ferences are developed as between individuals and groups of individuals, and also as between diversely located communities, as regards the gravity of these risks. It is in the public interest that these excesses of risk for the relatively few should be distributed as evenly as possible over the entire population, and it is a part of the patriotic duty of insurance to do what it can to accomplish this even distribution.

As against this consideration, however, there arises another, namely, that from their very nature the extra hazards of war have in them a large element of incalculability, since war is not the nominal state of human society and thus from its comparative rarity as well as from the great changes which take place from generation to generation in the methods of conducting it, it affords little opportunity for collecting dependable experience in the insurance sense. Guesswork, therefore, necessarily plays an inordinate part in the calculation of the true cost of war risks to the insurers. Yet underwriters have always to bear in mind the overriding obligation to maintain their solvency and not to do injustice to the general body of their policyholders in order that they may show an overfull measure of patriotic generosity to the group or groups of policyholders particularly exposed to the hazards of war.

There is no doubt that war will increase the mortality rate of life insurance companies, but to what extent there is all too little statistical data to give any evidence.

Modern warfare is such as to cause a tremendous death rate among those exposed. On the other hand, the improvements in hospital practice and war relief work have been so influential as to have a favorable effect upon prolonging the lives of the disabled, and, in fact, effecting many cures which in previous wars would have been regarded as impossible of accomplishment. So far as life insurance is concerned, there is bound to be a greater exposure to the war hazard than ever before, as the proportion of policyholders to population is far greater and the per capita amount carried is also greater than at the time of previous wars.

It has now been made clear that the casualties of war are not confined to those exposed to shot and shell, bomb and bayonet. The repercussions of war upon the civil population are of the most serious and far reaching character. The mortality both of the old and of the very young is greatly increased by the strains, psychologic and economic, that war creates. Normal mental and physical health for all classes of society is remarkably difficult to maintain under the stresses of war. Griefs and anxieties are ever drawing upon mental health; industrial pressure, due to the insatiable demand for war material, produces intensified and cumulative fatigues for great masses of workers, male and female. Both infectious and degenerative diseases increase rapidly among the civil population in time of war. Tuberculosis gets a fresh hold on the community, as a result of depressing effects of war; and the death-rate from it tends to rise sharply. Industrial and other accidents, also, grow more numerous, partly in consequence of heightened effort and speed in industry and of the carelessness of workers induced by weariness, monotony and ever-present strain, and partly by reason of the

continuous preoccupation of masters and workers alike with apprehensions, cares and sorrows outside their customary round of work. Finally, not a single country engaged in the present war has been able to avoid entirely inequalities and uncertainties in the supply and distribution of the necessaries of life, particularly articles of food. Despite all governmental effort and care, prices of these necessaries have fluctuated in the most violent way in all the belligerent countries; supplies have been irregular to a greater or less extent; and it has too frequently happened that considerable classes or groups of all the populations involved have been forced by excessive prices simply to do without many things essential to their health and well-being. Undernutrition and malnutrition have occurred on a far wider scale in even the most comfortably-off European countries than the great majority of Americans in the least suspect; and the average of health, vitality and efficiency for the populations of these countries as a whole has been correspondingly reduced, to the undoubted detriment of the military and naval forces themselves.

Safeguarding the health, vitality and well-being of a people at war is as much a work of nation-wide cooperation and of trained efficiency of the highest type, as is the provision and equipment of armed forces on land and sea, and the supplying of these forces with adequate food, munitions, medical and surgical care, and the like. In peace, as has been demonstrated of late years in the United States, great improvement can be brought about in the conditions of the public health, through the more or less loosely associated and not firmly organized and centralized endeavors of a multitude of individuals and of public and private agencies of a more or less official or formal kind. It is more than doubtful, however, whether this method even approaches adequacy in time of war, when the most important desideratum of all is that no smallest part of the body politic should be remote from instant touch with a central authority, competent and ready to act on the spot, when occasion arises. 1

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WAR AND PROPERTY INSURANCE

In many forms of property insurance old hazards have been increased and new hazards have arisen.

Fires are likely to be more frequent even in those parts of a country which are not within the area of actual hostilities, Under the necessity of speeding up production, factories are under pressure. Machines are run at higher speed and more continuously. Workmen are likely to be less careful in respect to agencies producing fires. Material is carelessly stored. Waste accumulates. Less attention than in normal times is given to the 'The Economic World, n. s., vol. xiii, No. 17, p. 596.

inspection of fire protective devices, such as sprinkler systems. When a fire occurs, the losses are likely to be greater on contents because of their accumulation and their improper storage. Already there is a marked increase in property loss due to fires in the United States, and while the accusation is frequently made that the loss is due to acts of enemies, and while this is doubtless true in some cases, yet it is safe to predict that careful investigation will show that by far the largest amount of the increased loss is due to the abnormal conditions surrounding property in war times and not to a marked increase in incendiarism.

In the areas of the nations over which the war is actually being fought, the increase in property loss is enormous. Not only are there cases of deliberate burning of property by the enemy, but in many other cases property is set on fire as a result of the actual combat by such instruments of warfare as the artillery, or, if not actually burned, it is demolished. Nor is this loss confined to buildings. The method of conducting this great war is such that to all intents the land is temporarily destroyed. Before much of it is suitable, either for agricultural or building purposes, but especially for the former, a considerable expenditure of capital and labor will be necessary. The whole landscape in many places is destroyed. Deep trenches have been dug and craters made by the powerful shells are found everywhere. The ground is strewn with the rubbish of the contest. Trees, forest and fruit, have been cut, torn or blown down by the enemy and his destructive artillery.

Cattle and other stock animals have been destroyed, or their natural reproduction has been prevented by the war. Much of this loss is a final and uncompensated one. There was no insurance on much of this property. To some of it the insurance principle had not been, and could not be, applied. Not only is civilized society devoting the greater part of its normal productive energies to the socially unproductive activities of war, but what is even worse, the machines devised by this socially unproductive labor and the energies of the people are devoted to

destroying the accumulated savings, capital goods and natural agencies of the past productive activities.

War brings a nation to the same situation that protracted illness or death brings to a frugal family. It compels a recourse to the use of saving funds from past industry. It tends towards social poverty.

Nor does insurance exercise its normally protective functions. It is well known, for example, that the standard fire insurance policy does not cover losses due to riot, civil insurrection or war. Hence, much property loss which to the individual owner would be met by the funds from the insurance organization is not covered. That is, war prevents the use of the cooperative principle in insurance. And yet there has been an extension of the insurance principle in property insurance to meet some of the risks which have arisen as a result of the war.

NEW KINDS OF INSURANCE

The most striking illustration of the rapid and yet wholly satisfactory working out of a war insurance problem is perhaps to be found in what has been done with regard to what is popularly, though not very accurately, known as bombardment insurance. Here the obstacles were great, because when our war with Germany began the law of the most important of our states from an insurance point of view, New York, actually made it impossible to write this form of insurance at all. New legislation, always hard to obtain, was necessary; and even when the New York Legislature had passed one bill authorizing bombardment insurance, it was found that this so restricted the coverage as to make it unadapted to the actual needs of property owners. Hence, still further amendment of the law was necessary, again calling for the expenditure of time and effort. Nevertheless, so skilful and rapid was the work of the fire underwriter having the matter in hand, that the signature of the Governor of New York had hardly been placed on the final amendatory act, when a new and complete war risk policy was ready for use, covering sub

stantially all the hazards to property arising from war or its attendant conditions, i.e., war, invasion, insurrection, riot, civil war, civil commotion (including strikes), military or usurped power, bombardment of all kinds, fire or explosion directly caused by any of the foregoing and explosion alone. Furthermore, a complete scheme of application of the new insurance had been worked out.

Another interesting illustration of the extension of the insurance principle is in the case of risks of property loss due to the operation and attacks by airships. In some cases this aerial insurance, both for property and lives, has been written by the government, and in some cases by the private insurance companies.

In scarcely any other field of insurance has the war had such a disruptive influence as in the case of marine insurance. Here, on account of the long practice of this branch of insurance and the accumulated data, the business was well organized and systematized. But the use of the submarine introduced a wholly new and incalculable factor in the risk. As a result, the private companies in all the leading countries so much limited their insuring of vessels and their cargoes, that the governments very generally had to assume these risks in part or in whole.

SOCIAL INSURANCE AND PENSIONS

In the field of social insurance, the war is having, or promises to have, both negative and positive effects. In the first place, it has prevented the carrying out in many countries of certain initiated systems of social insurance, such as sickness, maternity, invalidity, compensation insurance and old age pensions. A developed social conscience had come to realize the social obligation to devise systems of insurance to meet these problems, and considerable progress had been made in the leading European countries and the United States. The carrying out of these plans called for large amounts of funds from the national treasuries, but under the stress of the necessity of war to secure funds to