# SHIPOWNERS PAINTED THEIR OWN SAFETY LINE *The Limit That Became a Target* Author: Elveander Welfendorff · Category: Risk · Date: 2026-10-22 · Place: Warsaw · EW Journal Source: https://ewbyew.com/shipowners-painted-their-own-safety-line/ --- The Prime Minister had just told the House of Commons, on 22 July 1875, that the Merchant Shipping Bill could not be carried that session. Benjamin Disraeli spoke of his unfeigned and unaffected regret and promised to try again next year, if the government were still in office. Samuel Plimsoll, who sat for Derby, rose in great excitement and begged him not to send thousands of living men to sudden death. Hansard records the sentence that followed: “I am determined to unmask the villains who send to death and destruction”. The Speaker, Sir Henry Brand, presumed that the honourable member did not apply the word to any member of the House. Plimsoll answered, “I did, Sir, and I do not mean to withdraw it.” Disraeli, rising under a sense of deep pain, moved that he be reprimanded. A friend told the House that Plimsoll was at that moment extremely ill, and the matter was put off for a week. As he went out he turned and called back, “Do you know that thousands are dying for this?” He was born in Bristol and had once failed as a coal merchant in London, where by his own later account he lodged in a common house at seven shillings and two pence a week. His fellow lodgers were seamen ashore between voyages, and by one account they told him shocking tales of the vessels that sailors called coffin ships. In Parliament he spent years campaigning against the overloaded and unseaworthy ships they described. A Royal Commission was appointed in 1873 on his motion, and his book Our Seamen carried the case to the public. The ships left port so low in the water that the first gale could take crew and cargo together, and critics of the trade added a darker point: with a ship heavily insured, a vessel lost at sea could return more to its owner than one delivered to port. Seamen who signed on, looked the ship over at the quay and declined to sail were guilty of desertion. Years before Plimsoll rose in the House, a group of sailors wrote to Queen Victoria to complain that they had been convicted of exactly that for objecting to dangerous vessels, and an inspector of prisons reported that nine out of twelve prisoners in the jails of south-west England were sailors, there for refusing to go to sea in ships they thought unseaworthy. Some of the owners sat in the Commons. Edward Bates, a Liverpool shipowner who represented Plymouth, is reported to have lost six ships in a single year, and he was later made a baronet. Even the Spectator, an admirer of his purpose, wrote on 24 July that in the intensity of his sympathy with the seamen he had “lost his head”, and called the scene an “outburst of morbid excitement”. Few reformers receive so courteous a rebuke from a friendly paper. The public took another view. His written protest, which his wife had waited in the Ladies’ Gallery to hand to reporters, was printed in full, and a meeting in Sheffield is said to have remarked that if he was mad, the sooner he bit a few more members the better. By 28 July the government had a stop-gap bill ready to let surveyors detain ships they believed unseaworthy, and it became law on 10 August. Lloyd’s Register had published a rule of thumb in 1835: three inches of freeboard, the height of a ship’s side above the water, for every foot of depth in the hold. Many owners ignored the rule, since a hold packed to the last bale earns more and sinks sooner, and in 1874 Lloyd’s required a painted line on the newly built awning-deck steamers it classed, a rule that bound only the ships it inspected. Under the Act of 1876 a load line became compulsory for British ships. The mark that came to carry Plimsoll’s name was a disc with a horizontal line through its centre. The Act required the line and left the owners to decide where on the hull it went. An owner who painted the mark high satisfied the law with a vessel that could still be loaded to the gunwales. Some, it is said, placed the mark on the funnel. The Lloyd’s Register Foundation passes the story along with an “apparently”, and the other accounts I could find repeat it with the same hedge. I would pay to know which funnel it was. A steamer loaded honestly to a mark on its funnel would have reached the bottom of the sea well before it reached the paint, and the story may be a joke that survived because it was funny. The documented part needs no help: for fourteen years the limit on British shipping was a figure supplied by the people it was meant to limit. Parliament closed the gap in 1890. A new Act fixed the position of the load line on British ships by law, working from tables the Board of Trade had drawn up, and the owner’s opinion of his own vessel ceased to be an input. The first international convention on load lines followed in 1930. A limit marks the point where danger begins, and a hold loaded exactly to the line is, on paper, a ship within the rules. Every inch of freeboard between cargo and mark looks like money abandoned on the quay, and the rival who loads to the line collects the freight that the cautious owner declined. Charles Goodhart’s remark of 1975 about monetary targets is usually paraphrased as saying that a measure stops measuring well once it becomes the target, and the load line is that remark in paint and iron. Early in 2012 the same temptation reached a London office of JPMorgan Chase. The bank’s Chief Investment Office, a unit known for investing surplus deposits prudently, had built a book of credit derivatives that ran past its limit on value at risk, the standard estimate of how much a portfolio could lose over a short period. A request went up to the chief executive, headed “APPROVAL NEEDED: JPMC 95% 10Q VaR One-Off Limit Approval”. The reply, attributed to Jamie Dimon by a Senate subcommittee’s exhibit list, ran to two words: “I approve.” The limit was raised for the time being, and the breach was over. Near the end of January the model was changed. The measured risk of the book fell by about half, in the subcommittee’s account, and the positions had not changed by a single contract. The original limits stayed in force, untightened for the new model, and the traders used the headroom to add positions. Any portfolio that outgrows its limit offers a risk officer two ways to restore order: shrink the portfolio, or shrink the number. The first costs positions, fees and the goodwill of the desk. The second costs an afternoon with a spreadsheet, and this spreadsheet was fed by hand. The bank’s own task force later found that one formula had divided by a sum where its builder had intended an average, likely muting the measured volatility by a factor of two. Two numbers came out of that quarter for a single book. The bank first reported a value at risk of 67 million dollars for the CIO, without mentioning the new model. After the trades became public the bank revoked the model on 10 May and restated the figure at 129 million. Losses by the end of 2012 stood at some 6.2 billion dollars. The owners placed the line and left the ship alone. The bank moved the ruler and left the limit alone. Modern load lines carry several marks, for tropical water, summer, winter and the winter North Atlantic, because the sea differs by place and season, and the master of a ship cannot invent a fifth when the cargo is tempting. Freeboard is the only part of a ship that earns nothing until the gale. Then it pays out once, by still being above the water, and no ledger has a column for that day. * * * --- © 2026 Elveander Welfendorff. Quotation with attribution and a link to the source is welcome.