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of a vessel. And when the United States commissioners awarded the payment for that vessel lost by the act of Spain, which claim they recognized as the property of a citizen, because it was a claim by a citizen against his own Government, and thus recognized, Vasse came into court and insisted that the amount $8,000 should come to him, because he was subrogated under the principles of law which I have named to the rights of the assured, and the assured having received his money already from Vasse had no right to this $8,000. The court so held, because it was about to be paid to the assured as his property, and it was a right to which the underwriter was subrogated.

In the case of Hosack vs. Roger's executors the same principle was decided under the same limitations; that is, the case arose out of a claim against our Government, assumed by our Government as a claim of a citizen injured by a foreign Government, for which we made express reclamation.  

But our Government, as I have already brought to the attention of the House, refused to make any such reclamation for claims of citizens. That is a principal reason why the Johnson-Clarendou treaty made reclamation for claims of citizens, and such reclamation only was set aside.

The question then arises, how shall the award be most equitably divided? Your committee have reported that-

"All such corporations and citizens of the United States, actual owners of property at the time of its destruction, whether ships or cargoes, outfit, advanced or other wages paid to officers and seamen, or freights actually earned, lost by capture," &c.- shall be first paid. Secondly, that all losses by officers, seamen, and crews, and the amount necessary to get themselves home again, shall be paid. Next, that where a party, an owner of a ship or cargo, has been insured in part only, he shall be paid his loss beyond his insurance. Next, that the Government of the United States, where it lost its own vessels or lost vessels which were under charter to it, and by the terms of the charter party the United States were bound to pay for its loss, and have paid for the loss of the vessel, that the Government, standing like a private individual who had lost his property without insurance, should be paid.

Then we come to another class of cases. And let me call the attention of the House to the fact that here is the most substantial difference between the bill presented now to the House and the bill passed through the Senate. The Senate bills throws out the insurers' prospective profits, unearned wages, unearned freights, all the things the House bill does, except one. Our bill provides the war premiums shall be paid; that is, that the merchants of our country who paid increased premiums to insure against war risks during the war, to insure their property against the cruisers, shall have their war premiums back again, out of this fund, because we look upon such payment as a total loss to them, whether they get their insurance or not. If they get their insurance they lose their premium. If they did not get their insurance they lose their vessel as well as the premium. Therefore we say that these war premiums should come in.

What, sir, is the answer to this so apparently just proposition? One answer is that the war premiums were in the course of a business as a part of the profits of the business, and that the merchant has got the profits out of the consumer or his customer. 

If such were the fact, I should hardly be able to say one word in favor of a payment of the war premiums, which would be a second payment; but the supposition of fact is not well founded. Upon one of our vessels the war premium was paid in order that she might go to sea; but she could not get freight on as reasonable terms as vessels that bore a foreign flag. The foreign flag protected both the vessel and the cargo, and any merchant who sent his ventures forth under a foreign flag had to pay war premium to insure his cargo. Where-ever any vessel carrying our flag was owned by owners so patriotic that they would not sail under a British flag, they had to pay the war premium. But British vessels took the carrying trade from them because the British flag covered both the vessel and the cargo safely. So that our merchants were obliged to diminish their charges for freight to an amount equal to what the merchant paid as war premium to get a cargo, beside losing the premium on their vessels.

I come now to another consideration; and that is, cargo and freight where undoubtedly the war premium should under ordinary circumstances, have come in to the merchant before he sold the cargo; but the difficulty here was that merchant was obliged to sell his cargo in competition with cargoes that came in British vessels on which war premium was not paid. He could not add the war premium to the price of his goods, because he was competing in the markets of this country with the cargoes of foreign vessels coming here without the war premium. Let me give an illustration: an American ship during the war was at Hong Kong, to be loaded with tea by a merchant who must pay war premium; a British ship is lying along side of her, and an American merchant loaded that vessel with tea, and the two vessels started for this country. The British ship would have her freight less the war premium, and the American ship had it plus the war premium. Both went into the market, and the American cargo had to


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take the market price without the addition of the war premium if it competed with the British ship; or if the British ship put up the freight so that the consumer had to pay it if he bought the American tea, it is not true that the merchant got it as profit. I challenge fullest discussion on this point.

Now, I have seen a pamphlet distributed here which says that the United States cannot undertake to protect its citizens from foolish fear of loss, and therefore we ought not to pay the war premium. To that I answer, will anybody consider that paying war insurance was from a foolish fear of loss, when cruisers are abroad which had swept eight million odd dollars' worth of our commerce from the seas? Was it not wise and prudent to pay the war premium, and were not the war premiums the direct result of the action of Great Britain and the southern confederacy in sending out these cruisers, and was it not necessary for the merchant to protect himself against these great dangers?

Mr. DAWES here made a remark which was entirely inaudible to the reporter.

Mr. BUTLER, of Massachusetts. The consumer did not pay the war premium to the merchant at all. The merchant never got the war premium; but the consumer may have had to pay an enhanced price because the merchant who imported in a British vessel would put up the price of his goods so as to get an enhanced profit equal to the war premium paid by his American competitor. 

Mr. HALE. Would it not be more likely to go the other way, that prices would be kept down by British competition?

Mr. BUTLER, of Massachusetts. It would be very likely, as the gentleman from Maine [Mr. Hale] suggests, to work the other way. But giving the whole advantage of the argument, the war premiums were never returned to the merchants. Therefore your committee have put the war premiums in a class by themselves.

Now that leads me to the consideration of another proposition of the bill. We have made two grand classes of claimants: the men who lost property, either uninsured or above the insurance, the crews and officers who lost their wages, and the United States, who lost their vessels by their being actually burned, as in the case of the Caleb Cushing and others, under charter, amounting to a small sum, making a class of losses the most meritorious, which we say shall be first paid, at all events. Then the merchants paying the war premiums, and the insurance companies, who have made an actual loss out of their war risks, form another class by themselves, to be in full only if there is enough to pay them; and if there is not enough to pay them then both are to be said pro rata, putting both on the same basis precisely, giving to the insurers all they lost, making both in fact to stand in the same category with the war premiums. 

We think there is enough to pay them all. And if any gentleman will turn to the report of the committee, (document No. 47,) he will find some tables on this subject in the appendix. The amount claimed by America was in gross $19,000,000; but there were immense claims that had no business there, so that they were reduced before the tribunal to $14,000,000. The British commission found the amount which should be paid to be about $7,000,000 of actual losses, throwing out prospective profits, prospective earnings, and prospective catch of whales, and all the matters which ought not to be allowed. By a fair adjudication of all these claims in the court there would be from six to seven millions of actual losses suffered. 

Then there are from five to six million dollars of war premiums which we have an account of so far. Allowing that to be the war premiums, then, as there were about five millions of insurance actually paid, the loss to the insurance companies who were unfortunate will turn out when we come to settle up the balance not to be a very great sum.

Mr. HALE. Will the gentleman allow a question right here?

Mr. BUTLER, of Massachusetts. Certainly.

Mr. HALE. Does the committee believe that the amount of five or six million dollars named by the gentleman is the aggregate of the war premiums; does it approximate the whole amount?

Mr. BUTLER, of Massachusetts. I think it is only about two thirds of the whole amount.

Mr. HALE. That is the judgement of the gentleman himself?

Mr. BUTLER, of Massachusetts. That is the best judgement I can form on all the information I have.

Mr. DAWES. That the war premiums were one half more than that amount? 

Mr. BUTLER, of Massachusetts. Yes, I think the statement of war premiums that have made their appearance is about $6,000,000. I think that is about two thirds of the amount that ever will make their appearance; so that the whole amount of war premiums will be about $9,000,000. Of course there is to be deducted from this sum the amount of the dividends of the mutual companies, which are a part of the war premiums. I do not believe that when brought into a court of justice, upon an examination of the cost of the vessels and cargoes actually lost, there will be more than $6,000,000 at the outside. To that is to be added the amount of seamen's wages that have not been paid by the owners. And if the war premiums all come in, that will leave enough to pay the whole, because $15,500,000 in gold is equal to about $17,700,000 in cur-