GENERAL AVERAGE DEPOSITS AND BONDS.

New Zealand Times, Volume XXIX, Issue 4135, 22 June 1874, Page 3

GENERAL AVERAGE DEPOSITS AND BONDS.

The Melbourne Daily Tdcjraph writes : "The long-vexed question of general average deposits and bonds appears at last likely to be settled satisfactorily to all parties. The representatives of the mercantile community spoke their minds pretty freely at a meeting on Thursday, and did not part without adopting certain resolutions, the carrying out of which, it is anticipated, will do much to produce a mutual understanding between the agents of damaged vessels and consignees of goods as to the manner in which future averages shall be levied. The reason which has induced importers to take this step is that no law or custom exists by which the agents of a vessel requiring repairs is limited to making any specified claim in the shape of an average deposit as security for the payment of the demands on the ship for repairs. Ten per cent, in most cases, it would appear, has been considered sufficiently adequate to defray all charges, but in a recent case 121 per cent, was demanded from consignees before delivery of their goods could be obtained, and there seems to be no reason why higher rates should not be required. To this oxir merchants take exception, and seek to fix certain data on which average bonds shall be signed. In a recent circular issued from Lloyd's, the committee refer to the present bond in use in the following unmistakeable condemnatory terms : —' In the bond commonly used the accident which gives rise to the average is assumed and admitted, and can never afterwards be questioned, however unfounded may be the statement upon which it is made. A second objectionable practice is that of constituting it an arbitration agreement, referring the average to one firm, without appeal, and without power of correction. It is the merchant, and not the underwriter, who is bound by the average agreement, and as the merchant is precluded from questioning the statement when made up, although he may be aware that the particulars alleged in it have no foundation in fact, he may be placed in the position of having assumed, on behalf of the underwriter, a liability which the latter is not prepared to accept, and which therefore may revert to the merchant—a practice which in some cases might operate very seriously to his prejudice.' The clause here taken exception to embodies mostly the grievances which our merchants complain of ; but they go further, and ask that the large sums levied in many instances in the shape of deposits should not pass to the private account of the agent of the vessel for an indefinite period, but should be placed to a bank account open for the special purpose. The new bond which it is recommended should be adopted has already been approved of in London by the Committee of Lloyd's, that body remarking that its nature is simple, and that it is merely designed to obviate an evident evil. The whole matter of mercantile custom in regard to averages is at present in an unsatisfactory state as regards consignees, there being no guarantee that the demands made for deposits should be confined within certain limits, that any surplusage after payment of the average will be refunded, or that the average will bo paid by the ship agent. No provision is made to ascertain whether the cases are such as the shipper is liable for, or whether the liability does not fall on the owner for allowing his vessel to go to sea improperly fitted or short-handed. These and other similar defects in the existing system require reform, and the appointment of a committee to confer with ships' agents to secure their concurrence in the new bond is the first step in the right direction, which, it may be trusted, will be followed up by others of a still more satisfactory nature."