766 THE POPULAR SCIENCE MONTHLY. 



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 mo- 

 ment. The melting-point of a soft alloy, or the transmission of an 

 electric current, has a constancy which may be depended upon. Fusi- 

 ble 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 34| to 52^ per cent. 

 Destruction by fire takes place in a much larger proportion in prop- 

 erty 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 whole- 

 some element of justice and safety in it. Very unbusiness-like cer- 

 tainly 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 commis- 

 sions 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 compa- 

 nies 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 com- 

 peting against one another for business. Small cities have often as 

 many as twenty insurance agencies, maintained at high expense in pro- 

 portion to the volume of transactions. Economy here could be effected 

 by a single local company without agencies, doing as much local 



