trusts himself to disclose all that will happen there as soon as it is known that England, at war with Germany, has become involved in hostilities with Turkey.' Dr Becker wrote before Turkey had taken the plunge, and he could, therefore, only close with a pious prayer 'that the course of this great war may enable the Emperor to redeem his pledge and Germany to show herself by deed as well as by word the friend of Islam.'

It would be premature to enquire into the nature of the evidence upon which Germany based such sanguine expectations. Her agents, we know, have been at work wherever there were symptoms of disaffection towards British rule; and they were, we must assume, satisfied that they had ample justification for counting upon success. Such an enquiry would involve a discussion of the state of public opinion amongst Mahomedans in India and Egypt, and of their attitude towards Turkey, which would be neither profitable nor advisable at this stage of the war. All one can safely say.is that Germany's expectations have not yet been fulfilled, and are not likely to be fulfilled if we are true to our own traditions, and remember, as I believe the great majority of our Mahomedan fellow-subjects remember, that the British Empire remains even in the stress of war with Turkey a great Mahomedan Empire which can never be indifferent to the permanent interests of Islam.

VALENTINE CHIROL.

Art. 14.- BRITISH OVERSEA COMMERCE IN WAR TIME. THE importance of commerce in war time has been emphasised by the Chancellor of the Exchequer. Speaking in the House of Commons on the outbreak of war he declared it to be vital, in order that we should have an uninterrupted supply of food and material, that our trade should go on during the time of war as it did in the time of peace. The freedom for British commerce which the Government felt confident of securing was no small matter; but its confidence has been well justified. At a time when the Navy was responsible for convoying large bodies of troops from India and the outlying parts of the Empire, the few German cruisers in the outer seas were allowed some liberty. But the total damage done by these marauders has been very small in comparison with the total values of British oversea trade; the depredations have been infinitely less than the most favourable expectations formed by high shipping authorities before the outbreak of war. We have seen what has happened to the German cruisers when the Admiralty could afford to detach forces specially to attend to them.

If anyone should be disposed to regard it as a small thing that our oversea commerce should be maintained in large volume, he should consider the idle condition of the German mercantile marine to-day. That marine before the war was, in comparison with our own, smallin tonnage it was only about a quarter the size of ours— but it was highly efficient. It is now non-existent on the seas. Where are the Vaterland' and the Imperator,' the new giants of the Hamburg-Amerika Line? Sheltering at New York and Hamburg respectively. Where is all the fine fleet of the Norddeutscher Lloyd? The Kaiser Wilhelm der Grosse' has been sunk in action as an armed merchant cruiser; the Berlin' is interned in Norway; the 'Kronprinz Wilhelm' has been acting as a merchant cruiser-others have probably been waiting on the German warships; some ships have been captured and sold at auction; the rest are sheltering in various European and American ports, or in neutral ports in the East. The Cap Trafalgar,' the largest liner in the South American trade, was sunk when acting as a commerce-destroyer by the old British liner Carmania.'

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Most of the vessels previously employed in the German South American fleet are either sheltering at Hamburg or in ports along the South American coasts. German companies for years had been developing the trade between New York and the Atlantic and Pacific coasts of South America. Germany had been gradually building up her mercantile marine and making ever greater efforts to acquire an increased share of the world's carrying trade, but she was unable, after the declaration of war, to protect that marine.

We learned from time to time of successful raids by the German cruisers Emden,' 'Karlsruhe,' and 'Dresden.' Yet, as pointed out above, the actual amount of shipping sunk by these and other vessels is, in proportion to the whole British Mercantile Marine, very small indeed. An estimate which I have made of the total cost of the damage done by German cruisers amounts to just over 5,000,000l.; and that is certainly not an under-estimate. We have heard of these losses because British ships are keeping the seas much as in time of peace; we do not hear now of captures of German merchant-ships at sea because there are none there to capture. Apart from the fact that the German Navy could not protect them at sea, there was no Government insurance to indemnify their owners against the risk of capture, so that the vessels were compelled to seek shelter in the nearest neutral port.

First and foremost, of course, the maintenance of British oversea commerce is due to the work of the Navy. It is the fear of the Navy which has kept the main German fleets in their harbours for weeks on end, and hinders enterprising ships from breaking away to prey on British commerce. It is the Navy which prevented many fast German liners from leaving neutral ports to act as raiders; and it is the Navy which watches over the safety of the hundreds of British ships that are at sea every day. Then it is the patrol work of the Navy which renders almost impossible the direct importation of contraband, such as the metals, rubber, oil and wool, which Germany badly needs for her military campaigns. It is known that supplies have reached the country through Holland and other countries; but,

whatever may have been the attitude of individual traders at the outbreak of war, the neutral countries now seem intent on husbanding almost all of their supplies for home consumption, for the extraordinary rise in freights, coupled with additional insurance charges, has rendered the imports of all commodities a very expensive matter for them. All the duties outlined have been carried out by the British Navy in addition to their work of protecting this country from invasion and convoying troopships.

Mr

The work of the Fleet has been ably seconded by the State War Insurance scheme. For years State War Insurance had been an academic subject. Committees have sat and voted against a Government scheme. Austen Chamberlain's Committee in 1908 found that the objections to a Government scheme were greater than the advantages that might be expected. A sub-committee of the Imperial Defence Committee again considered the subject and last year reported that the conditions had undergone great changes since the earlier Committee sat; and it prepared, after consultation with experts, a scheme of its own. In normal circumstances the scheme would probably have been issued for public discussion this autumn, as it was thought that such proposals as were outlined should be ventilated in times of peace. No foreign susceptibilities could thus be hurt; and the scheme, if it were endorsed by public opinion, could be put into operation at once in the event of war. Probably at the end of July the White Paper outlining it was lying in a pigeon-hole in a Government office; when the war cloud burst it was extracted, and, within three or four days, the whole plan was launched.

Experience has amply vindicated the wisdom of putting the scheme into practice at once. In the few days immediately preceding the outbreak of war between this country and Germany very high rates were being paid by merchants for insurance against war risks, but immediately after the opening of hostilities, while underwriters were facing the new conditions, merchants could obtain the insurance they wanted at the Government Office. It is certain that a large proportion of the trade could not long have afforded to pay the high rates asked before war involving this country had actually broken out. The establishment of the Government

Office for the insurance of cargo had instantly a steadying effect. The authors of the scheme recommended that the maximum rate on cargo should be 57. 58. per cent., and the minimum rate 11. 1s. per cent.; and, when the Office opened its doors for business on the afternoon of Aug. 5, the 57. 58. rate was quoted. This meant that merchants all over the world knew the highest rate which they would be asked to pay, and they could make their calculations accordingly. Gradually the Government rate was reduced, until on Tuesday, Sept. 1, it fell to 21. 2s. per cent. No change was made for three months; but after the Battle of the Falkland Islands it was reduced to 17. 10s. per cent. The Office has transacted a very large amount of business during the past few months, but insurance companies and private underwriters have had all the business that they could desire. In order to compete with the Government Office it was necessary for them to quote rates at least as low; and that they have been able to do so is a sign that the Government rate was intrinsically a sound one. The State Office was established mainly for the encouragement of trade and not with any idea of earning profits; but the Insurance Company or underwriter is in business to make money, and, if it had been thought in the market that the rate quoted by the Government would not leave a profit, the business would not have been accepted.

There is one important feature of the open market which affects its suitability for providing war insurance. The underwriter is able to withdraw as soon as he thinks he has had enough; and at one time many underwriters did withdraw temporarily from the market. It is, in fact, the prerogative of the strong underwriter to cease accepting business as soon as he thinks he has written all that he wants. He may have collected a considerable volume of premium and then have come to the conclusion that the outlook in some particular trade is not as satisfactory as he would like, and so he decides to become a spectator. He may think that the premiums he has in hand will be sufficient to enable him to pay all claims that may reasonably be expected, or he may even be prepared to face a loss on what he has written. His instinct is to use his skill in discriminating between risks offered to Vol. 222.-No. 442.

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