he names the ocean rate, terminal and transfer charges, and any other charge which might accrue against the shipment at the port of export. This agent then advises the manufacturer that he is authorized to accept his shipment between specific dates which he names, giving the full rate.

The manufacturer delivers his freight to the rail carrier and at the same time secures at least a marine insurance policy covering the ocean shipment of his freight and whatever additional insurance he desires to secure. In addition he must comply with the customs requirements of the foreign country to which his shipment is destined. In the present case it would be necessary for him to furnish only an export declaration. Some countries require certificates of origin, while others demand that the bill of lading be viséed. He is presented with the original receipted copy of an "order" uniform through export bill of lading. Copies of this bill are made according to the foreign destination of the shipment, the needs of the rail carrier, and the shipper. The manufacturer takes the original copy of the bill of lading and his marine insurance certificate to his bank which discounts the bill. He then mails to the consignee a copy of the bill of lading and the marine insurance certificate. This ends his duties.

FINANCES

Financial procedure under the use of the uniform through export bill of lading is at the present time somewhat indefinite. Immediately after the war many importers in Europe were attempting to break contracts which they had already placed in the United States and took as one of the easiest means the fact that proper documents were not issued in connection with the shipment. At that time a through bill of lading was being used which, as previously stated, was not of the same type as the present one. The importer claimed that this through export bill of lading was not an ocean bill of lading and accordingly refused to accept delivery of freight shipped on such a bill. In this stand they were backed by decisions of foreign courts. Banks in this country had discounted these bills in certain instances, with the result that several banks lost on these transactions. Consequently, in 1920, the New York bankers credit conference issued regulations regarding the acceptance of this type of bill of lading.

These regulations among other things provided:

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2. We will interpret the terms "documents,” shipping documents" and words of similar import, as comprehending only ocean bills of lading (sailor bill of lading included) and marine and war risk insurance, in negotiable form, with invoices.

5-A. Forwarders' bills of lading will not be accepted unless specially authorized. Railroad through bills of lading will not be accepted, except on exportations to the Far East via Pacific ports, unless expressly stipulated.

Under these regulations many banks at the present time-members of the New York bankers' credit conference-are not accepting the uniform through export bill of lading as prescribed by the Interstate Commerce Commission unless it is expressly stipulated by the importer in his letter of credit that such a bill of lading will be acceptable to him. Some banks will not accept this bill of lading if there is a general statement in the letter of credit to the effect that

payment shall be made on presentation of the bill and necessary papers. They are demanding "on board ocean bills" in connection with letters of credit where the uniform through export bill is not designated, and it is sometimes necessary for exporters using the uniform through export bill of lading to have their agent at the port of export take up this bill and substitute an "ocean" bill of lading so that they will be able to discount it without difficulty.

The general exception to the above condition is on transcontinental freight moving via the Pacific. Here conditions are such that this bill can be used without much difficulty.

A survey of banks discloses that they feel the financial practices used in connection with this bill of lading are not clearly set forth. They bring up the question of settlement of claims. They inquire as to who is responsible in case of loss in a foreign country, whether the issuing carrier, one of the intermediate carriers, or the ocean carrier. They feel that this position should be clearly defined before any regularity can be effected on financing of shipments by

these means.

This state of affairs is regrettable. The remedy, however, is not difficult. One way is that all exporters intending to use this bill should advise their customers abroad to state in opening their letters of credit that the uniform through export bill of lading will be acceptable. The other way is by precedent. If, after many shipments have moved via the uniform through export bill of lading, it can be shown that freight is not tied up for long stretches of time at the port, it is believed that foreign customers will see the advisability of using this bill of lading. There can be no doubt that, with a proper working arrangement between the rail and ocean carriers, the through transit of merchandise will require a much shorter period of time than freight moving on a "for export" bill of lading and addressed care of the forwarding agent at the port.

Correspondence with a large number of banks in this country on this particular question reveals that the only outstanding difficulty is the one outlined above. Practically all the banks are in favor of its use, the inland bank even more than the seaboard banks. One bank has suggested as a possible course of action that an international conference might be called to discuss the question of acceptance of the uniform through export bill of lading.

In this connection it might be stated that if the rules for the carriage of goods by sea, prescribed by the Brussels convention of 1922, are adopted by all countries, a change of Part II of the uniform through export bill of lading will be necessary. These rules will establish a uniformity in all bills of lading so that the present financial trouble will be greatly minimized.

INSURANCE

There is a wide divergence of opinion concerning questions of insurance in connection with the uniform through export bill of lading. Arguments are advanced that the broker is in possession of the best insurance rates in the market. As soon as a definite shipment is made a rate is quoted, a certificate is made up and forwarded with the documents, so that no additional charges will be made later. Where this bill of lading is used a binder is placed, reading "steamer

or steamers," and the lowest premium is charged. Before this premium is paid the name of the steamer on which the goods have moved must be definitely known. This results in a handicap to f. o. b. shipments as this premium must be billed out to the ultimate consignee after the original documents have been forwarded. This necessitates extra work on the part of the shipper and irritation on the part of the ultimate consignee.

An explanation of the principal clauses to consider, by Royal H. Miller, of the Division of Commercial Laws of this bureau, is as follows:

Insurance is so technical a subject that very few shippers are qualified to draw up their own policies without the assistance of an expert familiar with the wording of marine insurance policies and capable of securing adequate coverage for the commodity handled.

Shippers who have any considerable volume of foreign shipments will undoubtedly wish to consider the advisability of an open policy with some reliable company, both because of the more advantageous rates as compared with the open market and because of the convenience and better service connected with such a form of policy. Certificates issued on such policies are generally recognized throughout the world as a satisfactory evidence of insurance, although in one or two countries it is necessary to furnish an original marine insurance policy.

The function of any marine insurance policy is to cover the risk of loss or damage to the shipment from the time it leaves the factory or warehouse of the American shipper until it reaches the foreign consignee. In order to make this coverage complete, certain clauses are contained in or appended to the policy. The omission of any one of these modifying clauses may make the cov erage incomplete and possibly insufficient to comply with the terms of a given contract.

No attempt is made in this short section to cover the entire subject of insurance on through bills of lading but a few of the more important clauses are described. The division of commercial laws of the Bureau of Foreign and Domestic Commerce is ready at all times to help business men with their insurance problems.

CLAUSES THAT MODIFY THE INSURANCE CONTRACT

The interpretation of these clauses was prepared by J. McMillan Hamilton, chairman of the Insurance Advisory Committee of the Bureau of Foreign and Domestic Commerce

Precedence of clauses. In interpreting a marine policy the printed conditions are modified first by printed clauses pasted to the policy, these by the written or typewritten portions of the policy, and then by slips, if any, pinned to the policy.

General average.-A general average loss is one arising out of sacrifices made or extraordinary expenses incurred for the preservation of the ship, cargo, and freight money, for the benefit of all interests. This is assessed ratably against all property involved.

It is a voluntary and intentional extraordinary sacrifice to protect all the common good. A sacrifice to protect the ship alone, or the cargo alone, is not covered by general average. It is the opposite of an accidental loss caused by a maritime peril.

A loss caused by water to extinguish a fire is general average, but not to the packages which themselves were on fire.

Particular average.-A particular average loss is a partial loss of the subject matter insured, caused by a peril insured against, and which is not a general average loss.

Particular average, instead of being contributed for by the general body of those who are interested in the adventure, falls entirely upon the owner of the property deteriorated by the damage.

Particular charges.-Expenses incurred by or on behalf of the assured for the safety or preservation of the subject matter insured, other than general average and salvage charges, are called particular charges. Particular charges are not included in general average or particular average.

They are covered in the policy by permission granted to sue, labor, and travel for, in, and about the defense, safeguard, and recovery of the goods."

Free of particular average, English conditions.-"Warranted free from average unless general, or the ship be stranded, sunk, burnt, or in collision."

If the vessel be stranded the insurer has to pay particular average without regard to percentage, and whether or not the damage is in any way attributable to the stranding.

The damage to the goods may have occurred prior to the stranding or after the stranding, and from an entirely different cause, but, providing they were on board at the time of stranding and the insurance was then in force, the damage is recoverable from the underwriters.

The same applies to burnt, sunk, or in collision, but a vessel which might be on fire is not necessarily interpreted as burnt, nor is a fire confined to cargo covered, and the term "or in collision" is interpreted by the courts as if it read "with another vessel," unless otherwise modified in the contract.

Free of particular average, American conditions." Warranted free from particular average unless caused by stranding, sinking, burning, or collision."

This clause differs from the free of particular average, English conditions, clause in that the loss must be caused by one of the abovementioned casualties.

Per cent particular average clause.-" Subject to particular average if amounting to - per cent."

The object of this limitation in amount is to prevent an endless amount of small claims which would involve expense of adjustment without due return. It is often modified to divide a single shipment into several units and becomes applicable to each.

This clause in one of its many modified forms is particularly desirable on most classes of merchandise and machinery, as will be seen by reading the preceding paragraphs.

River Plate clause.-The risk under this policy shall cease upon arrival at any shed (transit or otherwise), store, customhouse, or warehouse, or upon the expiry of 10 days subsequent to landing, whichever may first occur.

This clause is being quite generally insisted on by the companies, particularly on policies to Brazil, Buenos Aires, and the River Plate, as owing to the large number and size of shore losses the marine companies do not care to assume the risk.

On insurance bearing this clause consignee or banks should be advised to see that other insurance is provided in case of lapse before delivery of goods or acceptance of drafts.

Not covered by policy.-Unless the policy otherwise provides, the insurer on ship or cargo is not liable for any loss proximately covered by delay, althou ordinary we

delay be caused by a peril insured against rdinary leakage and breakage; inherent

vice or nature of the subject matter insured; that is, as fruit rotting, meat becoming putrid, wine souring, or flour heating not from external damage but solely from internal combustion.

Rioters, strikers, and locked-out workmen.-Damage caused by these perils is excluded from the general marine cover, and if desired must be included by indorsement.

Thieves.-The term "thieves" does not cover clandestine theft or a theft committed by one of the ship's company, whether crew or passengers.

Safely landed.-Where goods are insured until they are safely landed they must be landed in the customary manner and within a reasonable time after arrival at the port of discharge, and if they are not so landed the risk ceases.

In due course of transit.-A policy although reading "from warehouse at point of origin to warehouse of consignee at final destination" also bears the words "in due course of transit." These words are not carelessly inserted-they have meaning.

Perils of the seas.-" Perils of the seas" refers only to fortuitous accidents or casualties of the sea. The damage caused by springing a leak is not a charge on the underwriters unless it be directly traceable to some fortuitous occurrence.

Where the leak arises from the unseaworthy state of the ship when she sailed, or from wear and tear or natural decay, and is only in consequence of that ordinary amount of straining to which she would unavoidably be exposed in the general and average course of the voyage insured, the underwriter is not liable.

Seaworthiness admitted.-A clause is often inserted in a policy admitting the seaworthiness of the vessel for the purpose of the insurWhere this is attached to a policy it is a concession on the part of the underwriter that any leak arising must be from a peril of the sea.

ance.

All other perils. This term includes only perils similar in kind to those insured against.

War risks.--All risks of war are excluded from the marine policy. They may be covered by indorsement on the policy or by a separate

contract.

A marine coverage may be secured to protect any insurable hazard, but it is decidedly in order for the insurer to realize what risks he retains and what risks are covered by his contract.

DOCUMENTATION

The problem of documentation is one which more than any other has handicapped the use of the uniform through export bill of lading in Latin American trade. Outside of France and the French colonies, Bulgaria, Greece, Yugoslavia, Portugal and the Portuguese colonies, Rumania, Spain, and Japan, in certain instances no documents are required beyond the usual customs invoice at the port of export. All Latin American countries, with the exceptions of British and Dutch Guiana, British Honduras, Bermuda, and the West Indies, excluding Cuba, Dominican Republic, and Haiti, require either a certificate of origin or a consular invoice and in some instances the viséing of a bill of lading. A bill of lading will not be viséed, except in the case of Argentina, unless the necessary consular documents