Now I, therefore, do hereby appoint the following persons to form the Imperial Shipping Committee and to exercise the functions hereinbefore set forth : Sir H. J. Mackinder, M. P. (Chairman) Sir A. H. D. Ramsay Steel-Maitland, Bart., M.P., nomi- Sir W. S. Meyer, G.C.I.E., K.C.S.I., nominated by the Sir Hubert Llewellyn Smith, G.C.B., nominated by the Hon. Sir George H. Perley, K.C.M.G., nominated by the Mr. H. B. G. Larkin, nominated by the Government of the The High Commissioner for New Zealand, nominated by the Captain G. Bowden, M.C., nominated by the Government Hon. Sir Edgar R. Bowring, nominated by the Government of Newfoundland. Sir Kenneth Anderson, Bart., K.C.M.G., § Sir Alfred Booth, Bart.,|| Mr. W. Lionel Hichens, Mr. Kenneth Lee, Mr. J. W. Murray, being persons experienced in shipping and commerce. I further appoint Mr. E. J. Elliot,¶ of the Board of Trade, to be Secretary to the said Committee. June 15th, 1920. (Signed) D. LLOYD GEORGE. On July 26th, 1922, Sir Gilbert Grindle, K.C.M.G., C.B., was appointed a member of the Committee in the room of Sir Frederick Butler, K.C.M.G., C.B., who resigned on joining the Foreign Office. Sir Frederick Butler had on October 2nd, 1920, succeeded Sir A. H. D. Steel-Maitland, who had resigned on the ground of ill-health. On February 13th, 1923, Mr. J. W. Bhore, C.B.E., I.C.S., was appointed a member of the Committee in the room of Sir W. S. Meyer, who died on October 19th, 1922. Mr. Bhore was succeeded by Mr. (now Sir) D. M. Dalal, C.I.E., on May 31st, 1923. ++ From March 17th, 1923, to March 14th, 1924, Mr. E. A. Eva served on the Committee during the absence from the country of Mr. H. B. G. Larkin. On April 15th, 1922, Hon. P. C. Larkin was appointed a member of the Committee in the room of Sir George Perley, resigned. § From January 19th, 1921, to June 7th, 1921, Mr. William J. Noble (now Sir William J. Noble, Bart.), served on the Committee during the absence from the country of Sir Kenneth Anderson. || On May 9th, 1921, Mr. T. Harrison Hughes was appointed a member of the Committee in the room of Sir Alfred Booth, who had resigned on the ground of ill-health. From February 3rd, 1922, to May 1st, 1922, Mr. L. C. Harris served on the Committee during the absence from the country of Mr. T. Harrison Hughes. From 15th January, 1924, to 13th June, 1924, Sir Alfred Booth served during the absence of Mr. T. Harrison Hughes from the country. ¶ Mr. R. D. Fennelly, of the Board of Trade, was appointed Secretary on February 13th, 1923, on the resignation of Mr. E. J. Elliot. INTERIM REPORT ON CANADIAN MARINE INSURANCE RATES. TO THE RIGHT HONOURABLE J. RAMSEY MACDONALD, Prime Minister, First Lord of the Treasury and Secretary of State for Foreign Affairs; TO THE RIGHT HONOURABLE W. L. MACKENZIE KING, Prime Minister of the Dominion of Canada. REPORT. We, the Imperial Shipping Committee, acting under the first part of our terms of reference, have under investigation a complaint received from the Government of the Dominion of Canada respecting discrimination against Canadian Atlantic ports in marine insurance rates. We have made progress in regard to one aspect of the matter and we therefore beg leave to present this interim Report to the Governments of the Dominion of Canada and the United Kingdom since they are the Governments primarily concerned. 1. The question of discrimination against Canadian ports in marine insurance rates on hulls and cargoes was referred to the Committee by the Canadian Government in a letter dated 28th April, 1924, from the Hon. Arthur Cardin, Minister of Marine and Fisheries, which is printed as Appendix I. 2. At that date a Sub-Committee of the Imperial Shipping Committee happened to be in Canada on another inquiry, and the opportunity was taken by the interests in Canada who are concerned to present statements on the insurance question. The representations heard by our Sub-Committee were from the Boards of Trade at Halifax, St. John, Quebec and Toronto, the Shipping Federation of Canada at Montreal, the Canadian Manufacturers' Association and the Canadian Export Club of Toronto. 3. The complaint of the Canadian Government is that vessels are charged higher rates of insurance both in respect of hulls and cargoes to or from Canadian Atlantic ports than to or from United States ports. It is admitted that twenty years ago there was some justification for this discrimination, but the Canadian Government claim that owing to the improved aids to navigation which have been provided in recent years this no longer exists. 4. The initial or basic rates of insurance are settled by competition. Insurance brokers submit risks to syndicates of Underwriters at Lloyd's, or to Marine Insurance Companies outside Lloyd's, and make the best bargain that can be obtained in each case. For the purpose of settling the terms and wording of the policies in general use there is, however, concerted action on the part of all the Underwriters and Insurance Companies. The Underwriters are organised for such common purposes in Lloyd's Underwriters' Association and the Marine Insurance Companies in the Institutes of Underwriters at London and Liverpool. Lloyd's Underwriters' Association and the Institute of London Underwriters co-operate through what is known as the Joint Hull Committee. 5. On the return of our Sub-Committee to London we obtained evidence from the following witnesses in Great Britain:-- Mr. P. G. Mackinnon, Deputy Chairman of Lloyd's. Mr. H. F. Hines, Chairman of the Institute of London Mr. F. J. L. Fish, Chairman of Lloyd's Underwriters' Our Chairman also met the Joint Hull Committee, of which Mr. Percy Janson is Chairman, and discussed the question at issue with them. In addition we have had before us certain documents forwarded from Canada by the Minister of Marine and Fisheries. 6. As we have stated above there is concerted action in regard to the terms and wording of Marine Insurance Policies, although apparently not in regard to the initial or basic rates of premium. In the normal time-policy on the hull and machinery of a ship there are certain clauses known as "Institute Clauses" under which the shipowner gives a warranty not to visit specified ports, such as the British North America ports on the Atlantic, the ports north of latitude 50° on the Pacific, and the White Sea ports in Europe. There are further clauses in the policy which provide that for additional premiums these warranties may be cancelled. By circulars issued from time to time the Joint Hull Committee recommend a scale of such additional premiums. 7. In its present form the B.N.A. clause will be found in Appendix 2, together with the pertinent portions of circulars dated 1st October, 1922 and 12th March, 1924, issued by Lloyd's Underwriters' Association referring to the matters mentioned in Paragraphs 6 and 9. 8. It will be seen on examination of these documents that, short of the complete abolition of the British North America Warranty, there are two separate issues raised. The first is concerned with the particular ports and seasons to which the warranty applies, and the second deals with the rates of additional premium for the cancellation of the warranty. 9. A distinction is drawn between the winter season and the summer season. At the present time, under the agreement made in the Joint Hull Committee between Lloyd's Underwriters' Association and the Institute of London Underwriters, the defined winter season is from October 1st to April 30th. Under the same agreement, it is at the present time provided that only one half of the additional premiums for cancelling the institute warranty shall be charged in the case of Halifax, Louisburg and Sydney (C.B.I.), and there is the further exception that no additional premium whatever is to be charged in the case of vessels visiting any of these three ports for bunkering purposes only. Further only one half of the additional premiums is charged for voyages between St. John, N.B. and United States Atlantic ports. 10. The statements and statistics submitted to our SubCommittee in Canada have been subjected to criticism by the Underwriters who gave evidence before us. They frankly admit that the river channel past Quebec to Montreal has been very greatly improved in consequence of the expenditure of large sums of money by the Canadian Government. They point out, however, that there have been comparable improvements in many other parts of the world and that there has been a very general reduction in the rates of premium. This the Canadian Government recognise but claim that the fall in Canadian rates has not been proportionate to the general fall. To this the Underwriters reply that there still remain risks of fog, ice and tidal currents in the outer approaches. 11. There are many facts which make comparisons difficult. For example some of the most important regular lines trading to Canadian ports or to both Canadian and American ports have "all in" time policies which do not incorporate the B.N.A. warranty. It may be, of course, that, in fixing the rates of insurance for these lines, the same considerations which have prompted the warranty may tell indirectly, but the conditions of "all in" time policies vary in the case of every company according to its reputation, the extent of the risk borne by the steamship company itself, or other circumstances. 12. We have found the representatives of the Underwriters ready to take a broadminded view of the situation. Since, however, the risks are borne by individual interests, it is obvious that there would have to be a widespread opinion that the dangers of the Canadian route had been over-estimated before it would be practicable to modify or abolish the additional premiums for the cancellation of the warranty. It will therefore be necessary for us to go further into this aspect of the question. 13. There are, however, certain matters in which we are pleased to say that we have been able to effect some immediate change. It appeared to us that a discrimination in marine insurance risks coincident with a political boundary had an invidious appearance, although we have no doubt that such was not intended. The Joint Hull Committee have agreed with us in this but it has been found impracticable to adopt a definite degree of latitude as the boundary as is the case on the Pacific Coast. They have, however, unanimously recommended that the Institute warranty shall be amended so as wholly to exclude the port of Halifax from its operation. The warranty in the revised form which it is proposed to adopt is printed as Appendix III. 14. In regard to the definition of winter and summer seasons the Joint Hull Committee have agreed with us that the month of October is more free from fog than the months of May and June, and have therefore decided, in compliance with our suggestion, that the summer season shall in future run from May 16th to October 31st instead of from May 1st to September 30th. The effect of this will be to lengthen the summer season, for which a lower additional premium is paid, by 17 days and to reduce the rates of premium paid during the very important month of October when the new Canadian harvest is being pressed forward for export. |