Conflagrations have been a risk for cities since time immemorial. Death, injury and loss of property have been almost inevitabilities as people have chosen to live in close quarters to each other, particularly in poorer districts. Hong Kong has been no exception, particularly in older Chinese district of Taipingshan, which stood frequent witness to ruinous conflagrations.
But the ruin of those fires was sometimes perhaps too convenient. And it was at that time that Chinese merchants first happened upon the Western business practice of commercial inventory insurance. In the 1880s, for instance, the telegraph and steamships had vastly improved communications between cities of the Empire, but prices of commodities were still subject to dramatic fluctuations. The goods of consumed by fire, suspiciously, tended to be insured when prices were near the top, presenting a major temptation to any warehouse owner whose fortunes had had to be marked down due to a falling market.
I quote the following for the report of H. E. Wodehouse, the Superintendent of the Fire Brigade of 1888:
The year has been characterized by an unusual number of fires, some of which have attained serious proportions, but the greater part of which have been soon extinguished. There were nearly three times as many fires as the maximum number recorded in any previous year and the resources of the Brigade have been very fully taxed. To those who know how easy the spread of a fire is in the crowded Chinese town with its back to back houses, and narrow lanes, I think the Brigades may be congratulated on the success that has attended their efforts.In Victorian English, this was tantamount to saying, 'of course there's bloody arson, it's happening more and more often, and unless we take steps to make suring insurance fraud isn't so easy it's going to happen more and more often.'
In one of these fires only has a charge of incendiarism been made. It was made at the instance of an Agent for a German Insurance Office, and was committed for trial at the Supreme Court, where the defendant was acquitted without being called upon to make his defence.
I understand that a civil suit is pending in connection with this trial and I forbear therefore from dwelling upon this particular case. Generally speaking, however, I may say that the practice of insuring contents of Chinese houses without any check beyond what is caused by the self-interests of the parties concerned is a grave source of temptation, and is fostered by the interests both of those who insure and of those who accept the risks.
Even supposing abuses not to arise it is inexpedient to give opportunity for them and the danger created by the facilities for bad practices is aggravated by the difficulty of detecting and exposing such as take place, and by the natural reluctance which a Company concerned only with its own interests feels to take the initiative by refusing a claim.
It is possible however that when systematic enquiries on oath are made, other causes such as the indiscriminate and careless use of Kerosine oil, or the increase of accidents arising with the growth of the population may be found to be the prime promoters of coflagrations, but the tendency of insuring is undoubtedly to give rise to incendiarism, and even apparent carelessness may be the result of careful forethought.
Two or three cases of undoubted incendiarism have come under my own notice, occurring not necessarily in the house in which the fire originated, but in the house adjoining it, and I am credibly informed that on the occasion of the large fire in Queen's Road West some weeks ago, the fire broke out simultaneously in three different houses separated from each other and with no possibility of intercommunication of the flames.