Bottomry


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Bottomry

 

in the civil law of bourgeois states, a loan agreement on pledge of a vessel and its cargo. The captain of a ship obtains a loan on bottomry at the shipowner’s expense. In the event that the ship is destroyed, the creditor loses the right of compensation for the sum he has granted; thus, there are higher interest rates on this type of loan than on the usual type. Bottomry is rarely utilized in contemporary practice.

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There are, by way of example, references to bottomry and respondentia, concepts which had been out of use for the best part of two centuries.
A fact intensive and thorough study of a slightly more contemporary application of bottomry can be found in George Steckley, Bottomry Bonds in Seventeenth Century Admiralty Court, 45 AM.
(By usury, I mean simply lending money at interest, whatever the rate.) The usury of Roman senators was not always as benign as Cato's investments in bottomry. The Roman Republic was a giant protection racket.
Bottomry, according to Rupp's Insurance & Risk Management Glossary, provided that any ship not returning to port be absolved of any debt on the ship itself or on its cargo.
It is similar to the practice of bottomry, which dates at least to classical Greek and Roman times.
And declared to have received on their behalf and that of their heirs and assigns from Seignior Abrham Cohen, hundred and twenty-five guilders of xx stivers apiece and that bottomry and marine risk surcharge [premium?] has been included therein.
policies of insurance." (85) Justice Story further held that a bottomry instrument, similar to an insurance policy in that they both are executed on land and "intrinsically respect maritime risks, injuries and losses," (86) was a maritime contract, and thus part of the admiralty jurisdiction.
(6.) Such a "bottomry" or "respondentia" loan was first used by the Empress and quickly became common in U.S.-China trade.