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Another extension of the scope of marine and seamen's insurance was effected by an amendatory act of July 11, 1918, whereby "When it appears to the Secretary of the Treasury, that vessels of foreign friendly flags, or their masters, officers, or crews, or shippers, or importers in such vessels, are unable in any trade to secure adequate war risk insurance on reasonable terms," the bureau is "authorized to make provisions for the insurance by the United States of (1) such vessels of foreign friendly flags, their freight and passage moneys, and personal effects of the masters, officers, and crews thereof against the risks of war when such vessels are chartered or operated by the United States Shipping Board or its agent, or chartered by any person a citizen of the United States, and (2) the cargoes to be shipped in such vessels of foreign friendly flags, whether or not they are so chartered." The bureau may also, at the discretion of the Secretary of the Treasury, issue insurance in the above circumstances to protect masters, officers, and crew against loss of life or personal injury and to include compensation during detention following capture.

The business success of marine and seamen's insurance which has not cost the government thus far a dollar, and the extent of the benefits and protection it has given to our shipping are referred to elsewhere in this volume. (1)

The second stage in the development of war risk insurance began with the amendatory act of October 6, 1917, which was in reality three great legislative proposals in one. Any one of the three features of this act was destined to relegate to relative insignificance the provisions for marine and seamen's insurance and the previous work of the Bureau of War Risk Insurance. This act sought to apply the principles of mutuality, governmental cooperation and insurance to lighten the burdens of war for our soldiers and sailors, their families and dependents. The act was drafted after preliminary studies had been made of Canadian and European experience by Lt. Col. (then Captain) S. Herbert Wolfe and others for the Children's Bureau of the Department of Labor; after numerous conferences with experts in various fields including representatives of commercial life insurance interests; and after a careful study of many of these reports and of the whole problem by the Committee on Labor of the Council of National Defense, whose representative, Judge Julian W. Mack, rendered the greatest service of all not only in drafting but in piloting the bill through its legislative history. It had the intelligent personal and active support of Secretary McAdoo and the unqualified endorsement of the President.

Before describing the three great governmental services it established for our fighting forces, we may complete the legislative history by stating that it has been amended by two joint resolutions, one (2) extending the period for application for insurance from men in the active war service as to whom the time for making application would expire before April 12, 1918; and the other (3) making provision for insurance to be taken out by third parties (within the permitted class of beneficiaries) for uninsured persons taken prisoner prior to April 12, 1918.

(3) Pub. Res. No. 27 -- 65th Cong., Apr. 2, 1918.

The act establishing the bureau as amended October 6, 1917, has also been amended in important particulars by two subsequent acts, the detailed effects of which will be taken into account in our subsequent description of the provisions for soldiers and sailors of the War Risk Insurance Act. The act of May 20, 1918, regulated the activities of claim agents and attorneys who solicited business in the adjustment of claims of beneficiaries under the War Risk Insurance Act, fixing the maximum charges for such services at $3.00 per case if any such services are necessary or to be allowed one in most cases, and providing that the benefits to the insured should be protected in every way possible from diminution by the costs of unnecessary legal services.

The second act was that of June 25, 1918, which represented the administrative changes which the experience of the bureau in the first six months operation of the Division of Military and Naval Insurance had shown to be desirable. It simplified considerably the records of the bureau and diminished the delay in payments of family allowances (due to some 200,000 changes per month, owing largely to changes in rate of pay), by providing for a flat allotment of $15 for Class A dependents or Class B dependents alone, or $20 for both as a condition for the granting of a family allowance, instead of a varying amount equal to the allowance but not less than these sums in the cases mentioned, nor more than half the man's pay. Other changes likewise were made in the direction of greater liberality on the part of the government, and some of them were made retroactive by this act and will be noted in the description of the act of October 6, 1917, which follows.