valuation, and annual division of profits.

  [3] An important addition to the marine insurance law of the United
    Kingdom was made by the Marine Insurance (Gambling Policies) Act
    1909, which made void policies taken out by persons uninterested in
    ships or cargo, who only gain by the loss of the vessel. Such
    policies are known as "policies proof of interest."     (P. P. I.).

  [4] Lord Mansfield expressed it: "The warranty in a contract of
    insurance is a condition or a contingency, and unless that be
    performed there is no contract" (_Hibbert_ v. _Pigou_, _apud_
    Marshall, 3rd ed., p. 375).

INTAGLIO (an Ital. word, from _intagliare_, to incise, cut into), a form
of engraving or carving, in which the pattern or design is sunk below
the surface of the material thus treated, opposed to "cameo" or
"relievo"--carving or engraving where the design is raised. Intaglio is
thus applied to incised gems, as cameo (q.v.) to gems cut in relief (see
GEMS).

INTELLECT (Lat. _intellectus_, from _intelligere_, to understand), the
general term for the mind in reference to its capacity for knowing or
understanding. It is very vaguely used in common language. A man is
described as "intellectual" generally because he is occupied with theory
and principles rather than with practice, often with the further
implication that his theories are concerned mainly with abstract
matters: he is aloof from the world, and especially is a man of training
and culture who cares little for the ordinary pleasures of sense.
"Intellect" is thus distinguished from "intelligence" by the field of
its operations, "intelligence" being used in the practical sphere for
readiness to grasp a situation. (The employment of the word as a synonym
for "news" is mere journalese; such phrases as "Intelligence Department"
in connexion with newspapers and public offices are more justifiable.)
In philosophy the "intellect" is contrasted with the senses and the
will; it sifts and combines sense-given data, which otherwise would be
only momentary, lasting practically only as long as the stimuli
continued to operate. It thus includes the cognitive processes, and is
the source of all real knowledge. Various attempts have been made to
narrow the use of the term, e.g. to the higher regions of knowledge
entirely above the region of sense (so Kant), or to conceptual
processes; but no agreement has been reached. "Intellection" (i.e. the
process as opposed to the capacity) has similarly been narrowed (e.g. by
Professor James Ward) to the sphere of concepts; other writers, however,
give it a much wider meaning. "Intellectualism" is a term given to any
system which emphasizes the cognitive function; thus aesthetic
intellectualism is that view of aesthetics which subordinates the
sensual gratification or the delight in purely formal beauty to what may
be called the ideal content.

INTELLIGENCE IN ANIMALS.[1] Professor G. J. Romanes, in his work on
_Animal Intelligence_ (1881), used the term "intelligence" as synonymous
with "reason," and defined it as follows: "Reason or intelligence is the
faculty which is concerned in the intentional adaptation of means to
ends. It therefore implies the conscious knowledge of the relation
between means employed and ends attained, and may be exercised in
adaptation to circumstances novel alike to the experience of the
individual and that of the species." There is here some ambiguity as to
the exact psychological significance of the words "intentional
adaptation" and of the phrase "conscious knowledge of the relation
between the means employed and the ends attained." A chick a day or two
old learns to leave untouched nauseous caterpillars, and Romanes would
certainly have regarded this as a case of intelligent profiting by
experience; but how far there is intentional adaptation and whether the
chick has conscious knowledge of the relation of means to ends, is
doubtful, and, to say the least of it, open to discussion. St George
Mivart, the acute dialectical opponent of Romanes, denied that animals
are capable of the exercise of reason or intelligence. He urged that
according to traditional views reason should denote and include all
intellectual perception, whether it be direct and intuitive or indirect
and inferential (_sensu stricto_), and contended that under neither head
are to be included the sensuous perceptions and merely practical
inferences of animals. Wasmann, who argues on similar grounds, regards
such behaviour as that of the chicken as instinctive in the wider sense
(see INSTINCT) and not intelligent; man alone, he contends, is
intelligent, that is to say has the power of perceiving the relations of
concepts to each other, and of drawing conclusions therefrom. It is
clear that the discussion largely turns on the definition of terms; but
more than this lies behind it. Both Mivart and Wasmann are emphatic in
their assertions that instinctive modes of behaviour in the wider sense
or the sensuous perceptions and practical inferences of animals differ
fundamentally in kind from the rational or intelligent conduct of human
folk, and that by no conceivable process of evolution could the one pass
upwards into the other.

  Psychological definition.

Wasmann regards the inclusion of those activities which result from
sense-experience under the term "intelligence" as pseudo-psychological.
To modern psychologists of standing we must therefore turn. Under the
heading "Intellect or Intelligence," in the _Dictionary of Philosophy and
Psychology_, G. F. Stout and J. Mark Baldwin say: "There is a tendency to
apply the term intellect more especially to the capacity for conceptual
thinking. This does not hold in the same degree of the connected word
intelligence. We speak freely of 'animal intelligence,' but the phrase
'animal intellect' is unusual. However, the restriction of the term to
conceptual process is by no means so fixed and definite as to justify us
in including it in the definition." With respect to the word intellection
again: "There is a tendency to restrict the term to conceptual thinking.
Ward does so definitely and consistently. Croom-Robertson, on the other
hand, gives the word the widest possible application, making it cover all
forms of cognitive process. On the whole, if the term is to be employed
at all, Robertson's usage appears preferable, as corresponding better to
the generality of the words intellect and intelligence." It does not seem
to be pseudo-psychological, therefore, to apply the term intelligence to
the capacity, unquestionably possessed by animals, of profiting by
sensory experience. The present writer has suggested that the term may be
conveniently restricted to the capacity of guiding behaviour through
perceptual process, reserving the terms intellect and reason for the
so-called faculties which involve conceptual process. There are, however,
advantages, as Stout and Baldwin contend, in employing the word in a
somewhat wide and general sense. It is probably best for strictly
psychological purposes to define somewhat strictly perceptual and
conceptual (or ideational) process and to leave to intelligence the
comparative freedom of a word to be used in general literature and
therein defined by its context. It may be helpful, however, to place in
tabular form the different uses above indicated:--

          _Perceptual Process._          _Conceptual Process._

  1. Instinct (wider sense).           Intelligence (e.g. Wasmann).
  2. Sense-perception                  Intelligence (e.g. Mivart).
                     \_______  _______/
                             \/
  3.                    Intelligence     (e.g. Stout and Baldwin).
  4. Intelligence.                     Intellect and Reason
                                         (e.g. Lloyd Morgan).

From this table it may be seen at a glance that, with such divergence of
usage, the application of the word "intelligent" to any given case of
animal behaviour has in itself little psychological significance. If the
psychological status of the animal is to be seriously discussed, the
question to be answered is this: Are the observed activities explainable
in terms of perceptual process only, or do they demand also a
supplementary exercise of conceptual process? Granting that they are
intelligent in the broad acceptation of the word, are they only
perceptually intelligent or also conceptually intelligent?

  Perceptual process.

  Conceptual process.

It would require more space than is at our command to make the
distinction which is drawn by those who use these terms clear and
distinct; but enough may perhaps be said to enable the general reader to
grasp the salient points. It will be convenient to take a concrete case.
A chick in the performance of its truly instinctive activities pecks at
all sorts of small objects. In doing so it gains a certain amount of
initial experience. Very soon it may be observed that some grubs and
caterpillars are seized with avidity whenever occasion offers; while
others are after a few trials let alone. Broadly speaking, we have here
intelligent selection and rejection. Psychologically interpreted what is
believed to take place is somewhat as follows. Each grub or caterpillar
affords a visual impression or sensation. This as such is just a
presentation to sight and nothing more. But in virtue of previous
experience it suggests what was formerly presented to consciousness in
that experience. It has meaning. An impression which carries meaning
begotten of previous experience is raised to the level of a percept; and
behaviour which is influenced and guided by such percepts, that is to
say by impressions _and_ the meaning for behaviour they suggest, is the
outcome of perceptual process. If a dog learns to open a gate by lifting
the latch, this may be due to perceptual process. Through previous
experience the sight of the latch may suggest meaning for practical
behaviour. His action may be simply due to the fact that the visual
presentation has been directly associated with the appropriate bodily
activities, and now by suggestion reinstates like activities; he may
not, though on the other hand he may, exercise conceptual thought. Let
us suppose that the chick which selects certain caterpillars and rejects
others does form concepts. What does this imply from the standpoint of
psychology? Stout and Baldwin define conception as the "cognition of a
universal as distinguished from the particulars which it unifies. The
universal apprehended in this way is called a concept." If then the
chick apprehends the universal "good-for-eating" as exemplified in the
particular maggot, and the maggot as a concrete case of the abstract and
universal "good-for-eating," it has a capacity for conceptual thought.
"There is one point in our definition," say Stout and Baldwin, "which
requires to be specially emphasized. Conception is the cognition of a
universal as distinguished from the particulars which it unifies. The
words "as distinguished from" are of essential importance. The mere
presence of a universal element in cognition does not constitute a
concept. Otherwise all cognition would be conceptual. The simplest
perception includes a universal.... The universal must be apprehended in
antithesis to the particulars which it unifies." The general, or in
technical phraseology, the universal characteristic "good-for-eating" is
present in all that the chick practically finds to be edible; but the
chick may just eat the nice caterpillars without thinking for a moment
of edibility.

  Their value.

Few would dream of contending that the chick a few days old is capable
of conceptual thought. Naïve perceptual process pretty obviously
suffices for an explanation of the behaviour of the little bird. But so
too, it may be said, does it suffice for the explanation of much of the
practical behaviour of men. If a great number of the actions of animals
are only perceptually intelligent, so too are a great number of the
actions of men and women. This is unquestionably the case; and it serves
to bring out the distinction in value which may be assigned to the
percept and the concept respectively. The value of the percept is for
simple direct practical behaviour; the value of the concept is for the
elaboration of systematic knowledge. Any given impression may have
meaning for behaviour in a given situation which is like that which has
previously developed in a certain manner; but it may also have
significance for the interpretation of such situations in a conceptual
scheme of thought. The sight of the sage-blossom may have meaning for
the bee which has sucked the sweets contained in such flowers; the sight
of the bee in this situation may have significance for scientific
interpretation as an example of the fertilization of flowers by insects.
The bee may be only perceptually intelligent; the man who observes its
action may or may not be conceptually intelligent.

A good deal of human behaviour may be interpreted in terms of perceptual
intelligence, and a far larger proportion of animal behaviour may be so
interpreted. But some human conduct cannot be explained save as the
outcome of conceptual intelligence. The question is, whether any
carefully observed and well-authenticated cases of animal procedure are
inexplicable in the absence of conceptual thought, and if so what
concepts are necessarily involved? It is now conceded that the mere
collection of anecdotes which result from casual as opposed to
systematic observation can afford no satisfactory basis for an answer to
this question. A solution can only be obtained by well-planned
observations conducted by those who have an adequate psychological
training. Even under these conditions a criterion of the presence or
absence of conceptual factors is needed; and such a criterion is not
easy to formulate or to apply.

  Development of concept.

If we institute inquiries with a view to ascertaining how the conceptual
factor originates, it appears to be the result of analysis and
abstraction, and to be reached by a process of comparison which becomes
intentional and deliberate. If, for example, in educational procedure,
we seek to assist children in forming concepts of colour, shape and
material, we place before them a number of objects, some round, some
square, some triangular; some red, some yellow, some blue; some made of
paper, some of wood, some of flannel. Any given object is both red and
square and made of flannel, blue and round and made of wood, and so on.
We teach the child to group the objects, to put all the blues, yellows
and reds together irrespective of shape or material; then all the
rounds, squares and triangles together; then all which are made of like
material. We thus help the children to grasp that though shape, colour
and material are combined in each object, yet for the immediate purpose
in hand one matters and the others do not matter. That which does matter
is abstracted from the rest. The child has to analyse his experience and
fix his attention on some given factor therein. He has to compare the
objects intentionally, that is, for a definite end. He reaches, for
example, the concept "blue" and realizes that the word may be applied to
a number of particular objects differing in other respects, and that
each is an example of what he understands by the word blue. Whether he
could reach the concept without words is a question on which opinions
differ.

  Are animals conceptually intelligent?

Locke held that animals are incapable of the abstraction which is
implied in such procedure. Dr Stout considers that observation of their
behaviour shows little if any evidence of intentional comparison. And it
is open to discussion whether they are able to analyse the situations
opened up by their perceptual behaviour. The matter cannot be fully
considered here. It must suffice if enough has been said to show the
nature of the distinction between perceptual and conceptual process.

An example may, however, be given of the kind of observation which,
since it was carefully planned and carried out, is of evidential value.
Dr Alexander Hill's fox terrier was "taught" to open the side door of a
large box by lifting a projecting latch. When the door swung open he was
never allowed to find anything in the box, but was given a piece of
biscuit from the hand. Then a warm chop-bone was put inside the box,
which was placed in a courtyard so that the dog would pass it when no
one was near, though he could be watched from the window. Details of the
terrier's behaviour are given by Dr Hill in _Nature_ (lxvii. 558, April
1903). The net result was that the dog failed to apply at once his quite
familiar experience of lifting the latch in the usual way. Here two
situations were presented; first the box with people around and a piece
of biscuit to be obtained from one of them by lifting the latch;
secondly the box with no one near and a redolent chop-bone inside. To us
it is obvious enough that the lifted latch is the key to the development
of both situations; we analyse them so as to get the essential factor
which matters. The dog apparently did not do so. He seemingly was
incapable of this modest amount of analysis and abstraction.

  Ambiguity of phrase "conscious knowledge of means."

We can now see more clearly what was meant by saying that Romanes'
phrase (that intelligence "implies a conscious knowledge of the relation
between means employed and ends attained") is ambiguous. The dog which
lifts the latch of a gate and goes out when the gate swings open
undoubtedly employs means to reach an end; he need not analytically
think the means as conducive to the end and the end as reached by the
means; he need not conceive this relationship as exemplified in a number
of particular cases; he need not cognize the universal as distinguished
from the particulars. Perceptual experience, therefore, does not imply
what Romanes states if his words are interpreted in terms of conception;
it does, however, imply that the relationship is contained within the
unanalysed whole of experience and is a factor contributing to an
acquired mode of behaviour.

Opinions differ as to how far, if at all, animals show what we are bound
to interpret as the rudiments of conceptual thinking. It is perhaps best
to regard the question as still _sub judice_. The evolutionist school,
but not without exception, incline to the view that we find in animals
the beginnings of conceptual experience; some are, however, of opinion
that, in the absence of language, conceptual analysis is well-nigh
impossible, and in any case cannot be carried far. To an evolutionist
the assertion that conceptual intelligence could not conceivably have
had a natural genesis from perceptual experience, appears to be made on
grounds other than scientific. Few if any psychologists contend, on
strictly psychological grounds, for a distinction of kind such as Mivart
and Wasmann postulate. Conscious experience is indeed _sui generis_ and
is distinct in kind from the energy with which the physicist or the
physiologist has to deal; but within conscious experience from its
earliest manifestation to its latest development scientific psychology
only recognizes differences of mode.

  Stages of development.

In individual development the earliest manifestation of experience is
the conscious accompaniment or concomitant of that type of organic
behaviour which includes all reflex and instinctive acts. This affords
the primordial tissue of experience, including a conscious awareness of
the stimulating presentations which initiate organic behaviour and the
kinaesthetic presentations which accompany it. Thus arises an awareness
of the development of the instinctive situation. Perceptual intelligence
depends upon associative re-presentation--the earlier phases of a
presented situation calling up a revival of the whole previous
experience before its later phases are again actually presented. Through
the process of inhibition, to the clearer understanding of which
physiology is daily contributing fresh data, the actual development
through behaviour of the later phases of the situation is checked, and
an acquired modification of the behaviour results. The whole range of
perceptual intelligence in animals illustrates the manner in which
accommodation to varied circumstances is reached. On these foundations
in varied experience conceptual intelligence is developed. The early
stages of its development, whether in the child, in whom it
unquestionably occurs, or in the higher animals, in which it is not
improbably incipient, are difficult to determine on the basis of
observation of its expression in behaviour or conduct. But the
distinguishing features of conceptual as contrasted with perceptual
intelligence are the comparison of situations with a view to their
analysis, the disentangling of factors which are of importance for some
purpose of interpretation or of conduct, and the attitude of mind which
is expressed by saying that the particular case is an example of what
experience has shown to be, in technical phrase, universal, and is
realized as such. Under the comprehensive phrase, intelligence in
animals, this may or may not be included.

  For literature, see under INSTINCT.     (C. Ll. M.)

FOOTNOTE:

  [1] For a discussion of human intelligence, see PSYCHOLOGY.

INTENDANT (from Lat. _intendens_, pres. part. of _intendere_, to apply
the mind to, to watch over; cf. "superintendent"), the name used in
early times in France to designate a functionary invested by the king
with an important and durable commission.[1] As early as the 14th
century the title of _intendentes_ or _superintendentes financiarum_ was
given to the commissaries appointed by the king to levy the _aides_, or
temporary subsidies. In the 16th century Francis I. created the
_intendants des finances_, permanent functionaries who formed the
central and superior administration in financial matters. They took the
place of the _généraux des finances_ and the "treasurers of France," who
became provincial functionaries in the various _généralités_. The
_intendants des finances_ existed until the end of the _ancien régime_;
they were at first under the authority of the _surintendant_, and
subsequently under that of the _contrôleur général des finances_. The
_intendants des provinces_ date from the last thirty years of the 16th
century. They were commissaries sent by the king with wide powers to
restore order in the provinces after the civil wars. Their functions
were at first extraordinary and temporary, but a few were retained as
permanent state officials, and in course of time they came to be fairly
generally distributed over the whole kingdom. The existing territorial
divisions were not disturbed, each _intendant_ being placed over a
_généralité_, save in some cases where slight modifications were
necessary for administrative purposes. In their functions, however,
there is another element worthy of notice. In the 13th and 14th
centuries the monarchy had organized a species of inspection
(_chevauchée_) over the provincial functionaries, which was performed by
the _maîtres des requêtes_, and this the reform ordinances of the 16th
century sought to revive. This inspectorate passed to the _intendant_,
who became the resident local inspector and supervisor of all the other
functionaries in his district; its connexion with the old _chevauchée_
is plainly shown by the fact that the intendants were almost invariably
selected from the _maîtres des requêtes_. The early intendants had
naturally been largely concerned with the troops; eventually special
military intendants (the only ones that exist in modern French law) were
created, but the _intendants des provinces_ retained certain military
duties, notably those relating to the housing of the troops.

The early intendants were called indifferently _intendants de justice_
or _intendants de finances_, their full official title being _intendants
de justice, police et finances, et commissaires, départis dans les
généralités du royaume pour l'exécution des ordres de Sa Majesté_. This
title shows the wide range of their duties, the word "_police_" in this
connexion connoting general administration. Not being officers of the
king, but merely commissaries, they could always be recalled, and their
powers were fixed by the commission they received from the king. As
their functions became pre-eminently administrative the laws of the 17th
and 18th centuries referred many questions to their decision, and, in
this respect, their powers were determined by law. They became the
direct general representatives of the king in each _généralité_, with
authority over the other officials, whom they were empowered to censure,
suspend or sometimes even replace. They were in constant touch with the
king's council, with which they were connected by their original rights
as _maîtres des requêtes_. In the first half of the 17th century they
encountered some opposition from the governors of provinces, who had
formerly been the direct political representatives of the crown, and
also from the parliaments, which traditionally intervened in the
administration, especially by means of _arrêts de règlement_ (decisions,
from which there was no appeal, regulating questions of procedure, civil
law or custom). The intendants, however, were energetically supported,
and so complete was their triumph that in the 18th century governors of
provinces could not enter upon their duties without formal _lettres de
résidence_.

The intendants had wide powers in the drawing by lot of the militia and
in the royal _corvées_ for the making and repair of the high roads, and
were largely concerned with the administration of the _taille_, in which
they effected useful reforms. They were the sole administrators of the
principal direct and indirect imposts created in the second half of the
17th century and in the 18th century, and had full powers to settle
disputes arising out of these taxes. Owing to the vast size of the
districts allotted to the intendants (there were no more than thirty-two
intendants in 1788), they often felt the need of assistants. As
commissaries of the king, they could delegate their powers to
_sub-délégués_, who were, however, not royal officials, but merely
mandatories of the intendant. Decisions of the intendant could be
carried to the king's council, and those of the _sub-délégué_ to the
intendant.

  See Gabriel Hanotaux, _Origines de l'institution des intendants des
  provinces_ (1884); D'Arbois de Jubainville, _L'Administration des
  intendants d'après les archives de l'Aube_ (1880); P. Ardascheff,
  _Provintzalnaya administratsiya vo Frantsii ve poshednoyo porou
  starago poryadka: provintsialny Intendanty_ (St Petersburg,
  1900-1906).     (J. P. E.)

FOOTNOTE:

  [1] In Germany the title _Intendant_ is applied to the head of public
    institutions, more particularly to the high officials in charge of
    court theatres, royal gardens, palaces and the like. The director of
    certain civic theatres is now also sometimes styled Intendant. The
    title _Generalintendant_ implies the same official duties, but higher
    rank. In the German army the _Intendantur_ corresponds to the British
    quartermaster-general's and financial departments of the War Office,
    the French _intendance militaire_. Subordinate to these are the
    _intendances_ (_Intendanturen_) under general officers commanding,
    the heads of which are in Germany called _Korpsintendanten_, and in
    France _intendants-généraux_, _intendants militaires_, &c. (see ARMY,
    § 58).

INTENT (from Lat. _intendere_, to stretch out, extend, particularly in
the phrase _intendere animum_, to turn one's mind to, purpose), in law,
the purpose or object with which an act is done. The question of intent
is important with reference both to civil and criminal responsibility.