In the bets made on one’s own prowess, as on speed in running, the chance-taking is still on the uneconomic side of the borderland, certainly if the running is for the sake of the wager, not for pleasure or for a useful purpose.  A premium won by a runner for speed in delivering a message of economic importance presents an essential contrast to the winnings in a wager.

Finally, the very borderland of difficulty is reached in the purchase and sale of goods in the market with a view of profiting by chance changes in price.  The purchasing and holding of land, lumber, grain, cattle, and other tangible and useful things, that need to be stored, held for buyers, or taken to market, must be judged liberally.  The quality of gambling depends somewhat on the motive as well as on the ability of the trader.  The enterpriser dealing with real wealth, and fitted to take the risks both because of his resources and of his exceptional knowledge, needs the motive of gain in such cases, and in a sense can be said to earn socially what he gets.  The motive of the uninformed must be a blind trust in luck, and a hope to gain from a rise in prices which they are quite unable to foresee or to explain.

Sec. 4. #Insurance:  definition and kinds.# The large element of luck in industry due to unavoidable chances has something of the same evil character as gambling.  It brings unearned prizes to some and to others unmerited losses.  It must therefore be a benefit to the community, if this element of unavoidable chance cannot be reduced as a whole, at least to regularize it and make it exactly calculable for any individual.  In this way each may be encouraged by the more certain prospect of receiving a reward proportionate to his efforts and abilities.  This desirable condition has in many respects been accomplished by means of insurance.

Insurance is the act of providing a guarantee of indemnity against a financial loss that will result if an event of a specified kind occurs.  The person seeking some surety against the possible loss is the insured; the person contracting to indemnify against the loss is the insurer; the written contract of insurance is the policy; and the price paid by the insured in fulfillment of his part of the contract is the premium; the amount paid when a loss has been incurred is the indemnity; and the person to whom the indemnity is paid is the beneficiary (who may or may not be the insured).

The insurance with which we are here concerned is that which gives financial indemnity.  This is given for loss of expected net income, when by chance either receipts are less or costs are more than average.  The two main classes as regards kinds of loss are property insurance and personal insurance. Property insurance is that which indemnifies for loss of one’s possession in specified ways, such as by fire, by the elements at sea (marine), by hail, lightning, or