"And this deponent further says, that the whole value of the property insured under said policy, at the time of the loss, was

dollars. That said premises were occupied at the time of said fire, (here describe their occupation, and when and how the fire originated, so far as he knows and believes, and all the circumstances in connection with it.)

"Sworn before me, this

State, City, and County SS.

of New York,

1840."

;

I. a notary public, duly commissioned and sworn, and dwelling in said city, do hereby certify, that I am a notary most contiguous to the fire mentioned in the annexed affidavit; that I am not concerned in said loss; that I am acquainted with the character and circumstances of that I have examined the circumstances attending the fire which happened to the property (describing it,) on the day of 1840, and verily believe, as appeared by the evidence adduced in my investigation, that the said has sustained, without fraud or evil practice, loss and damage, on the said property mentioned in his affidavit hereto annexed, to the amount of

[L.S.]

dollars.

In witness whereof, I have hereunto set my hand and affixed my notarial seal of office, this

day of

1840.

Notary Public.

CHAPTER V.

When there is more than one insurance upon the property, how payment of loss is divided-optional with the insurers to pay for or replace the property-in case of failure, how assets are divided-buildings, merchandise, and trades classified-short rates.

In cases where there is more than one insurance upon the same property by different companies, the rule is that they will be liable for such rateable loss or damage as may happen to the property insured, according to the amount insured by each, without reference to the dates of the different policies; this condition is also inserted in the policy, and forms a part of the contract.

It is optional with the insurers either to pay the loss or damage in money, or to replace the goods burnt or damaged with others of like kind and of equal quality, or to rebuild or repair the building or other property insured; notice of their intention to do so being given within twenty days after the proof of loss has been made. The usual time allowed the insurer to pay the loss is sixty days after it is ascertained and proved.

Although such cases are rare, there have been instances in which the whole capital of a company has been found insufficient to pay the losses sustained: this was the condition of some companies in this city, occasioned by the calamitous fire which occurred in December, 1835, by which several millions of property were destroyed. In the case of those companies, receivers were appointed, who settled up the affairs of the company for which they acted, by disposing of their property and dividing the assets among the persons claiming under policies issued by the respective companies, in a rateable proportion according to the amount of their insurance and loss, irrespective of dates, thereby giving all an equal percentage without precedence. All unearned premiums or moneys due on unexpired

VOL. IV. NO. III.

31

policies, were returned to the holders previous to the final division among

the claimants for losses.

It was also declared at a trial growing out of the above-mentioned fire, that dividends declared but not paid over to the stockholders, were also liable to pay the losses sustained. (6 Paige's Chan. Reports, p. 482— Lowene vs. The American Ins. Comp. and others.)

Fire companies in this city have divided certain kinds of buildings and goods into different classes, for their convenience in fixing the rate of premium ; but no universal rule can be made respecting the rate to be charged upon a particular class of buildings or goods, inasmuch as there are many other things to be taken into consideration in order to determine the rate; such as the nature of contiguous buildings; the facilities at hand for extinguishing fires, and saving property; number of tenants occupying the building; width of street, &c. &c. It is not necessary here to enumerate all these different classes; it will be sufficient to observe that the compa nies have divided buildings into eight classes; and trades, goods, and merchandise into four classes, denominated not hazardous, hazardous, extra hazardous, and specially hazardous; as may be seen by referring to the classification usually annexed to their policies. These lists are valuable for consultation; for by them a person can obtain a general idea of the plan adopted by the insurers in fixing the rate of premium; and, in many cases, if he has a previous knowledge of the rate charged on a given class of buildings or description of goods, can form a tolerably correct estimate of what the rate of premium will be on other property; but its greatest importance is in enabling the insured to know when it is necessary, and when not, to inform the insurer of a change of occupancy of a building. We have already seen that whatever tends to increase the risk of the subject insured, should be made known to the insurer. Now suppose A has his building insured with a hazardous privilege, it being then occupied as a tavern, and subsequently rents it to a bookseller; he would immediately see, by reference to the classification, that the latter business is denominated extra hazardous, and is considered more dangerous than the former, and consequently notice must be given to the insurer, and the difference of premium paid, or his policy will be void.

The principles which govern insurers in fixing the rate of premium, are similar to those which govern men in determining the rate of interest upon loans, except that while in loans two things determine the interest, viz, incon venience and hazard, in insurance the inconvenience is not taken into account, but only the hazard; for the underwriter is not inconvenienced by laying out of his money until a loss occurs. In this city the rate of insurance is higher than in most other cities of our own country, and very much higher than in Europe; but according to the principle of hazard above stated, any one acquainted with the vastly greater proportion of fires which take place here, will admit that the rate in this city is as low in proportion to the risk, as in any other city in the world. The question is often asked, why is New York so often the scene of conflagration? and many causes have been assigned: whatever causes may exist, certain it is, that to secure an effective system of prevention and detection, would authorize the civil authorities to expend a large sum of money; for thereby the inhabitants would be relieved from an onerous tax in the reduction of the immense sum annually paid for fire insurance.

One year is the usual time for which policies are drawn; but insurance

can be effected for a shorter time, but not for less than one month, except carpenters' risks, which can be obtained for fifteen days at half the premium for one month. Policies for periods less than a year are charged a higher rate in proportion to the time.

The following is the rate of premium for $100, for periods short of a year, allowing the annual rate on a certain building to be 50 cents: for one month, .10-2 months, .15-3 months, .20-4 months, .25—5 months, .30-6 months, .35-7 months, .39-8 months, .42-9 months, .44—10 months, .46-11 months, .48.

The following deductions on the amount of premiums are made on insurances effected for a longer period than one year :

Of foreign companies-comparative view of amount of fire insurance capital at different periods-concluding remarks.

In addition to the fire companies of this city, chartered by the legislature of New York, there are agencies of companies of other states and of England established here, who insure through the intervention of agents. They generally take risks a degree lower than the city offices, in order to secure a portion of the business; for most insurers prefer obtaining policies from companies chartered by this state, on account of the facility with which they can obtain a knowledge of their character and capability to sustain a loss, and the rules by which they are governed; but the most important reason is, in cases of litigation arising from a loss, the party insured would be obliged to prosecute his claim in another state or country, and be governed by laws and customs with which he is, perhaps, unacquainted; besides the additional trouble and expense attending such a necessity. There is also an advantage gained by insuring in foreign companies, in the event of an extensive conflagration; for they are likely to be more secure on ac count of their having fewer risks in this city, as was seen in the case of the great fire in December, 1835. That event caused the failure of several of our offices, owing to their having a large amount of risks in that part of the city which was consumed. The ruin of some merchants who were insured in them was the consequence, while those insured in the foreign offices recovered in full; because these had not issued policies to any considerable amount, and therefore their losses were not so great as materially to impair their capital. It is due to our offices, however, to state, that they are very cautious in distributing their risks, so that nothing but an uncommonly great disaster, such as that above referred to, would endanger their safety, their custom being to insure not over from five to fifteen thousand dollars, according to their capital, on any one building, without procuring reinsurance; and no more in the immediate neighborhood of a previous risk, or where a fire would be likely to extend.

Something might here be said of the liberality shown to foreign companies by our state legislature, in permitting them to be established here, to the curtailment of the business of our own companies, while they are exempted from taxation upon their capital, and from the restrictions exercised

upon our own corporations; but this is not the place for the consideration of this subject.

The following table shows the number of companies and the amount of capital in this city, at the respective dates. Some of the companies included here are of a mixed character, being not only fire companies, but also taking risks upon marine and inland navigation, and upon lives.

In addition to the above, there are at present several agencies of other companies, belonging to other states, established in this city, whose aggregate capital is equal to as much, if not more, than that of our own companies. By the above table it appears that the amount of insurance capital, properly belonging to this city, is not so great now as it was in 1825, '30, '35, and but little more than it was in 1820; this can be accounted for from the fact that the business of insuring has not been found profitable enough to support the different companies which have arisen during the last twenty years. Some old companies have suffered their charters to expire without renewal; some have been voluntarily wound up; and others were destroyed by "the great fire." The business can never become safe and profitable, until some existing evils have been remedied. We do not here refer solely to the inefficiency of our laws respecting the discovery and punishment of incendiaries, but also to the manner of taking risks by most of our insurers: the prevailing disposition among them, we fear, is to aug. ment the amount of premiums; and, as a necessary consequence, that circumspection which is so important in ascertaining the character and circumstances of the insured, is in many cases overlooked, or but imperfectly performed. But we are happy to perceive that the evil here complained of will soon be numbered among the things that were; and judg. ing from the practice of the underwriters latterly, the time is at hand when none but honest men can obtain policies; then the reduction of rates will follow of course, and stockholders will receive smaller but more certain dividends.

MERCANTILE ENGAGEMENTS.

Doubt every man who does not strictly comply with his engagements.

If he has disappointed others, may he not disappoint you? Promises are the ruin of many, and usually import nothing. Many a man promises from mere good nature, and will promise the same thing to a hundred in a day, and disappoint ninety-nine. In short, never think you have money at your command until it is actually in your hand, and therefore take care how you promise it. NO, is a very useful word: be not afraid to use it. Many a man has pined in misery for years, for the want of firmness to pronounce this little monosyllable.-Foster.

* And the Washington Mutual Assurance Company, whose capital is not known. + And the Western Insurance Company, of Buffalo, which had an office here, capital

not known.

And a fire and marine mutual company, incorporated in 1838,

ART. IV.-BANKS, BANKING, AND PAPER CURRENCIES.

Banks, Banking, and Paper Currencies, in three parts. 1. History of banking and paper money. 2. Argument for open competition in banking. 3. Apology for one-dollar notes. By R. HILDRETH. Boston: Whipple & Damrill. 1840. 1 vol. 12 mo. pp. 210.

THE number of treatises which, within two or three years past, have undertaken to discuss the subject of the currency, give some ground to hope that this interesting and important matter, after having been bandied about as a football among politicians, will come at length to be studied in that spirit of impartial search after truth, from which alone any useful results can be expected.

the

Notwithstanding the amount of talent and zeal which has been expended during the last three or four years in speeches and newspaper essays upon currency, there is hardly to be found in any of them a single suggestion of any scientific value. Indeed, there is great justice in the sweeping censure passed upon these productions in the closing sentence of our author's advertisement.

"If any one wishes to learn how little this subject is understood, even by those whose proper business it is to understand it, let him read the debates of the twenty-fifth congress, and the discussions upon banking which have taken place in the newspapers and other periodicals during three years past; a greater collection of blunders and contradictions, a greater display of ignorance and prejudices, and a more plentiful lack of reason and good sense, it will not be easy to find anywhere else, or upon any other subject."

It may well be doubted whether a legislative hall, occupied by heated and hostile political partisans, or the columns of a newspaper, whose object is not so much the discovery or diffusion of truth as the advancement of some particular party ends, are well adapted to the discussion of a subject which is in fact of a purely scientific character, however momentous or universal may be the interests involved in it. Yet hitherto almost all the discussions we have had upon the subject of the currency have taken place precisely under these circumstances; and if they have rather served to confuse than to enlighten the public mind, that is a circumstance not much to be wondered at. It is indeed very unfortunate that instead of discussing the subject of the currency in quiet and comfortable times, when we are most capable of calm reflection and unbiased judgment, this is a matter which seems to have very little attraction for the generality of men, except at moments of difficulty and distress, moments when they are least of all qualified to form a sound and discriminating judgment, or to act with prudence or good sense. Drowning men, it is said, catch at straws; and when commerce is in a disturbed and agitated state, when prices are falling, and speculations are unsuccessful, men readily adopt any theory which tends to relieve them from all responsibility for the misfortunes which they suffer, and which holds out, in the adoption of new measures and new means, the splendid vision of a sudden restoration of that prosperity and wealth which they feel to be slipping from their grasp.

There never, perhaps, was a more sudden or singular change of opinion than that which took place in the United States during the spring of 1837, on the subject of specie payments by the banks. Up to the close of the year 1836, it was, as it had been for the twenty preceding years, the firm