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Hokitika Guardian, 6 June 1925, Page 2

('Rr.i)iT insurance is a lirancli of the business of insurance which lias grow;i considerably in recent, years. It may he briefly described as the insurance of mercantile ami commercial risks generally l.v guaranteeing the credit of one of the parties to the transaction. Mr H. Stanley Spain, underwriter of the Trade Indemnity Co.. Ltd., who with Mr Cuthhmt Heath, Chairman of the same undertaking, has been largely responsible, says a London rommereial paper, for the development of this aspect of commercial life, recently delivered an interesting and informative lecture on the subject. Mr Spain mentioned that, firstly, the transaction involved jjt a proposal for credit

insurance must be one concerning the actual buying and soiling of merchandise. thus eliminating the possibilities of covering accommodation transactions. Secondly, the lontract must Iks made either subsequent to the actual date of the application or immediately Ito fure. I In l nest vital eondition was that the company only accepted a pmportiuii of the risk : sometimes only bo per lent.. Init never more than 7b per cent. The assured bad to tarry the retiiainiug portion himself. otlierwise tin' credit o| the company might he engaged in hazardous trading. Another important londition in the present form of credit policy is that the hover himself he ante actually insolvent before liability attaches. This condition has been much dismissed, some contending that the policy was of no use to a hanker with such a condition attaching. Vet another point is that the compauv only paid when t'lc ultimate net less was ascertained. In this lecture Mr Spain also spoke of the forms ol policy in ii.se dealing with the various methods el granting credit--e.g. hills el exchange, the granting of open accounts, goods delivered on s.dc

or return, and open credit, ft may be mentioned that the recent meeting oi the Trade Indemnity Company showed flint their business bad increased

very considerably during the last, few years. The risks covered in 1923 were estimate I as representing nut less than £7.0011.(H 0. and the gross premium in

dine amounted to £(>.2,167. l-ast year the premium income reached £H 10,G:id. and it is estimated that the volume of credit insurance provided was quite iloul.de that of 1923. Seine of the great

composite insurance < oinpanies have, in vc-ded in the Trade Indemnity Com puny, v.Li'h lias paid a dividend ol ■

Till', task of finding the cause as a means to escape from trade problems is now a universal task, healing with (he position in (treat Britain. Mr .J. 11. Thomas, a stalwart of the British bailor I’artv. who was one of the most Miciossfiil Ministers in the short-lived l.nbnr Government at Home, speaking recently in an industrial centre in Cornwall, said that unless a solution of

the nation was inevitably going t( disaster. The eri unmie lad was ill

were unable to compete with the foreigner in shipbuilding. It was no good running a > :p\ from hard Lets. Anyone who said Labour or Conservative. would remedy matters by ofiii o not. ciilv talked dap-:r: p and humbug, but was deliberately deceiving people. The remedy, proclaimed by the .Minority movement in the country was an upheaval similar to the Russian method but no mole could be got out ol industry than was put into it. The prndical way was for the leaders of all lie industries, the largest employers as well as the trade unions oi any industry affected, to sit down and try in ascertain the real cause ol the ditfieulties. So far a- the milwaymon were • ■oncerued. it was far better to obtain tilings bv reas oi than by lor e. They had no right to he unmindful of the in t"i i't - of th" t: a veiling - | uhlie. Iliad. ise to tln in was ; i ilcnia ml the niaxiniuin conditions their industry ee'.ild h":ir. lull as liny demanded the in- 1 linn: the employer, so they ought in give the best in return. Answering questions. Mr Thomas - -aid In- In-!:-'. - e | a remedy for e.xi-.liug conditions in t!: ■ count rv was Social:-in. but il lie lull tile power to 1 111 it ill! a o| el'atic II by his one vote lie should relusc L' do it be' a use t lit- majority of tie- people did not believe in it. Mr Thomas lias beau regarded a- one of the .vilest and safest men in Ibe Labor movement at Home, and his remarks record 'd about lit in with that coiiclu'iun. His remarks ate certainly cf \alne and lit in with the general idea of what should l 1 e done, a roim 1 table ronfeicn e "boreal all will agree to loyally carry ■mi • lie ' ompaci reai lied, and give a—--a red .-lability for the I iiture. Till', address by the visiting liieinbe.r iif ihe Dairy (bniti'cl Board ibis we-k

'■■as listened t i attentively by a mall, bill interested aitendame. ’lie meeting «as di-pi ed to guv the noli y of the Board a trial, which is probably Ibo only thing to do now that the matter had gone ,-n far. Mr Hamilton's speech led oil' to believe that the Board eonsideis it possible to eliminate speculation on the London market in regard to the sale of N Z. luil-

tor. This is a very u] timistic attitude to till,l' up. I!y a coincidence, in hist night’s issue our well informed commcreiui correspondent in Wellington expressed hio opinion regarding the smile subject founded on the remarks of the t Iniiniian ;:f the Board. Mr IJ"mi 11!in evidently re-echoed the opinions hero. Wliat onr < orre.-pomlent said in discussing the mutter, therefore, applies to the statements expressed locally. For. after all. it is a fact that speculation is the incentive to business till the v.orhl over. It is a ease i.f milhing venture, nothing win. The business man studies markets and prices, and having regard to supplies (he the eoniniod'ty what it may) hays neoordingly. In other words, it is all a matter of supply and demand. Plow New Zealand can control prices really in Britain remains to lie seen, for the Dominion hnlter is not adequate, enough to (oilier the v.hole trade. It is I-v corners that prices may lie stipulated definitely, anti Xew Zealand will not lie strong enough in quantity or finance' to reach that omnipotent position. N'or, we take it. will the market price of the Loudon business alone settle the return to the consumer. With the ne essity for shipping to "West of Fnglaml ports to secure the necessary cool storage (as Mr Hamilton made plain was a necessity to maintain the quality of the colonial article! i oinpetiition in those quarters must he p ken into account also. It would lie an ox ellec; thing of course if prices could he established so that they mnv never ho too high and never too low. A Imam is as had almost as a slump -a« experience has shown. But business methods [Vuudcd on sjieeulative ideas often lead to one extreme or the ether, and it will lie difihuli | for the Now Zealand trade in butter and cheese to except the pitfalls which are as probable as they are possible. The price to the former is to receive another uncertain quantity. Price according to grade may not prove a very opierative method for the -mail fat tore. The factories i u the Coastall come within that category, and the whole policy is decidedly experimental for this quarter of New Zealand. where output i-s limited and churnings delave l for quantities. The stilije t is of the highest importance to the dairy farmer and the tiros and eons are so eonllirtin.tr. that punitive and negative opinions seem to he very evenly divided.