out of the Office; or from a mistaken conviction that all claims are settled by bargaining, and that consequently too much should be asked at the outset; or from a misapprehension of the nature of the Insurance contract.

Having regard to the increasing tendency of the Insured to claim for comparatively trivial damage by fire, it would appear to be beneficial to the Companies, and instructive to the Insured, to subject all small losses to systematic official examination with a view to their adjustment on correct lines.

In allowing gratuities to an Insured's employés for assistance rendered in putting out a fire, care should be taken not to make such grants on too generous a scale, lest the recipients be tempted to cause another fire. The payment by some brigade authorities of an allowance for the first intimation of a fire is an objectionable feature; as the result of " fire-raising" to secure such rewards the Offices have sustained severe losses and several persons have been convicted.

In offering some few observations on the strengthening of current methods, it is suggested that, in place of the present custom of interchange of information-whether by direct application to the Office possessing it, or by anonymous circulation as is in vogue in some towns-some arrangement might be made for pooling the particulars gathered by each Company for the benefit of all sharing in the working expenses of the system, the cost of which compared with the advantages gained would not be heavy. Possibly the scheme suggested might be worked by the establishment of bureaux in the larger Insurance centres in affiliation with the Trade Protection Societies, where all the information obtained by the various Offices by special inquiry or in the settlement of losses could be collected and furnished, under proper precautions, to the Companies when called for; the co-operation of the Societies referred to should also be sought with a view to their inquiries, when made for an Office, being adapted to Insurance requirements. The ideal system would, of course, be one which would ensure a suspicious character being declined wherever he might present himself, and the writer ventures to contemplate, in the future development of Insurance practice, the practical solution of the problem of the reduction of Moral Hazard being eventually found by its inclusion in the scope of the functions of the Fire Offices' Committee. The formation of a central bureau working in conjunction with the suggested local ones, the whole being in the

control of the Committee, might be deemed feasible, and it is needless to enlarge upon the advantages such a scheme would offer in the dissemination of valuable information, which might include personal descriptions-and possibly photographs-for purposes of identification of known "fire-raisers."

Any relaxation of regulations in the stress of competition is likely to lead to the insurance of unknown or doubtful people, and is much to be deprecated. The completion of a proposal form in certain classes of risks should be rigidly insisted upon, and the practice occasionally adopted by some agents of signing the forms for the proposers discouraged, especially in the case of trade risks. The details communicated on the proposal should be declared to be part of the basis of the contract, and the signature of the proposer deemed as essential as it is in the case of an application for Life Assurance-an Office ought not to expose itself to the risk of an Insured, in the event of a fire, repudiating the statements in his proposal on the ground tha they were made without his knowledge or consent. There is considerable variety in the questions relative to Moral Hazard which proposers and agents are asked to answer, and it would be an advantage if the combined Offices could agree to standardise all forms of proposal, but more particularly those for shop and farming insurances.

As regards household furniture proposals, wider recognition is desirable of the fact that it is scarcely prudent to pass these without comment when they are received with no information as to respectability, &c.

The question of making provision for judicial inquiry into the origin of fires has, as indicated in the earlier portion of this paper, been the subject of considerable investigation in this country from time to time, but without tangible result beyond the instructions given by the Lord Advocate of Scotland in 1866 to the ProcuratorFiscals of counties to institute inquiries into all fires, and the private Act obtained in 1888 by the City of London Corporation. It is difficult to understand why, in view of the general consensus of opinion that it is very desirable such investigations should be made, Great Britain should still lag behind the Continent, the United States, and the Australian Colonies, where the effect has been to reduce the number of fires. Opinions differ as to the most suitable functionary to take up the work if and when the Legislature grants the necessary powers, but, while the assignment of the duties to the Coroners has been favoured by

some authorities, the general view seems to be that the matter would be dealt with more satisfactorily by the Board of Trade. A stumbling-block in the way of progress is the expense of conducting the investigations. The necessary funds should, of course, be provided by the community, and the difficulty should not be insuperable seeing that it is anticipated the results would be not only that crimes would be detected, but that they would also be prevented, the knowledge that inquiry (if public) would follow the occurrence of a fire being bound to have a deterrent effect, with a consequent reduction in the loss to the nation through fire waste, which would be reflected in a modification of the cost price of insurance to the public.

As previously mentioned, the extension of the survey system to include all shop risks, and official inspection of all small losses, are both matters worthy of consideration.

It is recognised that much of the matter included in this paper will necessarily be trite to experienced officials, but in touching upon various phases of the subject the writer has been actuated by a desire to stimulate those younger men who are studying Fire Insurance in all its aspects to exercise their powers of observation in the performance of their duties. Much valuable knowledge regarding the pressure of competition in various trades may be gained by a careful perusal of the reports on the state of trade and accounts of bankruptcy proceedings, &c., appearing in the daily newspapers.

As "crime is the exception to the general morality of a country," and is especially so in these times when the progress in the moral and social conditions of the people as compared with a century ago is so marked, those who apply for insurance with ulterior motives are comparatively few, and it may be concluded that if unremitting attention is given to the question of Moral Hazard, and a stringent selection of customers practised, the Companies will not be affected by the feature to any abnormal extent, the danger mainly to be apprehended being that of fraudulent or inflated claims following accidental fires, and in such cases the services of an Assessor of extensive local knowledge are of great value.

Although the necessity of refusing protection is obvious in all cases where a doubt as to the bona-fides of the proposer exists, caution should not be permitted to lapse into timidity, nor should action be taken on opinions hastily formed on imperfect informa

tion. As Fire Insurance is inseparably bound up with the system of credit on which the commerce of the country is based, rejection by a first-class Office is a serious matter for a trader employing all his capital in his business; other Companies generally follow the lead given, the result being that he must be content with the protection of an Office possessing small funds or remain uninsured, with the probability of his credit being withdrawn should the fact come to the knowledge of his creditors. Banks are scarcely likely to grant an advance against the goods of a man who cannot obtain insurance. In America insurance is considered to be so essential to the granting of credit that it is becoming the custom for manufacturers and wholesale firms to require information as to the quality and amount of the insurance held by their customers, and steps are taken to ascertain that the policies are kept in force.

In conclusion, the attention of those wishing to examine the question of Moral Hazard more closely is directed to the information contained in Walford's "Cyclopædia," Relton's "Fire Insurance Companies," Moore's "Fire Insurance and How to Build," Griswold's "Fire Underwriter's Text-Book," Bunyon's and Porter's legal works, and the Reports of the various Institutes to which free reference has been made in the preparation of this paper.

CLOTHING FACTORIES.

By ROBERT A. DIXON (Liverpool and London and Globe
Insurance Company, Leeds).

A Paper read before the Insurance Institute of Yorkshire, 19th February, 1906.

THE wholesale manufacture of clothing is a comparatively new industry. The days when clothing was very much dearer than it is now, and clothes were handed down from father to son, are within the memory of many men now living. Not more than fifty years ago practically all men's clothes were made by tailors, bespoke or to measure; now millions of suits, overcoats, and other garments are made annually to stock patterns, and sold at cheaper prices than were before ever thought of. These are made in factories employing large numbers of hands, and numerous up-to-date power-worked machines and labour-saving appliances.

Two principal factors have contributed to the enormous development of this industry: these are the cheapening of cloth, and the invention and continual improvement of the sewing machine. The means by which the remarkable cheapening of cloth has been brought about have been explained to us in former papers read before our Institute, and particularly in the excellent paper by our respected President on the Waste Products of Woollen and Worsted Mills. Here we heard how, of many materials formerly treated as waste and thrown away as valueless, almost every atom is worked up and made to serve some useful purpose in the manufacture of cheap cloth. On this account, and by reason of the many improvements in machinery, tweed, serges, and other cloths of superior appearance and finish are now produced and sold at a small fraction of the price per yard of the cloths manufactured by our grandfathers.

The sewing machine is, perhaps, of all mechanical contrivances invented to take the place of human labour, the most potent factor in promoting the well-being and happiness of mankind all over the world. Probably owing to our familiarity with the sewing