2. How much will £2 8s. amount to in 28 years, at 6 per cent. per annum, compound interest? Ans. £12 5 41. COMMISSION AND BROKERAGE. COMMISSION and BROKERAGE are compensations to Factors and Brokers for their respective services. The method of operation is the same as in Simple Interest. EXAMPLES. 1. What is the commission on $1974 at 5 per cent.? 1974 98,70 Ans. $98,70. 2. The sales of certain goods amount to $1873,40; what sum is to be received for them, allowing 21 per cent. for commission, and per cent. for prompt payment of the net proceeds? Ans. $1821 99 cts. 9 m. To invest or purchase, so as to reserve the commission, or not to overship net proceeds. As 100 more the commission on the intended purchase is to 100, so is the proposed sum to that to be laid out or invested. EXAMPLES. 1. A factor has in his hands $709,80, and being directed to invest it in purchasing certain goods, how much can he invest so as to reserve his commission of 5 per cent. on the purchase? 100 105: 100 :: 709,80 100 105)70980,00(676 630 798 735 2. As the commission in this case is an even part of 100 say, deducting part of the given sum will give the amount to be laid out or invested-thus 3. A factor has in his hands 3690 dollars, which he is directed to lay out in iron, reserving from it his commission of 2 per cent. on the purchase; the iron being 95 dollars per ton, how much did he purchase? Ans. 37 tons, 17 cwt. 3 qrs. 16 lbs. INSURANCE. INSURANCE is a contract by which the Insurer undertakes, in consideration of a stipulated premium, to indemnify the person insured from loss, or damage to the property at risk, by certain perils enumerated in the contract. The instrument which is the evidence of this contract, is called a Policy of Insurance. The premium is the sum paid by the person insured, to him who insures, for taking the risk. The insured [or assured] is the person who owns the property at hazard, which is the subject of the contract. Some policies contain a stipulation that the Insurer shall not be liable for partial losses under five per cent. ;-others ten per cent.-but for general averages the Insurer is liable be they ever so small. A General Average signifies a contribution made by the Owners of the Ship, Cargo and Freight, paid by each in proportion to the amount saved of each, toward any particular loss or expense voluntarily incurred, as by the cutting away of a mast or cable, hiring extra inen, when in distress, &c. for the general safety of the ship and all on board, in order that he whose goods may have been thus sacrificed, or he whose money may have been thus expended, may lose no more, and that all others interested in Ship, Cargo, or Freight, may lose no less than their proportional part. A Partial Loss is a loss by the perils against which the Insurer has undertaken to indemnify, in the ordinary prosecution of the Voyage, and not voluntarily incurred ;—as if a vessel's masts be swept away by the force and violence of the winds or goods be damaged by the straining of the ship, so as to cause her to leak. Total Losses are of two kinds-absolute, and legal or technical. An absolute total loss is when the Ship or Property insured is entirely destroyed, as if they be sunk or consumed by fire. A legal or technical total loss is when the loss is of that nature and extent, which authorizes the Assured to abandon the property insured to the Insurer.-As if a vessel be so much damaged by perils, insured against, as to require repairs exceeding one half of her value, after deducting one third from the cost of repairs, for the difference between new and old, according to an established rule ;-or if goods be damaged to more than half their value. In such cases, if the Assured abandon, it is a total loss with Salvage. If he does not abandon, it is settled as a partial loss.-The Assured is never obliged to abandon; but under these circumstances he has the option to abandon the property insured to the Insurer, who is thereupon obliged to pay the sum insured upon it, and take what may be saved. Ór he (the Assured) may keep what is saved, and claim and recover, as for a partial loss, as he may deem most for his interest. Losses are generally made payable in sixty days after proof is presented, but the parties may vary this term by special agreement. Policies usually contain a stipulation, that in case of loss, the Insurer shall be allowed to deduct one per cent. A person may insure the whole or any part of his property. If he insures a part only, he is considered as being himself the insurer of the residue.-To insure the whole, he must not only insure the cost and charges, or value of the property, at the port of Shipment, but he must cover his premium and the one per cent. abatement, together with the commission paid for making the Insurance and for collecting the loss if any be paid. To ascertain what sum must bę insured to cover the premium and charges, he must first ascertain what sum will be covered by insuring 100 dollars, and so many times as this sum is contained in the sum to be covered, so many hundred dollars he must insure—thus, Suppose A. ships an adventure, the cost of which is $1000 The shipping charges and packages 50 1050 He wishes to cover this sum at a premium of 5 per cent. by which is to be understood, that he wishes to insure that amount which will authorize him to receive of the Insurers $1050 in case of a total loss. The sum to be covered is $1050 1 $1051 The premium is five per cent.-Commission for making the insurance half per cent. and for collecting the loss, one per cent. For the Insurance of 100 dollars, he will receive in case of total loss Subject to deduction, viz. For Premium $100 00 $5,00 The insurance of 100 dollars therefore leaves 92 dols. 50 cts. only, and as many times as 92 dols. 50 cts. are contained in 1051 dols. so many times 100 dollars must he insure. 62,50: 1051 :: 100: $1136,21 to be insured. AVERAGE. THE Word Average, when applied to Marine Insurance, originally signified a proportionate division of any damage among the parties concerned in any risk at sea. It is now used, however, for all losses, damages, &c. short of a total loss. General average may arise from two causes: first, from a sacrifice deliberately made of the property of one of the parties, concerned in the adventure for the benefit of the others, whereby his loss is turned to their gain; and of course, he has a right to claim restitution. Secondly, a claim may arise from expense incurred, or services performed, by one party; for example, the ship-master may incur expenses for the general benefit, and, therefore, he has a right to claim a remuneration. Particular Average, as understood at Lloyd's, signifies a partial loss of the ship or cargo, arising from the common accidents of the sea, and must be borne by the owners of the property that suffer the damage; and underwriters are liable for particular or general average in proportion to the sums which they have underwritten. If goods arrive but damaged, the underwriter must pay the owners such proportion of the prime cost, or value mentioned in the policy, as corresponds with the proportion of the diminution in value, occasioned by the damage. On the average being adjusted, after the arrival of the ship, the wages of the seamen must be deducted from the freight, and the remainder is the sum liable to contribution. But it is necessary to remark that before proportioning the loss, each of the interests, viz. the cargo, the ship, and the freight, after the value is ascertained, must be cleared of all charges attached to it. In computing a general average for masts, rigging, &c. cut away, a deduction is made of one-third, from the cost of replacing them, as the new articles are supposed to be so much better than the old; but goods thrown overboard are valued at the sum they would have brought, had they arrived. But if the average claim is settled at the port of loading, the goods are valued at the invoice price. GENERAL RULE. As the whole value, subject to contribution, is to the whole loss, so is each person's share of that |