THE

MERCHANTS' MAGAZINE

AND

COMMERCIAL REVIEW.

OCTOBER, 1862.

GENERAL AVERAGES CONSOLIDATION.

THE Civilization of Rome and the civilization of India have each developed themselves in a manner so totally distinct from the other, that the idea of their common origin can hardly be conceived. And yet recent philological researches into the formation of their two languages clearly prove that the inhabitants of each sprung from a common stock. So clear is this proof, that it is asserted that if all historical records were destroyed and mere specimens of each language preserved these alone would serve to show their relationship. The Sanscrit is now acknowledged to be the parent of all European languages, living or dead, and this language bears the same relationship to the modern Hindoostanee that the Latin tongue does to the modern Italian.

The early codification of the Roman customs of law is held by a distinguished modern author* to be the principal cause of the different development of the two countries in civilization. All ancient societies

obtained written laws sooner or later, but the period at which their codes were made, exercised the greatest influence over their future progress. In Rome the plebian or popular element successfully assailed the oligarchical monopoly, and a code was obtained early in the history of the commonwealth. At a period when usage was rational and healthy, that is to say, when the customs of the people had been so lately formed, that the circumstances of their origin and the reasons for their adoption were familiar to every one, the celebrated code known as the Twelve Fables was framed. This deliberate methodizing, and adoption into a

* HENRY SUMNER MAINE. "Ancient Law."

VOL. XLVII.—NO. IV.

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body of written law, of ideas and principles of justice, that were before this time only matters of traditionary custom arrested forever that law of development by which usage that is reasonable generates usage which is unreasonable. It at once placed a barrier against the encroachments of the aristocracy upon the liberties of the people, and prevented their reasonable customs from degenerating into superstitious abuses.

On the other hand, in India and in the East generally, aristocracies tended to become religious rather than civil or political, and gained therefore rather than lost in power. Codes were obtained relatively much later than in Western societies. The customs of the people had become corrupt, for the reason that they were obeyed by multitudes who were ignorant of the true grounds of their expediency, and who were, therefore, left to invent superstitious reasons for their permanence. Prohibitions and ordinances originally confined to a single description of acts were made to apply to all acts of the same class. After one kind of food had been prohibited for sanitary reasons, the prohibition was extended to all food resembling it, although the resemblance originally depended upon analogies the most fanciful. So again a wise provision for insuring general cleanliness dictated in time long routines of ceremonial ablution; and that division into classes which at a particular crisis of the social history was, perhaps, necessary for the maintenance of the national existence, degenerated into the most disastrous and blighting of all human institutions-caste. The opportunity thus afforded to the priests of increasing and consolidating their influence was too great to be resisted; and to this end they rather encouraged than suppressed the superstitions of the people. And when codes were finally obtained, they were rather collections of such rules as the priests deemed proper to be observed, than compilations of reasonable usages.

Thus we find that the early introduction of a rational code preserved the liberties of the Roman people, and laid the foundation of that splendid system of jurisprudence, which has so largely affected the civilization of the world. But when a written law came to the Hindoos their liberties were already gone, and their customs had degenerated into superstitions, and they became, and have since continued to be, the most oppressed and the most corrupt of nations pretending to any degree of civilization.

It would appear from these illustrations, that a code has the same influence in fixing the customs of a nation that a literature has upon the natural development of a language. It is asserted that those barbarous nations whose range of ideas is most limited, have still so surprising & word-making power, that tribes from a common stock, separated for a few years, soon lose the power of communicating with each other at all. Not that their changed circumstances give birth to new ideas which they embody in new words, but that they invent new words to express the same ideas. But the moment the language begins to be written this process is forever arrested; and as a consequence the period in its growth at which its literature first appears is of the greatest importance. A brave and free people will naturally possess a very different set of ideas to those which will prevail among an enslaved race, and must necessarily speak a superior language. If that language is arrested by a literature while it is in this condition, it may remain a monument of a noble race long after the people who gave it birth have disappeared from the family

of nations. And in the same way many ancient codes, that of Rome preeminent among the rest, remain to prove the almost forgotten greatness of the people who originally framed them.

The mercantile community is, in respect to the rules which govern its transactions, somewhat similarly situated to ancient societies before their laws were codified. The law-merchant which regulates them is little more than a body of customs and traditions. It is true that these customs are many of them as old as commerce itself; and are embodied in many ancient local codes that are surpassed by no modern enactments for wisdom and integrity. It is true also that these customs are not confined to one nation or people, but embrace the usages of the commercial world. And as these codes have no authority but their own intrinsic merit, where their application would be clearly unjust they need never be applied. And as customs that have been handed down for ages unimpaired, and have stood the test of thousands of decisions must almost necessarily be correct, it would be only reasonable to suppose that the decisions of the law-merchant were on the whole more equitable and just than those of the civil law of any country. And this is admitted to be the case. At the same time in the daily transactions of life cases constantly arise in which the law, correct as it may be on the whole, is found to be rather cumbersome in its application. So vast a range of precedents can never be compassed by any but a professional man, and even then only by one of great industry and learning. Hence it follows that most of those whose pursuits require such knowledge are unable to obtain it. For all practical purposes à code of exact rules on these matters would be vastly more convenient; but to obtain such a code the consent of all trading nations must first be obtained; and then, too, the powers of human language would be severely taxed, to make the rules. so general as to cover every case, and so clear as to be understood by every one.

Without such a code there must be uncertainty on many points, caused not so much by want of precedents as by ignorance of their existence. For instance, a merchant whose vessel is in distress in a foreign port may have to submit to charges neither founded in principle, nor sanctioned by general practice, and yet be unable to resist them from the want of any distinct law to appeal to. And again, although the broad principles of the law-merchant may be admitted by all nations, yet in the practice founded upon them many discrepancies notoriously exist. It is in the application of a great truth to a particular set of circumstances that individual idiosyncracies appear. This of course must frequently cause confusion and embarrassment and even affords an opportunity for fraud. And finally, there are certain principles just in themselves which should not be pushed too far, and here custom must decide where the limit should be placed. As an example, the loss of interest on money during detention at a port of distress is not allowed as General Average, although undoubtedly the consequence of a General Average Act. Whether these difficulties could be removed by an universal code remains to be seen. One thing is certain, with a code uniformity would be obtained, and this alone would perhaps make amends for the occasional injustice arising from a necessarily strict observance of the letter of the law.

And as in the case of ancient societies the circumstances under which it is obtained will forever stamp it for good or evil, and it may be too late

in the history of commerce to attempt such a measure, or the proper time for its adoption may not yet have arrived.

Commerce has already done much towards breaking down ancient hostilities. In olden times there were examples of the splendor and wealth derivable from it even before Tyre. But in those days the same word signified "stranger" and "enemy." And even in Greece, merchants were frequently pirates when the opportunity offered. In Rome it held no high position, but in the middle ages the greatest of the Medici was so proud of his success as a merchant that he refused to add any other title to his name. And only a few years ago, we might well have believed that the commerce of the Atlantic alone would forever have sufficed to preserve peace between the great nations lying on its borders. And even in these troubled days when the nation, convulsed with civil war, sees one half its people longing for and the other half dreading an armed European intervention in its domestic troubles-there comes a message of peace from the other side of the Atlantic, and merchants here are invited to join their brethren on the other side in an attempt at a universal codification of that large and important branch of mercantile law known as General Average.

France already has a code of laws on this subject; they are a part of the Code Napoleon, but were derived almost entire from the Ordonnance of Louis XIV., which in its turu was principally compiled from the Roman and Rhodian laws. England, up to and during the time of Lord Mansfield, did not differ much in her General Average customs from other European countries. Since that time, however, England has introduced innovations, some of them under the sanction of the courts of law, but more of them as Customs of LLOYD'S.

In this country the common law of England was adopted by us at the time of our Revolution, and with it the General Average law of which it formed a part. It was adopted by us in its best days, however, before the innovations alluded to had commenced. And it has been since devoloped by a free use of continental learning, and at the present day differs widely from that of England, but not from that of the rest of Europe.

In the month of May, 1860, a circular was issued by several commercial bodies of Great Britain to the commercial bodies of other countries, representing the great inconvenience of the present system of adjusting General Average, and inviting them to send representatives to Glasgow in September, 1860, to" consider the best means of attaining to some degree of uniformity of system." The circular describes the system of General Average as one which pre-eminently requires that the same principles should be acknowledged among the chief maritime nations. But so far from this being the case, however, some of the most important rules not only vary in the same country but in the same port. Uncertainty is always an evil; and in regard to General Average the evil is peculiarly felt. The ship may be owned in one country, insured in another, her cargo owned and insured in several, and the port of distination where the General Average is made up, may be in a country which has different rules to any of the others. What is considered to be a Particular Average on ship in one port, is held to be General Average in another, so that the owner of an outward bound ship may find himself unable to recover his loss either from his underwriters at home, or as General Average abroad; or, on the other hand, he may be in a position to indemnify himself fraudulently twice over.

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"A very large proportion of the most important questions rests in England nominally upon the decision of that extremely vague authority the custom at LLOYD's,' but really depends upon the idiosyncrasy of the par ticular adjuster who may be intrusted with the papers." The greatest evil of all which result from the present uncertainty of the law, is the opportunity which it affords of introducing charges of the most outrageous description, which do not even go into the pocket of the shipowner, but which he feels himself helpless to resist from the want of a law to appeal

to.

The result of this circular was the assembling of delegates from various commercial bodies in the following September to discuss the evils complained of, and to suggest a remedy. The suggestion of Judge MARVIN, who represented the Chamber of Commerce and Board of Underwriters of this city, that definite and acceptable rules could not be framed by the Congress, but that they should refer these questions to some of the ablest jurists in the country who might take into their counsel some of the best adjusters, was adopted. He further proposed that these gentlemen might in the course of the year draw up the doctrine of General Average in the form of a bill to Parliament, if they pleased, and what cases were to be included in General Average. This bill was then to be printed and sent to all the commercial cities in the world for revision and correction. By that means a great mass of experience, suggestion and thought would be collected. The bill would then be returned to the central committee in London with the suggestions. A final bill would then be drawn up and submitted to the British Parliament, and if it became a law, the Judge did not think "there would be any great difficulty encountered in the Congress of the United States; and if it were adopted by the two greatest commercial nations, France and other countries would be soon likely to follow, and in the course of four or five years a much greater uniformity might be obtained."

This outline of a bill has already arrived in this city, and is now being considered by our commercial bodies. It is called "General Averages Consolidation," and if the plan which has been so successfully carried out hitherto, should be faithfully pursued, a very valuable General Average Code must be the result. At the same time, the greatest care and deliberation are necessary to make the bill a faithful exponent of admitted principles; and to avoid injustice and error in their application to particular circumstances. The suggestion of Judge MARVIN as to the best method to be adopted in the original bill, might, with great propriety, be carried out here for its correction. A committee "of the ablest jurists of this country, who might take into their counsel some of the best adjusters," should be appointed by the Chamber of Commerce and the Board of Underwriters, to thoroughly revise and amend this instrument, and to return it to its framers with all the suggestions that their united learning and experience might dictate. If care is thus taken, both in this country and in all others to which the bill may be sent, to collect the suggestions of the ablest minds upon its merits, it will bring back to its framers such a mass of "experience, suggestion, and thought," that they can hardly fail to draw up a second bill so just in its principles, and so wise in their application to all practical details, as will readily secure its universal adoption.

An opportunity is thus afforded, such as may never occur again, of comparing the points of difference in the practice of each nation, and of sifting