Debate On The Bill To Prevent Inconveniencies Arising From The Insurance Of Ship

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Title:     Debate On The Bill To Prevent Inconveniencies Arising From The Insurance Of Ship
Author: Samuel Johnson [More Titles by Johnson]

HOUSE OF COMMONS, FEB. 27, 1740-1.

DEBATE ON THE SECOND READING OF A BILL TO PREVENT INCONVENIENCIES ARISING FROM INSURANCE OF SHIPS.

The bill being read, sir John BARNARD spoke thus:--Sir, there cannot be brought before this house any questions more difficult in themselves, more entangled with a multiplicity of relations, or more perplexed with an endless diversity of circumstances, than those which relate to commercial affairs; affairs on which the most experienced often disagree, and on which the most sagacious may deceive themselves with erroneous conjectures.

There are no questions, sir, which require so much personal knowledge of the subject to which they relate, nor is there any subject with which so few gentlemen in this house have had opportunities of being acquainted. There are no questions, sir, which their variety of relations to different persons exposes to be so easily misrepresented without detection, nor any in which the opposition of particular interests so much incites a false representation. In all these cases, deceit is easy, and there is a strong temptation to deceive.

Nor are these questions, sir, always perplexed by intentional fraud, or false assertions, of which they that utter them are themselves conscious.

Those who deceive us, do not always suppress any truth of which they are convinced, nor set facts before us in any other light, than that in which themselves behold them; they for the most part err with an honest intention, and propagate no mistakes but those which they have themselves admitted.

Of this kind, sir, are, doubtless, the measures proposed in the bill before us, which those by whom they are promoted may easily think to be of benefit to the publick, but which, I believe, will appear the result of imperfect views, and partial consideration.

The great and fundamental errour, sir, of the patrons of this bill, seems to be an opinion that the practice of insuring is not known to other nations, nor can be carried on in any other place; and from this principle they deduce consequences, which, if they were inevitably certain, might easily influence us to an immediate approbation of the bill, as necessary to secure our commerce, and distress our enemies.

They conclude, sir, with sufficient justness, that very few merchants would hazard their fortunes in long voyages or distant commerce, or expose themselves to the dangers of war, without the security which insurances afford them; and having persuaded themselves that such security is to be obtained from no other nation, they imagine that we might, by prohibiting it, confine all the foreign vessels in their ports, and destroy, by one resolution, the trade of both our rivals and our enemies.

That our East India company may desire the ratification of this bill, I cannot deny, because they might, perhaps, receive from it some temporary advantage by the short inconveniencies which those whom they consider as the enemies of their commerce would feel from it. They may desire it, because the experiment, if it fails, as it must, cannot injure them; and if it succeeds, may produce great advantages to them: they may wish it, because they will feel the immediate benefit, and the detriment will fall upon others.

I shall not inquire whether our merchants are inclined to look with malevolence on all those who cultivate the same branches of commerce with themselves, though they have neither the violation of natural rights, nor the infringement of national treaties, to complain of. I should be unwilling to suspect a British merchant, whose acquaintance with the constitution of his own country ought to show him the value of liberty, who ought to be above narrow schemes, by the knowledge which his profession enables him to gain, of a desire to encroach upon the rights of others, or to engross the general benefits of nature; and shall only observe, that several other nations can plead a claim to the East India trade, a claim of equal validity with our own; that the Danes have their settlement there, and that the Portuguese discovered the way to those regions of wealth, from which some, perhaps, are inclined to exclude them.

But nothing is more vain than to attempt to exclude them by refusing to ensure their ships, because the opinion that they can be insured by no other nation is entirely without foundation. There are at this time offices of insurance along the whole coasts of the midland sea, among the Dutch, and even among the French. Nothing can debar any nation from the trade of insurance but the want of money; and that money is not wanted by foreigners for this purpose, appears from the great sums which they have deposited in our funds.

That this trade is now carried on chiefly by this nation, though not solely, is incontestable; but what can be inferred from that, but that we ought not to obstruct our own gain; that we ought not to make a law to deprive ourselves of that advantage of which either favourable accidents or our own sagacity have put us in possession.

For this reason it appears that it would not contribute to the wealth of the publick to debar us from insuring the ships even of those with whom we are at war, for it is always to be remembered that they will receive no detriment from such prohibitions, nor will feel any other consequence from them than a necessity of transferring to some other nation the profit which we receive from it.

What the profit is which arises to the nation from the trade of insurance it is not possible exactly to determine, but that the trade is really advantageous may be reasonably conceived, because after many years' experience it is diligently followed, and a law was never necessary to prohibit the pursuit of a business by which nothing was to be gained. But could the gain of the insurer be a doubtful point, there is a certain advantage to the nation by the money paid for commission, brokerage, stamps, and the credit of the premium deposited here.

I might add, sir, another considerable sum yearly arising to the government from the additional letters, occasioned by this trade, which increase the revenues of the post-office, without any deduction for additional charge.

That the loss of this profit, and the gain of insuring, will ensue upon the ratification of this bill, cannot be denied; nor does it appear, that this loss will be counterbalanced by any advantage that will be gained over our rivals or our enemies.

Whether this bill, sir, would produce to the merchants of that city by which it is promoted, the advantages which they expect from it, or remove any of the grievances of which they complain, I am not able positively to determine; but know, that it is not uncommon for merchants, as well as other men, to confound private with publick grievances, and to imagine their own interest the interest of the nation.

With regard, sir, to the practice of insuring, interest or no interest, as the term is, when an imaginary value is put upon the ship or cargo, often much above its real worth, it cannot be denied, that some opportunities may be given by it for wicked practices. But there will always be circumstances in which there can be no security against frauds, but common faith; nor do I see how we can secure the insurers against the possibility of being defrauded.

I cannot, indeed, discover, sir, how this method of insuring can be prevented; for how can the value of a cargo be estimated, which is to be collected in a long voyage, at different ports, and where the success of the adventurers often depends upon lucky accidents, which are, indeed, always hoped for, but seldom happen. An imaginary value must, therefore, be fixed upon, when the ship leaves the port; because the success of that voyage cannot be foreknown, and the contracting parties may be safely trusted to set that value, without any law to direct or restrain them.

If the merchants are oppressed by any peculiar inconveniencies, and can find means of redressing them without injuring the publick commerce, any proposal for that purpose ought to be favourably received; but as the bill now before us proposes general restraints, and proposes to remove grievances which are not felt, by remedies, which those upon whom they are to operate, do not approve, I think it ought not to be referred to a committee, but rejected.

Mr. SOUTHWELL spoke next, in terms to this purpose:--Sir, when I first proposed this bill to the house, I lamented the absence of that honourable gentleman, from whose discussions and arguments I expected great information; and for whose judgment, in all commercial questions, I have the highest esteem, as his penetration not only enables him to discover the consequences of methods which have not yet been tried, but as his extensive acquaintance with many branches of trade, cannot but have informed him of the success of many expedients tried, as well in other nations as our own, for the advancement of it.

Trade, sir, is a subject, of which it has been justly observed, that very few gentlemen have attained knowledge sufficient to qualify themselves to judge of the propriety of any new regulation; and I cannot but confess, that I have no uncommon skill in these questions. What I have to offer on this occasion, has been suggested to me, not so much by my own observations, as by the intelligence which I have very industriously sought, and by which, as I endeavoured to inquire of those whose opinion was least likely to be perverted by their interest, I hope I have not been misled.

The merchants, sir, to whom it has been my fortune to apply, have generally concurred in the opinion that the present practice of insuring is prejudicial to our commerce, nor have I found any disagreement between my constituents and the traders of this great metropolis.

I am unwilling to imagine that there can be any evil for which the wisdom of this assembly cannot discover a remedy, and am, therefore, of opinion, that if the grievance is real, some expedient may be discovered for removing it; and that it is real, I cannot but be convinced by the declarations of so many men, who can have no interest in complaining when they suffer nothing, and whose known abilities exempt them from the suspicion of imputing any part of their uneasiness to a cause which cannot produce it.

The bill before us, sir, requires, in my opinion, some amendments, and in its present state might, perhaps, produce more detriment than advantage; but since it is necessary at least to attempt something for the relief of men so useful to this nation, it appears to me necessary to form a committee, and to deliberate on this subject with more attention.

Mr. LOCKWOOD spoke next, to the following effect:--Sir, though I am not of opinion that the bill in its present state ought to be passed into a law, yet I am far from thinking it so imperfect as not easily to be amended, and, therefore, am desirous that it should be considered in a committee.

I have not, indeed, sir, often observed, that bills injudiciously drawn up at first have received great improvements from a second consideration, and have found it more easy to form a new bill, than to make alterations in one that is laid before us; for some original errour will commonly remain, and the sentiments of different men, pursuing different views, can seldom be modelled into one consistent scheme. But I am far from considering this bill as one of those that cannot be amended, for I can discover but few objections to the regulations proposed in it, and those not relating to any of the essential parts, but slight and circumstantial, such as will easily be removed, or, perhaps, answered.

The grievance, sir, for which this bill proposes a remedy, is so generally known, and so universally lamented, that, I believe, there is not any thing more worthy of the attention of the legislature than an inquiry into the cause of it, and the proper method of redressing it.

In our inquiry into the causes of this obstruction of trade, I am of opinion, sir, that the practice of insuring, interest or no interest, will appear to be the foundation of this general uneasiness; it will be found a practice of so natural a tendency to fraud, and so easily susceptible of dishonest artifices, that I believe every member of this house will desire its suppression.

To confirm my assertion, sir, and illustrate the question before us, I shall mention some particular instances of fraud to which this custom has given occasion; of fraud so evident and so detestable that it cannot be related without indignation.

The Royal George was a large ship belonging to the South sea company, which, having been a voyage to Vera Cruz, put in at Jamaica in her return; and being there refitted to proceed on her voyage homewards, set sail, and came within a week's sailing of the port, when, upon a sudden, the officers entered into a consultation, and determined to go back a month's voyage to Antigua; for what reason, sir, may easily be guessed, when it was told that a ship was insured upon a supposed value of sixty thousand pounds.

This resolution, sir, was no sooner formed, than orders were given to change the course and steer to Antigua, in opposition to all the remonstrances of the carpenter, who is the proper judge of the condition of a vessel, and who declared, with honesty and resolution, against their whole procedure. But they pursued their new scheme without any regard to his murmurs or assertions; and when they arrived at Antigua, found some method of influencing the officers of that island to declare the ship unfit for the prosecution of the voyage.

Their design, sir, was now happily completed. To confirm the determination which had been pronounced in their favour, they stranded the ship upon a bank of sand, forced out the iron that grapples the timber together, and having first taken away the masts and rigging, and whatever else could be used or sold, threw the ballast to each end, and so broke the vessel in the middle.

By this well-contrived shipwreck, having, as they imagined, raised their fortunes, they came home triumphantly from their prosperous voyage, and claimed the money for which the ship was insured. The insurers, startled at a demand so unexpected, inquired into the affair with all the industry which its importance might naturally incite, and, after some consultation, determined to try whether the ship might not be refitted and brought to Britain.

In pursuance of this resolution, they sent workmen and materials, and, without much expense, or any difficulty, brought it hither.

I believe, sir, this relation is sufficient at once to prove the practice, and explain the nature of the frauds to which this method of insurance gives occasion; but as the frequency of them is such, that many instances may be produced, I shall offer another short narrative of the same kind.

A ship that belonged to the East India company, insured after this method, was run ashore by the captain, in such a manner that he imagined none but himself able to recover it, and therefore, though it cost five thousand pounds, sold it for five hundred; but the purchaser, no less expert than the captain, found means very speedily to disengage it, to restore it to a proper condition with little expense, and was much enriched by his fortunate bargain.

I cannot but observe, sir, that this kind of fraud is more formidable, as it may be practised without a possibility of detection: had the captain, instead of stranding, destroyed his vessel, how could his wickedness ever have been discovered; or how could the South sea company's ship have been brought home, had it been sunk in some distant corner of the world.

This practice, sir, and the frauds which it has occasioned, and the suspicions which the easy practice of frauds always creates, have produced so many trials, and filled the courts of justice with such intricate contentions, that the judges, who know, perhaps, nothing of this practice but from its effects, have often declared it to be so pregnant with contests and cheats, that it ought not to be suffered, and that a law for suppressing it would much contribute to the establishment of peace, and the security of property.

I am not insensible, sir, of the force of the argument made use of by the honourable gentleman who spoke in favour of this practice, and cannot but allow it that regard which his reasonings always deserve; it is the strongest, and perhaps the only argument that can be produced. His assertion of the impossibility of estimating the real value of a ship, or of foreknowing the success of a voyage, is incontestable: but perhaps it will follow from thence, not that an imaginary value ought to be admitted, but that no insurance ought to be allowed, where there is no rational method of ascertaining it; or, at least, that all such insurance ought to be rather below the probable value than above it.

If the grievance complained of has been proved not to be imaginary, we ought, doubtless, to consult how it may be remedied; nor do I believe that our consultations will be ineffectual, if we engage in them, not with an intention to perplex, but to inform each other. I am of opinion, sir, that the importance of the question requires a committee; nor can I discover any essential defect in the bill, which should hinder it from passing into a law.

Mr. BURRELL spoke to this effect:--Sir, I am convinced by experience, as well as reason, that so many inconveniencies arise from this method of insurance, that it affords so many opportunities of fraud, and gives such encouragement to negligence, that I shall willingly concur in any measures that may effectually suppress it.

It is, sir, too well known to require proof, that interest is the parent of diligence, and that men attend to the performance of their duty, in proportion as they must suffer by the neglect of it; and, therefore, every practice that deprives honesty of its reward is injurious to the publick.

But that this is the consequence of estimating ships at an imaginary value in the offices of insurance, is, to the highest degree, evident. When a ship is estimated above its real value, how will the commander suffer by a wreck, or what shall restrain him from destroying his vessel, when it may be done with security to himself, except that integrity, which, indeed, ought to be generally diffused, but which is not always to be found, and to which few men think it safe to trust upon occasions of far less importance.

To show, sir, that I do not indulge groundless suspicions, or magnify the bare possibility of fraud into reality; that I do not blacken human nature, or propose laws against wickedness that has not yet existed; it may be proper to mention some letters, in which I have been informed, by my correspondent at Leghorn, of the state of the ships which have arrived there; ships so weakly manned, and so penuriously or negligently stored, so much decayed in the bottoms, and so ill fitted with rigging, that he declares his astonishment at their arrival.

It may deserve our consideration, sir, whether the success of the Spanish privateers may not be, in great part, attributed to this pernicious practice; whether captains, when their vessels are insured for more than their value, do not rashly venture into known danger? whether they do not wilfully miss the security of convoys? whether they do not direct their courses where privateers may most securely cruise? whether they do not surrender with less resistance than interest would excite? and whether they do not raise clamours against the government for their ill success, to avoid the suspicion of negligence or fraud?

That other frauds are committed in the practice of insuring, is well known to the honourable gentleman: it is a common practice to take money upon bottomry, by way of pledge, for the captain's fidelity, and to destroy this security by insuring above the real value; so that the captain may gain by neglecting the care of his vessel, or, at least, secure himself from loss, and indulge his ease or his pleasure without any interruption from the fear of diminishing his fortune.

The whole practice of insurance, sir, is, in its present state, I believe, so perplexed with frauds, and of such manifest tendency to the obstruction of commerce, that it absolutely requires some legal regulations.

Sir John BARNARD then spoke to this purpose:--Of frauds in the practice of insurance, with regard to which the honourable gentleman has appealed to me, I can confidently affirm that I am totally ignorant: I know not of any fraudulent practices openly carried on, or established by custom, which I suppose are meant: for with regard to single acts of fraud, committed by particular men, it is not to be supposed but that they have been detected in this, as in all other branches of traffick: nor can I conceive that any argument can be drawn from them against the practice; for if every part of commerce is to be prohibited, which has furnished villains with opportunities of deceit, we shall contract trade into a narrow compass.

With regard, sir, to the instance of the Royal George, though the proceedings of the officers are not wholly to be vindicated, yet part of their conduct is less inexplicable than it has been represented. Their return to Antigua, when they were bound for Britain, and were within a week's sailing of their port, is easily to be defended, if the wind was contrary to their intended course; for it is not difficult to conceive that they might reach a distant port, with a favourable wind, much sooner than one much nearer, with the wind against them.

I have always observed, sir, that the gentlemen engaged in the trade to the East Indies, assume an air of superiority, to which I know not what claim they can produce, and seem to imagine, that their charter gives them more extensive knowledge, and more acute sagacity, than falls to the lot of men not combined in their association.

But however these gentlemen may disapprove my arguments, and however they may misrepresent them, I shall be satisfied, that they will have, with the disinterested and impartial, their just weight, and that this affair will not be hastily determined upon an imperfect examination.

Sir Robert WALPOLE replied to this effect:--Whether the merchants are satisfied with the present methods of insuring, or what is the opinion of any separate body of men, I think it absolutely unnecessary to inquire. We are constituted for the publick advantage, and are engaged by our senatorial character to consider, not the private interest of particular men, but the general advantage of our country.

In our pursuit, sir, of national interest, we shall be obliged frequently to oppose the schemes which private men or separate fraternities, have formed for their own advantage, and which they may be expected to defend with all their art; both because every man is unwilling to imagine that the publick interest and his own are opposite, and because it is to be feared, that many may consider the publick only in subordination to themselves, and be very little solicitous about the general prosperity of their country, provided none of the calamities which afflict it extend their influence to themselves.

We are in the discussion of this question, sir, to consider that we are engaged in a war against a nation from which insults, depredations, oppressions, and cruelties, have been long complained of, and against which we are, therefore, to act with a resolution proportioned to the injuries which we have suffered, and to our desire of vengeance. We are to practice every method of distressing them, and to promote the success of our arms even at the expense of present gain, and the interest of private men.

It is well known, sir, to all who have either heard or read of the Spaniards, that they live in carelessness and indolence, neglect all the natural advantages of their own country, despise the gain of foreign commerce, and depend wholly on their American settlements, for all the conveniences, and, perhaps, for most of the necessaries of life.

This is the particular circumstance that makes a war with Britain so much to be dreaded by them. A nation superiour to them by sea holds them besieged, like a garrison surrounded by an army, precludes them from supplies, intercepts their succours, and if it cannot force their walls by attack, can, at least, by a blockade, starve them to a capitulation.

Thus, sir, by a naval war with an enemy of superiour strength, they must at length be subdued, and subdued, perhaps, without a battle, and without the possibility of resistance; against such an enemy their courage or their discipline is of no use; they may form armies, indeed, but which can only stand upon the shore, to defend what their enemies have no intention of invading, and see those ships seized in which their pay is treasured, or their provisions are stored.

Such, sir, is our natural superiority over the Spaniards, a species of superiority that must inevitably prevail, if it be not defeated by our own folly; and surely a more effectual method of defeating it, the Spaniards themselves could not have discovered, than that of insuring, their ships among our merchants.

When a ship thus insured is taken, which, notwithstanding all precautions, must sometimes happen, we examine the cargo, find it extremely valuable, and triumph in our success; we not only count the gain to ourselves, but the loss to our enemies, and determine that a small number of such captures will reduce them to offer us peace upon our own terms.

Such are the conclusions which are made, and made with reason, by men unacquainted with the secret practices of our merchants, and who do not suspect us to be stupid enough to secure our enemies against ourselves; but it is often found, upon a more close examination, that our ships of war have only plundered our merchants, and that our privateers may, indeed, have enriched themselves, but impoverished their country. It is discovered that the loss of the Spaniards is to be repaid, and, perhaps, sometimes with interest, by the British insurers.

If it be urged, that we ought not to enact any laws which may obstruct the gain of our fellow-subjects, may it not be asked, why all trade with Spain is prohibited; may not the trade be equally gainful with the insurance, and may not the gain be more generally distributed, and, therefore, be more properly national?

But this trade was prohibited, because it was more necessary to our enemies than to ourselves; it was prohibited, because the laws of war require, that a less evil should be suffered to inflict a greater; it is upon this principle that every battle is fought, and that we fire our own ships to consume the navies of the enemy.

For this reason, sir, it appears to me evident beyond contradiction, that the insurance of Spanish ships ought to be prohibited: we shall, indeed, lose the profit of the insurance, but we shall be reimbursed by the captures, which is an argument that cannot be produced for the prohibition of commerce.

It is urged, sir, that they may insure their ships in other countries; an assertion, of which, whether it be true or not, I am not able to decide; but it is acknowledged, that the necessity of establishing new correspondence will be at least a temporary obstruction of their trade, and an obstruction of even a short continuance may lay them at our mercy.

But let us, sir, reflect upon the weakness of this argument,--they must be allowed to insure here, because they may insure in other places; will it not be equally just to urge, that they must trade with us, because they may trade with other nations? And may it not be answered, that though we cannot wholly suspend their commerce, it is yet our business to obstruct it as far as we are able?

May it-not, sir, be farther affirmed, that by insuring in other nations, they may injure their allies by falling into our hands, but do not the less benefit us? that if they do not grow weaker, we at least are strengthened; but that by insuring among us, whatever steps are taken, the equilibrium of the war is preserved always the same?

It is asserted, and I suppose with truth, that we insure at a lower rate than others, and it will, therefore, follow, that the Spaniards, whenever their ships shall escape us, will suffer more by having-insured amongst foreigners, than if they had contracted with our merchants.

Thus it appears, sir, that there are stronger reasons for prohibiting the insurance of Spanish ships, than for putting a stop to our commerce with them; and that whether their ships are taken by us, or escape us, it is the general interest of the nation, that they shall be insured by foreign merchants.

With respect, sir, to the East India company, I have no regard to their interest, considered as distinct from that of the rest of the nation; nor have received any solicitations from them to promote this bill, or to espouse their interest; but cannot, without concealing my real sentiments, deny, that as they have the grant of an exclusive trade to the East Indies, to insure the ships that are sent thither without their permission, is to invade their rights, and to infringe their charter; and that the practice, if the validity of their charter be admitted, is illegal, and ought to be discountenanced.

The practice, sir, of insuring, interest or no interest, or of assigning to ships an imaginary value, is nothing more than a particular game, a mere solemn species of hazard, and ought, therefore, to be prohibited, for every reason that can be urged against games of chance.

With regard to this bill in general, it is, in my opinion, highly necessary, nor can I discover any important objection that can be made against it. Some law of this kind, and to this purpose, I have long intended to offer to the consideration of this assembly, and since it is now before us, I think we ought to consider it with the attention which may be justly expected from us.

Lord BALTIMORE spoke thus:--Sir, I know not how properly the practice of insuring may be termed a species of hazard, nor do I think any thing more is to be considered, than whether the game be gainful to the nation, or not, for I cannot discover that there is any absurdity in enriching ourselves at the expense of other nations, whether enemies or allies. That we ought to prefer the general good to the advantage of individuals, is undoubted, but I cannot conceive that in this case there can be any opposition between private and publick interest. If our insurers gain by securing the ships of our enemies, the nation is benefited, for all national gain must circulate through the hands of individuals.

No man will assert that we ought to assist our enemies, nor will any man imagine that we assist them by impoverishing them, and if our insurers gain by their practice, the Spaniards must undoubtedly be losers.

Mr. WILLIMOT spoke next, to the following purpose:--Sir, I have conversed on the question to which this bill relates, with men engaged in various kinds of traffick, and who have no common interest but that of their country. I have dispersed among the merchants, most eminent for their acquaintance with the whole extent of commerce, and for their knowledge of the true interest of the nation, copies of this bill, and cannot find any of them so sensible of the grievance of which we have so loud complaints, as to desire that it should be redressed by the measures now proposed.

That frauds are practised on every side, in this, as well as in other trades, the general corruption of our age gives us sufficient reason to suspect; but what is common to every sort of traffick, cannot be produced as an argument for the prohibition of any.

That the practice of insuring an imaginary value may give opportunity for greater frauds than can be practised in common dealings, is likewise evident, but I cannot discover such frauds to require the interposition of the legislature.

If they are practised only by those of our own nation, the publick does not suffer; for property is only transferred from one subject to another: the fraud ought, indeed, to be severely punished in the courts of criminal justice, but the custom which gave the opportunity of practising it, ought not to be restrained, any more than any other profession not criminal in itself, but liable to accidental abuses.

If our insurers are defrauded by foreigners, the nation is then, indeed, more nearly affected, but even in that case, it is to be remembered, that the private interest of the insurers, who must be immediately ruined, is a sufficient security for the publick. For it cannot, sir, be conceived that any man will obstinately carry on a business, by which he becomes every day poorer, or, that when he desists he will be succeeded by another, who cannot but know that he engages in that traffick to his certain ruin.

The true state of this affair is, that frauds are, indeed, often committed, and are for that reason always suspected, and that the insurers, when they insure the ship and cargo against accidents, reckon, among other chances, the probability of being cheated, and proportion their demands, not only to the length and danger of the voyage, but to the character, likewise, of the man with whom they contract.

This, sir, is always the practice of those whom experience has made acquainted with the danger of implicit confidence and unsuspecting credulity, nor do any but the young and unskilful suffer themselves to be so exposed to frauds, as that their fortunes should be injured, or the general gain of their business overbalanced, by a few deceits.

Thus it appears, that notwithstanding the ease and safety with which the present methods of insurance admit fraud to be practised, the insurers, by a proportionate degree of caution, secure themselves from being injured, and, by consequence, the nation.

The insurance of foreign ships is now to be considered, by which great profit arises to the nation. We insure, sir, as it has been observed, at lower rates than other nations, because we have more business of this kind, and the smallness of our profit is compensated by the frequency; the cheapness of insurances, and eagerness of foreigners to insure here, reciprocally contribute to each other; we are often applied to, because we insure at an easy rate, and we can insure at an easy rate, because we are often applied to.

Nor is the cheapness of British insurance the only motive to the preference which it preserves among foreigners, who are induced to apply to this nation, by the reputation which our merchants have deservedly gained for probity and punctuality superiour to that of any other traders. Our merchants, sir, bargain without artifice, pay without subterfuges, and are ready on all occasions to preserve their character at the hazard of their profit.

From these two considerations we may draw unanswerable arguments against any restraints upon the practice of insuring: if foreigners are once disappointed in their applications to us, our business will in a great part cease, and as we shall not then be able to insure at lower rates than other nations, we shall never recover that branch of our trade. And as the character of the British merchants exempts them from any suspicion of practices pernicious to the publick, why should they be restrained? Why, sir, should they appear to be suspected by the legislature of their own country, whom foreigners trust without hesitation.

It has been objected to them with great warmth, and urged with much rhetorical exaggeration, that they assist the enemies of their country, that they prolong the war, and defeat those advantages which our situation and commerce have given us; imputations sufficiently atrocious, if they were founded upon truth.

But let us, sir, examine the arguments by which this accusation has been supported, and inquire whether this triumph of eloquence has been occasioned by any real superiority of evidence or reason; it is urged, that we have already prohibited commerce with the Spaniards, and that, therefore, we ought, likewise, to prohibit the insurance of their ships.

It will not require, sir, an imagination very fertile, or a knowledge very extensive, to supply arguments sufficient to refute the supposed demonstration; in opposition to which it may be urged, that this kind of commerce is of a peculiar nature, that it subsists upon opinion, and is preserved by the reputation of our insurers; a reputation that the insurers of other nations may obtain by the same means, and from whom we shall, therefore, never recover it.

It may be observed, sir, that other commodities are the peculiar product of different countries, and that there is no danger of losing our other trade by suspending it, because it depends upon the excellence of our manufactures; but that insurance may be the commodity of any country, where money and common honesty are to be found.

This argument may, perhaps, be yet more effectually invalidated, or, perhaps, entirely subverted, by denying the expedience of that prohibition which is produced as a precedent for another restraint. Nor, indeed, does it appear why we should preclude ourselves from a gainful trade, because the money is drawn by it out of the hands of our enemies; or why the product of our lands should lie unconsumed, or our manufactures stand unemployed, rather than we should sell to our enemies what they will purchase at another place, or by the intervention of a neutral power.

To sell to an enemy that which may enable him to injure us, that which he must necessarily obtain, and which he could buy from no other, would, indeed, be to the last degree, absurd; but that may surely be sold them without any breach of morality or policy, which they can want with less inconvenience than we can keep. If we were besieging a town, I should not advise our soldiers to sell to the inhabitants ammunition or provisions, but cannot discover the folly of admitting them to purchase ornaments for their houses, or brocades for their ladies.

But, without examining with the utmost accuracy, whether the late prohibition was rational or not, I have, I hope, suggested objections sufficient to make the question doubtful, and to incline us to try the success of one experiment, before we venture upon another more hazardous.

I am never willing, sir, to load trade with restraints; trade is, in its own nature, so fugitive and variable, that no constant course can be prescribed to it; and those regulations which were proper when they were made, may, in a few months, become difficulties and obstructions. We well know, that many of the measures which our ancestors pursued for the encouragement of commerce, have been found of pernicious consequence; and even in this age, which, perhaps, experience, more than wisdom, has enlightened, I have known few attempts of that kind which have not defeated the end for which they were made.

It is more prudent to leave the merchants at liberty to pursue those measures which experience shall dictate upon every occasion, and suffer them to snatch the present opportunity of honest gain, whenever it shall happen; they will never injure their own interest by the use of this liberty, and by preserving themselves, they will preserve the nation from detriment; nor will they need to be restrained by a law proposed without their solicitation, and of which they cannot discover any beneficial consequences.

Mr. Horace WALPOLE spoke next, to this purpose:--Sir, for the bill now before us I have no particular fondness, nor desire that it should be promoted by any other means than rational arguments, and the representation of indubitable facts.

I have no regard, sir, in this inquiry, to any private interest, or any other desire than that of securing the interest of my country, which, in my opinion, evidently requires that we should give no assistance to our enemies, that our merchants should cooperate with our navies, and that we should endeavour to withhold every thing that may make the war less burdensome to them, and, consequently, of longer continuance.

It was observed, sir, in the beginning of the debate, by a gentleman eminently skilled in mercantile affairs, that insurance was practised by many nations; but he did not inform us of what one of the clauses makes it proper to inquire, whether they allowed the method of insuring interest or no interest, and rating ships at an imaginary value. This is, I know, prohibited by the Dutch, a nation whose authority on commercial questions will not be disputed, nor do they allow their East Indian ships to be insured at all.

The difficulty of estimating the value of any cargo has been urged in defence of this practice, nor is the defence wholly without weight, because the cargo in many voyages cannot be ascertained. I shall, however, take this opportunity of observing, though I may somewhat digress from the present argument, how necessary it is that some of our exported cargoes should be exactly specified.

I have been lately informed, sir, that six ships laden with British wool, have entered at one time into a port of France; nor do I know how this practice, which is justly complained of as pernicious to our trade, and threatening the ruin of our country, can be prevented but by a constant and regular particularization of every cargo carried to France.

I admit, sir, that some cargoes which are imported cannot be particularly registered; such is the gold with which we are daily supplied by our commerce with the Portuguese, in opposition to their laws, and which our merchants are, therefore, under the necessity of concealing.

It is not, indeed, easy to foresee all the inconveniencies that may arise from new regulations of commerce; but the difficulty is not so great as has been represented, nor can I conceive why all our consultations on trade should be without effect. Gentlemen may obtain some knowledge of commerce from their own observation, which they may enlarge by an unconfined and indifferent conversation with traders of various classes, and by inquiries into the different branches of commerce; inquiries, sir, which are generally neglected by those whose employments confine their attention to particular parts of commerce, or whose application to business hinders them from attending to any opinions but those which their own personal experience enables them to form.

From these informations impartially collected, and diligently compared, a man not engaged in the profession of a merchant may form general principles, and draw consequences, more certain, and more extensive in their relations, than those which are struck out only from the observation of one subdivided species of commerce.

A member of this house, sir, thus enlightened by inquiry, and whose judgment is not diverted from its natural rectitude by the impulse of any private consideration, may judge of any commercial debate with less danger of errour or partiality than the merchants, of whom, nevertheless, I have the highest esteem, and whose knowledge, or probity, I do not intend to depreciate, when I declare my fears that they may sometimes confound general maxims of trade with the opinions of particular branches, and sometimes mistake their own gain for the interest of the publick.

The interest of the merchants ought, indeed, always to be considered in this house; but then it ought to be regarded only in subordination to that of the whole community, a subordination which the gentleman who spoke last seems to have forgotten. He may, perhaps, not intend long to retain his senatorial character, and, therefore, delivered his opinion only as a merchant.

He has distinguished between the conduct of experienced and unskilful insurers, with how much justice I shall not determine. I am afraid that a vigorous inquiry would discover, that neither age nor youth has been able to resist strong temptations to some practices, which neither law nor justice can support, and that those, whose experience has made them cautious, have not been always equally honest.

But this is a subject upon which I am not inclined to dwell, and only mention as the reason which convinces me of the propriety of the bill before us.

Sir William YONGE spoke to this effect:--Sir, there appears no probability that the different opinions which have been formed of this bill will be reconciled by this debate; nor, indeed, is there any reason for wondering at this contrariety of sentiments.

The several clauses of the bill have relations and consequences so different, that scarce any one man can approve them all; and in our present deliberation, an objection to a particular clause is considered as an argument against the whole bill.

It is, therefore, necessary, to prevent an unprofitable expense of time, to resolve the house into a committee, in which the bill may be considered by single clauses, and that part which cannot be defended may be rejected, and that only retained which deserves our approbation. In the committee, when we have considered the first clause, and heard the objections against it, we may mend it; or, if it cannot be amended, reject or postpone it, and so proceed through the whole bill with much greater expedition, and at the same time, with a more diligent view of every clause, than while we are obliged to take the whole at once into our consideration.

I shall, for my part, approve some clauses, and make objections to others; but think it proper to reserve my objections, and the reasons of my approbation, for the committee into which we ought to go on this occasion.

[The bill was referred to a committee, but not forty members staying in the house, it was dropped.]

[The end]
Samuel Johnson's Writing: Debate On The Bill To Prevent Inconveniencies Arising From The Insurance Of Ship

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