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as tow, flax and other waste. A lounge stuffed in the same manner took fire. Numerous cases have occurred in which fires have originated in the greasy overalls of painters left in houses overnight. In the case of a new house a fire was started by a heap of oilcloth clippings left in a corner. Oilcloth is made with linseed oil. Any sweepings, especially those in places where vegetable oil is kept, are liable to catch fire, and the danger is greater if the accumulations are allowed to become considerable and get covered up. Generally speaking there is little risk if the air has free access since the heat generated is rapidly carried away: confinement by keeping in the heat allows it to rise to a temperature which causes ignition. All sweepings of factories, drug stores, grocery stores, machine shops, etc., should always be placed in a metal receptacle. The metal will not only prevent a fire from spreading but, being a good conductor, will conduct away the heat which is generated by spontaneous combustion. In any record of fires one will not find many outbreaks attributed to this cause for the simple reason which I mentioned a while ago.. But it is certain that as a cause of fires spontaneous combustion is of the highest importance, and very many of the fires of which the causes are unknown may safely be attributed to it. No precautions against fire can be considered effective until every care has been exercised in dealing with those substances which have a dangerous tendency to ignite spontaneously.

It is of interest to notice how some of the modern methods of heating and lighting, which would appear

to a superficial observer to remove the danger of fire, manage to develop grave fire risks of their own. I have already given the instance of electricity, and another instance is that of pipes used for heating by means of steam or hot air. In fact, it is seriously contended in some quarters that stoves with their obvious dangers are really safer than steam pipes since every precaution is readily taken by users of stoves while it is difficult to persuade people to believe in the risks of steam pipes. The heat given out by hot pipes in contact with wood, wool, cotton, sawdust, charcoal and other combustible substances will gradually increase their liability to ignite until they may actually take fire spontaneously. I mentioned wood just now, and what is true of wood is true of these other substances. It is naturally difficult to trace a fire unquestionably to hot pipes since the evidence is quickly destroyed, but many undoubted cases have arisen in regard to all the substances which I have mentioned. Steam pipes for power purposes are frequently packed to prevent the escape of heat and it has been proved that charcoal, sawdust and similar substances are not safe for this purpose. A very curious case occurred in America. A pine board had been placed in a wool-drying room a few inches above steam pipes to prevent the wool from falling upon them. This precaution was actually the cause of a costly fire since the heat from the pipes caused resin to ooze out of the knots in the pine wood and fall upon the pipes, resulting in combustion. This example would suggest the need for making sure that steam pipes

are well removed from wood. Charcoal if moistened and then subjected to a low-drying heat will ignite at a temperature below that of boiling water. The heat of steam pipes will gradually reduce wood to the condition of charcoal, and if any moistening then occurs, as may well happen, all the conditions are present for combustion. Steam pipes have been

known to set fire to wood at a distance of 300 feet from the boiler. The greatest danger arises from steam and hot-air pipes when they pass under floors, behind partitions or in any concealed space. Not only does combustible dust collect about them but rats and mice build their nests near them on account of the warmth, and the inflammable and oily rubbish used by these creatures for nests is thus brought into close contact with the pipes. The safest place for pipes is probably near the ceiling, not too near, where stock and other inflammable substances cannot come in contact with them. It was known in London fifty years ago that hot-air pipes would cause fires, and experience since then has only added confirmation. The dangers of steam and hot-air pipes seem to have attracted more attention in America than in this country, but there can be no doubt that many fires have been directly traced to them.

CHAPTER IX.

FINANCE.

THE finance of fire insurance is not a subject with which most insurance officials have much to do; it is a matter for the managers and directors of insurance companies. But as success in fire insurance must over a term of years depend almost wholly on attention to sound principles of finance it is most important that all those connected with the business should have as clear a grasp of them as possible.

Sound finance is, of course, based upon a sound system of accounts; without full and accurate accounts no company can know precisely how it stands. But I shall not deal with the subject of accounts. I shall assume that a system of accounts is in force which enables the principal officers to keep in close touch with the financial working of their companies. Adequate rates of premium are at the basis of the business and I have indicated how these are determined. A fire office receives its premium income from a vast number of sources and most of these sources are themselves small. On the other hand, its principal outgoings are in comparatively large sums for fire claims, and if a profit is to be made it is at least as important to limit as far as possible the

amounts payable in claims as it is to keep up the rates of premiums. Excessive claims are avoided by carefully limiting the "lines" of individual companies on risks the bigger the risk the smaller the lineand by distributing the liabilities of a company over the widest possible area. The maximum lines held by companies on single risks vary according to the size of the companies. A strong office will hold, say, £10,000 on a large private house in a town and £3,000 on a cotton or woollen mill. The limitation of lines on buildings and "blocks" of buildings, and the provision for reinsurance facilities with other companies, so that an excessive line is not run for a single night, and the sifting out of unprofitable risks before they can do much harm, are a severe test of competence in insurance management. There are some companies who go on year after year making profits while other companies fluctuate very much, making large profits one year and perhaps losing money in the next. The managers of the first class of companies show by the severe test of actual results that their system of limiting lines and reinsuring or refusing excessive hazards is a sound one, and those managers who show widely varying results according as a fire insurance year is "good" bad" are clearly to a much greater extent than the former class dependent on luck. Strictly speaking there should be no such thing as luck in fire insurance, either good or bad. The function of a competent manager is to eliminate luck from his operations and the fact that few men succeed in

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