the principle whereby, on the first bursting out of flame, automatic means of safety begin their work. Developed fully, this principle promises to be the most effective known against the incendiary, whose crimes lead, perhaps, to one third the losses by fire. A watchman usually vigilant may be unobservant or negligent at a critical moment. The melting-point of a soft alloy, or the transmission of an electric current, has a constancy which may be depended upon. Fusible links which stop a destructive air-blast, or close a door, window, or hatchway, fusible plugs which control powerful streams of water, are excellent substitutes for apparatus to be started by human agency on detection of danger.
That insurance has increased incendiarism is proved by British statistics. Between 1852 and 1866, the proportions of fires originating in Great Britain from unknown causes rose from 3412 to 5213 per cent. Destruction by tire takes place in a much larger proportion in property insured than uninsured. Incendiarism is of two kinds, that of an interested policy-holder, and that of a malignant criminal. While fires due to the latter may be checked or extinguished by well-planned apparatus, the losses due to the former variety of crime might be to some extent prevented by insurance companies only indemnifying for losses in part. Suppose a merchant to take out a policy by which he is to be reimbursed for three fourths the amount of a loss actually sustained, whether partial or total. Clearly, the company has a better risk than if it granted full indemnity, for now its client has a direct interest in escaping loss by exercise of skill and vigilance. Any means which makes responsibility reside with an owner has a wholesome element of justice and safety in it. Very unbusiness-like certainly is the action of some stock companies which refuse to reduce a premium rate when the insured adopts new means of safety. Such refusal would warrant the impression that any methods whereby the volume of loss by fire would be diminished, and with it the commissions and fees of canvassers and agents, have a sinister interest to oppose them.
The cost of insurance is chiefly due of course to losses; about one half as great, however, are the expenses of the business. Let us turn once again to mutual underwriting for instruction. That system, being uncompetitive, requires neither advertisement nor solicitation. Its expenses are one tenth those of stock insurance. The mutual companies are simply the agents of their policy-holders to provide means of collecting the sums paid for indemnity and the small charges of the business. Stock companies founded, say, in New York, Hartford, or Philadelphia, have agencies throughout the country, actively competing against one another for' business. Small cities have often as many as twenty insurance agencies, maintained at high expense in proportion to the volume of transactions. Economy here could be effected by a single local company without agencies, doing as much local
