that sound and damaged be separated as soon as possible. The cost of making bales merchantable is also paid. This, being a particular charge incurred at destination, would not be recoverable under the Sue and Labour clause, and but for the agreement would not be payable by insurers unless the particular average attained the three per cent. franchise called for.

The customary allowance in respect of absorbed water in country damaged cotton at Liverpool, the predominant cotton importing centre, is fixed at one-sixth, if before shipment, but otherwise one-third. It may here be remarked that cotton is reputedly very susceptible to spontaneous combustion. Many experts contend, however, that most fires in cotton shipments are due to sparks from locomotives, etc., which obtain entrance into the bales during country transit, and which smoulder for a considerable time before the commodity bursts into flame, the smoke being absorbed meantime by the surrounding cotton. There is probably a lot to be said for this contention, but in view of the capilliary nature of cotton, if there be damp in the bales, or oil contamination, every characteristic is present to encourage the production of spontaneous combustion.

Risk at port of discharge does not extend for a period of more than ten days, and automatically ceases on the arrival of the consignment at warehouse, or on delivery to carriers if it is destined to the interior.

A clause included is to the effect that the policy shall not inure to the benefit of any carrier or any fire policy. As the standard form of fire policy provides that the subjectmatter is not covered whilst under the protection of a marine policy, the position is one of some humour. It is quite certain, however, that the Courts would not permit such clausing to operate to the detriment of the rights of the assured, but whether contribution would apply, or which policy should bear the loss, has not been settled. Fire men firmly hold that the marine policy should bear the loss, but this contention would appear to be illogical, as the land risk is certainly more of the nature of a fire than marine risk. In

any case, assured would probably prefer to claim on his marine underwriters, as in such event the indemnity he would receive would be based on the agreed valuation inserted in the policy, whereas from the fire insurers he would be called upon to demonstrate the value of his interest immediately anterior to the loss, and this would be the maximum indemnity which he could recover. As, however, in these clauses the exclusion of benefit to fire underwriters takes the form of a warranty, it is hardly likely that the marine insurers would in such circumstances admit the claim. Benefit of the policy may not, by the terms of the contract of carriage, be conferred on carriers, by sea or land, nor can the policy be used to protect a carrier or other bailee who has effected. prior or subsequent to the policy date, other insurance in respect of losses which, but for this warranty, the policy would be liable.

Other than indicated above, the cover granted and the exclusions associated with these clauses are as the ordinary S.G. Form.

INSTITUTE OF LONDON UNDERWRITERS. ALEXANDRIA COTTON AGREEMENT CLAUSES.

(France (Med.), Italy, Switzerland, etc.)

This set of clauses is as the last, with the following exceptions:-Fire and country damage prior to ship is specifically covered; no average payable in respect of pickings as such; making bales merchantable ranks as an ordinary particular charge; risks after discharge not to exceed ten days, and automatically ceases on arrival at warehouse at the port of destination or in the interior. It is agreed, however, to hold the subject-matter covered after this ten days, if desired, to their destination in France, Italy or Switzerland, at an additional premium of is. 3d. per cent., or other destination at 2s. 6d. per cent.

INSTITUTE LOCATION CLAUSE.

This clause takes three forms, one for general use, another for use in connection with open policies, and a third for insertion into open covers. It arose out of a large fire at Burutu, West Africa, in which large sums were involved. Open covers are, of course, not valid policies of marine insurance, and it is the practice for policies to be issued from time to time, either for individual shipments or batches of shipments, or as floating policies, as required, in order that cover may be continuous. It being a vital principle of marine underwriting that risks must be scientifically averaged, it necessarily follows that some restriction must be placed upon the amount to which liability can accumulate under a floating policy at any one place (or location). As the assured cannot very well control conditions after discharge, the Location clause restricts the liability of insurers only in respect of one casualty prior to shipment, and the movement of vessels on inland waterways or land conveyance is not to be deemed to be shipment within the meaning of the clause. It is to be observed that the clause does not govern the amount which may be at risk in any one location at any one time, but only the extent of the insurers' liability in respect of any one accident. The limit may be the same as the limit per bottom, which usually appears in floating policies and open covers, or it may be a sum arbitrarily fixed. In the clause used in connection with open policies, the words appear: "In all in conjunction with preceding and succeeding slips." This is to avoid any misapprehension that where two or more policies are effected, each "to follow and succeed" a previous policy, that the clause in each policy should be construed as an entirely independent contract. The general clause is identical in wording with that applicable to open covers.

INSTITUTE STANDARD CONDITIONS FOR OPEN POLICIES AND COVERS.

In view of the general popularity of this form of cover, it is essential that a standard form of protection should be available. The Institute wording indicates definitely that cover is afforded only in respect of subject-matter in which the assured has an insurable interest. If an insurance has been effected elsewhere prior to the interest being acquired and/or coming within the control of the assured as selling or purchasing agent, the policy or cover does not attach, and therefore the difficulties inseparable from double insurance do not apply. Losses prior to shipment fall within the terms of the agreement if, had the loss not taken place, the interest would have been shipped by a vessel sailing within the terms of the conditions. This provision is necessary, as, in the case of open covers, the term is usually a period of twelve months, the sailing date of the vessel determining if any shipment falls within the period of the cover. To avoid any misunderstanding, the provisions of the Marine Insurance Act, 1906, as to declarations off the policy being scrupulously declared are embodied in the conditions, but this would apply even were the condition omitted. Location clause is incorporated, as is to be expected. To avoid any difficulty in the event of loss or arrival prior to declaration, an agreed basis of valuation is required to be inserted. The conditions specially point out that they do not operate so as to restrict the assured's powers of assignment of the policy or of the interest. Attention is particularly drawn to the footnotes to the effect that where the attachment of the contract cannot be determined by sailing or bill of lading date, modified provisions may be incorporated, and that it is incumbent on the assured to give the earliest provisional notice of intended shipments (vessel's name and approximate value of shipment). It is to be feared that the latter condition is more honoured in the breach than in the observance. As well as a clause applicable to either open policies or open covers, distinct clauses are reproduced applicable to one of these classes of contract only. The conditions remain unaltered.

The

JAVA TOBACCO SURVEY CLAUSE.

This does not bear the designation "Institute," but is a Standard clause, and resulted from bad claims experience in connection with shipments of tobacco from the East Indies. Tobacco, it shipped in poor condition, is subject to inherent vice, which may result in fire or heating. Although the loss in such circumstances is not within the scope of the policy, the difficulty often apparent in demonstrating this to the assured is very pronounced. To obviate this, the clause warrants that all tobacco shipped shall be surveyed before shipment and certified as fit by experts appointed by the Dutch underwriters' associations, or by Lloyds' agents.

INSTITUTE CORN TRADE CLAUSES.

These are known as "F.P.A. Clauses, 1922," and constitute an agreement between the London Corn Trade Association and the Institute of London Underwriters. They are particularly noteworthy in connection with the treatment of increased value. In normal circumstances, where an insurance is effected on increased value, it is apparent that no subrogation rights can be conferred on insurers, as the policies on cargo itself, containing as they do an agreed value on the subject-matter insured, would give to the underwriters full rights in respect of any claim paid. Originally, it was the regular practice for increased value insurances to be placed against the risks of total loss only, without benefit of salvage to the insurers. No objection could be raised to this course if the premium rating took this into consideration. Nowadays, however, it is the almost invariable desire of the assured to obtain protection of increased value on "to pay as cargo terms. Strictly speaking, in view of the absence of subrogation rights, such insurances should be rated higher than a normal with average cover. Insurers have found great difficulty in bringing assured to appreciate this contention, especially in view of the condition of the market. To this, one notable exception is apparent, as is witnessed by the clauses at present under consideration.