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The fire defences of Paris as compared with those of American cities, and especially of Philadelphia
Feb., 189o. ]
];#c Z)
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In reference to designing, all the different styles, such as Gothic, Renaissance, etc., are t a u g h t , and the pupils s t u d y some chemistry, sufficient to cover their special work. A g y m n a s i u m a t t a c h e d to the e s t a b l i s h m e n t , provides for special training, a d a p t e d to the trades which are t a u g h t . I saw a class g o i n g t h r o u g h the exercises, a n d was partieularly impressed with the g r e a t care shown b y the teacher w i t h his pupils. It struck me t h a t u p h o l s t e r y would be an i m p o r t a n t trade to teach in Philadelphia, and that, w i t h the exception of some of the h e a v i e r work connected with it, it was well adapted to girls. 17b be coJ~tim~ed.] =__::::
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F I R E I)EFI~;NCI~S o v P A R I S as C O M P A R E D wvrH "rues1.; ~l. A M E R I C A N C I T I E S , aND E S P E C I A L L Y ov P H I L A D ' E L P H I A . " By W. L. 130SWELL, Delegate of the INSTITUTE to the Paris Exposition,
[~efi0;'q ;Hade /'0 /'~e FRANKLIN INSTITUTE at the Staled ~leeting', held
Wovember z7, z889.]
The specific object of m y a p p o i n t m e n t being the examination of such new i n v e n t i o n s as m i g h t be exhibited at the Exposition, for g u a r d i n g a g a i n s t fires or s e c u r i n g their prompt extinction, m y a t t e n t i o n was n a t u r a l l y first t u r n e d in this direction. It was safe to infer t h a t a n y m e a n s or invention of this kind could not fail to find its place in the Exposition. But repeated a n d t h o r o u g h examination, failing to reveal a n y t h i n g of t h e kind, the question became a different one; and as the m a t h e m a t i c i a n , who reaches a negative result, only feels called upon to make a re-statement of his problem, so the real question became, w h y is this field of i n v e n t i o n left unworked? T h e s e appliances became only more conspicuous by their absence. In a n s w e r i n g this question, we m u s t first see if there is the same necessity for fresh appliances or fresh m e t h o d s in Paris as w i t h us. T a k i n g as a u t h o r i t i e s for m o s t of the
lO2
Yosz~,ell:
[J. F, I.,
s t a t e m e n t s t h a t follow, t he R e p o r t of t he F i r e m e n of Paris m a d e to the Police D e p a r t m e n t , of w h i c h t h e y a r e a part, the last R e p o r t of the I n s u r a n c e P a t r o l of t h i s city, a n d t h e R e p o r t of the Chief E n g i n e e r of t h e B u r e a u of Fi re, also of th is city, we r each t he f o l l o w i n g c o m p a r a t i v e s t a t e m e n t s . N e a r l y t w o- t hi r ds of all the fires in P a r i s d u r i n g l a s t y e a r were c h i m n e y fires, w h i c h w e r e e x t i n g u i s h e d w i t h o u t difficu lty and w i t h no m a t e r i a l loss, and m a y t h e r e f o r e be disr eg ar d ed . Besides t h e s e the fires in t888 in Pari s w e r e 923, as a g a i n s t 762 in Philadelphia.. As to t h e g r a v i t y of t he a g g r e g a t e losses l ast year, we tind as follows : Fire loss in Philadelphia. . . Fire loss in Pennsylvania. . . Fire loss in the United States : Insurance Loss. . . Total Loss. . . . . Fire loss in Paris, . 2 . . .
. . . . . . . . . . . . . . . .
$2, I28, I55 5, Io2,4o2
. . . . . . . . . . . . . . . . . . . . . . . .
52,677,896 119,~o9,38o 1,322,742
T h e a v e r a g e fire loss in t h e U n i t e d S t a t e s f o r t h e l a s t t h i r t e e n year s has been a b o u t $9o,ooo,ooo a year. T h e difference b e t w e e n t he i n s u r a n c e loss a n d t h e t o t a l loss in the U n i t e d S t a t e s arises f r o m t he f a c t t h a t in t h e cities and l a r g e t ow ns t h e loss b y fire is g e n e r a l l y b o r n e b y th e i n s u r a n c e companies, so t h a t in P h i l a d e l p h i a , f o r e x a m pie, the d i s c r e p a n c y m a y be d i s r e g a r d e d ; b u t t a k i n g t h e wh o le c o u n t r y t o g e t h e r , it a m o u n t s , as a p p e a r s a b o v e , t o m o r e th a n one-half the ent i r e loss. F r o m an e x a m i n a t i o n of t h e s e figures we r e a c h the foll9wing r e s u l t : that-iJ~ p r o portio~z to populatiol~, fires are tzviee as mlmcrozls b~ P/dladel/J/da as hi Paris, a e d fozlr times as destr~ctive. On c o m p a r i n g t h e fire loss in P h i l a d e l p h i a with t h a t in t he U n i t e d S t a t e s , w e find a ratio r e m a i n i n g from y e a r to y e a r n e a r l y t h e s a m e ; w h i c h results, p a r t l y f r o m the size of the city, a n d c h i e f l y fr,)m the v a r i e d c h a r a c t e r of t h e i n d u s t r i e s h e r e c a r r i e d on. In no o t h e r city is t h e r e so g r e a t v a r i e t y ; a n d if w e aseertain th e fire loss in t hi s city, we can, w i t h i n r e a s o n a b l e limits, find t he loss in t h e U n i t e d S t a t e s . So t h a t w e m u s t e n l a r g e o ur view and r e a c h t h e i n e v i t a b l e c o n c l u s i o n t h a t our n a t i o n a l loss b y fire in p r o p o r t i o n to p o p u l a t i o n , is m o r e than four times t h a t of Paris,
Feb., ,89o. ]
F/rc D(flenccs ({fi I)aris, tic.
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In view of these facts, we are driven to inquire the reason of this discrepancy, a question e m i n e n t l y proper for consideration b y this INSTITUTE, which seeks the fullest practical results from scientific investigation. Let us examine, therefore, more in detail the n a t u r e of fire hazards and the m e a n s adopted for g u a r d i n g against them. Hazards are of two kinds, physical and moral. Physical hazards are s u c h as arise, first, from the character of the building, a low, brick b u i l d i n g w i t h m e t a l or slate roof is always safer than a high, frame s t r u c t u r e with shingle roof ; secondly, from the character of the occupancy ; a g u n p o w d e r factory will always be more hazardous than a warehouse for the s t o r a g e of pig-iron ; thirdly, from exposure, a b u i l d i n g adjoining a distillery will always b e more hazardous than one adjoining a graveyard; fourthly, from difference in the m e a n s for the detection and extinction of fires, an efficient fire d e p a r t m e n t a m p l y supplied with water, will always give a lower i n s u r a n c e rate, b e c a u s e of diminished hazard. T h e s e illustrations are, of course, e x t r e m e cases, b u t in the large i n t e r v e n i n g g r o u n d the inspection of hazards and d e t e r m i n a t i o n of rates is a w o r k d e m a n d i n g obviously the a m p l e s t experience and observation, and t h e closest attention. The second class of hazards includes w h a t are called moral h a z a r d s ; hazards d e p e n d e n t on the owner, b e i n g entirely personal in their character. H e r e is an element of danger generally d i s r e g a r d e d b y the public, chiefly perhaps, for the reason t h a t its value cannot be scientifically ascertained. The ratio of f r a u d u l e n t claims in Paris has been set down on good a u t h o r i t y as t w e n t y per cent., and an American underwriter, of large experience, has given his opinion that the ratio in this e o u n t r y i s f i f t y p e r cent. W h i l e no reliance can be placed upon these exact figures, as b e i n g only m a t t e r s of opinion, y e t t h e y sufficiently show that t h e intelligent underwriter m u s t mal~e large allowance in the determination of hazards, for the personal element : m u s t consider w h o m he insures, rather than w h a t he insures. T h e e x t e n t of this
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l~osa,c/l ."
I J. F. I.,
e l e m e n t ma\, t)c best shown perhaps by considering the times at which tires occur. And for this purpose I have prepared plates giving the hours of the occurrence of the fires of Paris d u r i n g last year. In all scientific invest!gations the scientist is d i s t i n g u i s h e d from the sciolist by the m a n n e r of his investigations ; the sciolist e x p e r i m e n t i n g to see w h a t results will follow in a blind way ; the scientist to see if his prevision of results is sanctioned and correct. Before e x a m i n i n g Plate I, which gives the Paris fires f o r l a s t year, and b e a r i n g in m i n d t h a t this plate refers only to the frequency of fires, and not to their gravity, which is conditioned largely by causes outside of the p r e s e n t inquiry, let us see w h a t we should naturally expect would be the times of the occurrence of fires. W e should expect to find t h a t in the forenoon fires wo ald increase for several hours with a p r e t t y s t e a d y ratio ; then t h a t they would decrease about mid-day, t h e n t h a t they would increase in the afternoon, decreasing agai~a a b o u t four or tire o'clock ; from which time t h e y would increase until they reached a m a x i m u m about e i g h t to nine o'clock at night, after which time they would decrease w i t h considerable regularity until t h e y reached the m i n i m u m a b o u t six to seven in the forenoon. T h e r e arc three times when fires are most f r e q u e n t ; from ten to eleven in the morning, three to four in the afternoon, and eight to nine at night, the n u m b e r at this last t i m e being very greatly in advance of those d u r i n g the d a y t i m e . The reasons why the fires should be g r e a t e s t at n i g h t from eight to nine, are obvious; as well as those w h i c h b r i n g more frequent fires at certain times in the f o r e n o o n and afternoon. If we now t u r n to Plate I, we find t h e s e expectations corroborated by the result ; the fires in t h e forenoon and the afternoon, being largely exceeded b y the fires of the night, and the fire line g o i n g with reasonable r e g u l a r i t y from the m a x i m u m at n i g h t to the m i n i m u m at six o'clock in the morning. Now the fires from six o'clock in t h e morning to nine o'clock at night, in t h e i r i'elative f r e q u e n c y , are suseeptible of a physical explanation, b u t after t h a t time, the causes of fires have g e n e r a l l y ceased, a n d if t h e r e were
Feb., i Sgo ;
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no clement but the physical danger, t h e r e w o u l d be b u t few fires d u r i n g the n i g h t and early m o r n i n g . T h e a t t e m p t e d e x p l a n a t i o n b y a t t r i b u t i n g such fires to spontaneous c o m b u s t i o n is w o r t h y only of p a s s i n g notice. It requircs b u t little chemical k n o w l e d g e to p r o n o u n c e such spontaneous combustion, u n d e r t h e c i r c u m s t a n c e s t h a t are generally found, to be a scientific impossibility. Let us look now at Plate iI, in which are given t h e fires of P h i l a d e l p h i a as to frequency. In the first plate the fires in Paris were 923 ; the fires in P h i l a d e l p h i a in Plate II are as given by the I n s u r a n c e Patrol, a n d as they only a t t e n d e d last year 285 fires, it is necessary to take also the fires attended l)3, t h e m in I887, 28I in number, and m a r k e d on the chart by a broken line. T h i s will give us an a g g r e g a t e of more than 5oo, e n o u g h to g u a r a n t e e us in d e t e r m i n i n g the law. It will be noticed in these t h a t t h e fire tine in t h e two years was r e a s o n a b l y the same, with such variation as would rather confirm the a c c u r a c y of t h e statistics on which it is founded. On e x a m i n i n g this plate we find the same lines within reasonable limits for fires in the forenoon and the afternoon, as we found in the plate r e p r e s e n t i n g t h e fires of Paris. W e find, as before, t h a t the m a x i m u m o f fires was at eight to nine at night, but from t h a t h o u r on to the early m o r n i n g we no longer find a tolerably r e g u l a r decrease in fires, b u t a broken line, i n d i c a t i n g serious fire dangers in the l a t t e r part of the night. In this respect the fire line of Philadelphia is in violent contrast with t h a t of Paris. T h e s e irregularities in the fire line in the l a t t e r part of the n i g h t are susceptible b u t of a single explanation : as b e i n g due to moral hazards r a t h e r than physical. W h i l e it w o u l d be m o s t u n j u s t to i n d u l g e suspicion in a n y p a r t i c u l a r case of the i n t e g r i t y of the assured, whose premises were destroyed d u r i n g the night, yet the result r e a c h e d by t h e a g g r e g a t e is s u c h as no smentitle i n v e s t i g a t i o n can disregard. In t h i s moral hazard there is included not only t h e d a n g e r of arson, b u t the general danger from neglect. So far as insurance interests are concerned, there is a r e g u l a r g r a d a t i o n from the m a n of honor, p u r s u i n g a profitable business, down t h r o u g h t h e
Io6
Z~osze~eI! :
[J. F. I.,
various degrees of unsuccessful labor to where financial failure so often leads to arson. It is not in h u m a n nature for a m a n u f a c t u r e r to have no more solicitude for a factory y i e l d i n g a large and s t e a d y income t h a n of one t h a t a n n u a l l y brings him in debt; nor will t h e m e r c h a n t w a t c h so vigil a n t l y over an a n t i q u a t e d stock, the m a r k e t value of which has fallen far below the insurance, as if his own m o n e y were at stake. Hence moral hazard is l a r g e l y c o n d i t i o n e d by the profitableness of the b u i l d i n g or the business. T h e n u m b e r of those who actually fire buildings for the sake of gain is small, but the n u m b e r of those who Become n e g l i g e n t of an unprofitable store or factory is very great, and so far as the hazard is concerned, neglect and carelessness are n e a r l y as dangerous as gunpowder, and w h e n there is a d d e d the cert a i n t y of i m m e d i a t e pecuniary profit from the fire, t h e mischief is largely increased. Now as a g a i n s t these dangers, t h u s h a s t i l y sketched, w h a t means in Paris have been f o u n d m o s t effectual? T h e first r e m e d y is f o u n d in the s u b s t a n t i a l c h a r a c t e r of the buildings, w i t h s t r o n g partition walls in each, a n d the care specifically taken to prevent fires. B u t as this m a t t e r will be more fully discussed by a n o t h e r delegate, I will not dwell here any f u r t h e r upon it. A second a d v a n t a g e in Paris is t h a t stores a n d factories a r e not separated by such great intervals from dwellings. One of the loneliest places in New York City is a m o n g the warehouses on t h e east side, a n d few persons w h o h a v e not been in the n e i g h b o r h o o d cf the large stores a n d warehouses of this city late at night, can be aware h o w easily a fire m a y s t a r t a n d m a k e considerable progress before its detection. So m u c h is this recognized t h a t a store occupied partly as a dwelling has a reduction m a d e in t h e rate on t h a t account. A third a d v a n t a g e in Paris is its complete d i s t r i b u t i o n of fire appliances, w h i c h m a k e it impossible for a fire to c o n t i n u e a n y l e n g t h of time. Ten dollars, e x p e n d e d for the prevention of fires, or their detection in t h e i r incipiency, are worth more than a t h o u s a n d dollars in the m e a n s for their e x t i n g u i s h m e n t . There is a r e g i m e n t of more t h a n
Feb., ~89o.]
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~,7oo trained firemen, with well-equipped stations in every part of the city, and with such ample provision as enables them to fiKht any fire t h a t m a y occur. In this service t h e cs/~yi/
Io8
[J. F. ~.,
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insurance companies bears to t h e total loss the s a m e proportion t h a t the i n s u r a n c e bears to the value of the p r o p e r t y at risk. T h a t is, let: . r = loss to insurance companies. Z ---- total fire loss. / = total insurance. K - - value of p r o p e r t y ; then,
.r
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Vet:r--= i
V
As in any particular case f. and V m a y be r e g a r d e d as constants, we h a v e x, a f u n c t i o n of/'. To illustrate t h e application of this rule, suppose a stock of goods worth $Ioo,ooo is insured to the a m o u n t of $5o,ooo; t h e n should the fire destroy goods to t h e value of $5o,o0o, the i n s u r a n c e companies would p a y 825,o0o only, and the balance w o u l d be borne by the assured himself. By the c u s t o m of this c o u n t r y of l e a v i n g off the co-insurance clause, the insurance c o m p a n i e s in the case supposed would p a y the entire loss, a n d t h e assured himself bear no part of the loss. T h e r e a s o n i n g in Paris is very simple and plausible. If only half a stock is insured, how can it be d e t e r m i n e d w h e t h e r a fire has b u r n e d up the half t h a t was insured or the o t h e r h a l f ? If there be a defalcation in a bank, b e y o n d its own m e a n s to r e m e d y , so that depositors suffer, w h y should the loss fall u p o n one depositor more t h a n ~nother ? W i t h o u t g o i n g into the q u e s t i o n on equitable grounds, it is evident t h a t t h e r e s p o n s i b i l i t y r e s t i n g on the assured would be i m m e n s e l y increased b y such a clause, and the increased care t h a t w o u l d r e s u l t on the p a r t of the assured would make it possible to l a r g e l y reduce the rate of insurance. A l t h o u g h m o s t i n s u r a n c e experts would perhaps regard it as ?xcessive, y e t in m y o w n opinion, the general i n t r o d u c t i o n of this clause in A m e r i c a n insurance would j u s t i f y a reduction in rates of fifty p e r cent., and this opinion has been reached by s t u d y of the q u e s t i o n for a n u m b e r of years. Still again in Paris there is a r e s p o n s i b i l i t y in t h e case of fire t h a t is a l m o s t i g n o r e d here. T h e first recourse, as it is called, is of the t e n a n t a g a i n s t
purnal Franklin hisfitute, 15:1. Cd"XIX
February, i8go .
Boswell, PI, a.
Fires in Philadelphi
25
25
20
20
15
15
10
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5
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m
a
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NIGHT . The Figures on the Sides Indicate the 2 ember
of
Fires at the times marked on the bottom .
Feb., I89o. I
/"/rc /)ejcltccs ~.f Paris, etc.
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the landlord, who is responsible to the t e n a n t if it can be established t h a t the fh'e was from some defect in t h e conszruction or m a i n t e n a n c e of the building. The second recourse is the reverse, for the t e n a n t is responsible to the landlord for a n y d a m a g e to the b u i l d i n g sustained by fire caused by the n e g l i g e n c e of the t e n a n t . The third recourse is the r e m e d y which one has a g a i n s t his neighbor; for he on whose premises the fire has oecnn-ed is responsible to his neighbors on both sides for a n y toss t h a t m a y occur to t h e m in consequence. While, at least in some States, these liabilities are recognized here, y e t generally, except in the case of railroad companies, t h e y are not in force. P r o b a b l y in Paris t h e y would be n e g l e c t e d more than t h e y are, But for the fact t h a t it is c o m m o n to effect insuravtee, not only on one's own property, but to cover these additional liabilities. In the e v e n t of fire, therefore, no s y m p a t h y w i t h the assured p r e v e n t s the course of justice. ~l'he m a t t e r is in the h a n d s of t h e different i n s u r a n c e companies r e p r e s e n t i n g the different interests, and it is a simple business a r r a n g e m e n t to enforce legal liability and thus protects the interests of the assured. 1 have t h u s Briefly s t a t e d the relative condition of Paris and P h i l a d e l p h i a as regards fires, w i t h the causes t h a t underlie the differences, a n d the possible remedies t h a t will come to us in time. In this I h a v e r e m e m b e r e d t h a t t h e gltiding policy of this I~STITUTB for more than half a c e n t u r y has been to combine the m o s t rigid scientific i n v e s t i g a t i o n with the a m p l e s t economic results.
];#c Z)
IOI
In reference to designing, all the different styles, such as Gothic, Renaissance, etc., are t a u g h t , and the pupils s t u d y some chemistry, sufficient to cover their special work. A g y m n a s i u m a t t a c h e d to the e s t a b l i s h m e n t , provides for special training, a d a p t e d to the trades which are t a u g h t . I saw a class g o i n g t h r o u g h the exercises, a n d was partieularly impressed with the g r e a t care shown b y the teacher w i t h his pupils. It struck me t h a t u p h o l s t e r y would be an i m p o r t a n t trade to teach in Philadelphia, and that, w i t h the exception of some of the h e a v i e r work connected with it, it was well adapted to girls. 17b be coJ~tim~ed.] =__::::
" T i n ' ;
:
:
_::.:
:
_:: ..............
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F I R E I)EFI~;NCI~S o v P A R I S as C O M P A R E D wvrH "rues1.; ~l. A M E R I C A N C I T I E S , aND E S P E C I A L L Y ov P H I L A D ' E L P H I A . " By W. L. 130SWELL, Delegate of the INSTITUTE to the Paris Exposition,
[~efi0;'q ;Hade /'0 /'~e FRANKLIN INSTITUTE at the Staled ~leeting', held
Wovember z7, z889.]
The specific object of m y a p p o i n t m e n t being the examination of such new i n v e n t i o n s as m i g h t be exhibited at the Exposition, for g u a r d i n g a g a i n s t fires or s e c u r i n g their prompt extinction, m y a t t e n t i o n was n a t u r a l l y first t u r n e d in this direction. It was safe to infer t h a t a n y m e a n s or invention of this kind could not fail to find its place in the Exposition. But repeated a n d t h o r o u g h examination, failing to reveal a n y t h i n g of t h e kind, the question became a different one; and as the m a t h e m a t i c i a n , who reaches a negative result, only feels called upon to make a re-statement of his problem, so the real question became, w h y is this field of i n v e n t i o n left unworked? T h e s e appliances became only more conspicuous by their absence. In a n s w e r i n g this question, we m u s t first see if there is the same necessity for fresh appliances or fresh m e t h o d s in Paris as w i t h us. T a k i n g as a u t h o r i t i e s for m o s t of the
lO2
Yosz~,ell:
[J. F, I.,
s t a t e m e n t s t h a t follow, t he R e p o r t of t he F i r e m e n of Paris m a d e to the Police D e p a r t m e n t , of w h i c h t h e y a r e a part, the last R e p o r t of the I n s u r a n c e P a t r o l of t h i s city, a n d t h e R e p o r t of the Chief E n g i n e e r of t h e B u r e a u of Fi re, also of th is city, we r each t he f o l l o w i n g c o m p a r a t i v e s t a t e m e n t s . N e a r l y t w o- t hi r ds of all the fires in P a r i s d u r i n g l a s t y e a r were c h i m n e y fires, w h i c h w e r e e x t i n g u i s h e d w i t h o u t difficu lty and w i t h no m a t e r i a l loss, and m a y t h e r e f o r e be disr eg ar d ed . Besides t h e s e the fires in t888 in Pari s w e r e 923, as a g a i n s t 762 in Philadelphia.. As to t h e g r a v i t y of t he a g g r e g a t e losses l ast year, we tind as follows : Fire loss in Philadelphia. . . Fire loss in Pennsylvania. . . Fire loss in the United States : Insurance Loss. . . Total Loss. . . . . Fire loss in Paris, . 2 . . .
. . . . . . . . . . . . . . . .
$2, I28, I55 5, Io2,4o2
. . . . . . . . . . . . . . . . . . . . . . . .
52,677,896 119,~o9,38o 1,322,742
T h e a v e r a g e fire loss in t h e U n i t e d S t a t e s f o r t h e l a s t t h i r t e e n year s has been a b o u t $9o,ooo,ooo a year. T h e difference b e t w e e n t he i n s u r a n c e loss a n d t h e t o t a l loss in the U n i t e d S t a t e s arises f r o m t he f a c t t h a t in t h e cities and l a r g e t ow ns t h e loss b y fire is g e n e r a l l y b o r n e b y th e i n s u r a n c e companies, so t h a t in P h i l a d e l p h i a , f o r e x a m pie, the d i s c r e p a n c y m a y be d i s r e g a r d e d ; b u t t a k i n g t h e wh o le c o u n t r y t o g e t h e r , it a m o u n t s , as a p p e a r s a b o v e , t o m o r e th a n one-half the ent i r e loss. F r o m an e x a m i n a t i o n of t h e s e figures we r e a c h the foll9wing r e s u l t : that-iJ~ p r o portio~z to populatiol~, fires are tzviee as mlmcrozls b~ P/dladel/J/da as hi Paris, a e d fozlr times as destr~ctive. On c o m p a r i n g t h e fire loss in P h i l a d e l p h i a with t h a t in t he U n i t e d S t a t e s , w e find a ratio r e m a i n i n g from y e a r to y e a r n e a r l y t h e s a m e ; w h i c h results, p a r t l y f r o m the size of the city, a n d c h i e f l y fr,)m the v a r i e d c h a r a c t e r of t h e i n d u s t r i e s h e r e c a r r i e d on. In no o t h e r city is t h e r e so g r e a t v a r i e t y ; a n d if w e aseertain th e fire loss in t hi s city, we can, w i t h i n r e a s o n a b l e limits, find t he loss in t h e U n i t e d S t a t e s . So t h a t w e m u s t e n l a r g e o ur view and r e a c h t h e i n e v i t a b l e c o n c l u s i o n t h a t our n a t i o n a l loss b y fire in p r o p o r t i o n to p o p u l a t i o n , is m o r e than four times t h a t of Paris,
Feb., ,89o. ]
F/rc D(flenccs ({fi I)aris, tic.
IO3
In view of these facts, we are driven to inquire the reason of this discrepancy, a question e m i n e n t l y proper for consideration b y this INSTITUTE, which seeks the fullest practical results from scientific investigation. Let us examine, therefore, more in detail the n a t u r e of fire hazards and the m e a n s adopted for g u a r d i n g against them. Hazards are of two kinds, physical and moral. Physical hazards are s u c h as arise, first, from the character of the building, a low, brick b u i l d i n g w i t h m e t a l or slate roof is always safer than a high, frame s t r u c t u r e with shingle roof ; secondly, from the character of the occupancy ; a g u n p o w d e r factory will always be more hazardous than a warehouse for the s t o r a g e of pig-iron ; thirdly, from exposure, a b u i l d i n g adjoining a distillery will always b e more hazardous than one adjoining a graveyard; fourthly, from difference in the m e a n s for the detection and extinction of fires, an efficient fire d e p a r t m e n t a m p l y supplied with water, will always give a lower i n s u r a n c e rate, b e c a u s e of diminished hazard. T h e s e illustrations are, of course, e x t r e m e cases, b u t in the large i n t e r v e n i n g g r o u n d the inspection of hazards and d e t e r m i n a t i o n of rates is a w o r k d e m a n d i n g obviously the a m p l e s t experience and observation, and t h e closest attention. The second class of hazards includes w h a t are called moral h a z a r d s ; hazards d e p e n d e n t on the owner, b e i n g entirely personal in their character. H e r e is an element of danger generally d i s r e g a r d e d b y the public, chiefly perhaps, for the reason t h a t its value cannot be scientifically ascertained. The ratio of f r a u d u l e n t claims in Paris has been set down on good a u t h o r i t y as t w e n t y per cent., and an American underwriter, of large experience, has given his opinion that the ratio in this e o u n t r y i s f i f t y p e r cent. W h i l e no reliance can be placed upon these exact figures, as b e i n g only m a t t e r s of opinion, y e t t h e y sufficiently show that t h e intelligent underwriter m u s t mal~e large allowance in the determination of hazards, for the personal element : m u s t consider w h o m he insures, rather than w h a t he insures. T h e e x t e n t of this
Io4
l~osa,c/l ."
I J. F. I.,
e l e m e n t ma\, t)c best shown perhaps by considering the times at which tires occur. And for this purpose I have prepared plates giving the hours of the occurrence of the fires of Paris d u r i n g last year. In all scientific invest!gations the scientist is d i s t i n g u i s h e d from the sciolist by the m a n n e r of his investigations ; the sciolist e x p e r i m e n t i n g to see w h a t results will follow in a blind way ; the scientist to see if his prevision of results is sanctioned and correct. Before e x a m i n i n g Plate I, which gives the Paris fires f o r l a s t year, and b e a r i n g in m i n d t h a t this plate refers only to the frequency of fires, and not to their gravity, which is conditioned largely by causes outside of the p r e s e n t inquiry, let us see w h a t we should naturally expect would be the times of the occurrence of fires. W e should expect to find t h a t in the forenoon fires wo ald increase for several hours with a p r e t t y s t e a d y ratio ; then t h a t they would decrease about mid-day, t h e n t h a t they would increase in the afternoon, decreasing agai~a a b o u t four or tire o'clock ; from which time t h e y would increase until they reached a m a x i m u m about e i g h t to nine o'clock at night, after which time they would decrease w i t h considerable regularity until t h e y reached the m i n i m u m a b o u t six to seven in the forenoon. T h e r e arc three times when fires are most f r e q u e n t ; from ten to eleven in the morning, three to four in the afternoon, and eight to nine at night, the n u m b e r at this last t i m e being very greatly in advance of those d u r i n g the d a y t i m e . The reasons why the fires should be g r e a t e s t at n i g h t from eight to nine, are obvious; as well as those w h i c h b r i n g more frequent fires at certain times in the f o r e n o o n and afternoon. If we now t u r n to Plate I, we find t h e s e expectations corroborated by the result ; the fires in t h e forenoon and the afternoon, being largely exceeded b y the fires of the night, and the fire line g o i n g with reasonable r e g u l a r i t y from the m a x i m u m at n i g h t to the m i n i m u m at six o'clock in the morning. Now the fires from six o'clock in t h e morning to nine o'clock at night, in t h e i r i'elative f r e q u e n c y , are suseeptible of a physical explanation, b u t after t h a t time, the causes of fires have g e n e r a l l y ceased, a n d if t h e r e were
Feb., i Sgo ;
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io5
no clement but the physical danger, t h e r e w o u l d be b u t few fires d u r i n g the n i g h t and early m o r n i n g . T h e a t t e m p t e d e x p l a n a t i o n b y a t t r i b u t i n g such fires to spontaneous c o m b u s t i o n is w o r t h y only of p a s s i n g notice. It requircs b u t little chemical k n o w l e d g e to p r o n o u n c e such spontaneous combustion, u n d e r t h e c i r c u m s t a n c e s t h a t are generally found, to be a scientific impossibility. Let us look now at Plate iI, in which are given t h e fires of P h i l a d e l p h i a as to frequency. In the first plate the fires in Paris were 923 ; the fires in P h i l a d e l p h i a in Plate II are as given by the I n s u r a n c e Patrol, a n d as they only a t t e n d e d last year 285 fires, it is necessary to take also the fires attended l)3, t h e m in I887, 28I in number, and m a r k e d on the chart by a broken line. T h i s will give us an a g g r e g a t e of more than 5oo, e n o u g h to g u a r a n t e e us in d e t e r m i n i n g the law. It will be noticed in these t h a t t h e fire tine in t h e two years was r e a s o n a b l y the same, with such variation as would rather confirm the a c c u r a c y of t h e statistics on which it is founded. On e x a m i n i n g this plate we find the same lines within reasonable limits for fires in the forenoon and the afternoon, as we found in the plate r e p r e s e n t i n g t h e fires of Paris. W e find, as before, t h a t the m a x i m u m o f fires was at eight to nine at night, but from t h a t h o u r on to the early m o r n i n g we no longer find a tolerably r e g u l a r decrease in fires, b u t a broken line, i n d i c a t i n g serious fire dangers in the l a t t e r part of the night. In this respect the fire line of Philadelphia is in violent contrast with t h a t of Paris. T h e s e irregularities in the fire line in the l a t t e r part of the n i g h t are susceptible b u t of a single explanation : as b e i n g due to moral hazards r a t h e r than physical. W h i l e it w o u l d be m o s t u n j u s t to i n d u l g e suspicion in a n y p a r t i c u l a r case of the i n t e g r i t y of the assured, whose premises were destroyed d u r i n g the night, yet the result r e a c h e d by t h e a g g r e g a t e is s u c h as no smentitle i n v e s t i g a t i o n can disregard. In t h i s moral hazard there is included not only t h e d a n g e r of arson, b u t the general danger from neglect. So far as insurance interests are concerned, there is a r e g u l a r g r a d a t i o n from the m a n of honor, p u r s u i n g a profitable business, down t h r o u g h t h e
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Z~osze~eI! :
[J. F. I.,
various degrees of unsuccessful labor to where financial failure so often leads to arson. It is not in h u m a n nature for a m a n u f a c t u r e r to have no more solicitude for a factory y i e l d i n g a large and s t e a d y income t h a n of one t h a t a n n u a l l y brings him in debt; nor will t h e m e r c h a n t w a t c h so vigil a n t l y over an a n t i q u a t e d stock, the m a r k e t value of which has fallen far below the insurance, as if his own m o n e y were at stake. Hence moral hazard is l a r g e l y c o n d i t i o n e d by the profitableness of the b u i l d i n g or the business. T h e n u m b e r of those who actually fire buildings for the sake of gain is small, but the n u m b e r of those who Become n e g l i g e n t of an unprofitable store or factory is very great, and so far as the hazard is concerned, neglect and carelessness are n e a r l y as dangerous as gunpowder, and w h e n there is a d d e d the cert a i n t y of i m m e d i a t e pecuniary profit from the fire, t h e mischief is largely increased. Now as a g a i n s t these dangers, t h u s h a s t i l y sketched, w h a t means in Paris have been f o u n d m o s t effectual? T h e first r e m e d y is f o u n d in the s u b s t a n t i a l c h a r a c t e r of the buildings, w i t h s t r o n g partition walls in each, a n d the care specifically taken to prevent fires. B u t as this m a t t e r will be more fully discussed by a n o t h e r delegate, I will not dwell here any f u r t h e r upon it. A second a d v a n t a g e in Paris is t h a t stores a n d factories a r e not separated by such great intervals from dwellings. One of the loneliest places in New York City is a m o n g the warehouses on t h e east side, a n d few persons w h o h a v e not been in the n e i g h b o r h o o d cf the large stores a n d warehouses of this city late at night, can be aware h o w easily a fire m a y s t a r t a n d m a k e considerable progress before its detection. So m u c h is this recognized t h a t a store occupied partly as a dwelling has a reduction m a d e in t h e rate on t h a t account. A third a d v a n t a g e in Paris is its complete d i s t r i b u t i o n of fire appliances, w h i c h m a k e it impossible for a fire to c o n t i n u e a n y l e n g t h of time. Ten dollars, e x p e n d e d for the prevention of fires, or their detection in t h e i r incipiency, are worth more than a t h o u s a n d dollars in the m e a n s for their e x t i n g u i s h m e n t . There is a r e g i m e n t of more t h a n
Feb., ~89o.]
l;/rc l)
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~,7oo trained firemen, with well-equipped stations in every part of the city, and with such ample provision as enables them to fiKht any fire t h a t m a y occur. In this service t h e cs/~yi/
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insurance companies bears to t h e total loss the s a m e proportion t h a t the i n s u r a n c e bears to the value of the p r o p e r t y at risk. T h a t is, let: . r = loss to insurance companies. Z ---- total fire loss. / = total insurance. K - - value of p r o p e r t y ; then,
.r
• £
::
/
:
Vet:r--= i
V
As in any particular case f. and V m a y be r e g a r d e d as constants, we h a v e x, a f u n c t i o n of/'. To illustrate t h e application of this rule, suppose a stock of goods worth $Ioo,ooo is insured to the a m o u n t of $5o,ooo; t h e n should the fire destroy goods to t h e value of $5o,o0o, the i n s u r a n c e companies would p a y 825,o0o only, and the balance w o u l d be borne by the assured himself. By the c u s t o m of this c o u n t r y of l e a v i n g off the co-insurance clause, the insurance c o m p a n i e s in the case supposed would p a y the entire loss, a n d t h e assured himself bear no part of the loss. T h e r e a s o n i n g in Paris is very simple and plausible. If only half a stock is insured, how can it be d e t e r m i n e d w h e t h e r a fire has b u r n e d up the half t h a t was insured or the o t h e r h a l f ? If there be a defalcation in a bank, b e y o n d its own m e a n s to r e m e d y , so that depositors suffer, w h y should the loss fall u p o n one depositor more t h a n ~nother ? W i t h o u t g o i n g into the q u e s t i o n on equitable grounds, it is evident t h a t t h e r e s p o n s i b i l i t y r e s t i n g on the assured would be i m m e n s e l y increased b y such a clause, and the increased care t h a t w o u l d r e s u l t on the p a r t of the assured would make it possible to l a r g e l y reduce the rate of insurance. A l t h o u g h m o s t i n s u r a n c e experts would perhaps regard it as ?xcessive, y e t in m y o w n opinion, the general i n t r o d u c t i o n of this clause in A m e r i c a n insurance would j u s t i f y a reduction in rates of fifty p e r cent., and this opinion has been reached by s t u d y of the q u e s t i o n for a n u m b e r of years. Still again in Paris there is a r e s p o n s i b i l i t y in t h e case of fire t h a t is a l m o s t i g n o r e d here. T h e first recourse, as it is called, is of the t e n a n t a g a i n s t
purnal Franklin hisfitute, 15:1. Cd"XIX
February, i8go .
Boswell, PI, a.
Fires in Philadelphi
25
25
20
20
15
15
10
1O
5
r cp
OD
0
r
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cv
m
a
a
NIGHT . The Figures on the Sides Indicate the 2 ember
of
Fires at the times marked on the bottom .
Feb., I89o. I
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the landlord, who is responsible to the t e n a n t if it can be established t h a t the fh'e was from some defect in t h e conszruction or m a i n t e n a n c e of the building. The second recourse is the reverse, for the t e n a n t is responsible to the landlord for a n y d a m a g e to the b u i l d i n g sustained by fire caused by the n e g l i g e n c e of the t e n a n t . The third recourse is the r e m e d y which one has a g a i n s t his neighbor; for he on whose premises the fire has oecnn-ed is responsible to his neighbors on both sides for a n y toss t h a t m a y occur to t h e m in consequence. While, at least in some States, these liabilities are recognized here, y e t generally, except in the case of railroad companies, t h e y are not in force. P r o b a b l y in Paris t h e y would be n e g l e c t e d more than t h e y are, But for the fact t h a t it is c o m m o n to effect insuravtee, not only on one's own property, but to cover these additional liabilities. In the e v e n t of fire, therefore, no s y m p a t h y w i t h the assured p r e v e n t s the course of justice. ~l'he m a t t e r is in the h a n d s of t h e different i n s u r a n c e companies r e p r e s e n t i n g the different interests, and it is a simple business a r r a n g e m e n t to enforce legal liability and thus protects the interests of the assured. 1 have t h u s Briefly s t a t e d the relative condition of Paris and P h i l a d e l p h i a as regards fires, w i t h the causes t h a t underlie the differences, a n d the possible remedies t h a t will come to us in time. In this I h a v e r e m e m b e r e d t h a t t h e gltiding policy of this I~STITUTB for more than half a c e n t u r y has been to combine the m o s t rigid scientific i n v e s t i g a t i o n with the a m p l e s t economic results.