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. 482Lowene 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 companies 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, inconvenience 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 account 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.

Amount of capital. Date. Numb. Comp. Amount of capital. 2,500,000* 1830

21

26

23

7,990,000

9,700,000

6,661,000+

In addition to the above, there are at present several agencies of other companies, belonging to other states, established in this city, whose aggre. gate 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 augment 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.

F. Hunt

ÅRT. 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.

Notwithstanding the amount of talent and zeal which has been expended during the last three or four years in speeches and newspaper essays upon the 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

and settled conviction of the best informed men in the country, that to pay its bills in specie on demand was absolutely essential to the character of a bank, and that, in fact, a broken bank and a non-specie-paying bank were precisely one and the same thing.

This opinion had not grown out of theoretical considerations merely. It was founded upon the bitter experience of the suspension of specie pay. ments which took place during the last war with Great Britain, and the losses, frauds, derangement of business, and commercial distresses which succeeded that suspension. It was so firmly rooted, and was so universally received, that he who had undertaken to advocate or even to justify a suspension of specie payments, would have been generally looked upon either as a rogue or a visionary. Yet universal and firmly rooted as this opinion seemed to be, a few months of commercial pressure and mercantile distress were sufficient to undermine and overturn it. In a moment of panic and alarm, when other resources had been tried and had failed, a general suspension of specie payments, on the part of the banks, was suggested as a remedy, and was caught at with the eager and thoughtless haste with which those sick persons, whom regular physicians have failed to cure, swallow any prescription which any bold empiric may chance to offer.

With respect to a public measure of so recent a date as the suspension of specie payments in 1837, most persons will be apt to form an opinion respecting it according to the notions they may entertain of its influence upon their own private fortunes. But opinions founded upon such premises are of little importance. As regards individual cases, it is in general difficult if not absolutely impossible to form any reasonable conjecture as to what the consequences would have been had a different course been pursued by the banks. But as respects the country at large, there are some consequences of the voluntary suspension which are sufficiently

obvious.

The immediate occasion of the suspension was the demand for specie to pay off the foreign debt; but the suspension, instead of satisfying that demand, and so quieting it, locked up fifty millions of dollars in the vaults of the banks. At a time when a full control of all the property in the country was needed to satisfy the unexpected claims made upon us by the London bankers concerned in the American trade, fifty millions of the most convenient and available portion of our assets were rendered entirely useless, thus serving greatly to aggravate our embarrassments.

If the consequence of this step had been that a stop had been put to the payment of the foreign debt, and that we had merely spunged out the accounts of our transatlantic creditors, though nobody could have defended such a proceeding on the score of honesty, it might possibly be contended that looking only to the present moment, so much property had been kept at home instead of being sent abroad, and that so far the country was a gainer. But everybody knows that no such result followed. Notwithstanding the suspension of specie payments, the foreign debt continued to be paid, though at very great sacrifices. All the specie that could be bought, was shipped, and many of the stocks and other securities remitted abroad, sold at a diminished price in consequence of the suspension.

It is no doubt true, that if a general suspension by consent had not taken place in the spring of 1837, a considerable, and perhaps a large number of banks, after paying out all the specie in their vaults, would have been under the necessity of suspending at last. Such a result would