Perhaps at no time had Mr. Wintermuth's good fortune served him better than when he secured the Guardian's principal reinsurance treaty. Nearly every large company has contracts with one or more reinsurance companies, usually foreign, and whenever an agent writes a policy for a greater amount than his company thinks it prudent to hazard on the risk in question, it cedes to one or more of these reinsurers such a proportion of the risk as it feels disinclined to retain, paying to the reinsurers an equal proportion of the original premium. The larger the policies a company is willing to write, the higher the esteem in which it is held by its agents, as a rule; and the Guardian had always, thanks to the excellent reinsurance facilities it enjoyed, been able to take care of very liberal lines on all acceptable classes of business. Moreover, since the treaty company paid the Guardian for its proportion of the premium a higher rate of commission than the Guardian paid the agent who wrote the risk, the transaction was profitable to the Guardian. The reinsurance company could afford to pay the higher commission, because it had no expensive agency plant to maintain, it did not need conspicuous offices, it employed no field men or inspectors, and in fact, except for the inevitable losses, this commission paid for the business was its only important expense. Mr. Wintermuth had, in the mist of years past, discovered on one of his trips abroad a reinsurance company rejoicing in the name of the Karlsruhe Feuer Rueckversicherungs Gesellschaft, or more briefly, the Karlsruhe Reinsurance Company. With the managing director of this worthy institution he had taken the unspeakable waters at an almost obsolete German spa, and although the waters did him no good, the reinsurance treaty that he incidentally arranged with Mr. August Schroeder made a very satisfactory termination of the treatment. It was a masterly contract--for Mr. Wintermuth--and its acceptance by Mr. Schroeder only showed that his experience with American business was very limited or that the waters had sapped his vitality to a degree more than was perceptible. It allowed the Guardian to do almost everything it pleased, restricted it not at all, never protested any action however unexpected, waived every possible right and privilege, paid a liberal commission and a share of the profits besides--in short, it was an ideal treaty and one which was the admiration of those few privileged characters who knew its merits. Nevertheless it had also proved to be a good contract for the Karlsruhe, for such business as the Guardian ceded had paid a modest but unfailing return to its Teutonic connection year after peaceful year.