Tuesday, 12 May 2015


Clarence and Richmond Examiner (Grafton) Thursday 19 August, 1909
The cabled news from London that themissing Lund Liner Waratah has been re-insured at the rate of 90 guineas percent, gives a clue to the extent of theanxiety felt for the vessel in shippingcircles there. The limit of re-insurance is95 guineas per cent., and when a vesselreaches that, hope for her safety is at adesperately low ebb. The last step is whenthe overdue ship is posted "missing" atLloyd's. That follows at differing periodsafter the re-insurance has reached 95 percent. Few ships have ever arrived afterbeing posted missing at Lloyd's.
The Waratah is a stout and moderntwin-screw steamer, which in any ordinary stormy weather should reach her destination well up to time, so that speculators on the re-insurance market fear something serious has befallen her when they risk such a high percentage on her arrival or non-arrival, as the case may be.
lt is a pure gamble - a gruesome gamblein which men actually bet that a vesselwill or will not reach her destination.The finding of a lifebuoy bearing a ship'sname or portion of her fittings will oftensend her price on the re-insurance marketup with a bound, although the thing mayhave been washed overboard in heavy weather.
This phase makes the high rate on theWaratah all the more surprising, as novestige of wreckage likely to have comefrom her has been seen or washed up, andthere is nothing so far to indicate thatshe is not still afloat. 
Still those who gamble in ships are business men of much ability, and often stand to win or lose a pile of money on a ship. No gambling in re-insurance is carried on in Australiabut on the great English and American Exchanges lots of men do nothing else.
On the Waratah, for instance, a manmay stake £10 at 5 per cent, that shewill not arrive. If she is posted missinghe draws about £190 for his investment.
Again, the appended table shows approximately how much an investment of £10will return according to the bet of thespeculator as to whether she will or willnot arrive. (The percentage rate jumps infives according to the length of time avessel may be overdue or what wreckagehas been seen, viz., 5, 10, 15, 20, 25 percent., and so on) :
                      To arrive   Not to arrive.At 5 per cent.        £10 ... 190At 10 per cent.        11 ...  95At 20 per cent.        12 ...48At 50 per cent.        19 ...19At 75 per cent.        34 ... 13 .At 85 per cent.        52 ... 11/10/At 90 per cent.        71 ... 10/19/At 95 per cent.        102 . 10
Thus when a ship is re-insured at 5 percent, "to arrive" the risk is all with thespeculator, for the chances are that shewill arrive, and he loses his money. Shipsthat are not overdue at all are speculated upon for various reasons, and if anyone ventures £10 on such a vessel "notto arrive," and she does not turn up, the"lucky" investor draws big money. Itwill be seen that as the length of theup, the inducement to investors to riskpassage increases and the percentage goestheir money on a vessel "to arrive" isenhanced, whilst at 95 per cent, "not toarrive" it is about "an even money bet."
Much money has been made by men onthe re-insurance market by successfulgamblers. It matters not to them howmany souls there may be aboard an over-due ship. When the "Lutine" bell tolls atLloyd's it is solemn business for thosehaving friends aboard an overdue vessel,for it is the warning that some ill-starredship has been given in as lost, probablywith all hands. At the same time it isthe signal for fortunate speculators whohave gambled on her "not to arrive" toclamour for their money won in such grimstyle. The "Lutine" bell was many yearsago recovered from the wreck of H.M.S.Lutine, lost on the English, coast, andsince hung at Lloyd's.
The cables state that the 90 per centre-insurance, the rate at which the Waratah stands, is the highest yet paid for aship of her size. The system of re-insurance is open to fraudulent practice. Caseshave been known where men have riskedlarge amounts on apparently well-foundships not-arriving, and have won. Thecourt of inquiry has subsequently discovered that ugly business by someone aboardhas accounted for disaster to the vessels. It is needless to point out that the speculators had some previous intimation thatthe vessels would never reach their destination. 
The reported sighting of bodiesalong the Waratah's route between Durbanand Capetown is likely to send her rateup to the limit immediately. In the sameway, if some vessel reported sighting theliner adrift the present heavy re-insurancerates would come down with a run.
This article casts a new and sinister light on the subject of vessel re-insurance. 'The rate at which the Waratah stands, is the highest yet paid for a ship of her size' is a ghastly reminder that the general belief was that the Waratah WOULD NOT ARRIVE.
How this must have affected desperate families hoping against all odds that the Waratah would be found adrift and unharmed.
One BIG tick for Australia not allowing this sort of morbid gambling!

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