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Title: Annals, Anecdotes and Legends - A Chronicle of Life Assurance
Author: Francis, John
Language: English
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  “Tragedy never quits the world--it surrounds us everywhere. We have
  but to look, wakeful and vigilant, abroad; and, from the age of
  Pelops to that of Borgia, the same crimes, though under different
  garbs, will stalk in our paths.”--SIR E. BULWER LYTTON.


  “Murder most foul, as in the best it is; But this most foul, strange,
  and unnatural.”--SHAKSPEARE.


       *       *       *       *       *

Dedicated, by Permission,




_Shooter’s Hill, May 23. 1853._


The subject of Life Assurance is so important, that any endeavour
to trace its history, however imperfect, may not be unacceptable.
Men toil, work, slave, nay, almost sin for their families; they do
everything but insure: and should this volume induce any one to avail
himself of the benefits of Life Assurance who has not hitherto done so,
or should it attract the attention of others who are ignorant of the
system, the writer will not deem his labour entirely in vain.

The many legends and traditions of the subject, form a page from the
romance of Mammon, which, remarkable as some of the stories may appear,
and fearful as many of them are, form but a small portion of the sad
and stern realities attached to the annals of Life Assurance.

The simple fact, that the payment of a small yearly sum will at once
secure the family of the insured from want, even should he die the
day after the first premium is paid, is sufficiently singular to the
uninitiated; but it is more so, that very few avail themselves of an
opportunity within the reach of all.



  Origin of the Doctrine of Probabilities. Essay of John de
  Witt. The Plague. First Bills of Mortality. Captain John
  Graunt--his Opinions, Life, and Estimates. Curious Terms in
  the old Registers--their Explanation. Life of Sir William
  Petty. His Career and Character                             Page 1


  Practice of Assurance by the Romans. Saxon Approximation to
  Friendly Societies. Marine Assurance. Danger of Navigation,
  and its Effect on Life Assurance. Assurance for Palmers and
  Pilgrims to the Holy Land. Bulmer’s Office of Assurance.
  Assurance of Navigators, Merchants, and Corporations.
  Uncertainty of Life. Annuities. Audley the Usurer. His
  History. Anecdotes concerning him. The Usurer’s Widow           25


  Judah Manasseh Lopez, the Jew Usurer. His Trick on the Duke of
  Buckingham. Suspicions concerning him. The Increase of London.
  Population of London. Proclamations. Halley’s Movement in Life
  Assurance. His Tables                                           46


  First Trial concerning Life Assurance. The Mercers’--its
  Establishment and System. The Sun--John Povey, its
  Projector--his Character. Wagers on the Life of King William.
  New Assurances. The Amicable--the Mode in which it was
  established. New Annuity Societies--Anecdotes concerning
  them--Close of their Career                                     56

  CHAP. V.

  Royal Exchange and London Assurance--their Rise and Progress.
  Bubble Era. Epigrams. Opposition to the New Companies.
  Accusations against the Attorney-General. List of Assurance
  Companies. Extraordinary Character of many. Remarkable Career
  of Le Brun. Directors in Trouble                                72


  Sketch of De Moivre--his Doctrine of Chances. Kersseboom. De
  Parcieux. Hodgson. Dodson. First Fraud in Life Assurance--its
  romantic Character. Thomas Simpson. Calculations of De Buffon   87


  Rise and Progress of the Equitable--its Dangers and its
  Difficulties. Comparative Premiums. Sketch of Mr. Morgan--his
  Opinions. Singular Attempt to defraud the Equitable--Death of
  the Offender. Attempt of Government to rob the Offices         108


  Bubble Annuity Companies--their Promises. Effect on the
  People. Dr. Price--his Life. Sir John St. Aubyn. The Yorkshire
  Squire--Assurances on his Life--his Suicide.                   125


  Gambling in Assurances on Walpole. George II. The Jacobite
  Prisoners. The German Emigrants. Admiral Byng. John Wilkes.
  Young Mr. Pigot and old Mr. Pigot. Lapland Ladies and Lapland
  Rein-deer. Insurance on Cities. Gambling on the Sex of
  D’Eon. Public Meeting. Disappointment of the Citizens. Trial
  concerning D’Eon. Lord Mansfield’s Decision                    140

  CHAP. X.

  Fraudulent Annuities--Act to prevent them. Salvador the Jew.
  David Cunningham, the Scotchman--his Career--his Annuity
  Company--its Success--his double Character--his Fate. Mortuary
  Registration. John Perrott--his Passion for China--Trick
  played him. Curious Fraud. Westminster Society. Pelican        157


  Legal Decisions. William Pitt, and Godsall and Co. Romance of
  Life Assurance. The Globe. New Companies. The Alliance--its
  Promoters. Improvement of the Value of Life consequent on the
  Improvement in Society--its Description. Trial concerning the
  Duke of Saxe Gotha. Important Legal Decision                   176


  Government Annuities--Opinions concerning them--Great Loss to
  the State. Mr. Moses Wing’s Letter. Mr. Finlaison. New Annuity
  Act--its Advantages to Jobbers. Endeavours to procure old
  Lives. Anecdotes concerning them. Philip Courtenay             199


  Fraud in Life Assurance Companies--its Extent--its
  remarkable and romantic Character. Janus Weathercock. Helen
  Abercrombie--her Death. Forgery of Wainwright--his Absence
  from England--his Return, Capture, and Death. Independent and
  West Middlesex--its Rise, Progress, and Ruin of all concerned  213


  Select Committee of 1841. Instances of Deception. Publication
  of Accounts. New Companies--Assertions about them--their
  Importance--Suggestions concerning them                        252


  Extension of Assurance. Society for Assurance against
  Purgatory. Commercial Credit Company. Guarantee Society.
  Medical, Invalid, and General. Agricultural Company. Rent
  Guarantee. Railway Passengers. Law, Property, and Indisputable
  Societies. Disputed Policy                                     282


  The Banker’s Mistress. The elder Napoleon. The deceived
  Director. The murdered Merchant. The Corn Law League and the
  Cutler. The Unburied buried. The disappointed Suicide. A Night
  Adventure                                                      295


  Scotch Life Assurance. Scottish Widows’ Fund--its Directors.
  North British. The Farmer’s Fate. Edinburgh Life. List of
  Scotch Companies                                               317




In the early annals of this country, there was no foundation whatever
on which to form a theory of the value of life. The wars of succession,
intestine strife, and civil discord, killed their thousands. Disease,
arising from exposure to the air, from foul dwelling-places, and
from an absence of the comforts of advanced civilisation, slew its
tens of thousands. They who were spared by the sword and escaped the
pestilence, perished too often by the fire of persecution. Death came
in forms which were governed by no known laws; and, notwithstanding
the insecurity of life, there was no possibility of making a provision
for survivors. To this we owe that kind consideration for the widows
and orphans of their members, which is observable in many of the city
corporate bodies.

Commerce was yet in its infancy, and all the capital which could be
collected, was necessary to its development. It was, indeed, on this
that the wisdom of the executive was concentrated. Every half century
brought rumours of some new land which was to enrich the adventurers
who combined to explore it. The most gallant spirits of England sailed,
and not always in the stoutest vessels, to explore a new passage, or to
trade on the shores of some new country, alike indifferent where they
went or how long they remained, provided they could bring home some
attractive article of merchandise. Every energy was, therefore, devoted
to the extension of our mercantile interests; and although Lombards,
goldsmiths, Jews, and usurers, frequently granted annuities, there
appears to have been no united attempt to grant assurances on lives.

This universal spirit of commerce produced, however, marine assurance
very early, while the gradual progressive movements made in science
and philosophy, prepared the way for assurance on life. The rude
notions of an uncultivated age were succeeded by broader and more
statesmanlike views; the Roman Church, with its narrow notions and
its denunciations of progress, ceased to exist; men feared no longer
to give a free exposition of their principles; and the Provincial
Letters of Pascal prove that a new era had arrived. The doctrine
of probabilities,--originated at a gaming-table,--so curious, so
interesting, and at the same time so necessary to the present
subject, was first popularised by this great genius; but we are
indebted to Holland for its earliest application to annuities; as
when the States-General resolved to negotiate some life payments,
the pensionary, John de Witt, added one more obligation to the many
received from this distinguished man, by employing the theory which
Pascal suggested, for the requirements of his government. His report
and treatise on the terms of life annuities is the first document of
the kind, and a most important paper it is. Step by step it explains
the grounds on which the proposition of its author was based, and by
which he arrived at the conclusion that the value of a life annuity,
in proportion to one for a term of twenty-five years, was really “not
below, but certainly above, sixteen years’ purchase.” It is probable
that from political motives this paper was suppressed; but John de
Witt was certainly the first who thought of applying mathematical
calculations to political questions, and the first who attempted to fix
the rate of annuities according to the probabilities of life. The essay
of the pensionary was, however, but little known to the public, and had
no sensible influence on the subsequent progress of the science.

Leibnitz, whose hobby was to investigate the theory of chances[1],
first drew attention to this production; but though often alluded to,
its very title was not correctly given, and we are indebted to the
researches of Mr. Hendriks for its rescue from an unmerited oblivion,
and for the able translation of an essay which, had it been published
at the time it was written, would have exercised an important influence
on its subject.[2] Up to the end of the 17th century, therefore,
as there were no laws to calculate the chances of mortality, life
annuities were granted according to the caprice of the usurer, or the
ignorance of the annuitant; and there is no occasion to remind the
reader that the barbaric splendour of the Tudors witnessed customs
which, rendering the conditions of life terribly uncertain, had
a depressive effect on the science of assurance. The smallpox, a
frequent and fearful visitor, was only met by an attempt to stare it
out of countenance; for to effect a cure the patient was clothed in
scarlet, the bed was covered with scarlet, and the walls were hung
with scarlet; so simple and so ignorant were the leeches of the early
ages. Dysentery, then known by its Saxon synonyms of the “flux,”
“scouring,” and “griping,” daily carried off the unwashed artificers
of old London. Nor were dirty habits confined to the mere populace;
the banquetting-halls of the palace were rarely or ever cleansed; the
accumulations of months were left on the floors, which, to hide the
dirt and preserve an appearance of decency, were periodically covered
with rushes.[3] In such places disease was ever ready to spring into
vigorous life. Every few years, fevers which had been lurking in alleys
and ravaging obscure places, devastated the city under various names.
At last, that awful sickness which, even at the present day, chills the
blood but to think of it, seemed to be naturalised in this country,
under the name of the plague; but to it we owe that the initiative step
was taken in England, in founding the first principles which govern
life assurance, for to it we owe our earliest Bills of Mortality.

Within a period of seventy years, London had been visited by it five
separate times; 145,000 having died from its collective attacks. As the
visitation had been governed by no known system, as it came without any
apparent cause and disappeared quite as capriciously, the Londoners
never felt safe from its re-appearance. It seemed always hovering
over them; and as the intervals between its departure and return were
sometimes only eleven years, and had never exceeded twenty-nine, its
harassing impressions were constantly on the minds of the citizens.
Its visits did not allow time even to soften or subdue the painful
remembrances connected with it; and were it necessary, a reference to
the letters, diaries, and chronicles of the day, would show that the
name of the plague turned men pale, and predisposed their constitutions
for its reception; that the very thought made the merchant regardless
of ’Change and of counting-house; and that the tradesman shuddered at
the memory of a disease which slew his children, depopulated London,
and destroyed his business.

The reports of the approach of the plague were, then, a positive and
practical evil; and in 1592, when 30,561 died of the disease, the
rumours of its horrors, appalling as these were in reality, were
enormously exaggerated. An attempt to quiet public feeling by correctly
indicating its progress was, therefore, made in the Bills of Mortality;
and though they were not at first maintained consecutively, they were
afterwards found so useful as to be continued from 29th December, 1603,
to the present time.[4] The mode of their production was simple. When
any one died it was indicated either by tolling or ringing a bell, or
by bespeaking a grave of the sexton. The sexton informed the searchers,
who hereupon “repair to the place where the dead corpse is, and by
view of the same and by other inquiries they examine by what disease
or casualty the corpse died. Hereupon they make their report to the
parish-clerk; and he, every Tuesday night, carries in an account of all
the burials and christenings happening that week, to the parish-clerks’
hall. On Wednesday, the general account is made up and printed; and on
Thursday, published and disposed of to the several families who will
pay 4_s._ per annum for them.” In 1629, two editions of the weekly
bills were printed, one with the casualties and diseases, and the
other without. For a long time these papers were made but little use
of by the public. A writer of the day says they were examined at the
foot, to see whether the burials increased or decreased; they were
glanced at for the casualties, as a matter of gossiping interest; and
in the plague time, the progress of the pest was closely watched by
the courtiers and the nobles, that they might escape its ravages; and
by the citizens, with that morbid feeling which is as much attached
to extraordinary calamities as to great crimes. But though this might
be the case ordinarily, such was not the view with which a citizen of
London, by name John Graunt, thought they should be regarded. This
man was the author of the first English work on the subject, entitled
“Natural and Political Observations on the Bills of Mortality.” Little
is known of his antecedents, save that he was the son of one Henry
Graunt of Lancaster, that he was born in “Birching Lane,” and that he
had the ordinary education granted to the sons of tradesmen. He came
early into business, passed through the chief offices of his ward with
reputation, and became captain and major of the train-bands, when such
an office involved danger as well as honour.

All that has hitherto been said of Graunt might be said of many. But
Graunt’s genius was far from being confined within these limits.
It shone through all the disadvantages of mean birth and doubtful
breeding. It broke down the barriers of rank and the limits of
position, and gave him the first thought of a design, which was
the earliest movement in economical arithmetic, and the closest
approximation to the data on which life assurance is founded.

The exact time is not known when he began to collect and to consider
the Bills of Mortality; but he says his thoughts had been turned
that way for several years, before he had any design of recording
certain notions he had formed. Until he published his volume, a more
than Egyptian darkness was on the eyes of the people, and he had to
combat some very singular notions. Among others, that London was to be
reckoned by millions, that the proportion of women to men was three
to one, and that in twenty-six years the population had increased two
millions. “Men of great experience in this city talk seldom under
millions of people to be in London.” To grapple with these and similar
errors was Graunt’s object; and it is easy to comprehend, that his
readers rebelled against assertions which lowered the pretensions of
their favourite city. It is probable that he made some enemies by his
book; as when the fire of London occurred, he was accused of having
gone to the reservoir of the New River Company, and of cutting off
the supply of water. As, however, he had changed, or was on the point
of changing his creed from puritanism to papistry, and the papists
had the credit of originating the fire; the accusation was possibly
a party one, and is of little importance now. It is with his work on
the population we have to deal, and this, which contained “a new and
accurate thesis of policy, built on a more certain reasoning than had
yet been adopted,” was first published in 1664; meeting with such an
extraordinary reception that another edition was called for in the
following year, the book being spoken of wherever books then made
their way. It formed a taste for these studies among thinking men; and
the fact is greatly to the author’s credit, that he made a bold, if
fruitless, attempt to deduce the law of life from bills of mortality
which did not record the ages as well as the deaths of the people.
In addition to the London bills, he gave one for a country parish
in Hampshire; and in the later editions he added one for Tiverton,
and another for Cranbrook. Charles II. recommended the Royal Society
to elect him one of their members, charging the Fellows “that if
they found any more such tradesmen, they should admit them all;” and
immediately after the appearance of the work, Louis XIV. ordered the
most exact register of births and deaths to be kept in France, that
was then known in Europe. A few extracts from this rare and curious
work will at once indicate its character, and show the simplicity
of the existing information; but in their perusal the reader will do
well to consider, that Graunt was the first who wrote on the subject;
that he had but slight foundations for his calculations; and that with
all these difficulties, he was very successful in his conclusions. He

“There seems to be good reason why the magistrate should himself
take notice of the number of burials and christenings: viz., to see
whether the city increase or decrease in people, whether it increase
proportionably with the rest of the nation, whether it be grown big
enough. But,” he adds, “why the same should be known to the people,
otherwise than to please them as with a curiosity, I see not.

“Nor could I ever yet learn from the many I have asked, and those not
of the least sagacity, to what purpose the distinction between males
and females is inserted, or at all taken notice of; or why that of
marriages was not equally given in. Nor is it obvious to every body why
the account of casualties is made. The reason which seems most obvious
for this latter is, that the state of health in the city may at all
times appear.” In another page he writes that “7 out of every 100 live
in England to the age of 70.” “It follows from hence that, if in any
other country more than 7 of the 100 live beyond 70, such country is to
be esteemed more healthy than this of our city.” It must be remembered,
however, that this was very conjectural. “We shall,” he says, when
leading to this conclusion, “come to the more absolute standard and
correction of both, which is the proportion of the aged; viz. 15,757
to the total 229,250, that is, of about 1 to 15, or 7 per cent.; only
the question is, what number of years the searchers call aged, which I
conceive must be the same that David calls so, viz. 70. For no man can
be said to die properly of age, who is much less.”

Out of the above 229,250 he estimates that 86 were murdered; and,
alluding to a peculiar disease which had arisen, intimates that the
proportion of males was greater than that of females, in the words,
“for since the world believes that marriage cures it, it may seem
indeed a shame that any maid should die unmarried, when there are
more males than females; that is, an overplus of husbands to all that
can be wives.” “In regular times when accounts were well kept, we
find not above 3 in 200 died in childbed; from whence we may probably
collect that not 1 woman of 100, I may say of 200, dies in her labour,
forasmuch as there may be other causes of a woman’s dying within the
month.” He then attempted to show the population of London, from which
he had been a long time prevented by his religious scruples; but his
arithmetical mind was provoked by a “person of high reputation” saying
there were “two millions less one year than another.” To ascertain the
number he made many very interesting calculations, and came to this
conclusion:--“We have, though perhaps too much at random, determined
the number of the inhabitants of London to be about 384,000.” He then
gave the following table, which is perhaps one of the most remarkable
we have, the period and the material being taken into consideration:--

  Of 100, there die within the first six years   36
  The next ten years, or decad                   24
  The second decad                               15
  The third    ”                                  9
  The fourth   ”                                  6
  The fifth    ”                                  4
  The sixth    ”                                  3
  The seventh  ”                                  2
  The eighth   ”                                  1

From whence it follows that, of the said 100 there remain alive--

  At the end of 6 years   64
      ”        16   ”     40
      ”        26   ”     25
      ”        36   ”     16
      ”        46   ”     10
      ”        56   ”      6
      ”        60   ”      3
      ”        76   ”      1
      ”        80   ”      0

He says gravely of another of his calculations, “According to this
proportion Adam and Eve, doubling themselves every 64 years of the 5610
years, which is the age of the world according to the Scriptures, shall
produce far more people than are now in it. Wherefore, the world is not
above 100,000 years old, as some vainly imagine, nor above what the
Scripture makes it.”

That Captain Graunt was a man of no ordinary perceptive power let
his volume bear witness. In it he touches on almost every intricate
question which, despised when he wrote, has since been investigated
by Adam Smith, by M’Culloch, by Porter, by Tooke, and by all to whom
political economy is dear. The following will give some idea of the
character of these studies:--

“It were good to know how much hay an acre of every sort of meadow
will bear; how many cattle the same weight of each sort of hay will
feed and fatten; what quantity of grain and other commodities the
same acre will bear in 3 or 7 years; unto what use each sort is most
proper; all which particulars I call the intrinsic value, for there
is another value merely accidental or extrinsic, consisting of the
causes why a parcel of land lying near a good market may be worth
double another parcel, though but of the same intrinsic goodness; which
answers the question why lands in the north of England are worth but
16 years purchase and those of the west above 28.” “Moreover, if all
these things were clearly and truly known, it would appear how small a
part of the people work upon necessary labours and callings; how many
women and children do just nothing, only learning to spend what others
get; how many are mere voluptuaries, and as it were, mere gamesters
by trade; how many live by puzzling poor people with unintelligible
notions in divinity and philosophy; how many, by persuading credulous,
delicate, and religious persons that their bodies or estates are out
of tune and in danger; how many, by fighting as soldiers; how many, by
ministries of vice and sin; how many, by trades of mere pleasure or
ornament; and how many, in a way of lazy attendance on others; and,
on the other side, how few are employed in raising necessary food and
covering; and of the speculative men how few do study nature, the more
ingenious not advancing much further than to write and speak wittily
about these matters.”

From this enumeration of his objects it may be seen that life assurance
was not contemplated by the author when his important book was written;
but as the earliest attempt to number the people, to classify their
callings, and to ascertain the mortality among them, he assuredly
laid the foundations of this science. His book gave new ideas. It
first propounded the fact, that “the more sickly the years are, the
less fruitful of children they be;” and though this was wonderfully
ridiculed, time has proved that it was not less strange than true.
It formed a taste for similar inquiries among thinking men. It was
published at a period when, the city being less populous, there was
additional facility in arriving at certain facts. From that time the
subject was cultivated more and more. Increased attention was paid
to the parish registers. The different diseases and casualties were
gradually inserted; but it was not till 1728 that the ages of the dead
were introduced. Graunt had forced people to think; and whatever merit
may be ascribed to Sir William Petty, Daniel King, Dr. Davenant, and
others, it may all be traced to the first observations of Graunt on the
Bills of Mortality. To him we owe the care with which parish registers
have since been kept, and the valuable material they have afforded to
the science of political economy.

There is something in the old registers which places us in an almost
antediluvian world, and seems to treat of diseases belonging to another
sphere. In 1657, among the deaths are recorded 1162 “chrisomes and
infants;” and few reading in 1853 would know that infants, until
christened, wore a “chrisom” or cloth anointed with holy unguent, from
which they were denominated chrisomes. “Blasted and planet” would
puzzle the medical student of to-day; but the latter was simply an
abbreviation of “planet struck,” both words indicating some wasting
disease which the faculty failed to fathom. “Head-mould-shot” and
“horseshoe-head” were meant for water on the brain, and were very
expressive of the shape of the head in those who suffered from it.
Another complaint was “calenture,” a disease said to be similar to the
_maladie du pays_, for it seized seamen with an irresistible desire to
immerse themselves, the sea assuming in their eyes the appearance of
green fields. “Tissick” expressed phthisis or consumption. In 1634,
the “rickets” is recorded; and the “rising of the lights” has been a
great puzzle to our medical historians. A little later than this period
is mentioned, “one died from want in Newgate,” “one murdered in the
pillory,” and “one killed in the pillory.” In the course of twenty
years fifty-one are put down as starved. “But few are murdered, not
above eighty-six of the deaths in twenty years; whereas, in Paris,
few nights escape without their tragedy.” It must be remembered, in
explanation, that medicine had not assumed the dignity of a science
before the time of Harvey in the middle of the seventeenth century,
but was exercised by “a great multitude of ignorant persons.” Common
artificers, smiths, weavers, and women took upon them cures, “to the
high displeasure of God, and destruction of many of the King’s liege
people.” Nor was the patient much better off when the clergy, priests,
and poor scholars left the cure of the mind for the cure of the body.
Such, however, was the position of leech-craft when Graunt inoculated
the people with the love of vital statistics.

Contemporary with Graunt, and contributor to his attempts, was one of
those strange, restless, speculative men whose love of money teaches
them how to procure it, and whose desire to preserve it, by purchasing
land, and leaving their heirs in possession, makes them the founders of
noble English houses. This was Sir William Petty, who, in his “Essay
on Political Arithmetick concerning the Growth of the City of London,
with the Measures, Periods, Causes, and Consequences thereof,” made a
further onward movement. The earlier portion of his life was passed in
battling with the world. He was as much a votary of mathematics as of
money, and was eminently successful in both. Although only the son of a
Romney clothier, he was the founder of a house which has exercised an
important influence on English political life--the House of Lansdowne.
He began his career with nothing, and he closed it possessed of
15,000_l._ per annum. He lived at a time when social economy was but
little regarded; and he published a volume which, however uncertain
both in its data and its conclusions, was an attempt to apply
arithmetic to the economics of life. It is both unphilosophical and
unjust to say, “Petty was nothing of a politician or statesman, or even
of a political economist. He was merely a political arithmetician;
that is to say, he occupied himself with a consideration of the
circumstances of society and of the forces and activity that pervaded
it, only in so far as they could be stated and estimated numerically.
His social science was little more than an affair of ciphering, a
business of addition and subtraction.” It is from the figures of such
men that our politicians form deductions, estimate consequences,
frame laws, and create trade. It may be true that he was no seer, and
that he was wrong in his prophetic capacity; but this is only another
proof that statisticians rarely possess a large development of the
imaginative faculty. That his work is worth perusal to all who are
interested in his subject, although based on information which was rude
and imperfect, we hope to show. In it he calculates that--

  Between 1604 and 1605, there died in London  5,135
    ”     1621 and 1622,        ”              8,527
    ”     1641 and 1642,        ”             11,883
    ”     1661 and 1662,        ”             15,148
    ”     1681 and 1682,        ”             22,331.

In about forty years he estimated that London had doubled itself (the
number being, when he wrote, 670,000), and that the assessment of
London was about one-eleventh of the whole territory: “Therefore, the
people of the whole may be about 7,369,000; with which account that
of the poll-money, hearth-money, and the bishops’ late numbering of
the communicants, do pretty well agree.” This founder of the House of
Lansdowne was a good deal puzzled by the growth of the metropolis. He
thus accounts for it:--“The causes of its growth from 1642 to 1682 may
be said to have been as follows: From 1642 to 1650, men came out of
the country to London to shelter themselves from the outrages of the
civil wars during that time. From 1650 to 1660, the royal party came
to London for their more private and inexpensive living. From 1660 to
1670, the King’s friends and party came to receive his favours after
his happy restoration. From 1670 to 1680, the frequency of plots and
parliaments might bring extraordinary numbers to the city. But what
reasons to assign for the like increase from 1604 to 1642, I know
not, unless I should pick out some remarkable accident happening in
each part of the said period, and make that to be the cause of this
increase (as vulgar people make the cause of every man’s sickness to be
what he did last eat); wherefore, rather than so say, I would rather
quit what I have above said to be the cause of London’s increase from
1642 to 1682, and put the whole upon some natural and spontaneous
benefits and advantages that men find by living in great more than in
small societies: I shall, therefore, seek for the antecedent causes
of this growth in the consequences of the like, considered in greater
characters and proportions.”

That the people are the life-blood of the kingdom, was Sir William’s
fixed belief; and he said, that if the whole highlands of Scotland
and the whole kingdom of Ireland were sunk in the ocean, so that the
people were all saved and brought to the lowlands of Great Britain,
the Sovereign and the subject in general would be enriched. The reader
will smile when he hears that a great deal of useful information
was embodied in Sir William Petty’s attempts to prove the following
extraordinary points:--

1st. That London doubles in 40 years, and all England in 360 years.

2nd. That there be in 1682 about 670,000 souls in London, and 7,400,000
in England and Wales; and about 20,000,000 of acres in land.

3rd. That the growth of London must stop of itself before the year 1800.

4th. That the world would be fully peopled within the next 2000 years.

Burnet says, that Petty wrote the book published in Graunt’s name;
but the bishop was too much of a gossip to be trusted, and the works
which Sir William claimed are sufficient for his fame. In the midst
of a life devoted to the world, he turned his attention to abstruse
and recondite subjects. That money makes the man, was his fundamental
article of faith. “Instead of saying with Bacon,” remarks a biographer,
“that knowledge was power, he would have said that knowledge was _l._
_s._ _d._... He was all for the practical, and in general for the
pecuniary, as the most comprehensive form of the practical.”

He was, probably, not a brave man; for he left England at the most
stirring period of its history, and, when at a later period he was
challenged by one of Cromwell’s knights to fight a duel, he claimed
the privilege of choosing time, place, and weapons, to throw an air of
ridicule over the proceeding. The place he named was a dark cellar, and
the weapon he chose was a carpenter’s axe. Near-sightedness was his
excuse for both.

He wrote “An Essay concerning the Growth of the City of London,”
“Observations on the Dublin Bills of Mortality,” “Two Essays concerning
the People of London and Paris,” “Two Essays on Political Arithmetick;”
and the name of Sir William Petty has come down to us more as the
author of these works, than as the successful speculator, as the
founder of the Marquisate of Lansdowne, or as one who began life
penniless, and left a princely inheritance. To those who wish to trace
the career of the man who drew so great a portion of public attention
to the foundations of life assurance, the epitome of his life as given
in his will may prove interesting.

Having thus endeavoured to trace the early dawn of the theory, it is
now time to chronicle the progress of life assurance as a social and
mercantile requirement.


[1] When asked what benefit it would produce, he replied, “C’est pour
perfectionner l’art des arts, l’art de penser!” This, at first regarded
as a _mot_, became a proverb.

[2] The title of this essay is “Waardye van Lyf-Renten naer proportie
van Losrenten;” or, the “Value of Life Annuities in Proportion to
Redeemable Annuities.”

[3] There was no just cause for surprise in these periodical
visitations. The thinkers of the day understood the connection between
cleanliness and health; and the following will show that such as these
hit on the right source of pestilence:--

“I often wonder,” says Erasmus in a letter to Dr. Francis, “and not
without concern, whence it comes to pass, that England for so many
years hath been continually afflicted with pestilence, and above all,
with the sweating sickness, which seems in a manner peculiar to that
country.... They glaze a great part of the sides with small panes,
designed to admit the light and exclude the wind; but these windows are
full of chinks, through which enters a percolated air, which stagnating
in the room, is more noxious than the wind.

“As to the floors, they are usually made of clay, covered with rushes
that grew in fens, which are so slightly removed now and then, that
the lower part remains sometimes for twenty years together, and in it
a collection of spittle, vomit, urine of dogs and men, beer, scraps
of fish, and other filthiness not to be named. Hence, upon change of
weather, a vapour is exhaled very pernicious, in my opinion, to the
human body.”

[4] The first parish registers were kept in England in 1538, in
consequence of an injunction from Thomas Cromwell. They had been
kept for a long time previous in Augsburg and Breslau, though it was
not till the beginning of the 17th century that they were general
in Europe. It is worth mentioning, that long ere this, the paternal
government of Peru kept a register of all the births and deaths
throughout the country; exact returns of the population being made
every year by officers appointed by the state.



It has been the endeavour of most writers to trace the practice, if not
the principle, of assurance as far back as possible; but in doing this,
trifles have been exaggerated into matters of importance. Some authors
contend, on the authority of Livy, that it was in use during the Second
Punic War: others, arguing from a passage in Suetonius, refer to the
Emperor Claudius, as the first insurer; because, in order to encourage
the importation of corn, he took all the loss or damage it might
sustain upon himself.

These cases are, however, entirely exceptional, and certainly indicate
no settled plan, as the very fact that the Emperor guaranteed the
contractor against damage, is a proof that there was no other mode of
doing so. Cicero is also quoted, because, in one of his epistles, he
expresses a hope of finding at Laodicea, security by which he could
remit the money of the republic without being exposed to danger in its

If, however, the assertion that marine assurance was known to the
ancients is not demonstrable, there is no doubt that life assurance
was unknown and unpractised, although the Romans had some wise
regulations in connection with the economy of the people. From Servius
Tullius downwards, they took a census every fifth year, and the right
of citizenship was involved in any one failing to comply with the
requirements of his age, name, residence, the age of his wife, the
number of his children, slaves, and cattle, together with the value
of his property. They do not seem to have kept any exact mortuary
register, as the chief object of their census was to levy men and money
for the purpose of conquest. One of the commentators on the Justinian
Code also gave a calculation of the worth of annuities, which, if it
may be accepted as an expectation of life, gives far more correct views
of its comparative value at various ages, than was known in Europe
until the time of De Witt.

Turning from these vague theories of an antique age to our own
country, we find that associations founded on social principles, in
which union for good or for ill, and in which provision was made for
contingencies, were the prominent features, are to be found in our
Saxon annals. The axiom, that “Union is Strength,” the necessity
of providing for casualties by mutual assistance, in other words,
assurance on its broadest and most rational basis, was practised in
the Saxon guild, the origin of which was very simple: Every freeman
of fourteen being bound to find sureties to keep the peace, certain
neighbours, composed of ten families, became bound for one another,
either to produce any one of the number who should offend against the
Norman law, or to make pecuniary satisfaction for the offence. To do
this, they raised a fund by mutual payments, which they placed in one
common stock. This was pure mutual assurance. From this arose other
fraternities. The uncertain state of society, the fines which were
arbitrarily levied, the liability to loss of life and property in a
country divided against itself, rendered association a necessity. And
if it was necessary before the Conquest, it became doubly so after
it. The mailed hand of the Norman knight was ever ready to grasp the
goods of the Saxon serf; and the Norman noble trod the ground he had
aided to subdue, with the pride of a conqueror, at the same time that
he exercised the rapacity of an Eastern vizier. To meet the pecuniary
exigencies which were perpetually arising from fines and forfeitures,
and to aid one another in burials, legal exactions, penal mulcts,
payments, and compensation,--ancient friendly societies, somewhat
similar to those of the present day, were established; and the rules of
one which existed at Cambridge prove its approximation to the modern
mutual friendly association. The following extracts will satisfy the
reader of the truth of this assertion:--

“1. It is ordained, that all the members shall swear by the holy
reliques that they will be faithful to each of their fellow-members, as
well as in religious as in worldly matters; and that, in all disputes,
they will always take part with him that has justice on his side.

“2. When any member shall die, he shall be carried by the whole Society
to whatever place of interment he shall have chosen; and whoever shall
not come to assist in bearing him shall forfeit a sextarium of honey:
the Society making up the rest of the expense, and furnishing each
his quota towards the funeral entertainment; and also, secondly, for
charitable purposes, out of which as much as is meet and convenient is
to be bestowed upon the church of St. Etheldred.

“3. When any member shall stand in need of assistance from his
fellow-members, notice thereof shall be given to the Reeve or Warden
who dwells nearest that member, unless that member be his immediate
neighbour; and the Warden, if he neglect giving him relief, shall
forfeit one pound.[5] In like manner, if the President of the Society
shall neglect coming to his assistance, he shall forfeit one pound,
unless he be detained by the business of his lord or by sickness.

“4. If any one shall take away the life of a member, his reparatory
fine shall not exceed eight pounds; but if he obstinately refuse to
make reparation, then shall he be prosecuted by and at the expense of
the whole Society: and if any individual undertake the prosecution,
then each of the rest shall bear an equal share of the expenses. If,
however, a member who is poor kill any one, and compensation must be
made, then, if the deceased was worth 1200 shillings, each member shall
contribute half a mark[6]; but if the deceased was a hind, each member
shall contribute two oræ[7]; if a Welchman, only one.

“5. If any member shall take away the life of another member, he
shall make reparation to the relations of the deceased, and besides
make atonement for his fellow-member by a fine of eight pounds, or
lose his right of fellowship to the society. And if any member, except
only in the presence of the king, or bishop, or an alderman, shall eat
or drink with him who has taken away the life of a fellow-member, he
shall forfeit one pound, unless he can prove, by the evidence of two
witnesses on oath, that he did not know the person.

“6. If any member shall treat another member in an abusive manner, or
call him names, he shall forfeit a quart of honey; and if he be abusive
to any other person, who is not a member, he shall likewise forfeit a
quart of honey.

“7. If any member, being at a distance from home, shall die or fall
sick, his fellow-members shall send to fetch him, either alive or
dead, to whatever place he may have wished, or be liable to the stated
penalty; but if a member shall die at home, every member who shall not
go to fetch his corpse, and every member who shall absent himself from
his obsequies, shall forfeit a sextarium of honey.”

These rules might have been certified by a Pratt, so simple and so
excellent is their arrangement. But they must not be regarded as
exceptional. The following form a portion of the regulations of
another similar society at Exeter:--

“1. At each meeting every member shall contribute two sextaria of
barley meal, and every knight one, together with his quota of honey.

“2. When any member is about to go abroad, each of his fellow-members
shall contribute five pence; and if any member’s house is burnt, one

“3. If any one should by chance neglect the stated time of meeting, his
regular contribution to be doubled.”

Well may Mr. Ansell say, “The guilds or social corporations of the
Anglo-Saxons seem, on the whole, to have been friendly associations,
made for mutual aid and contribution, to meet the pecuniary exigencies
which were perpetually arising.” Nor can the reader fail to be struck
with the resemblance these rules bear to those of many of the modern
societies; and, as they were framed 800 years ago, the similitude is
somewhat remarkable. After the Conquest guilds were established for
the express promotion of religion, charity, or trade, and from these
fraternities the various companies and city corporations have arisen.
The following, forming a portion of the rules of St. Catherine’s Guild,
seem like those of some modern fraternity:--

“If a member suffer from fire, water, robbery, or other calamity, the
guild is to lend him a sum of money without interest.

“If sick or infirm, through old age, he is to be supported by his guild
according to his condition.

“If a member falls into bad courses, he is first to be admonished, and
if found to be incorrigible he is to be expelled.

“Those who die poor, and cannot afford themselves burial, are to be
buried at the charge of the guild.”

Societies like these, established at a period when

  “The good old rule, the simple plan,
  That they should take who have the power,
  And they should keep who can,”

was almost the law of the land, cannot fail to surprise those who
believe that the past was an age of barbarism, and the present the
culminating point of civilisation. It is certainly a curious truth,
that that combination which has been esteemed a peculiar feature of
modern times, had its antetype in societies framed when commerce and
law were yet in their infancy.

Of the rise of assurance generally in Europe the information is limited
enough. Malynes and Anderson say it was known about the year 1200,
and refer to the marine laws of the isle of Oleron; but a perusal
of these has satisfied later writers that the theory was too hastily
adopted, and that the earliest ordinance on the subject with which we
are acquainted is that of the magistrates of Barcelona, in 1523, to
which city must be attributed the honour, until some authentic evidence
to the contrary has been produced; and we must not omit to notice,
also, that a writer on the “Us et Coutumes de la Mer” says assurance
was long detested by the Christians, “being classed by them with the
unpardonable sin of taking interest.”

The first English statute relating to marine assurance was passed in
1601. The earliest mention of it occurs in 1548, in a letter written
by the Protector Somerset to his brother the Lord Admiral, and that
it was commonly known in 1558 may be gathered from a speech of the
Lord Keeper Bacon. In the act alluded to above, “An Act concerning
Matters of Assurances among Merchants,” it is stated, that “it hath
been time out of mind an usage among merchants, both of this realm and
of foreign nations, when they make any great adventure, specially into
remote parts, to give some consideration of money to other persons,
to have from them assurance made of their goods, merchandises, ships,
and things adventured, or some parts thereof, at such rates and in
such sort as the parties assurers and the parties assured can agree;
which course of dealing is commonly called a policy of assurance, by
means of which policies of assurance it cometh to pass, upon the loss
or perishing of any ship, there followeth not the loss or undoing of
any man, but the loss lighteth rather easily upon many than heavily
upon few, and rather upon them that adventure not than on those that do

If mercantile or marine assurance were so common, it is difficult to
imagine that some approximation to life assurance, however imperfect
or normal it might be, was entirely unpractised. It must necessarily
have occurred to the captain of a trading vessel, that the storm or the
whirlwind, which might send his merchandise to the bottom of the sea,
might also send himself with it; and the thought that, if his goods
were worth insuring for the benefit of the owners, his own life was
worth insuring for the benefit of his family, arose naturally from the
risks he ran. And in those days there was not merely a risk of storm
or whirlwind. Man was more cruel than the tempest; and the galleys of
the Turks were then as much feared, by the masters of trading vessels,
as the corsairs of the Algerine were dreaded at a later period. They
roved the seas as if they were its masters; they took the vessels,
disposed of the cargo in the nearest market, and sold the navigators
like cattle. The only way of mitigating this terrible calamity was by
some mode of insurance, to procure their rescue if taken; and we find
that to attain so desirable a result they paid a certain premium to
their merchant freighters, who, in return, bound themselves to pay a
sufficient sum to secure the navigators’ freedom within fifteen days
after the certificate of their captivity, the ordinary days of grace
being lessened on such policies.

In those days, also, when crusades were common, and men undertook
pilgrimages from impulse as much as from religion, it was desirable
that the palmer should perform his vow with safety, if not with
comfort. The chief danger of his journey was captivity. The ballads of
the fifteenth century are full of stories which tell of pilgrims taken
prisoners, and of emirs’ daughters releasing them; but as the release
by Saracen ladies was more in romance than in reality, and could not be
calculated on with precision, a personal insurance was entered into,
by which, in consideration of a certain payment, the assurer agreed
to ransom the traveller, and thus the palmer performed his pilgrimage
as secure from a long captivity as money could make him. It is true,
that this care for his personal safety may detract somewhat from a high
religious feeling; but truth is sadly at variance with sentiment, and
the pilgrims of the crusading period were but too glad to lessen the
chances against them.

Another mode of assurance was commonly practised, by which any
traveller departing on a long or dangerous voyage deposited a specific
amount in the hands of a money broker, on condition that if he returned
he should receive double or treble the amount he had paid; but, in the
event of his not returning, the money broker was to keep the deposit,
which was in truth a premium under another name.

In 1643 Captain John Bulmer published, “Propositions in the Office of
Assurance, London, for the blowing up of a boat and a man over London
Bridge.” Nor was this an unusual mode of conducting an enterprise
which was at once ingenious and costly, and which required an union
of capital to support it. In the address above alluded to, Bulmer, an
unsuccessful engineer, pledged himself to perform his promise within
a month after intimating from the office that he was ready; “viz. so
soon as the undertakers wagering against him, six for one, should have
deposited enough to pay the expenses of boat and engine,” he also
subscribing his own proportion. The money was not to be paid until the
Captain had performed his contract, when he was to receive it all. If,
however, he should fail, it was to be repaid to the subscribers. “And
all those that will bring their money into the office shall there be
assured of their loss or gain, according to the conditions above named.”

These facts are an evidence that the principle of assurance was making
way, and that men endeavoured to provide against the chances or
mischances of life, to the best of their ability. Thus, any seafaring
person proceeding on a voyage, could insure his life for the benefit
of his heirs; and if the information which has come down to us limits
the practice to this particular class, it was because seamen were the
chief visitors to foreign countries, and for them some such plan was
essentially a necessity.

But there was a further and more remarkable fact in operation; as an
annuitant enjoying a life-rent or pension could make an insurance on
his life, by way of provision for his family. These, however, were only
exceptional cases, for which the premiums were probably distressingly
heavy; if we may judge from the fact, that a century later the life
of a healthy man, of any age, was estimated at only seven years’
purchase. The great merchants of that day were chiefly responsible
for such assurances, and many of the corporations engaged in these
and similar adventures. The following will show that by 1569 the
provident societies of the present day were anticipated. The writer is
illustrating his opinion on usury.

“A merchant lendeth to a corporation or company 100_l._, which
corporation hath by statute a grant, ‘that whosoever lendeth such a
sum of money, and hath a child of one year, shall have for his child,
if the same child do live till he be full 15 years of age, 500_l._ of
money; but if the child die before that time, the father to lose his
principal for ever.’ Whether is this merchant an usurer or not? The
law says, if I lend purposely for gain, notwithstanding the peril or
hazard, I am an usurer.”

Again: “A corporation taketh 100_l._ of a man, to give him 8_l._ in the
100_l._ during his life without restitution of the principal. It is
no usury, for that here is no lending, but a sale for ever of so much
rent for so much money. Likewise, if a private man have 1000_l._ lying
by him, and demandeth for his life and his wife’s life 100_l._ by the
year, and never to demand the principal, it is a bargain of sale and no

But though these things are evidences of something closely akin to
the principles of life assurance, it is certain that no system existed
by which so happy a result could be habitually attained. The state of
society was opposed to it. Life was then scarce “worth a pin’s fee.”
The noble was at the mercy of his own fierce passions, and, if not
engaged in some intestine warfare, was crossing and recrossing seas,
was making or unmaking kings. The knight sought dangerous adventures
with an avidity which would place his life on the trebly hazardous list
of assurance-offices, and pale the roses on the cheeks of directors.
The citizen, again, was constantly embroiled in quarrels with which
he had no business, and merchants would have looked doubtfully on any
proposal to accept a life which was likely enough to end the day after
its assurance.

In addition to these chances, there was the liability to “plague,
pestilence, and famine.” The black pest, the sweating sickness, the
small-pox, are names to conjure up frightful images. Nothing is now
certainly known of the numbers which these diseases swept away in our
early history, but the rapidity with which whole families disappeared
tended to exaggerate the feeling of insecurity. It seems, therefore,
almost impossible to suppose that any plan of life assurance could
have existed during these ages, when there were no documents to
give the number of deaths, and no laws to determine the value of
life. But if assurances were rare, we have constant evidence that
annuities were familiar enough. The State employed them for its wants;
scriveners employed them for the necessities of their clients; Pole and
Whittington, Canning and Gresham, invested their mercantile gains in
them; the usurer made his money breed by granting them in many forms
and on various securities; and although to arrive at a just system
of annuities was as difficult as a just system of assurance, yet the
usurer took as much care in the one case to secure his own interest, as
he would in the other had it been an operation into which he chose to

The sixteenth century gave birth to one of these men, who, before
life assurance was understood, exercised great genius in granting
and receiving annuities. The name of Audley is one of the earliest
we possess in this line: he was originally a lawyer’s clerk, with a
salary of 6_s._ a week; but his talent for saving was so well supported
by his self-privation, that he lived upon half, keeping the other
half as the superstructure of his future fortune. He was so great an
adept in the tricks of law, that he was soon enabled to purchase his
apprenticeship; and, with the first 600_l._ he had saved, bought of a
nobleman an annuity of 96_l._ for nineteen years. The nobleman died;
his heir neglected to pay the annuity, and Audley made him suffer for
his neglect to the tune of 5000_l._ in fines and forfeitures.

The usurer soon found money trading better than law writing. He became
a procurer of bail; he compounded debts; he enticed easy landowners
into granting well-secured annuities; he encouraged their extravagance,
and, under pretence of ministering to their wants, became possessed of
many a fine estate. The following story will illustrate his craft:--In
the early part of his career, a draper of mean repute was arrested
by his merchant for 200_l._ Audley bought the debt of the latter for
40_l._, and was immediately offered an advance on his bargain by the
fraudulent tradesman. Audley refused the terms; and when the draper
pressed, as if struck by a sudden whim, he consented to discharge
the debt, if his creditor would sign a formal contract to pay within
twenty years from that time one penny, to be progressively doubled on
the first day of twenty consecutive months, under a penalty of 500_l._
The terms seemed easy, and the draper consented. The knave was one of
those who “grow rich by breaking.” But here Audley had him in his net.
Year after year he watched his prey; he saw him increase in wealth,
and then made his first demand for one penny. As month succeeded month
he continued his claim, progressively doubling the amount, until the
draper took the alarm, used his pen, found that to carry out his
agreement would cost him more than 4000_l._, and, to avoid it, paid the
penalty of 500_l._; his only revenge being to abuse Audley as a usurer,
probably anticipating the wish of Jaffier, that he could “kill with

Audley, like many of our own day, was equally ready to lend money to
the gay gallants of the town on annuities, as he was to receive it from
the thrifty poor who took, on “the security of the great Audley,” the
savings of their youth to secure an annuity for their age. But needy as
the youngsters of that day might be, the usurer was as willing as they
were needy. He lent them, however, with grave remonstrances on their
extravagance, and took the cash they paid him, with an air of paternal

His money bred. He formed temporary partnerships with the stewards of
country gentlemen, and, having by the aid of the former gulled the
latter, finished by cheating the associates who had assisted him to his
prey. The annuity-monger was also a philosopher. He never pressed for
his debts when he knew they were safe. When one of his victims asked
where his conscience was, he replied, “We monied people must balance
accounts. If you don’t pay me my annuity, you cheat me; if you do, I
cheat you.” He said his deeds were his children, which nourished best
by sleeping.

His word was his bond; his hour was punctual; his opinions were
compressed and sound. In his time he was called the great Audley; and
though the Fathers of the Church proclaimed the sin of usury to be the
original sin, Audley smiled at their assertions and went on his way
rejoicing. As his wealth increased he purchased an office in the Court
of Wards; and the entire fortunes of the wards of Chancery being under
his control and that of the other officers of the court, it may be
supposed that Audley’s annuity-jobbing increased. When he quarrelled
with one who disputed the payment of an annuity, and who, to prove his
resisting power, showed and shook his money-bags, Audley sarcastically
asked “whether they had any bottom?” The exulting possessor answered in
the affirmative. “In that case,” replied Audley, “I care not; for in
my office I have a constant spring.” Here he pounced on incumbrances
which lay on estates; he prowled about to discover the cravings of
their owners, which he did to such purpose that, when asked what was
the value of his office, he replied, “Some thousands of pounds to any
one who wishes to get to heaven immediately; twice as much to him who
does not mind being in purgatory; and nobody knows what to him who will
adventure to go to hell.” Charity forbids us to guess to which of these
places Audley went. He did not long survive the extinction of the Court
of Wards, and died “receiving the curses of the living for his rapine,
while the stranger who had grasped the million he had raked together
owed him no gratitude at his death.”

It must have been the widow of some such shrewd assurer who dared
the dangers of Chancery in 1682, and endeavoured to file a bill, the
purport of which was to compel 500 individuals to declare the amounts
they owed her husband, who is designated as “a kind of insurer.” The
boldness of this woman in attacking 500 persons attracted attention;
and the alarm which must have possessed her creditors was no doubt
heightened by the fact that 60 skins of vellum and 3000 sheets of paper
composed the bill, and that each would be compelled to have a copy,
provided the plaintiff were successful. Not only, however, did Lord
Chancellor North, “amazed at the effrontery of the woman,” dismiss the
bill on the ground of the enormous expense which each defendant would
incur, but he directed the plaintiff’s counsel to refund his charges
and to “take his labour for his pains.”


[5] About as much silver as is now coined into 3_l._ 1_s._ 11_d._

[6] Equal in weight to about 2_l._ 1_s._ 3_d._ of our silver coinage.

[7] Equal in weight to 10_s._ 4_d._ of our present silver coinage.



Among the frequenters of St. Paul’s, when the noble, the merchant,
and the citizen congregated in its walk, was an old man known to all
who met there in their daily avocations as Judah Manasseh Lopez. A
Lombard, a Jew, and a usurer, it was difficult to say whether the
outward respect he received from his customers was not counterbalanced
by the curses he received from the public. The bullying mien of the
self-dubbed captain sunk into a more subdued tone as he asked for loans
or deprecated payment. The spendthrift who was dicing away his paternal
inheritance, and who had security to offer for the money he wanted,
was more indifferent, while the goldsmith shrunk from his approach
with a contemptuous expression he did not always care to conceal.
This man employed his wealth in the purchase and sale of annuities.
He lent to merchants when their vessels failed to bring them returns
in time to meet their engagements. He advanced cash on the jewels of
those whom a disturbed period involved in conspiracies which required
the sinews of war. But annuities were his favourite investment; and to
him, therefore, resorted all that were in difficulties and were able
to deal with him. With the highest and the lowest he trafficked. He
was feared by most, and respected by none. One remarkable feature in
his business was, that no one found it easy to recover the property
he had pledged, provided it much exceeded the amount advanced. In
an extremity, Buckingham, the favourite of Charles, applied to and
received assistance from the Jew on the deposit of some deeds of value.
When the time approached which had been stipulated for repayment,
Lopez appeared before the Duke in an agony of grief, declaring his
strong-room had been broken into, his property pilfered, and the Duke’s
deeds carried away. But Buckingham had dealt too much with men of
this class to believe the story on the mere word of such a Jew. He,
therefore, kept the usurer while he ordered some retainers to proceed
to the city and to search out the truth, placing the Hebrew at the same
time under watch and ward, with an utter indifference to his comfort.
When the messengers returned, they avouched that all Lombard Street was
in an uproar at the violation of its stronghold. Still the Duke was
dissatisfied, and refused to part with his prey until he had received
full value for his deposit. In vain the Hebrew fell on his knees, in
vain did he call on Father Abraham to attest his innocence, for in the
midst of one of his most solemn asseverations Buckingham was informed
that a scrivener was urgent in soliciting an audience, and he saw at
the same time that a cloud came over the face of Lopez. The request of
the scrivener being granted, to the Duke’s astonishment he produced the
missing document, explaining to his Grace that Lopez, believing the
scrivener too much in his power to betray him, had placed it in his
charge until the storm should blow over, but that, fearing the Duke’s
power and trusting to his protection, he had brought it to York House.
On the instant Buckingham confronted the two. The Jew’s countenance
betrayed his crime, and, fawning on the very hem of the Duke’s garment,
he begged forgiveness, and crouched like a dog to procure it. From that
time it is probable that the Duke had his loans on more equitable terms
and on smaller security, as he dismissed the Jew with a consideration
the latter did not deserve.

But darker and more dangerous things were hinted of this man. He was
well versed in medical lore. He was reputed to possess subtle drugs;
and it was often noticed that the healthiest of those to whom he was
bound to pay life annuities were sometimes cut off in a remarkable way,
and that, too, after they had been closeted with him. Whether Lopez
granted insurances on lives is unknown, but he lived himself to a bad
old age, hated as much as he was feared, and sought after as much as he
was despised.

Such men made large profits. They knew nothing and they cared nothing
for the chances of life. Their charges covered all risks. And so little
was known of the number of the people, that a few desultory facts
concerning this and a previous period, being gathered from various
sources, may not be unacceptable or uninstructive. Up to this time,
and long after, the population of London and of England was a riddle.
The utmost exaggeration prevailed in all the accounts which we possess
concerning it. Fitzstephen writes of London being peopled with a
multitude of inhabitants; and adds, that, in the fatal wars under King
Stephen, 80,000 men were mustered. Allowing for the martial fury of the
time, this would give a population of 400,000 in the twelfth century
dwelling in London. Everything points to the fact that the metropolis
augmented more than the authorities thought good.

The progressive increase of London was a continual source of alarm. In
1581 a proclamation was issued, forbidding any new buildings. Elizabeth
caused a statute to be passed to the same effect, because “such
multitudes could hardly be governed, by ordinary justice, to serve God
and obey her Majesty;” and because “such great multitudes of people in
small rooms, being heaped up together, and in a sort smothered, with
many families of children and servants, in one tenement, it must needs
follow, if any plague or any universal sickness come among them, it
would presently spread through the whole city.” These proclamations
were continued. James said, so many people “cumbering the city were
a general nuisance;” adding, that the single women who came from the
country marred their reputations, and that the married lost them. Still
the people flocked, in spite of proclamations, and in opposition to
statutes. Old country establishments crowded by the score to “upstart
London,” “pinching many a belly to paint a few backs, and burying all
the treasures of the kingdom in a few citizens’ coffers.” At last some
effect was produced, not however by the proclamation, but by fining
one Mr. Palmer a thousand pounds. Still, if we may judge by what Howel
writes, the city of London continued to increase “For the number of
human souls breathing in city and suburbs, London may compare with any
in Europe in point of populousness.” This he estimates, taking “within
that compass where the point of the Lord Mayor’s sword reacheth,” at a
million and a half of souls. Foreigners could scarcely understand the
huge concourse which thronged London, and which for a long time baffled
our earlier political economists, who wondered how it was that the
annual deaths outbalanced the annual births. Our satirists were very
hard on the new comers. Ben Jonson describes them as “country gulls,”
who come up every term to learn to take tobacco and see new notions.
They paid heavily for their lesson in London life; and many an annuity
was wrung out of the fat land of the country gentleman from his visit
to the metropolis. Sir Richard Fanshawe, in an elegant and elaborate
poem,--an evidence that the subject occupied public attention,--asks,

                “Who would pursue
   The smoky glory of the town,
   That may go till his native earth,
   And by the shining fire sit down
                 On his own hearth,

  “Free from the griping scrivener’s hands
   And the more biting mercer’s books,
   Free from the bait of oiled hands
                 And painted looks?”

It is clear, from these and other facts, and from the circumstance
that it would be very difficult to separate the casual visitors from
the fixed inhabitants of London, that up to the year 1700 there was
little information on which to found an argument. All that we possess
is vague and desultory. Lord Salisbury, in a letter written to Prince
Henry prior to 1612, says, “Be wary of Londoners, for there died here
123 last week.” On the 1st of May, 1619, we learn by another source
that the number of deaths in London was from 200 to 300 weekly. At
the accession of James I., London was said to contain little more
than 150,000 inhabitants; and at the restoration of Charles II.,
120,000 families were said to be within the walls of London. “Before
the Restoration,” said Sir William Petty, “the people of Paris were
more than those of London and Dublin put together; whereas, in
1687, the people of London were more than those of Paris and Rome.”
Evelyn, again, says, in his Diary, in 1684, that he had seen London
almost as large again as it was at that time. Judging from various
independent sources, however, the population of England at the time of
the Revolution may be fairly estimated as ranging from 5,000,000 to

That the tables of Graunt and Petty had produced small practical
effect, and that little or nothing was known as to the chances of
life, may be gathered from a pamphlet printed in 1680, in which the
whole doctrine of the value of life as then understood and acted on
is affirmed: the utmost value allotted to the best life was 7 years,
at which the life of a “healthful man,” at any age between 20 and 40,
was estimated; while that of an aged or sickly person was from 5 to 6
years, the various limits between these two extremes constituting the
whole range of difference in value.

Such was the limited nature of the statistics of life when the
Astronomer Royal Halley compiled those calculations which make his name
honoured by directors and actuaries. To him we owe the germ of all
subsequent developments of this science, in that general formula for
calculating the value of annuities which is yet regarded with so much

Up to the period in which he lived--the latter half of the seventeenth
century--the town of Breslau, in Silesia, was the only place which
recorded the ages of its dead; and from these Halley drew a table of
the probabilities of the duration of human life at every age. This
was in 1693, and was the first table of the sort ever published.[8]
In it he taught, with great clearness and exactness, the conditions
needful for the formation of rates of mortality; the manner of forming
them with complete geometrical precision; of deducing a corresponding
table of the present state and annual movement of the population; of
reading in them the probability of survivorship of any person taken at
random in a given society; of, in truth, concluding upon the probable
duration of the co-existence of several individuals from the sole
knowledge of their age. He also first developed the true method of
calculating life annuities, taking for his guide the rate of mortality
during five successive years in Breslau.

That the tables of Dr. Halley were very much wanted may be assumed,
as in 1692 annuities were granted on single lives at 14 per cent., or
only 7 years’ purchase; and that the State took very little trouble to
apply these tables is as true, for we read that, soon after they were
published, annuities were estimated on 1 life at 9 years’ purchase,
on 2 lives at 11 years’, and on 3 lives at 12 years’ purchase. Some
allowance must, of course, be made for the difficulty of raising money
and the difference of interest; still the price paid was out of all
proper proportion. But the most singular circumstance connected with
government annuities at this period is, that, when life annuities were
changed into annuities for 99 years, the owner of a life annuity might
secure an annuity for 99 years, by paying only 4-1/2 years’ extra
purchase. Thus, by the payment of 15-1/2 years’ purchase, a certain
annuity of 99 years could be procured.


[8] The following figures will give some idea of the chances of life as
estimated by Dr. Halley:--

  Out of 1000 born, 661 will be living at 10 years of age.
    ”          ”    628          ”        15       ”
    ”          ”    598          ”        20       ”
    ”          ”    567          ”        25       ”
    ”          ”    531          ”        30       ”
    ”          ”    490          ”        35       ”
    ”          ”    445          ”        40       ”
    ”          ”    397          ”        45       ”
    ”          ”    346          ”        50       ”
    ”          ”    292          ”        55       ”
    ”          ”    242          ”        60       ”
    ”          ”    192          ”        65       ”
    ”          ”    142          ”        70       ”
    ”          ”     88          ”        75       ”
    ”          ”     41          ”        80       ”
    ”          ”     19          ”        84       ”



It may be judged that life assurance was in operation by the latter
end of the seventeenth century, as a policy was made on the life of
Sir Robert Howard, for one year, from the 3rd of September, 1697. On
the same day in the following year Sir Robert died, and the merchant
refused to pay, on the ground that the policy had expired. Lord Holt,
however, ruled, that “‘from the day of the date’ excluded the day
itself, and that the underwriter was liable.” This appears the first
assurance on a life of which there is positive legal record.

Reference is usually made to the Amicable Society as the earliest
institution for the assurance of lives; but the Mercers’ Company, in
1698, commenced a scheme for granting life annuities to the nominees
of the assurers, in place of paying down a fixed sum. This was
undertaken at the instigation of Dr. Asheton, and its failure is
a proof that the duration of human life was very little known, or
that sufficient care had not been taken by the Mercers’ Company to
enable them to be annuity-mongers with half the success of Audley the
usurer, or Lopez the Jew. They formed something like a scale, but it
was incomplete. Married men, under 30, were allowed to subscribe but
100_l._; under 40, they might not subscribe more than 500_l._; under
60, they were limited to 300_l._ When this was commenced, it was
considered a very notable plan. It was thought that it would prove a
good business speculation, and, on considerable sums being subscribed,
“the Corporation rejoiced greatly.” It was soon discovered, however,
that the undertaking was founded on a mistake; so the first breach of
faith was in lowering the annuity. This proved insufficient, and the
company became unable to meet their engagements. They had fixed the
payments to their annuitants at the rate of 30 per cent., and now they
saw their funds almost annihilated by the error. At last they stopped
payment altogether; but the distress was so acute, that, recollecting
one or two forced loans they had made to the monarchs of England in
the troublous times of old, they petitioned parliament, in 1747,
for assistance. Their tale was a pitiable one: “At Michaelmas, 1745,
they found themselves indebted to the said charities, and their other
creditors, 100,000_l._; they were liable for present annuities to the
extent of 7620_l._; for annuities in expectancy, 1000_l._ a year more:
the whole of their income being 4100_l._”

The desired assistance was granted, and it need not be added that the
company is now one of the most flourishing in London.

If the principles on which the Mercers’ Corporation founded its
operations were erroneous, it must be considered that Government acted
as strangely in its public proposals for life annuities. Nothing can
illustrate more strongly the crudities of the science at this period,
than the fact, that when loans were raised by William III., on life
annuities, no greater annual amount was given to the man of seventy,
whose chances of life were so small, than to the man of thirty, whose
chance was so large. Thus, the State offered 14 per cent., at any age,
and it is curious that these proposals were accepted by very few. It is
true that interest was much higher than at present, but this does not
palliate the fact, that there was no attempt to vary the rate according
to the age.

Before approaching the next movement, it will not be out of place
to indicate the establishment of one or two offices which have since
added life assurance to that of fire. The Hand-in-Hand was established
in 1696, by about one hundred persons. In 1698 they framed a deed of
settlement, which was enrolled in Chancery. Ten years later, John
Povey, author of the “Unhappiness of England, as to Trade,” projected
the Sun. Finding his attempt very successful, Povey conveyed his rights
to certain purchasers, who, by a deed of settlement, of April, 1710,
erected themselves into the society now familiar as the Sun Fire and
Life Office.

It is not generally known that this institution printed, at first
weekly and then quarterly, a work which has since proved a valuable
addition to our historic literature. It was, indeed, a general custom
with insurance companies to publish periodical papers in aid of their
business, and was only another mode of that advertising which is so
liberally practised by those of the present century.

Mr. Povey, the founder of the above company, was a veritable promoter.
Not contented with establishing an office to insure against the chances
of fire, he invented also a scheme to extinguish it, and “Povey’s
fire-annihilator” was then a feature of the time. This gentleman, who
looked “a grave, honest-countenanced, elderly gentleman,” but is
described as “a meddling, restless, and turbulent spirit,” projected a
life assurance company for “4000 healthy persons, between the ages of 6
and 55,” to be called the Proprietors of the Traders’ Exchange House.
This, like many of his proposals, died a natural death. With those of
his class he was often in hot water, and was accused of plagiarising
the ideas of others. In addition to the offices of which mention has
been made, he formed the Society for Assurance for Widows and Orphans,
the progress of which is lost sight of. At any rate, he comes down to
us as the founder of one of the most liberal fire-offices in existence,
of the capital of which it may be remarked, _en passant_, almost as
little is known as of its projector.

The war which was undertaken by William, against France, produced a new
form of assurance: not only did wagers on his life become prevalent--a
betting which was but another form of insurance; policies were entered
into on the result of his campaigns. The conspiracies which were formed
against him increased the interest felt; and so uncertain were the
chances of his taking Namur, that 30_l._ were offered down, to receive
100_l._, provided the city and castle were captured before the last day
of September in 1694. At this period, also, a mutual assurance company
was formed to aid an adventurer with funds to raise a vessel which,
laden with the treasures of the East, had been lost on her passage
home; the peculiar feature of the transaction being, that, if any of
the association should die before the object was accomplished, their
share was to be transferred to the remaining adventurers.

The assurance merchants found their profits endangered in 1706, when
the Bishop of Oxford and Sir Thomas Allen applied to Queen Anne for a
charter to incorporate them and their successors, “whereby they might
provide for their families in an easy and beneficial manner.” The
application was successful, and the AMICABLE, an improvement on the
Mercers’ Company, obtained its charter, the number of shares being
limited to 2000. But that which appears most extraordinary was, the
mode of arranging the payments. The age of the shareholder--from 12 to
45--made no difference in his premium; and whether he were well, or
whether he were dying, was no consideration. Each person paid 7_l._
10_s._ entrance money, and 6_l._ 4_s._ per annum for life; but, as a
yearly return of 1_l._ 4_s._ was paid to each shareholder, the real
payment was 5_l._ The yearly number of deaths in London was about 1 in
20 at this period, and this fact probably originated the amount of
payment, though nothing could surpass the absurdity of a plan which
made no distinction between an old life and a young one,--between a
healthy and an unhealthy man. It is said that the Amicable had no
data; but Dr. Halley had already published his tables, and Vulture
Hopkins, or Mr. Snow the banker, or any money-monger, would have taught
the directors their error. It is true that success,--at any price,
almost,--was their object, and this was insured by the large payment.
It may be said, also, that it is wrong to judge of past actions by the
aid of present information; but common sense was as general then as
now, and any usurer’s books would have taught the Amicable its mistake.

The annual income, after deducting expenses, was divided yearly among
the representatives of those who had died. Thus a healthy year, with
only a slight mortality, made the division good; but in an unhealthy
year it was proportionably less. An annual distribution of this kind
was manifestly unsound, if not unfair; and must have been sometimes
severely felt by the representatives of the deceased. The Amicable,
however, may be received as the nursing mother of life assurance at a
period when, little as arithmetical economy was understood, it was
still less acted on.

Besides the attempt to engraft an annuity society on the Mercers’
Company, various minor endeavours were made, from 1690 to 1712, to
establish institutions which should grant yearly payments and pay
specific sums to the representatives of the deceased.

The principle of assurance, applied to other subjects than merchandise,
seemed a sudden light to those who had capital, and did not know how
to employ it; while it was a great boon to those who wanted money,
and did not know how to get it. The latter employed their wits in its
application to subjects which are not yet allowed to be legitimate;
and, while the former, with the praiseworthy caution of men who had
“put money in their purses,” went slowly but surely to work to found
institutions like the Amicable, the Royal Exchange, and the London, the
others did not hesitate to form societies, to frame rules, and to decoy
all they could meet, under titles as promising as their results were

In 1708 began what were then known as “the little goes” of assurance.
One was held at the Cross Keys, in Wych Street. We gather that each
person subscribed 5_s._ fortnightly, inclusive of policy, stamp, and
entrance money, on condition of 200_l._ being paid to his heirs and
executors. Another was an evident bubble, 5_s._ a quarter entitling
the subscriber’s representatives to receive 120_l._ at his demise;
while a third, called the “Fortunate” Office, was to provide marriage
portions of 200_l._ for those who paid 2_s._ a quarter. If contemporary
accounts are to be trusted, the ravenous appetite for assurance was
something like that which at the present day possesses projectors,
as offices were opened in every part of the town. If one company was
commenced to insure marriage portions, a second was sure to follow to
insure the portions of their children. A mutual life assurance was
instantly followed by a mutual ship assurance. The following notice
from the “British Apollo” will be found to illustrate this speculative
fancy:--“A first and second claim is made at the Office of Assurance
on Marriage, in Roll Court, Fleet Street. The first will be paid on
Saturday next; wherefore, all persons concerned are desired to pay
2_s._ into the joint stock, pursuant to the articles, or they will be
excluded. _The two claimants married each other, and have paid but
2s. each._” They were, however, to receive but 37_l._ Here is another
specimen: “Any person by paying 2_s._ at their entrance for a policy
and stamps, and 2_s._ towards each marriage but their own, when the
number is full, will secure to themselves 200_l._; and in the mean
time, in proportion to the number of subscribers.” This undertaking was
found to answer so well, that many others opened in the same line--one
of them, appropriately enough, in Petticoat Lane. Soon after this,
appears an advertisement from a baptismal office of assurance, where
every subscriber paid 2_s._ 6_d._ towards each infant baptized, until
he had one of his own, when he was to receive 200_l._, “the interest of
which is sufficient to give a child a good education; and the principal
reserved until it comes to maturity.” Most of the projects were systems
of wholesale robbery. For a time, however, they were greedily run
after. “The success of these schemes,” says a chronicler of the time,
“sharpened the invention of the thrifty, and immediately almost every
street in London abounded with insurance offices, where policies for
infants three months old might be obtained for short periods. From
these, they diverged into other ages and various descriptions of

Emblems were placed in windows indicating the allurements of the
“Golden Globe.” Tempting advertisements were inserted in the journals
to show the especial advantages of a new Tontine. Infant or adult,
married or single, were addressed in, “The Lucky Seventy, or the
Longest Liver takes all;” while, paraded in promising forms, and
painted in bright colours, arose societies to keep the subscribers when
they married, and pay for their burials when they died.

There is something very painful in the recollection that the sufferers
were those who could least afford it. It was not the grasping Hebrew
who invested from his full store. It was not the wealthy East Indian
director, the rich alderman, the over-fed citizen, or the “new-fangled
banker” who lost a small portion of his gold. It was the poor and
thrifty man, who, denying himself to secure his children a provision,
was involved in loss.

Policies and premiums were in the mouths of all. It was the El-dorado
of the London craftsman, the alchymy of the needy tradesman. The
philosopher’s stone seemed placed before the class that least dreamed
of grasping it: but it was the realisation of the legend in which the
dreamer awakes and finds his golden pieces are turned to slate; it was
the arousing of Analschar from his gorgeous vision.

The jobbers of Change Alley were not behind; the members of Lloyd’s
entered keenly into competition, usurers trembled with delight at
the prospect of increasing their store, and annuity-mongers threw
themselves with ravenous rapacity on the unwary. Under the name of
Africanus, Steele selects a well-known character of the day to satirise
the “bites and bubble-mongers” of 1710, in “one who has long been
conversant in bartering; who, knowing when Stocks are lowest it is the
time to buy, therefore, with much prudence and tranquillity, thinks it
the time to purchase an annuity for life.” “Sir Thomas told me it was
an entertainment more surprising and pleasant than can be imagined, to
see an inhabitant of neither world, without hand to lift, or leg to
move, scarce tongue to utter his meaning, so keen in biting the whole
world and making bubbles at his exit. Sir Thomas added, he would have
bought twelve shillings a year of him, but that he feared there was
some trick in it, and believed him already dead.”

There is some confusion between annuities and assurances; it is an
evidence, however, that the public attention was pointed to the
tricks which were current. During this period, there is no trace of
any life-office; but it would appear that the Bills of Mortality were
regarded with interest, from a paper in the “Guardian” being founded on
them, and that they were so regarded is most probably to be traced to
their connection with assurance. The following is an extract from a
quizzical paper bearing on the mortuary registers. Died

  “Of a six-bar gate                            4
   Of a quick-set hedge                         2
   Broke his neck in robbing a hen-roost        1
   Surfeit of curds and cream                   2
   Took cold sleeping at church                11
   Of October                                   1
   Of fright in an exercise of the train-bands  1.”

Addison also composed the following bill of mortality in a paper “On
Dying for Love;” and it is a further proof of the attention paid to the
subject, that this great writer took it as a model:--

“T. S. wounded by Zelinda’s scarlet stocking, as she was stepping out
of a coach.

“Tim Tattle killed by the tap of a fan on his left shoulder by
Coquetilla, as he talked carelessly with her at a bow-window.

“Samuel Felt, haberdasher, wounded in his walks to Islington, by Mrs.
Susanna Cross Stitch, as she was clambering over a stile.

“John Pleadwell, Esq., of the Middle Temple, assassinated in his
chambers, the 6th instant, by Kitty Sly, who pretended to come to him
for advice.”

After 1712, these projects ceased to be placed before the town; and
the following odd “bite” had its share in dispersing the hungry crew
who proposed them. “There has been the oddest bite put upon the town
that ever was heard of. We having of late had several new subscriptions
set on foot for raising great sums of money for erecting offices
of insurance,” &c.; “and at length some gentlemen, to convince the
world how easy it was for projectors to impose upon mankind, set up
a pretended office in Exchange Alley, for receiving subscriptions
for raising 1,000,000 of money to establish an ‘effectual’ company
of insurers, as they called it: on which, the day being come to
subscribe, the people flocked in and paid down 5_s._ for every 1000_l._
they subscribed, pursuant to the Company’s proposals; but after some
hundreds had so subscribed, that the thing might be fully known, the
gentlemen were at the expense to advertize, that the people might have
their money again without any deductions; and to let them know that
the persons who had paid in their money contented themselves with a
fictitious name set by an unknown hand to the receipts delivered out
for the money so paid in, that the said name was composed only of the
first letters of six persons’ names concerned in the said scheme.”

For a period the people had rest from new propositions: as it was found
necessary to stop these offices for insurances on marriages, births,
christenings, and annuities, and to close the career of gentlemen
without a penny; this being done by the insertion of a clause in an
Act of the 10th of Queen Anne, enacting a penalty of 500_l._ on the
promoters of such societies.

Unfortunate as these bubble assurance companies might be, unformed and
unintelligent as their conductors proved, and ruinous as they were
to the people who trusted them, they were a movement in the right
direction. The principle of life assurance is so eminently social,
and so important to those who wish to invest their savings for their
successors, that any effort or endeavour to move this science from
the hands of usurers and speculative merchants was to be rejoiced at.
Hitherto it had been entirely in the hands of the monied man. Many had
been honourable in their dealings, but they were ignorant of the trade
in which they invested their money, while a bad business year or the
destruction of a fleet,--a civil war or the arbitrary demands of a
monarch,--might ruin alike assurer and assured.

Others who traded in it were harpies; who took advantage of the wants
of the applicants, who measured their terms by the requirements of
their customers, who demanded to the last penny, and claimed on the
earliest day. Such men did more harm to the feeling of security in
these transactions than can now be possibly imagined; but the above two
classes only could supply the requirements of the people in the early
annals of annuities and assurance.



The rise of the Royal Exchange and London Corporations forms no
uninteresting picture of the time in which they were produced. The
bubbles of 1712 had not long passed away, when some of the first
merchants of London, willing to secure to themselves the advantages
which the Amicable as a life, and the Sun as a fire, office possessed,
met in Mercers’ Hall, to petition the crown for a charter to effect
marine and other assurances. The petition was well timed, as upwards
of 150 underwriters had recently failed; many merchants having fallen
to the ground with them, there was every reason in the public clamour
for a safer and more secure mode of investment. About the same time
also another body, of “knights, merchants, and citizens of London,” had
petitioned with the same object. A junction of the two was arranged,
and, under the title of the Royal Exchange Assurance, they endeavoured
to obtain a charter. This was at the commencement of that remarkable
period in commercial history known as the South Sea bubble. The above
proposition, however, was well grounded; and so many were prevented
from subscribing, that, under the title of the London Assurance, a
company of equal magnitude was commenced.

Their petitions made slow progress; but the Royal Exchange, without
waiting the issue, commenced business, and, in nine months, had insured
property to the amount of 2,000,000_l._ sterling. While these companies
were in progress, the great bubble era came. With it, excepting as
regards assurance, this volume has nothing to do. But the public found
this pressed closely on its attention. When men were willing to receive
a company with fair promises in the place of fair prospects,--when
persons ran about the Alley exclaiming, “Give us something to subscribe
to; we care not what it is,”--a practice so sound as assurance was
certain to be applied in every form that the hurried ingenuity of
speculators could devise. Besides the proposed assurances on the lives
of men, cattle were brought into use, and 2,000,000_l._ were demanded
for assuring horses. Of this it was said:--

  “You that keep horses to preserve your ease,
   And pads to please your wives and mistresses,
   Insure their lives, and if they die we’ll make
   Full satisfaction, or be bound to break.”

Of an office for marine assurance:--

  “In vain are all insurances, for still
   The raging wind must answer heaven or hell;
   To what wise purpose must we then insure?
   Since some must lose whate’er the seas devour.”

The life and fire-companies were also epigrammatised with as much point
as the epigrammatist could confer. Thus, on the former he wrote:--

  “Come all ye generous husbands with your wives,
   Insure round sums on your precarious lives,
   That, to your comfort, when you’re dead and rotten,
   Your widows may be rich when you’re forgotten.”

With regard to fire-companies:--

  “Projecting sure must be a gainful trade,
   Since all the elements are bubbles made;
   They’re right that gull us with the dread of fire,
   For fear makes greater fools than fond desire.”

Another company, having at its head “three English peers, two bishops,
four Irish peers, with many eminent merchants and gentlemen,”
petitioned the king that it might be incorporated for purchasing and
improving forfeited and other estates in Great Britain, for granting
annuities, and for insuring lives; “seeing this will unite by interest
many of the king’s subjects against the Pretender and his adherents
for ever. In order to which, several of the petitioners have sent
persons into Scotland for purchasing the forfeited estates there, and
have since, by a voluntary subscription to the Governor and Company
of Undertakers for raising the Thames water in York Buildings, raised
a joint stock of 1,200,000_l._, on the credit of which estates they
propose to grant annuities for and to insure on lives; for the benefit
of such of his Majesty’s subjects as are straitened in their fortunes
by the reduction of interest.”

When this petition was referred to the Crown lawyers the Amicable
employed counsel to oppose it, and a vigorous warfare was carried on.
Rejecting with scorn the idea of any rival being of use to the world,
and pointing to its own venerable standing of fourteen years, the
Amicable called the new company a “company of upstarts.” The latter
retorted that its opponents had grown old and supine, and that the
safety of the entire commercial world depended on their success; that,
having a large capital, there would be a greater security than in a
society like the Amicable; and they backed their argument with bribes
to all who could be supposed to have any interest. Their arguments and
their bribes, however, were futile, and they missed their object.

Even the Royal Exchange and London Corporation did not escape the
charge of having attempted to forward their interests by fees
disproportioned to the services which were sought. The age at which we
have arrived was the age of corruption. Whispers passed through every
coffee-house in the city that the Right Honourable Nicholas Lechmere
was accused of betraying the trust reposed in him, and that some
persons concerned in various undertakings had endeavoured to obtain
charters by corruption and other undue practices. These reports were
attributed at the time to the private assurers, who were by no means
pleased at so formidable a rivalry. The proper degree of indignation
having been exhibited by the Right Honourable gentleman, the rumour was
found to have emanated from Sir William Thompson, who broadly asserted
that very unjustifiable methods had been taken by one Bradley and
Billinghurst in order to obtain a charter for Lord Onslow’s Assurance
Company; that large sums of money had been received by his Majesty’s
Attorney-General, contrary to his duty, to influence him in his
opinion; and that there were public biddings for these charters, as if
at an auction, in the chambers of the Attorney-General. Such assertions
being somewhat damaging to the character of an official gentleman,
the committee appointed to inquire into “petitions for companies for
insurance, annuities, &c. &c.,” instituted a minute inquiry. As all
the witnesses represented some proposed company, they were unanimous
in asserting its virtue. Not one of them ever dreamed of offering Mr.
Attorney more than his legal fee. Not one of them was not content to
rest the success of his case on its singular merits only.

Their examination lets us into a picture of the customs of the time.
On a certain occasion as many as 150 met in the Attorney-General’s
chambers, where the question was debated with great warmth; one party
contending, with all the eloquence of self-interest, that a new company
for the purpose of assurance would be very beneficial to the nation;
the opposite party asserting that no such company was requisite, and
that the nation would suffer from it. The advocates representing the
underwriters proved that there were private adventurers ready to
undertake all the business that could be brought; and, in return,
the advocates for the companies produced a list of failures among
the private assurers, and a calculation of the loss the public had
sustained through them. The general tenor of the evidence went to clear
Mr. Attorney, but it tended to criminate the applicants for charters.
One company gave its agent authority to pursue “all proper methods;”
and, as the agent had interpreted these words “to bribe all he came
near,” they could only express their regret. Another company declared
its purity with much vehemence; but, on close examination, it was found
to arise from its poverty. Moral feeling was utterly extinct. The cry
with all was, “Give!” “Give!” said the Attorney-General’s clerk. “You
must give something; they have given something handsome on the other
side,” said the Attorney-General himself. One witness deposed: “He,
with some others, went to the chambers of the latter, and, having
procured access, informed him they were come to wait on him with his
fee; but Mr. Attorney said, ‘What do they come here for? Why do they
not leave it with my clerk?’ The reply was, ‘It was matter of weight,
and they desired to give it him themselves.’ Sir William Chapman then
gave the fee, recommending the assurance company to the Attorney’s
favour, saying, ‘The company would speak for itself, and hoped, if it
should be found to be of use to the nation, that he would favour it,’
and some words of that kind, and then they withdrew.” The accusation
failed, the decision being, “That the Right Honourable Nicholas
Lechmere had discharged his trust, in the matters referred to him by
his Majesty in Council, with honour and integrity.”

In the mean time the two new companies proceeded slowly. “Onslow’s
Insurance,” as the Royal Exchange was called, and “Chetwynd’s Bubble,”
the title given to the London, were hawked in Change Alley along
with companies for “importing jackasses” and for “fatting hogs.” The
House of Commons was privately importuned by lavish promises, and
publicly solicited in two letters printed and given to every member.
Even in that age of corruption their bribery proved vain; and had not
a fortunate chance turned up in their favour, their application for
charters might have been dismissed with contempt. By some inadvertence,
the grand Committee of Supply had been dismissed before provision
could be made for the arrears in the civil list. The ministers were in
despair; and the companies took advantage of the necessities of the
State to offer the large sum of 600,000_l._, on condition of receiving
his Majesty’s charter for their respective companies. The offer was
eagerly grasped by the ministry; and on evidence being given of the
respectability of the members,--of the cash lodged at the Bank to meet
losses,--of their funded property, and of the amount of the business
transacted,--Mr. Aislabie, Chancellor of the Exchequer, presented to
the House the following message:--

“His Majesty, having received several petitions from great numbers
of the most eminent merchants of the city of London, humbly praying
he would be graciously pleased to grant them his letters patent for
erecting corporations to assure ships and merchandise, and the said
merchants having offered to advance and pay a considerable sum of
money for his Majesty’s use in case they may obtain letters patent
accordingly; his Majesty, being of opinion that erecting two such
corporations, exclusive only of all other corporations and societies
for assuring of ships and merchandise, under proper restrictions and
regulations, may be of great advantage and security to the trade and
commerce of the kingdom, is willing and desirous to be strengthened
by the advice and assistance of this House in matters of this nature
and importance. He, therefore, hopes for their ready concurrence to
secure and confirm the privileges his Majesty shall grant to such
corporations, and to enable him to discharge the debts of his civil
government without burdening his people with any aid or supply.”

A bill was then ordered to be brought in, and the “most dutiful
Commons” waited on his Majesty with an address of thanks “for
communicating the application for an insurance company,” it being “an
instance of so much condescension as deserved the highest return of
duty and thankfulness.”

Each of the companies thus established had power to purchase lands
to the value of 1000_l._ yearly. No person could be a director of
the London Assurance and Royal Exchange at the same time. Each
corporation was to pay 300,000_l._ for its charter; but though this
was a chief condition, the difficulties into which they fell induced
the government, when life assurance was added to that of marine and
fire in 1721, to absolve the proprietors from paying such amount of the
300,000_l._ as remained unpaid.

The following is the most correct list which can be obtained of the
assurance projects of the South Sea bubble era:--

1. The Royal Exchange.

2. The London Assurance.

3. For a general insurance on houses and merchandise, at the Three
Tuns, Swithin’s Alley, 2,000,000_l._

4. For granting annuities by way of survivorship, and providing for
widows, orphans, &c., at the Rainbow, Cornhill, 1,200,000_l._

5. For insuring houses and goods from fire, at Sadler’s Hall,

6. For insuring houses and goods in Ireland, with an English earl at
the head of it.

7. For securing goods and houses from fire, at the Swan and Rummer,

8. Friendly society for insurances.

9. For insuring ships and merchandise, at the Marine Coffee-house,

10. British Insurance Company.

11. For preventing and suppressing thieves and robbers, and for
insuring all persons’ goods from the same, at Cooper’s, 2,000,000_l._

12. Shales’s Insurance Company.

13. For insuring seamen’s wages, Sam’s Coffee-house.

14. Insurance Office for horses dying natural deaths, stolen, or
disabled, Crown Tavern, Smithfield.

15. A company for the insurance of debts.

16. A rival to the above for 2,000,000_l._, at Robin’s.

17. Insurance Office for all masters and mistresses against losses they
shall sustain by servants, thefts, &c., 3000 shares of 1000_l._ each,
Devil Tavern.

18. For a general insurance in any part of England.

19. A copartnership for insuring and increasing children’s fortunes,
Fountain Tavern.

20. For carrying on a general insurance from losses by fire within the

21. Insurance from loss by Garraway’s Fishery, Crutchley’s, at
Jonathan’s Coffee-house.

22. Mutual Insurance for Ships.

23. Symon’s Assurance on Lives.

24. Baker’s second edition of Insurance on Lives.

25. William Helmes, Exchange Alley, Assurance of Female Chastity.

26. Insurance from house-breakers.

27. Insurance from highwaymen.

28. Assurance from lying.

29. Plummer and Petty’s Insurance from death by drinking Geneva.

30. Rum Insurance.

A mere glance at this list will show that the ideas conveyed by some of
the titles were sound and salutary, and that they are now being brought
into action. It is true that we cannot yet insure our homes against
house-breakers, or our persons from highwaymen; we cannot yet insure
our poor population from death if they drink too much rum or Geneva;
we certainly have yet no assurance against lying, however necessary
it may be in this age of projects; nor have we, like William Helmes,
of Exchange Alley, commenced a company to insure female chastity.
These were Utopian schemes into which we have not yet entered; but
with many of the more practical we are growing familiar. The present
“Agricultural Society” answers to that for insuring cattle. The
“Guarantee Company” has adopted that of “insuring to all masters and
mistresses the losses they may sustain by their servants.” The company
for the “insurance of debts” is at the present day fairly represented
by the “Commercial Credit Mutual Assurance Company;” nor is there much
doubt that the system will be spread to a still greater extent. The
society for insuring seamen’s wages was very desirable, as the sailor
never received his pay in cash, and parted with his tickets at a heavy
discount. To this some of our naval losses may be attributed, as our
best men went over to the enemy in consequence. A company, therefore,
which should cash the seamen’s tickets at a fair rate would have been a
national good.

Of course, schemes were plentiful enough, and many plans were commenced
with no other view than that of receiving deposits and spending them.
One of the offices was started by an old man called Le Brun. In 1690,
he had promised to bring up pearls and gold from sunken ships. In 1710,
he had been conspicuous in offering strange benefits to all who joined
his Marriage and Widows’ Assurance Company; and in 1720, he was ready
with something new. His life had been one of adventurous daring. He
had owned a privateer when privateers were pirates. He had been, as
a boy, with Sir Henry Morgan in his bucaneering attack on Panama. He
had accompanied Paterson in his ill-fated Darien expedition. But in
all had he failed to procure the gold for which his soul thirsted, and
that which he did obtain was spent in riot. When the Mississippi scheme
was acting he was in Paris, and now he came over in time to propose
a wonderful project for the benefit of all who would risk 5_l._ By
this “Office of assurance and annuity for every body,” any person who
paid 5_l._ was to be assured of receiving 100_l._ per annum, “as soon
as a sufficient number had subscribed;” and it need hardly be added
that, as this “sufficient number” never did subscribe, the assurance
of M. le Brun was all that the unhappy subscribers beheld for their
money. To prevent the public from suffering by the arts of such men as
these, legal proceedings were resorted to; and when the proclamation
was issued, not only did it destroy the bubbles, but it produced a
serious effect on the two chartered companies. It is probable that they
had been “rigging the market,” as the directors were ordered to attend
the authorities, in order that they might receive a fitting rebuke;
and it must have been a very impressive, though not a very picturesque
sight, to see a body of respectable, square-toed, elderly gentlemen,
with brown coats and cocked hats, listening with subdued awe, as they
were sternly cautioned “to keep strictly to the limitation of their
respective charters, _or it would be the worse for them_.”

That they took warning from this caution may be deduced from the
circumstance already stated, that when they petitioned to be released
from the payment of so much of the 300,000_l._ as was not paid[9], the
Chancellor of the Exchequer signified his consent, and a clause was
inserted to that effect in a bill then passing through the House.

It must not be supposed that any more scientific system than that
adopted by the Amicable Society guided these companies. On the
contrary, whether an applicant were 12 or whether he were 45, one
premium was asked. The policy was granted for a single year, and
renewed without reference to age or to health. The earliest document
possessed by either of these companies is dated 25th November, 1721. It
was granted by the London Assurance to Mr. Thomas Baldwin, on the life
of Nicholas Bourne, for 100_l._, five guineas being the premium for
twelve months; and this was the annual per centage paid for many years.
With such a system, it is not to be wondered that the success of the
company was slow.


[9] The total amount paid by each company was 150,000_l._



To the same year which witnessed the proposition for the new companies
we are indebted for the work entitled the “Doctrine of Chances,”
written by Abraham de Moivre, who, owing to the revocation of the Edict
of Nantes, was compelled to seek shelter in England, where he perfected
the studies he had commenced in his own country. In his boyhood he
had neglected classics for mathematics, to the great surprise of
his master, who often asked “what the little rogue meant to do with
those ciphers.” In 1718, he published the first edition of the above
book; and a few extracts from this, which led him afterwards to his
hypothetical application of those chances to the survivorship of life,
may not be unacceptable; as, though the author deemed it wise to
apologise in his dedication for publishing a work which “many people
in the world might think had a tendency to promote play,” yet his
volume will prove the best apology. The book is very entertaining in
its character, and is an evidence of an inquiring and mathematical mind
employing itself upon trifling questions rather than remain idle. Thus,
Case 1. is “To find the probability of throwing an ace in two throws of
one die.” And this kind of problem he varied to almost every possible
form. There is “the probability of throwing an ace in three throws,” of
“throwing an ace in four throws,” of “two aces in two throws,” of “two
aces in three throws,” worked out in a most exact and elaborate manner.
From dice he proceeded to lotteries, and showed how many tickets
ought to be taken to secure the probability of a prize. The volume, a
considerable quarto, was nothing more than an amusing book on gambling
and its various chances. But it produced a better effect. A few years
later, he published something more worthy of him, in his “Doctrine of
Chances, applied to the Valuation of Annuities on Lives,” in which he
says, with some appearance of surprise, “Two or three years after the
publication of the first edition of my ‘Doctrine of Chances,’ I took
the subject into consideration; and consulting Dr. Halley’s tables of
observation, I found that the decrements of life, for considerable
intervals of time, were in arithmetical progression; for instance, out
of 646 persons of 12 years of age, there remain 640 after 1 year; 634
after 2 years; 628, 622, 616, 610, 604, 598, 592, and 586, after 3,
4, 5, 6, 7, 8, 9, and 10 years respectively, the common difference of
those numbers being 6. Examining afterwards other cases, I found that
the decrements of life for several years were still in arithmetical
progression, which may be observed from the age of 54 to the age of 71,
where the difference for 17 years is constantly 10.”

The greatest difficulty which occurred to him was to invent practical
rules that might readily be applied to the valuation of several lives,
“which was, however, happily overcome, the rules being so easy that, by
the help of them, more can be performed in a quarter of an hour, than
by any method before extant in a quarter of a year.”

It was first published in 1725; and finding thus from Halley that, for
several years together the decrement of life was uniform, it being only
in youth and old age any considerable deviation took place, he founded
an hypothesis that it was uniform from birth to extreme old age; in
other words, that out of a given number of persons living at any age,
“an equal number die every year until they are all extinct.” On this
he gave a general theorem, by which the values of annuities on single
lives might be easily determined. This was of great use at the time, no
table of the real value of annuities having then been published, except
a very contracted one founded on Halley’s paper; and if subsequent
investigations proved that De Moivre was utterly wrong, his conclusions
formed the basis of many a future calculation.

Although the ability of De Moivre was recognised by the Royal Society
when it appointed him arbitrator in the contest betwixt Newton and
Leibnitz, and although Newton, when applied to for an explanation of
his own works, would often say “Go to De Moivre, he knows better than I
do,” yet it is to be feared that golden opinions were won by him more
freely than guineas.

It is sufficiently known that the coffee-houses of the eighteenth
century were the resort of all who sought intelligence or loved the
company of the wits and fine men about town. To one of these, in St.
Martin’s Lane, De Moivre went, where it was customary to apply to him
for the solution of many questions connected with annuities, and for
answers to queries concerning games of hazard, which were propounded to
him by those who hoped to turn the chance of loss into a certainty of
gain. The payment of these questions was his chief mode of subsistence;
and there is something unpleasant in the memory of this man, compelled,
in his old age, to be at the bidding of gamesters, and to consort with
men who lived on the town by their wits.

The opinion of posterity is divided upon his merits. “By the most
simple and elegant formulæ,” says Francis Baily, “he pointed out the
method of solving all the most common questions relative to the value
of annuities on single and joint lives, reversions, and survivorships.”
The subsequent editions of his works prove that he was aware of his
errors of detail, by correcting them. He enlarged the boundaries of the
science which he loved, and encouraged others to follow in the same
path. Although his hypothesis may not be applicable to all occasions
and circumstances, and though later discoveries proved that it could
not be always safely adopted, “nevertheless it is still of great use
in the investigation of many cases connected with this subject, and
will ever remain a proof of his superior genius and ability.” Such is
the opinion of Baily on the merits of De Moivre; but it has been added
by Morgan, that “on the whole the hypothesis of De Moivre has probably
done more harm than good, by turning the attention of mathematicians
from investigating the true laws of mortality.”

In 1737, an attempt was made to calculate the number of the people,
which was estimated at 6,000,000, an amount probably not very far from
the mark; as in 1688 the population was reckoned at a little over
5,000,000. Some important assistance was rendered in 1738, by the
publication of Kersseboom’s tables, taken from the records of life
annuities in Holland[10]; and as the ages of the annuitants had been
there recorded for 125 years, they proved a considerable aid to those
interested. So small was the progress made in England by 1746, that
Dr. Halley’s Breslau Tables and those of M. Kersseboom were the only
ones which gave anything like a representation of the true laws of
mortality. In this year, however, the “Essai sur les Probabilités de
la Durée de la Vie Humaine” of M. De Parcieux, with several valuable
tables deduced from the mortuary registers of religious houses
in France, and from the nominees in the French tontines, were an
additional contribution to our information.

The first effort to show the value of annuities on lives from the
London Bills of Mortality is attributable to James Hodgson. Nor was
this endeavour uncalled for or unnecessary. Many assurance offices
had arisen, undertaking to grant these annuities; and the tables
principally in use were founded on the decrease of life at Breslau. But
by the Breslau Tables, half the people lived till they were about 41
years of age, while in London half did not reach the age of 10. This
was a vast difference in the estimate of mortality, and affected the
price of annuities in a proportionate degree. But if the Breslau Tables
calculated life at too high a rate, it was equally evident that the
London Tables made them too low; it is obvious, therefore, that the
value of a life annuity founded on any confined observations would be
unsuitable to the general annuitant; and it is evident that a scale of
prices should have been based on a more enlarged foundation.

The work of Mr. Hodgson deserves very great attention, and the notice
of the reader is called to its investigation, as the conclusions were
arrived at after great labour, and are a specimen of the time and
trouble bestowed on the subject. “The easy way of raising money for
public uses,” says Mr. Hodgson, “by granting annuities upon lives, has
met with so great encouragement that there is no room to doubt it will
be carried down to future times.” The following statements of this
gentleman will be read with surprise by those who are acquainted with
the chances of life as calculated at the present day. He estimated that
“1000_l._ would purchase an annuity of 70_l._ per annum for a life of
29 years 10 months, when money is valued at 3 per cent. per annum; that
the same sum will purchase the same annuity for a life of 23 years,
when money is valued at 4 per cent. per annum; and that the same sum
will purchase the same annuity for a life of 23 years, when money is
valued at 5 per cent. per annum; and that it will purchase the same
annuity for a life of 16 years 2 months, when money is valued at 6 per

“It appears that the highest value of a life is when the person is
about 6 years of age, and that from the birth to that time the value of
lives decrease, as they do from that time to the utmost extremity of
old age; that a life of 1 year old is nearly equal in value to a life
of 7 years old; that a life of 3 years old is nearly equal in value to
a life of 12 years old; that a life of 4 years old is nearly equal in
value to a life between 9 and 10 years; and that a life of 5 years is
nearly equal in value to a life of 7 years of age. And hence arose the
custom of putting the value of the lives of minors upon the same value
with those of a middling age, which at the best is but a bold guess,
and made use of for no better reason, than that they knew of no better
way to find the true value.”

Such was a portion of Mr. Hodgson’s contribution in 1747 to vital
statistics. This work was followed in 1751 by the “Observations on the
past Growth and present State of the City of London” of Corbyn Morris,
containing tables of burials and christenings from 1601 to 1750. The
tables were important in themselves, and the book is noticeable as
containing a proposal to remodel the Bills of Mortality.

The topic was particularly interesting to mathematical men. In 1753,
Mr. James Dodson pursued the subject, and solved in his “Repository”
an immense variety of questions. Hitherto a table deduced by Simpson
from the London Bills of Mortality, was the only one taken from real
observation. But it need not be said that London was a very limited
theatre on which to found the payment of premiums. The number of
persons who died there in a given time, doubled that of other and more
healthy cities. It was impossible to separate the casual visitors from
the natives, in the record of deaths. It was equally difficult to
divide those who had been born there, from those who were naturalised
by virtue of a long and continued residence. The city, which has ever
been the land of promise to the country, brought adventurers from the
rural districts in a continued stream. The difficulties which prevented
correct information from spreading may be judged by the statement that,
from 1759 to 1768 a third more deaths than births were registered,
the average annual burials being 22,956 to 15,910 of births. In the
previous 10 years, the excess had been 10,500, or near half the
burials. The baptismal registries were also very deficient in that
large class denominated sectarians; Jews, Quakers, Roman Catholics,
and all who refused to recognise the rites of the English Church being
excluded. It required, therefore, care and calculation of no ordinary
character to make any approximation to the truth; and Mr. Dodson
believed he would be nearer it, by adopting the opinions of De Moivre
as the ground work of his tables, rather than by entering on a sea of
uncertain and hypothetical calculations.

In 1754, a further “valuation of annuities on lives,” deduced also from
the London Bills of Mortality was published. By this it appeared that
the work of Mr. Hodgson had not produced much effect in sending the
Breslau Tables out of general use; for, says the author, “I think it
very unreasonable that a poor citizen of London should be made to pay
for an annuity according to the probability of the duration of life at
Breslau, where, as appears from the bills of mortality, one-half of the
people that are born live till they are about 41 years of age, whereas
at London one-half die before they arrive at the age of 13.”

The first known fraud in assurance is one of the most singular in
its annals. The reader must judge for himself of the circumstances
attending it; but there is no doubt that others far more fearful in
their results have since been practised.

About 1730, two persons resided in the then obscure suburbs of St.
Giles’s, one of whom was a woman of about twenty, the other a man
whose age would have allowed him to be the woman’s father, and who was
generally understood to bear that relation. Their position hovered on
the debatable ground between poverty and competence, or might even be
characterised by the modern term of shabby genteel. They interfered
with no one, and they encouraged no one to interfere with them. No
specific personal description is recorded of them, beyond the fact that
the man was tall and middle aged, bearing a semi-military aspect, and
that the woman, though young and attractive in person, was apparently
haughty and frigid in her manner. On a sudden, at night time, the
latter was taken very ill. The man sought the wife of his nearest
neighbour for assistance, informing her that his daughter had been
seized with sudden and great pain at the heart. They returned together,
and found her in the utmost apparent agony, shrinking from the approach
of all, and dreading the slightest touch. The leech was sent for; but
before he could arrive she seemed insensible, and he only entered the
room in time to see her die. The father appeared in great distress,
the doctor felt her pulse, placed his hand on her heart, shook his
head as he intimated all was over, and went his way. The searchers
came, for those birds of ill-omen were then the ordinary haunters of
the death-bed, and the coffin with its contents was committed to the
ground. Almost immediately after this the bereaved father claimed from
the underwriters some money which was insured on his daughter’s life,
left the locality, and the story was forgotten.

Not very long after, the neighbourhood of Queen Square, then a
fashionable place, shook its head at the somewhat unequivocal
connection which existed between one of the inmates of a house in
that locality, and a lady who resided with him. The gentleman wore
moustaches, and though not young, affected what was then known as the
macaroni style. The lady accompanied him everywhere. The captain,
for such was the almost indefinite title he assumed, was a visitor
at Ranelagh, was an _habitué_ of the Coffee-houses, and being an
apparently wealthy person, riding good horses and keeping an attractive
mistress, he attained a certain position among the _mauvais sujets_ of
the day. Like many others at that period, he was, or seemed to be, a
dabbler in the funds, was frequently seen at Lloyd’s and in the Alley;
lounged occasionally at Garraway’s; but appeared more particularly to
affect the company of those who dealt in life assurances.

His house soon became a resort for the young and thoughtless, being
one of those pleasant places where the past and the future were alike
lost in the present; where cards were introduced with the wine, and
where, if the young bloods of the day lost their money, they were
repaid by a glance of more than ordinary warmth from the goddess of the
place; and to which, if they won, they returned with renewed zest. One
thing was noticed, they never won from the master of the house, and
there is no doubt, a large portion of the current expenses was met by
the money gambled away; but whether it were fairly or unfairly gained,
is scarcely a doubtful question.

A stop was soon put to these amusements. The place was too remote
from the former locality, the appearance of both characters was too
much changed to be identified, or in these two might have been traced
the strangers of that obscure suburb where as daughter, the woman was
supposed to die, and as father, the man had wept and raved over her
remains. And a similar scene was once more to be acted. The lady was
taken as suddenly ill as before; the same spasms at the heart seemed to
convulse her frame, and again the man hung over her in apparent agony.
Physicians were sent for in haste; one only arrived in time to see her
once more imitate the appearance of death, while the others, satisfied
that life had fled, took their fees, “shook solemnly their powdered
wigs,” and departed. This mystery, for it is evident there was some
collusion or conspiracy, is partially solved when it is said, that many
thousands were claimed and received by the gallant captain from various
underwriters, merchants, and companies with whom he had assured the
life of the lady.

But the hero of this tradition was a consummate actor; and though
his career is unknown for a long period after this, yet it is highly
probable that he carried out his nefarious projects in schemes which
are difficult to trace. There is little doubt, however, that the
_soi-disant_ captain of Queen Square was one and the same person who,
as a merchant, a few years later appeared daily on the commercial
walks of Liverpool; where, deep in the mysteries of corn and cotton,
a constant attender at church, a subscriber to local charities, and a
giver of good dinners, he soon became much respected by those who dealt
with him in business, or visited him in social life. The hospitalities
of his house were gracefully dispensed by a lady who passed as his
niece, and for a time nothing seemed to disturb the tenour of his
way. At length it became whispered in the world of commerce, that his
speculations were not so successful as usual; and a long series of
misfortunes, as asserted by him, gave a sanction to the whisper. It
soon became advisable for him to borrow money, and this he could only
do on the security of property belonging to his niece. To do so it
was necessary to insure their lives for about 2000_l._ This was easy
enough, as Liverpool, no less than London, was ready to assure anything
which promised profit, and as the affair was regular, no one hesitated.
A certain amount of secresy was requisite for the sake of his credit;
and availing himself of this, he assured on the life of the niece
2000_l._ with, at any rate, ten different merchants and underwriters in
London and elsewhere. The game was once more in his own hands, and the
same play was once more acted. The lady was taken ill, the doctor was
called in and found her suffering from convulsions. He administered a
specific and retired. In the night he was again hastily summoned, but
arrived too late. The patient was declared to be beyond his skill; and
the next morning it became known to all Liverpool that she had died
suddenly. A decorous grief was evinced by the chief mourner. There was
no haste made in forwarding the funeral; the lady lay almost in state,
so numerous were the friends who called to see the last of her they had
visited; the searchers did their hideous office gently, for they were,
probably, largely bribed; the physician certified she had died of a
complaint he could scarcely name, and the grave received the coffin.
The merchant retained his position in Liverpool, and bore himself with
a decent dignity; made no immediate application for the money, scarcely
even alluding to the assurances which were due, and when they were
named, exhibited an appearance of almost apathetic indifference. He
had, however, selected his victims with skill. They were safe men, and
from them he duly received the money which was assured on the life of
the niece.

From this period he seemed to decline in health, expressed a loathing
for the place where he had once been so happy; change of air was
prescribed, and he left the men whom he had deceived, chuckling at the
success of his infamous scheme.

It need not be repeated, that the poverty-stricken gentleman of the
suburbs, the gambling captain of Queen Square, and the merchant of
Liverpool, were identical. That so successful a series of frauds was
practised appears wonderful at the present day; but that the woman
either possessed that power of simulating death, of which we read
occasional cases in the remarkable records of various times, or that
the physicians were deceived or bribed, is certain. There is no other
way of accounting for the success of a scheme which dipped so largely
into the pockets of the underwriters.

The next movement in the scientific annals of life assurance was made
by Thomas Simpson, a natural and self-taught mathematician, whose
life prior to throwing himself on the world of London for support had
been somewhat of a vagrant one. He had cast rustic nativities, told
fortunes, advanced courtships, and occasionally varied his vagabondism
by undertaking to raise the devil, an attempt in which he was so
successful, that he sent his pupil mad, and was obliged himself to
leave the village. In 1740, he produced a volume “On the Nature and
the Laws of Chance;” in 1742, this was followed by his “Doctrine of
Annuities and Reversions,” deduced from general and evident principles,
with tables showing the value of joint and single lives. In 1752, he
made an additional contribution to the statistics of annuities, as
he published in his “Select Exercises” a supplement, wherein he gave
new tables of the values of annuities on two joint lives, and on the
survivor of two lives, more copious than hitherto. He first attempted
to compute the value of joint lives; but as these were still taken from
the London Bills of Mortality, they were by no means fit for general
acceptance. He treated his subject, however, more broadly and clearly
than it had been previously treated, giving some of the best tables
of the values of life annuities, which were published for many years.
Though the manner in which they might be computed had been shown by
Dr. Halley, it is to the self-taught Simpson we are indebted for their
practical application.

In 1760, M. Buffon published a further contribution to the statistics
of assurance, in a table of the probabilities of life, estimated
from the mortality bills of three parishes in Paris, and two country
parishes in its neighbourhood.

The following are some of his calculations:--“By this table,” says the
author, “we may bet 1 to 1 that a new-born infant will live 8 years;
that a child of one year old will live 33 years more, that a child of
full two years old will live 33 years and 5 months more, that a man of
thirty will live 28 years more; that a man of forty will live 22 years
longer, and so through the other ages.”

Buffon adds, “The age at which the longest life is to be expected is 7,
because we may lay an equal wager, or 1 to 1, that a child of that age
will live 42 years and 3 months longer. That at the age of twelve or
thirteen, we have lived a fourth part of our life, because we cannot
reasonably expect to live 38 or 39 years longer; that in like manner
at the age of 28 or 29, we have lived one-half of our life, because we
have but 28 years more to live; and lastly, that before fifty we have
lived three-fourths of our life, because we can hope but for 16 or 17
years more.”

Some profound moral reflections followed these estimates; and as a
critic of the day “thought all serious remarks out of place in an
arithmetical calculation, and that M. Buffon had better reserve them
for his book on beasts,” the reader will not be troubled with their
repetition. He will not, however, be displeased to read the remarks on
this table, by one of the annotators of the day.

“For insuring for 1 year the life of a child of three years old we
ought to pay 10 per cent., for as it has by M. Buffon’s table an
equal chance of living 40 years, it is 40 to 1 that it does not die
in a year. In the same manner we ought to pay but 3 per cent. for
insuring for 1 year the life of a lad of nineteen or twenty; but 4
per cent. for insuring for 1 year the life of a man of thirty-five;
and 5 per cent. per annum for insuring for 1 year the life of a man
of forty-three; after which the insurances ought to rise above 5 per
cent. in proportion to the advance of a person’s age above forty-three.
So that a man of seventy-seven ought to pay 25 per cent., and a man of
eighty-five 33-1/2 per cent. for insuring his life for 1 year.”


[10] By Kersseboom’s table, out of 817 persons of 20 years of age, all
living at the same time--

  711 will have lived to 30 years
  605      ”       ”     40  ”
  507      ”       ”     50  ”
  382      ”       ”     60  ”
  245      ”       ”     70  ”
  100      ”       ”     80  ”
   10      ”       ”     90  ”

By De Parcieux’s, it appears that out of 814 persons of 20--

  734 will have lived to 30 years
  657      ”      ”      40  ”
  581      ”      ”      50  ”
  463      ”      ”      60  ”
  310      ”      ”      70  ”
  118      ”      ”      80  ”
   11      ”      ”      90  ”
    1      ”      ”      94  ”



The first meeting of the Equitable Society for the assurance of life
and survivorship “was holden at the White Lion in Cornhill” in 1762,
when only four assurances were effected. In the next four months
their number did not exceed thirty; and so lightly were the prospects
of the institution held by those having authority, that when the
Attorney-General was applied to for an act of incorporation,--“I do not
think the terms are sufficiently high,” was his intelligent opinion,
“to justify me in advising the Crown to grant a charter.”

Such was the commencement of this institution. For many years prior,
the Equitable had been struggling into being, aided by the lectures
of “the justly celebrated Mr. Thomas Simpson,” but yet more by the
strenuous exertion of Edward Rowe Mores, an accomplished antiquarian
and an enlightened gentleman. To his “great pain and travel,” says the
deed of settlement, “the society was indebted for its establishment,”
and in return its promoter was made a director for life with an
annuity of 100_l._[11] Though its board of management included some
of the first bankers and merchants of the day, yet then, as now,
it seemed necessary to catch a peer of the realm to act as decoy,
so Lord Willoughby de Parham, with no interest in its movements or
concern in its affairs, was paraded before the public as patron and
director, and at the end of two years was gravely thanked for the
use of his name in maintaining the reputation of the novel society.
It was probably, however, the working spirits, such as Sir Richard
Glyn[12] and Sir Robert Ladbroke who took charge of its movements, and
who were guilty of, or at any rate were responsible for, the double
dealing which followed; for it is quite in keeping with the commercial
integrity of the eighteenth century, that the directors, fearing its
slow growth would injure its character, gave it the appearance of a
more rapid advance, by adopting the unworthy expedient of calling the
25th policy the 275th, thus inducing the world to understand that the
society consisted of 250 more members than its actual number. Thus the
success of the Equitable institution may be dated from the mendacious
employment of names, and from an absolute deception in the number of
the policies. For many years, an utter indifference was exhibited by
the policy holders about the concerns of the society. It was useless to
advertise a general court, as a sufficient number to form a meeting did
not answer to the call. Nor could a full court be procured until the
cupidity of the members was appealed to, and five guineas were promised
to the first twenty-one who should arrive before twelve o’clock. Then,
and not till then, were the meetings properly attended; a fact which
speaks loudly for the shrewdness of those who devised the scheme, and
the avarice of those who formed the association.

The usual quarrels which depress young institutions, pursued the
Equitable; and twenty-one persons who had contributed to pay the
original expenses made a sudden claim of 15_s._ for every 100_l._
assured. This was resisted by the new members, and “kindled into a
flame that might have destroyed the society, had not the moderation and
good sense of Sir Charles Morgan and a few other sober-minded gentlemen
allayed the fervour of the contending parties, and prevailed on them
to enter into a compromise.” The natural result of this “flame” was to
decrease the number of policies from 564 in 1768, to 490 in 1770, and
it was some time before the assurances were again increased.

There were many reasons for its comparative want of success. There was
an air of mystery about the Equitable which did not become a commercial
institution, and which is now difficult to understand. In December,
1762, a solemn oath was taken by directors and actuary, “never to
discover the names of persons making or applying for assurances,” as if
some unimaginable disgrace attached to it. The terms, notwithstanding
the learned opinion of Mr. Attorney-General, were enormous; for Mr.
Dodson, taking the London Bills of Mortality from 1728 to 1750 as his
foundations, produced premiums so high as to be almost prohibitive.
He had, “for greater security, assumed the probabilities of life in
London during a period of 20 years, which, including the year 1740,
when the mortality was almost equal to that of a plague, rendered such
premiums much higher than they ought to have been, even according to
the ordinary probabilities of life in London itself.”

In addition, there were certain fantastic extreme premiums for fancied
risks: there was “youth hazard,” “female hazard,” and “occupation
hazard”! There was 11 per cent. placed on the premiums of “officers
on half-pay,” and on persons “licensed to retail beer.” There was no
capital on which to fall back, as with the Royal Exchange and London
Assurance; and in addition, the original subscribers claimed all the
entrance money for themselves, so that, altogether, it is no great
wonder there was a lassitude and lack of vigour in the first few years
of the institution. There was also probably more impediment in insuring
with a company than with a jobber, as the underwriters would not be
hedged with the forms and ceremonies which always surround a board of

The following is a comparative statement of the premiums in 1771, with
those now charged; and though the former may excite a smile, we must
remember that up to this period there had been no attempt whatever to
vary the payments in proportion to age, but that 5 per cent. was still
the accustomed demand for youth and eld:--

                Premiums in 1771.         Present Premiums.
  Age.       Male.           Female.
         _£_ _s._ _d._    _£_ _s._ _d._    _£_ _s._ _d._
  14      2   17    0      3    3   11      1   17    7
  20      3    9    4      3   14    3      2    3    7
  25      3   14    0      4    1    5      2    8    1
  30      3   18    7      4    4    4      2   13    4
  40      4   17    9      5    4    8      3    8    0
  49      6    2    5      6   11    0      4   17   10

In 1769, the continuance of the Equitable must have been very doubtful;
and had it not been for Dr. Price’s treatise, which recommended it to
public notice, it is possible that this beneficial institution would
have been closed. Hitherto its actuaries had been men who knew nothing
about their business. The first, Mr. Mosdell, was a simple accountant;
its second, Mr. Dodson, son of the mathematician, possessed the name,
without the acquirements, of his father; the third, Mr. Edwards, was
sufficiently aware of his own incapacity never to trust to himself; the
fourth was a vice-president, who knew about as much of the art as his
predecessor; nor was it until 1775, when Mr. Morgan was appointed,
through the interest of his uncle, Dr. Price, that any real progress
was made. From this period a new era may be dated; and “the society, no
longer going on from year to year in ignorance and terror, incapable
of deducing any just conclusion as to its real state, became now, by
its more intimate connection with Dr. Price, possessed of ample means
for ascertaining that fact and forming its future measures on the solid
principles of mathematical science.”

In 1776, as Dr. Price urged on the directors the necessity of
decreasing the tables of premiums, declaring them to be exorbitant
and absurd, the female and youth hazard were at once abolished; and
in consequence of an examination of the accounts, all the payments
were reduced one-tenth. In 1780, on the recommendation of the same
gentleman, the Chester and Northampton observations of mortality were
adopted as the basis of the premiums, with an addition of 15 per
cent., because certain directors thought the doctor was lowering the
character of the institution by lowering the charges. In 1786, however,
this 15 per cent. was discontinued, and various additions were made
to the policies, which, like the taste of human flesh to the tiger,
stimulated the proprietors to ask for more.[13] At the next meeting,
ignorance and avarice united to demand a repetition of the bonus; but
the majority decided on investigating the affairs of the society, and
so satisfactory was the result, that a further 2 per cent. was added.
In another two years an addition of 1 per cent. of all insurances of an
earlier date than 1795 was voted; but still the cry was “Give! give!!”
from a few absurd and insatiable proprietors. Success continued to mark
the progress of the society; and by 1815, alarm being manifested lest
it should become unmanageable from its magnitude, a resolution was
passed limiting the participators in the surplus to 5000. Decennial
investigations were agreed to, and the Equitable maintained its
brilliant career. Below is a tabular statement of its progress; but it
would be unjust to close this sketch without a more special allusion
to one whose name was connected with it for upwards of half a century.
Mr. Morgan, nephew to Dr. Price, was, as his name would imply, a native
of the principality. Although originally educated for the medical
profession, he showed so great a tabular aptitude, and evinced so much
facility in the acquirement of mathematical knowledge, that Dr. Price
induced him to relinquish the profession of surgeon for the situation
of actuary to the Equitable; his management of which, seeing it rise
from a capital of a few thousands to many millions, was sound and
judicious; and although the institution contained in itself the germ
of its success, yet Mr. Morgan’s arrangements tended to raise it to a
position of almost national importance. His mathematical attainments
were of the highest order; he contributed important papers to our
scientific publications; he wrote various valuable works on annuities;
and many a reader will call to mind his last few appearances at the
meetings of the Equitable, when, drawn from his retirement, he stood
bravely up to oppose, with the experience of a long life, the rash
innovations of greedy proprietors; when he alluded so modestly to his
past services, and touched so feelingly on that great misfortune, the
death of his “friend, associate, and son,” which had compelled him
to leave his retirement and to appear in defence of those rules and
regulations by which he had conducted the Equitable to a distinguished

At the present time the following warning of this “old man eloquent,”
uttered at one of these meetings, may have an effect in staying the
demand for decreased premiums, annual divisions, and half-yearly
bonuses:--“Can anything be more absurd, or betray greater ignorance,
than to propose an annual profit and loss account in a concern of
this kind, or to regulate the dividend or the call by the success
or failure of each year?... Exclusive of the immense labour of such
an investigation, the events of one year vary so much from those of
another that no general conclusion can be safely deduced from the
experience of so short a term.”

A tradition is current that, very shortly after the establishment of
the office, a fraud was discovered in time to save the society from
loss and to hang the criminal for the attempt. A man named Innes
induced his step-daughter to insure her life with the Equitable for
1000_l._ Soon after this she died, and in proper time Innes produced
a will, duly signed and attested by her, making him executor and
legatee. There were facts connected with her death which seemed morally
to implicate him in a terrible tragedy, but there was nothing which
could be brought home as legal proof. The character of the man, his
eagerness to procure the money, the doubtful circumstances of the case
altogether, made the assurers hesitate, and they took the bold course
of refusing to pay, upon the ground that the will was not a genuine
document. But the man whose character was bad enough to justify such
suspicions, was not likely to lose his money for want of a few false
oaths, so he produced upon the trial one of the attesting witnesses,
who swore that the will was executed in Glasgow, and that he personally
knew the other witness. As Innes, however, undertook to procure further
evidence in his favour, the trial was postponed, and when it came on
a second time every thing went swimmingly on in his favour. His two
confederates, one of them was named Borthwick, were ready to swear
anything and everything. The time, the place, the room, were minutely
described; the scene was graphically painted; and they sat down
satisfied that they had played their parts to perfection. But Innes was
not contented: he wanted the thousand pounds; and resolved to “make
assurance doubly sure,” another person was called, who was to clench
the argument by proving that he saw the deceased person sign the will
in the presence of the two men who had attested the signature. This
witness appeared with fatal effect. Wan and ghastly he is said to have
arisen in the witness-box, and well might he be ghastly who was about
to peril a brother’s life! “My Lord,” he said, “my name is Borthwick.
I am brother to the witness of the same name who has been examined.
_The will was not made on the Bridge-gate at Glasgow, it was forged by
a schoolmaster in the Maze, in the Borough!_” The trial immediately
ceased: “a screw is loose,” said Innes, as in vain he endeavoured to
glide out of court. Of the confederates in this base deed one graced
the pillory, another was imprisoned, Innes himself paid the extreme
penalty of life, the office escaping the meditated fraud.

It is said to be the boast of the Equitable that this was the only case
in which they found it necessary to appeal to law.

Whatever defects may have characterised the constitution of this
Society, it was a great improvement on the arrangements of the Amicable
and the two proprietary companies. It did all that a legitimate life
office could be supposed to do. It assured lives for any number of
years, or for the whole continuance of life. It took the price of the
assurance in one present payment, or it accepted annual premiums. It
allowed annuities to the survivors if they preferred it; and though
the scale might be too high for what we now know, it at least was more
business-like than its contemporaries; for so slow were the latter to
profit by experience, that it was not until the commencement of the
nineteenth century that the Royal Exchange Corporation availed itself
of the Northampton Tables to compute its premiums.

In 1779, Mr. Morgan produced his “Doctrine of Annuities and
Assurances.” This gentleman was the first to detect the inaccuracy
of the rules which Mr. Simpson with others had given to discover the
value of contingent annuities, and which he himself had adopted in the
above work. Notwithstanding the castigation he received from Mr. Baily,
for his “loose and obscure manner,”--for the “grossest errors,”--for
“distorting,”--for “enveloping in mystery,”--for “introducing a
depraved taste in mathematical reasoning,” there is no doubt that his
was the earliest attempt to give correct solutions on the various cases
of deferred annuities which had arisen out of his experience in the

The following additions were made to the policies of the Equitable by

                                       _£_  _s._  _d._
  For every 100_l._ assured in 1762    258    0    0
       ”               ”       1763    249   10    0
       ”               ”       1764    241    0    0
       ”               ”       1765    232   10    0
       ”               ”       1766    224    0    0
       ”               ”       1767    215   10    0
       ”               ”       1768    207    0    0
       ”               ”       1769    198   10    0
       ”               ”       1770    190    0    0
       ”               ”       1771    181   10    0
       ”               ”       1772    173    0    0
       ”               ”       1773    164   10    0
       ”               ”       1774    156    0    0
       ”               ”       1775    147   10    0
       ”               ”       1776    139    0    0
       ”               ”       1777    130   10    0
       ”               ”       1778    122    0    0
       ”               ”       1779    113   10    0
       ”               ”       1780    105    0    0
       ”               ”       1781     96   10    0
       ”               ”       1782     88    0    0
       ”               ”       1783     81    0    0
       ”               ”       1784     74    0    0
       ”               ”       1785     67    0    0
       ”               ”       1786     60    0    0
       ”               ”       1787     54    0    0
       ”               ”       1788     48    0    0
       ”               ”       1789     42    0    0
       ”               ”       1790     36    0    0
       ”               ”       1791     30    0    0
       ”               ”       1792     24    0    0
       ”               ”       1793     19    0    0
       ”               ”       1794     16    0    0
       ”               ”       1795     13    0    0
       ”               ”       1796     10    0    0
       ”               ”       1797      8    0    0
       ”               ”       1798      6    0    0
       ”               ”       1799      4    0    0
       ”               ”       1800      2    0    0

That a desire for the benefit of insuring was spreading, and that the
commercial relations of the Continent were increasing, may be traced
in the fact that in 1765 his Prussian Majesty granted letters patent
for establishing a chamber of assurance in Berlin for thirty years,
during which period no other assurance office was to be allowed in any
part of Prussia; and during the same year, the free city of Hamburg
established a company for the sale, not only of immediate, but of
deferred annuities.

In 1765, one of those insolent attempts occurred on the part of the
state, which reminds the reader of an absolute, rather than of a
representative, government. The peace concluded in 1763, followed a war
which cost upwards of a hundred millions, and the bribery which was
necessary to carry the treaty through the House, had contributed to
exhaust the treasury. Money was to be acquired, and the people grumbled
at the taxation necessary to raise it. In this dilemma it suddenly
occurred to the ministers that there might be unclaimed property in
the assurance offices, and by some confusion of right and wrong it
was thought just to claim this private property for the public good.
Nothing could more decidedly approach confiscation. But in dealing with
these offices the government was dealing with a large and influential
body of proprietors whose gains were aided by this “dead cash,” and
who were not men to see their purses invaded with impunity. The
Amicable, the Royal Exchange, the London and the Equitable Assurance
Companies numbered among their shareholders the greatest mercantile
names of the day; they were the same men, or of the same generation,
who as directors or as proprietors of the Bank of England resisted,
a few years later, the just demand of William Pitt for the unclaimed
dividends on the national debt; a demand so obviously sound that its
opponents had not an argument to support their refusal. If, then,
they were so vigorous when wrong, it may be imagined that they stood
boldly forward when they were right. Their courage was undaunted,
and they positively defied the claim. The Whigs declared that it was
as barefaced as shutting the Exchequer by the Second Charles; the
Jacobites said they might as well have a Stuart as a Guelph, that
the minister had mistaken his men, and that under no circumstances
would they voluntarily yield. Pamphlets were issued, which distinctly
asserted that no one would trust a government acting so infamously;
that confiscation of private property to pay a nation’s debts was only
one remove from bankruptcy; and that no citizen would lend money to a
government so unprincipled. The propriety and proper feeling of the
people aided the resistance of the offices, and the attempt was only
successful in proving to the state, that all arbitrary power had past
away, and that for the future an honest course would be their best


[11] In 1768, Mr. Mores quarrelled with and separated from the society.

[12] Sir Richard was a notability of those days, and divided civic
popularity with Beckford, whose colleague he was in the representation
of London in 1761. He was made Doctor of Civil Laws by Oxford
University, a custom which would have been perhaps more honoured in the
breach than the observance; and we owe Blackfriars’ Bridge greatly to
the energy and exertions of Sir Richard Glyn, Knight, Baronet, and Lord
Mayor, and--more honourable title still,--director of our first purely
mutual life assurance office. We look in vain for such names as Glyn,
Gosling, Ladbroke, or Beckford, among the sheriffs and aldermen of the
present day.

[13] That the safety of this Society was doubtful may be partly
judged from the fact, that half the policies issued within the first
twenty-five years had been abandoned, probably from doubt of their
ultimate payment.



The bubbles which sprang up in the shape of annuity institutions were
numerous. They were becoming objects of serious concern. They attracted
the class which understood the least. They appealed to the finest
sympathies of nature, and traded in the feelings they sought to excite.
Projectors and promoters arose, and with them came societies which
could do nothing but empty the pocket of the subscriber to fill that
of the manager. There were annuity clubs for naval and for military
men, for clergymen and clerks, for schoolmasters and for tradesmen;
but as there was no special information by which to govern the rates,
or as those rates were more tempting than trustworthy, the subscribers
were fleeced, partly in proportion to their own ignorance, and partly
in proportion to the consciences of the directors. This was the era
of annuity societies, as the present is the era of life assurance. A
prodigious traffic was carried on in such schemes, and a perfect rage
for forming them spread through the kingdom.

The most tempting names which could be chosen allured the world.
Prospectuses of a vaunting character were passed from hand to hand. The
promises of Mr. Montague Tidd, of the Anglo-Bengalee, were nothing to
these. Widows were to be provided with all they required, for a nominal
amount. Children were to be endowed with fortunes, for comparatively
nothing. The London Annuity and Laudable Society out-heroded Herod.
The coffee-houses were haunted by agents to spread the praises of a
royal Lancaster. Touters--this modern title is expressive--who brought
a certain number of subscribers, were allowed the privileges of most
of the societies for nothing. A commission of the first year’s premium
was no uncommon reward to those who attracted a new victim, and very
heartless and infamous was the result. In one case a son brought the
savings of a parent to a company which was sure to break. Friends
insidiously recommended societies, under the guise of kindness, to
their intimate acquaintance, and so long as they pocketed the heavy
reward, were regardless of consequences. These associations spread
from London to the Continent. Amsterdam, Bremen, Denmark, and Hanover
were filled with wretched bubbles of this character, which carried
misery to hundreds of homes.

The people were utterly guiltless of all knowledge on the subject.
The information which had been brought forward from time to time, had
produced its effect on the scientific portion of the world, but those
who were practically interested, knew nothing. The young and unthinking
were so ignorant or so indifferent to results, that they were content
to pay only a fourth or fifth of the fair amount of premiums for their
deferred annuities. The elder and more cunning--and by these the
societies were principally supported--thought that the bubbles would
last their time, and with the selfishness of age, were content. But in
the midst of their contentment a shell exploded in their citadel. Dr.
Price, an unsuccessful Unitarian preacher, and the contributor of many
rare papers to the “Philosophical Transactions,” published the work
which has brought his name down to the nineteenth century as a deep
thinker. There had been hitherto little or no advance in the science
which regulated assurance or annuities on lives. The reputation of
the doctor drew attention to his work. It was there found that, not
content with the tables of mortality from Breslau, he had obtained
correct tables from Northampton, Norwich, Chester, and other places.
He entered minutely and by name into the prospects of the various
societies, he proved it to be utterly impossible for them to perform
their contracts, and averred that, if some fresh arrangements were
not entered into, to strengthen the existing companies, they must
inevitably fail, for they were founded on principles which could not
last; which must deceive the public; and which could only pay the

It was seen that no ordinary care and research had been bestowed on
his calculations. Chester, Warrington, and Shrewsbury had contributed
the English portion of the statistics. From abroad, Sweden and Finland
had sent the mean numbers of the living with the annual deaths for
twenty-one successive years, together with a complete set of tables
of the values of the annuities on single lives, both with and without
the distinction of sexes, which completed the interest of a book that
is yet quoted with respect. If the book itself were thus important,
the character of the writer was sufficiently established to secure a
favourable reception to his doctrines. He had already written on the
subject, and nothing more completely evinces the general ignorance
than that his two previous papers should have been devoted to topics
which are now self-evident; one of them being to demonstrate that
marshy ground was insalubrious; and another, to prove that the value
of life in large close towns, was less than in the wide, invigorating

From Dr. Price the world first heard that half of the children who
were born in London, died under three years of age; that in Vienna
and Stockholm, half died under two; in Manchester, under five; and in
Northampton, under ten. “London,” said the worthy Unitarian, “is a
gulf which swallows up an increase equal to near three-fourths of that
of Sweden.” The results of the work were as good as the work itself.
The papers of the day quoted its opinions; the subscribers to the
annuity societies took the alarm, discontinued their subscriptions, or
demanded an inquiry. The rage for establishing new annuity companies
was as suddenly stopped by Dr. Price, as in 1720 the old companies were
stopped by the arm of the law. A partial reformation was attempted
in some, the managers of others suddenly disappeared, while a still
greater number finding it impossible to continue, dissolved their
society and left the unhappy annuitants to regret their carelessness
and digest their loss. Of course, the author did not escape abuse, and
many an anathema was launched at the head of the doctor, and many an
epigram pointed at him by those “who live by others’ losses.”

In 1779, he made a further attempt to contribute to the information
of the public in an “Essay on the Population of England;” but the
data on which he founded his opinion, was scarcely certain enough
to render his conclusions of much value to the statistician. In the
fourth edition of his work on annuities, he gave several valuable
tables on single and joint lives, at various rates of interest, not
only from the probabilities of life at Northampton, but also from the
same probabilities at Sweden. His after career is well known. He was
employed to form a plan by which the poor might support themselves in
sickness and in old age; but which, when introduced to the senate,
was rejected. He lived to see the French Revolution, and to be a
prophet of good concerning it. Horace Walpole writes in 1790:--“Mr.
Burke’s pamphlet has quite turned Dr. Price’s head. He got on a table
at their club, and toasted to our parliament being made a national
convention.... Two more members got on the table--their pulpit,--and
it broke down with them.” In another letter he says:--“Dr. Price, who
had whetted his ancient talons last year to no purpose, has had them
all drawn by Burke; and the revolutionary club is as much exploded
as the Cock Lane Ghost.” In 1791, he died, and his name has survived
Horace Walpole’s sarcasms with his own revolutionary principles. The
information which he presented, was various and important. Gossip it
would be called by some; but it was that gossip to which the historian
appeals as a confirmation of his views. The poor’s rates were estimated
by him at 1,556,804_l._ in 1777. He calculated that 651,580 was rather
over than under the population of London in 1769. He explained that
the most obvious sense of the expectation of life, was that particular
number of years which a life of a given age had an equal chance
of enjoying; and he gave it as his opinion, founded on extensive
information, “that the custom of committing infants as soon as born to
the care of foster-mothers, destroys more lives than sword, famine, and
pestilence united.”

By his calculations he showed, that--

  In Stockholm on an average of 6 years 1 in 19     died.
     London            ”          ”     1 in 20-3/4   ”
     Rome              ”          ”     1 in 21-1/2   ”
     Northampton       ”          ”     1 in 26-1/2   ”
     Madeira           ”          ”     1 in 50       ”
     Liverpool         ”          ”     1 in 27       ”
     Berlin            ”          ”     1 in 26-1/2   ”
     Sweden (Stockholm excepted)  ”     1 in 35       ”
     Vaud, Switzerland    ”       ”     1 in 45       ”
     Ackworth, Yorkshire          ”     1 in 47       ”

The varied and valuable information of Dr. Price was of great use in
stimulating the minds of those having authority, an improved register
of mortality being established at Chester in 1772, and at Warrington in

The earliest endeavour to encourage a spirit of saving among the poor
was made in 1773, a bill being introduced into the House of Commons,
the leading provision of which was that every parish where there were
four or more officers might grant life annuities, payable quarterly, to
those who were willing to purchase them, according to a table annexed.

The bill was supported both by the social and political economists of
the House, who had met at Sir George Savile’s, in Leicester Square, for
this purpose. It had been contrived with much kindness, and framed with
considerable ingenuity. It passed the Lower House by a majority of two
to one; but in the Upper House was lost. The importance of measures of
this character cannot now be doubted. All that tends to produce habits
of thrift among our poor is exceedingly desirable. It is from them we
must always hope for a large portion of our taxes, and to give them an
interest in order, to place them in a fair social position, to engender
habits of self-respect and independence, are considerations of vital
importance; and it is, therefore, to be regretted that, at this early
period of our manufacturing career, some such impulse was not given to
the industrious working-man.

In 1777, several of the brokers and underwriters of the City were
mulcted of their iniquitous profits. During the minority of Sir
John St. Aubyn, and at the early age of seventeen, this gentleman
found himself, like many more, in want of money. The scriveners of
the City were ready, the extravagances of the youth supplied, an
unlimited amount of cash was placed in his possession, and in return
he granted to the underwriters annuities guaranteed on the estates
to which he would succeed at twenty-one, assuring his life with them
in the mean time to guard against contingencies. Not content with
this, the underwriters made him procure the additional guarantee of
a schoolfellow, for which the young scapegrace pledged his honour to
his friend. When he came of age, he fortunately arrived also at years
of discretion, and instituted a suit in Chancery for the destruction
of the bonds which he had granted. Great was the wrath of the
money-changers; but their anger was vain, and they were obliged to
content themselves with the righteous decision, that on repayment of
the principal, with 4 per cent. interest, the annuity bonds should be
given up.

Nor was this a solitary instance in which the assurance- and
annuity-mongers were overreached. The following will be found both
painful and impressive as a warning.--

Residing in one of the wildest districts of Yorkshire, was one of those
country squires of whom we read in the pages of our elder novelists.
He could write sufficiently to sign his name; he could ride so as
always to be in at the death; he could eat, when his day’s amusement
was over, sufficient to startle a modern epicure; and drink enough
to send himself to bed tipsy as regularly as the night came. He was
young, having come to his estate early, through the death of a father
who had broken his neck when his morning draught had been too much
for his seat, and he seemed at first exceedingly likely to follow his
father’s footsteps. In due time, however, being compelled to visit
London on some business, he found that there were other pleasures than
those of hunting foxes, drinking claret, following the hounds, and
swearing at the grooms; and that although on his own estate, and in
the neighbourhood of his own hall, he might be a great person, all
his greatness vanished in the metropolis. With the avidity of a young
man entirely uncurbed, enjoying also huge animal powers, he rushed
into the dissipation of London, where, as he possessed a considerable
portion of mental capacity, he contrived to polish his behaviour and to
appear in the character of a buck about town, with some success. His
estate and means soon became familiar to those who had none of their
own; and as he was free enough in spending his money, and was not very
particular in his company, he was quickly surrounded by all the younger
sons, roysterers, and men who lived by their wits, of the circle in
which he visited. With such as these his career was rapidly determined.
The gaming of the period was carried to such an extent that it might
truly be termed a national sin, and into this terrible vice he threw
himself with a recklessness which almost savoured of insanity. Mortgage
after mortgage was given on his estate; but as this was entailed, it
was necessary that he should also assure his life, which was done at
Lloyd’s, on the Royal Exchange, and with those usurers who added it to
their other branches of business.

In the midst of his career there seemed a chance for his escape. It
may be supposed that many intriguing women fixed their eyes on so
desirable a match, and that many young ladies were willing to share the
fortunes, for better or for worse, of the possessor of a fine estate.
At last the hour and the woman came, and the Yorkshire squire fell
in love with a young lady of singular beauty, half friend and half
companion to a faded demirep of fashion, who, aiming at the gentleman
herself, had committed the incredible folly of placing her friend’s
charms in comparison with her own. To fall in love was to propose, to
propose was in this case to be accepted, and the marriage took place.
Immediately afterwards they left the metropolis--the squire’s income
being much reduced by his liabilities--for his Yorkshire home, dreaming
probably sweet dreams of the future, and building castles in the air,
of which moderation and amendment were the foundation. For a period he
kept them. A son, heir to the entail, was born to him, and soon after
this he again made his way to London, for some reason which does not
appear. Once more within this vortex of pleasure, his good resolutions
failed him, and he was led to the same pursuits, the same pleasures,
and the same vices. He forgot his wife in the charms of new beauties,
he forgot his child, he forgot his home. He gambled, he betted, he
hazarded his all, until one fine morning, after a deep debauch with
some of his companions, where dice and cards with closed doors marked
its character, he arose a ruined man. He had lost more than his whole
life would redeem, the only security of the winners being his annuity
bonds on the estate, and his various life assurances should he die. At
the same time, he was aroused to a sense of the wrongs he had suffered;
he saw that he had been the dupe of gentlemen sufficiently practised in
the art of play to be called sharpers, and saw also, what was doubtless
the fact, that he had been cheated to their hearts’ content. Almost
mad, burning with consuming fire, he determined to be revenged. Another
night he was resolved to try his luck, and by playing more desperately
than ever, win back, if possible, the money he had lost, and then
forswear the dangerous vice. With a desperate resolve to outwit them,
in life or in death, he met the gamesters. He had hitherto arranged
all the losses he had sustained, and his opponents were prepared to
humour him. The doors were once more closed, the shutters were down to
exclude light, refreshments were placed in an ante-chamber, and for
thirty-six hours the last game was played. The result may be guessed.
The squire had no chance with the men banded against him, and high as
his stakes were, and wildly as he played, they fooled him to the top of
his bent. Exhausted nature completed the scene, and the loser retired
to his hotel. He was ruined, wretched, and reckless. He knew that if
he lived it would be a miserable existence for himself and his wife,
and he knew also that if he died by his own hand, not only would his
family be placed in a better position than if he lived, but that the
men who had wronged him would be outwitted, as the policies on his life
would be forfeited, and his bonds become waste paper. His mind soon
became resolved. He evinced to the people of the hotel no symptoms of
derangement; but saying he should visit the theatre that night, and go
to bed early, as he had been rather dissipated lately, he paid the bill
he had incurred, giving at the same time gratuities to the waiters. He
then wrote a letter to one of the persons with whom his life had been
assured, stating, that as existence was now of no value to him, he
meant to destroy himself; that he was perfectly calm and sane; that he
did it for the express purpose of punishing the men who had contrived
to ruin him; and, as the policy would be void by this act, he charged
him to let his suicide be known to all with whom his life had been
assured. In the evening he walked to the Thames, where he took a wherry
with a waterman to row him, and when they were in the middle of the
current, plunged suddenly into the stream, to rise no more.

The underwriter who had received the letter, communicated it to the
other insurers; and when a claim was made by the gamblers, they saw
that they had been duped by the Yorkshire squire, although at the
fearful price of self-murder.



For many years prior to 1774, a spirit of gambling which took the
form of assurance was prevalent in the City, and so serious did it
become that the legislature were compelled to notice it. This mode of
speculation is one of the strangest by-ways in the annals of insurance.
From 1720 much of the legitimate business had been usurped by it,
policies being opened on the lives of public men, with a recklessness
at once disgraceful and injurious to the morals of the country. That of
Sir Robert Walpole was assured for many thousands; and at particular
portions of his career, when his person seemed endangered by popular
tumults, as at the Excise Bill; or by party hate, as at the time of
his threatened impeachment; the premium was proportionately enlarged.
When George II. fought at Dettingen, 25 per cent. was paid against
his return. The rebellion of 1745, as soon as the terror which it
excited had passed away, was productive of an infamous amount of
business. The members of Garraway’s, the assurers at Lloyd’s, and the
merchants of the Royal Exchange, being unable to raise or lower the
price of stocks any more by reports of the Pretender’s movements, made
sporting assurances on his adventures, and opened policies on his
life. Sometimes the news arrived that he was taken prisoner, and the
underwriters waxed grave. Sometimes it was rumoured he had escaped, and
they grew gay again. Thousands were ventured on his whereabouts, and
tens of thousands on his head.

The rebel lords who were captured in that disastrous expedition, were
another source of profit to the speculators. The gray hairs of old Lord
Lovat did not prevent them from gambling on his life. The gallantry of
Balmerino and the devotion of Lady Nithsdale, raised no soft scruples
in the minds of the brokers; and when the husband of the latter escaped
from the Tower, the agitation of those who had perilled their money
on his life, and to whom his violent death would have been a profit,
is described as noisy and excessive. But no sooner was it known that
he had escaped, than fresh policies were opened on his recapture, and
great must have been the indignation of his high-minded wife when she
afterwards heard this trait of City character. Devotional as is the
mind of the great metropolis in the presence of mammon, there were
perhaps no blacker instances of that foul spirit which sought to make
money from the sufferings of gallant though mistaken gentlemen.

The advent of the German emigrants was another opportunity. In 1765,
upwards of 800 men, women, and children, lay in Goodman’s Fields in
the open air, without food. They had been brought by a speculator from
the Palatinate, Franconia, and Suabia, and then deserted by him. In
a strange land, without friends, exposed by night and by day to the
influences of the atmosphere, death was the necessary result. On the
third day, when several expired from hunger or exposure, the assurance
speculators were ready, and wagers were made as to the number who would
die in the week. In the western part of the metropolis considerable
feeling was exhibited for these unhappy creatures; in the country
a charitable fervour was excited in their behalf; but indubitably
the greatest interest was felt by those operators in the Alley and
underwriters of Lloyd’s Coffee-house, who had made contracts on their
distresses, and speculated on their deaths. The benevolent spirit of
England, however, soon put this speculation to an end, by providing the
unfortunate Germans with food, shelter, and the means of emigration.

The trial and execution of Byng were productive of a similar mania.
At each change in his prospects, slight as his chances ever were,
the underwriters raised or lowered their premiums, the assurers were
elevated or depressed. This victim of the most dastardly ministry
that ever misgoverned England, had but little sympathy from the
speculators on his life; and it is difficult to say whether their
power, importance, and position,--for jobbers and underwriters then
were merchants and men of family,--did not in some degree inflame the
feeling for blood which had seized the people. It is certain it did
not mitigate it. When Wilkes was committed to the Tower, policies were
granted at 10 per cent. if he remained there a specified time. King
George, when he was ill, and Lord North, when he was unpopular, were
both scheduled in the brokers’ books as good subjects. When Minorca
was lost, and the premier Duke of Newcastle “began to tremble for
his place, and for the only thing which was dearer to him than his
place, his neck,” there were plenty to open policies on his life, and
plenty to avail themselves of the chances which threatened him. As
soon as he resigned his premiership, assurances were entered into on
the continuance of the new Pitt ministry in power; and when the duke
reassumed office, fresh engagements were opened on the chance of his
remaining in place. Successes or disasters were all the same to the
assurers; the seals of a prime minister, or the life of a highwayman,
answered equally the purpose of the policy mongers; and India or
Minorca, Warren Hastings or Admiral Byng, were alike to them if they
could put money into their purses. They made wager policies on the
lives of the high-minded Jacobite, and they did the same on every
batch of felons left for execution. Assurances were entered into on
the life of the Regent Orleans of France; and when he was succeeded by
Louis Quinze, they insured, not the lives indeed, but the continuance
of his mistresses in the favour of the monarch. Day by day during
the trial of the Duchess of Kingston for bigamy, there were frequent
expresses from West to East with information of the proceedings, which,
according to its chances, varied the premiums and excited the cupidity
of the assurers. There was absolutely nothing on which a policy could
be opened, but what was employed as a mode of gambling. Scarcely a
nobleman of note went to his long account, without an assurance being
opened during his illness, by those who had no interest in his life.
These policies, especially those on political offenders whose existence
trembled in the balance, were most mischievous. A pecuniary interest
in the death of any one is fearful odds against benevolent feeling;
and it was hardly to be expected that men should throw what influence
they possessed into the scale of mercy. The power of opening merely
speculative policies on private persons was also demoralising, and
perhaps dangerous to life itself. It was not possible--it was not in
human nature--to have money depending on the existence of the inmate of
your home without watching him with feelings which the good man would
tremble to analyse, and even the bad man would fear to avow. People
then opened policies on the lives of all in whom they were socially
interested; and under the plea of provision, acquired an interest in
their relatives which was almost fearful and sometimes fatal, from its
intensity. There is no doubt that the system was false and hollow. The
son then insured the life of his father; the father opened policies on
the life of his son: and when thousands or perhaps tens of thousands of
pounds were dependent on it, who shall tell the feelings of the son,
or dare to judge the sensations of the father, if sickness or disease
opened a golden prospect? The mind shrinks from the horror of the idea,
and recoils indignantly at the thought that such sacred relations
of life should be thus sordidly regarded. But the argument might be
carried further; for to many a dark mystery might a clue be given, in
the remembrance that a pecuniary interest might have existed between
the murdered and the murderer!

Nor was this all. One life was commonly pitted against another. Thus,
Lord March, afterwards notorious as the Duke of Queensberry, laid a
wager with “young Mr. Pigot,” that Sir William Codrington would die
before old Mr. Pigot. As the latter, however, happened to be dead when
the wager was laid, young Mr. Pigot refused to pay; so Lord March went
to law, and compelled him to do so. Another adventure excited still
more the cupidity of underwriters and assurers, and produced larger and
more varied policies than any, except on the sex of D’Eon, whose career
is sketched at the end of this chapter. It was spread in the papers
that a country baronet had laid a heavy wager that he would go to
Lapland, and in a given time, bring home two females of the country and
two rein-deer. This, which was originally only a bet between a couple
of foolish young men, created a mania at Lloyd’s: policies were first
opened that the baronet would not return within the time; then, that
he would not return at all; then, that he would die before he reached
Lapland. The next movement was to speculate on his returning with the
women; and this increased the premiums enormously, immense sums being
risked on the childish enterprise. Merchants and men of rank joined in
the assurances; and when the adventurer came back with his Lapland deer
and Lapland ladies, large sums were paid by those underwriters who had
speculated on his failure.

The “London Chronicle” remarks, in 1768, “The introduction and amazing
progress of illicit gaming at Lloyd’s Coffee-house is, among others,
a powerful and very melancholy proof of the degeneracy of the time.
Though gaming in any degree is perverting the original and useful
design of that coffee-house, it may in some measure be excusable to
speculate on the following subjects:--

“Mr. Wilkes being elected Member for London; which was done from 5 to
50 guineas per cent.

“Mr. Wilkes being elected Member for Middlesex; from 20 to 70 guineas
per cent.

“Alderman Bond’s life for one year, now doing at 7 per cent.

“On Sir J. H. being turned out in one year, now doing at 20 guineas per

“On John Wilkes’s life for one year, now doing at 5 per cent.--N.B.
Warranted to remain in prison during that period.

“On a declaration of war with France or Spain in one year, 8 guineas
per cent.

“But,” continued the same journal, “when policies come to be opened on
two of the first peers in Britain losing their heads at 10_s._ 6_d._
per cent., and on the dissolution of the present parliament within
one year at 5 guineas per cent., which are now actually doing, and
underwritten chiefly by Scotsmen, at the above coffee-house, it is
surely high time to interfere.”

Such was the opinion of the journalist; and the following extract from
“Every Man his own Broker,” is a further proof that legislation of some
kind was absolutely necessary:--

“Another manner of spending the vacation formerly, was in insuring
the lives of such unfortunate gentlemen as might happen to stand
accountable to their country for misconduct. I am not willing to
disturb the ashes of the dead, or I could give an account of this
cruel pastime, the parallel of which is not to be met with in the
instance of any civilised nation; but I hope we shall hear no more of
such detestable gaming; therefore, as a scene of this kind fully laid
open might astonish, but could not convey instruction, humanity bids me
draw the veil, and not render any set of men unnecessarily odious.

“A practice likewise prevailed of insuring the lives of well known
personages, as soon as a paragraph appeared in the newspapers
announcing them to be dangerously ill. The insurance rose in proportion
as intelligence could be procured from the servants or from any of
the faculty attending, that the patient was in great danger. This
inhuman sport affected the minds of men depressed by long sickness;
for when such persons, casting an eye over a newspaper for amusement,
saw their lives had been insured in the Alley at 90 per cent., they
despaired of all hopes, and thus their dissolution was hastened.
But to the honour of the principal merchants and underwriters, they
caused an advertisement, some years since, to be fixed up at Lloyd’s
Coffee-house, declaring that they would not transact business with any
brokers who should be engaged in such infamous transactions.

“Insuring of property in any city or town that is besieged, is a
common branch of gambling insurance in time of war, but ingenious
gamesters, ever studious to invent new and variegate old games, have
out of this lawful game (for insurance in general is no more than a
game at chance) contrived a new amusement, which is, for one person to
give another 40_l._, and in case Gibraltar, for instance, is taken by
a particular time, the person to whom the 40_l._ are paid is to repay
100_l._; but if, on the contrary, the siege is raised before the time
mentioned, he keeps the 40_l._

“In proportion as the danger of being taken increases, the premium
of insurance advances; and when the place has been so situated, that
repeated intelligence could be received of the progress of the siege,
I have known the insurance rise to 90_l._ for the 100_l._ A fine field
this opens for spreading false reports, and making private letters from
the Continent. But how infinitely more harmless to trifle with property
than to affect the life of a fellow-subject, or to injure him with the
public, to serve a private end!

“Of sham insurances, that is to say, insurances without property on
the spot, made on places besieged, in time of war, foreign ministers
residing with us have made considerable advantages. It was a well known
fact, that a certain ambassador insured 30,000_l._ on Minorca in the
war of 1755, with advices at the same time in his pocket that it was

At length the legislature interfered, and in order to hinder the growth
of gambling in life assurance, it was enacted, that “no insurance shall
be made on the life of any person, or on any event whatsoever, where
the person on whose account such policy shall be made _shall have
no interest_, or by way of gaming or wagering; and that every such
insurance shall be null and void.

“It shall not be lawful to make any policy on the life of any person,
or on any other event, without inserting in the policy the name of the
person interested therein, or for what use, or on whose account such
policy is so made.

“Where the insured has an interest in such life or event, no greater
sum shall be received from the insurer than the amount of the interest
of the insured in such life or event.”[14]

This statute was some time before it came into effective operation.
It was after this that policies and wagers were carried on to such
an incredible degree in the trial of her Grace of Kingston. The
underwriters were fully aware that their movements were illegal;
but the spirit of gambling by means of assurance was too common to
be put down at once by an act of parliament, and in 1777, a singular
instance of the determination to grant wager policies came before
the public eye. Charles Genevieve Louise Auguste d’Eon de Beaumont,
popularly known as the Chevalier d’Eon, was the cause of a trial
before Lord Mansfield, as to the validity of a policy without an
insurable interest. The career of this man or woman, for the question
was long doubtful, was familiar to the public, and will illustrate
the excitement of the period. Equerry to Louis XV. doctor of law,
ambassador and royal censor, employed in a confidential mission to
the Russian court, and said to be a favourite of its empress, D’Eon
came to England with a reputation ready made. He soon quarrelled with
le Duc de Nivernois, ambassador from the most Christian King, and
as D’Eon proved unsuccessful in his attempt to injure his grace, he
was so incensed that he disclaimed all connection with the court and
ambassador, declared that the peace had been accomplished in England
by the agency of French gold; denouncing also, in no measured terms,
those who had been accomplices, and pointing almost by name to men
who, under the guise of patriotism, had betrayed their country. As a
patriot’s capital is his public character, the accused parties waxed
wroth, defied their calumniator, and talked of prosecuting him. The
people, unwilling to lose their faith in English probity, took the part
of their countrymen, and mobbed the knight wherever he appeared.

In the mean time, doubts arising as to his sex, his calumnies were all
forgotten, and a new interest was attached to the chevalier, by the
assertion of some that he was male, and of others that he was female.
This was something fresh for assurance brokers, and the question was
mooted at Lloyd’s. At first wagers were made; but as there was no
present mode of deciding whether this extraordinary individual was man
or woman, they were quickly abandoned.

It was decided, therefore, that policies should be opened on his sex,
by which it was undertaken that on payment of fifteen guineas, one
hundred should be returned whenever the chevalier was proved to be a
woman. At first he pretended to be indignant, and advertised that on
a certain day and hour he would satisfy all whom it concerned. The
place was a City coffee-house, the hour was that of ’Change, and the
curiosity of the citizens was greatly excited. The assurances on this
eccentric person’s sex were greatly and immediately increased, policies
to a very large amount were made out, wagers of thousands were
entered into, and to the rendezvous thronged bankers, underwriters,
and brokers. The hour approached, and with it came the chevalier, who,
dressed in the uniform of a French officer and decorated with the order
of St. Louis, rose to address the assembly. It is easy to imagine the
breathless attention of the listening throng (for a million was said to
depend on his words), the eager interest of some, the cool cupidity of
others, the ribaldry of more, and the astonishment of all, as with an
audacity only to be equalled by his charlatanry, he said “he came to
prove that he belonged to that sex whose dress he wore, and challenged
any one there to disprove his manhood with sword or with cudgel.” The
spirit of the citizens had long passed away, commerce had sheathed
the sword of chivalry, and none grasped the gauntlet for the honour
of London. Bankers, brokers, and underwriters gaped at one another
aghast; and though the boldness of the speech pleased many, it was far
from satisfactory to those who came with the hope of winning a wager,
or claiming their assurance money. The knight departed in triumph.
Large sums were said to be offered him to divulge his sex. “I know for
certain,” says a writer of the day, “that there were sums offered
to him, amounting to 30,000_l._” However this may be, it was thought
necessary to settle the question, if possible; and one of the first
actions tried after the act to prevent gaming in assurance, arose from
a policy on the sex of D’Eon, in which it appeared that Mr. Jaques, a
broker, had received several premiums of 35 guineas, for which he had
granted policies undertaking to return 100 whenever the chevalier was
proved to be a woman. The form of the contract was as follows:--

“In consideration of thirty-five guineas for one-hundred received
of Roebuck and Vaughan, we whose names are hereunto subscribed, do
severally promise to pay the sums of money which we have hereunto
subscribed, on the following condition; viz., in case the Chevalier
d’Eon should hereafter prove to be a female.”

From this day the star of the chevalier waned in England. He turned
fencing-master, but with difficulty obtained a living. He assumed
female attire, but his hour was over. He had ceased to be a curiosity
to the many; the “death brokers,” as Horace Walpole calls them, could
make no more by him; and with the assurance on his sex ceases the
interest of Chevalier d’Eon, in the context of this volume. His name
is only interesting to the reader from the fact that Chief Justice
Mansfield adjudicated on his case, and that an important decision was
arrived at in the legal history of this science, when his Lordship
declared that a policy of assurance, although not even on life, when
entered into without an insurable interest, was against the purport of
the act recently passed, and contrary to English notions of morality.


[14] 14 Geo. 3. c. 48.



When it was found that a fraudulent system of assurance would no longer
be permitted, a fraudulent system of annuities usurped its place, and
parliament was once more compelled to legislate. By an act passed in
1777, it was determined that, “owing to the pernicious practice of
raising money by the sale of life annuities having greatly increased,
and being much promoted by its secrecy, the particulars of all deeds,
bonds, &c., for granting these annuities shall, within twenty days of
the execution thereof, be enrolled in the Court of Chancery, otherwise
such bond shall be void. All future deeds also for granting annuities,
to contain the consideration and the names of the parties; and that
if any part of the consideration be returned, or is paid in bills not
honoured, or is paid in goods, or any part retained under pretence
of securing the future payments of the annuity, or under any other
pretence, the Court may order the deed to be cancelled. All contracts
with persons under twenty-one to be void; and no solicitor, scrivener,
or broker, to take more than 10_s._ per cent., under penalty of fine
and imprisonment.”

A long course of evil doing had led to this enactment. From the
commencement of the eighteenth century, Jews, and Christians worse than
Jews; usurers, and bankers worse than usurers; had habitually sold
life annuities: before this, it was less common, being reserved almost
entirely for usurers and goldsmiths. It was a branch of business of
which, little as the seller might know, the annuitant knew nothing.
But if such men as Snow the banker, Samson Gideon the founder of the
house of Eardley[15], Fordyce the insolvent banker, and Colebrooke
the bankrupt East India director, undertook to grant payments, it may
easily be guessed, that they were either unmercifully fleeced, or got
nothing at all, when the great millionnaire was in the Gazette. Nor
was the practice confined to these men; Exchange Alley was pre-eminent
in buying or in selling annuities, in undertaking to pay, or in
willingness to receive any amount of money. They were as ready to
assure the life of, or to promise an annuity to a country clergyman,
as they were to trade in the fall of a prime minister, or to traffic
in the blood of an admiral. They took the hoard of the servant with as
much coolness as they coined false intelligence; and when a reverse of
fortune made them penniless, it involved hundreds of innocent persons
with them.

The frauds which now attend the loans of money to the spendthrift,
are nothing compared to the gigantic scale with which, under the
name of annuities, they were then carried on. If a man granted one
on a fine estate for a consideration, that consideration was rarely
paid in money. The unhappy borrower was obliged to take whatever he
could get. Thus the stock-jobber made his prey receive consols at a
price much above that of the market. The merchant gave him a bill of
lading for some indifferent kind of merchandise. The banker handed him
long-dated bills, and sometimes was a bankrupt before they were due.
The large tradesmen--many of whom then, as now, surreptitiously carried
on the trade of money lending--got rid of goods which were otherwise
unsaleable. One piece of plate did yeoman’s service to its owner; into
whatever transaction of the kind he entered, it was always introduced.
It was valued at 600_l._ to the recipient, and it was always bought
back by the usurer for 70_l._ This man, a wealthy jeweller named
Salvador, was a specimen of another class, common enough in the middle
of the eighteenth century. His shop in Cornhill was the general resort
of those who wanted money and could give good security. He ran from
his house to ’Change Alley twenty times a day, to ascertain the price
of the funds, in which he dealt largely; and his agony was excessive
when it went against him. He would tear his hair and gnash his teeth;
he truly rent his heart, but not his garments, for the latter cost
money. During these paroxysms, the youngsters of the day were made to
suffer most exorbitantly, and one of them openly calling him Shylock
Salvador--the name he was usually known by--nearly paid the penalty of
his life; for the incensed Jew threw himself on the young profligate
and almost killed him. The idiosyncrasy of this man made him mad when
he lost his money, and as mad to regain it. Yet he evinced touches of
benevolence which redeemed his character, and traits of kindness which
made him much loved and respected by all his tribe. To Christians he
was as mischievous as a monkey, taking a delight in giving a crown
piece to a beggar, and then following him to demand it back, under
pretence that he had given it instead of a penny, with which, however,
he always failed to redeem it.

It need not be added that he was loud in his reprobation of the act
against gambling in annuities, as it promised to strike a deep blow at
his profits. The bill met with much opposition, especially in the upper
house, but while the Earl of Abingdon deemed it his duty to denounce
its unconstitutional tendency, and to declare, “it was not calculated
for the genius of a free nation,” the Earl of Mansfield, a higher
authority, said, his experience had long since taught him that some
bill was wanting to put a stop to the usurious contracts and fraudulent
transactions which had been practised for many years, and which were
now carried to an height of enormity.

At this period, various brokers and merchants devoted their capital
entirely to annuities, and many most honourable men experienced a
pleasure in aiding the endeavours of the poor, scorning at the same
time to take a mean advantage of the spendthrift; but there were others
who would have jobbed in the lives of their fathers, and sold their own
souls to perdition in their love of mammon.

There were also the annuity companies which were unsafe, because they
were unsound in principles, and of which Dr. Price said that they cared
little about it; and that in addition to these there were likewise
fraudulent companies established by fraudulent men; let the following
sketch bear witness.

Among those who misemployed their capacity in the formation of bubble
annuity societies, was one David Cunningham, whose career, so far as it
can be gathered, is a strange illustration of perverted powers. Born
in the shire of Inverness, of which his father was a native, bred a
presbyterian, with the confined if respectable notions of the class,
and meant “to wag his pow” in a pulpit, from whence in due time he is
even said to have held forth; Cunningham might have been respectable
and respected, had not his zeal for proselytism with a fair daughter
of his flock carried him beyond the borders of propriety. Like Adam
Blair he sinned, but unlike Adam Blair he repented not, and suddenly
disappearing from his native place, he left the victim of his passion
to repent her misdeed, and his parents to bear the agony of an only
son’s shame. As a boy he had been remarkable for acuteness and ability,
had at an early period devoted himself to arithmetical studies, and,
indebted to the pedlar--then the only communication between town
and country--for some odd books which treated of the science of
mathematics, had studied them to so much purpose that if the money had
been spent on his secular which was spent on his spiritual education,
he would probably have been a great mathematician and possibly a good
man. Possessed of a fine person and specious address, nothing is known
of him until twenty years afterwards, when he appeared in London with
a tolerable supply of money, and more than a proportionate supply of
audacity. Here he commenced the vocation of schoolmaster. At this time
the preaching of Whitfield and Wesley was a passion. Parties of titled
people were made up to hear them exhort and used up ladies of rank
experienced new sensations when Wesley expounded the religion they had
neglected, and Whitfield described the tortures they would endure.
Among the votaries of the new apostle, who, with the restlessness of
genius soon aspired to lead where hitherto he had followed, was David

He still kept on his school and made use of his gifts in prayer, which
were very remarkable, to procure introductions to the better class of
London society, among whom he moved with an air of pious humility,
alike distinguished for his toadying and his teaching. These he used
as levers for the artful design of forming an annuity company--next
to religion, annuity companies being the fashion--to be founded on a
new principle for indigent persons and widows. This principle was,
that it should be partly self-supporting and partly philanthropic, and
that annuities bought by the poor should be aided by the charitable
contributions of the rich.

Cunningham was rather late in the market, for the volume of Dr.
Price, which dispersed the assurance bubbles, was on the point of
publication as he made his announcement; but the Scot was a crafty
man, and his prospectus breathed benevolence, not personal benefit; it
talked of charity and forgot allusion to per centages. Others might
weary themselves in striving to establish a purely self-supporting
institution, Cunningham struck into a new path. He showed that of the
existing companies some did not ask enough, and some demanded too
much. Other societies were often carried on in taverns; his fastidious
taste revolted from the idea. The whole mind of this scheming man was
bent upon betraying the public, and he determined to establish an
Imperial Annuity and Charitable Pension Society, the terms of which
should be lower than all others, while any awkward questions as to
its responsibilities should be checked by pointing to a long list of
patrons, against whose names should be placed large sums as donations
and subscriptions. Directors were not more difficult to procure then
than now, but Cunningham chose to be his own manager, and to represent
his own board. Persons of rank were as proud of seeing their names to a
charity as at the present day, and so plausible and persevering was the
Scotchman that he soon procured duchesses and peeresses to herald his

He was shrewd enough to vary his premiums to the position of the
applicant. He would take less than the established rates under cover
of a charitable institution; and the poor brought their money to him
because they could buy a larger annuity with less cash than anywhere
else. He tempted the general public with low rates of premium as he
pointed to the character of a board which never met. He would sell a
life annuity for whatever he could get, as he never refused an offer;
and, with a list of patrons like that which he paraded at the head of
his advertisements, it was almost impossible to doubt the solidity
of the company. His speculation answered. He had a large office; he
employed a considerable number of dependants; and the money which he
gained easily he spent freely. More customers came to his office than
to any other’s; for while the poor sought him with their savings, the
rich advised with him as to investment. He was consulted by widows,
and made the trustee of orphans. No one inveighed against mammon with
more solemn sanctity, and no one received money with a more demure
aspect. He gave great parties; he contrived to connect his name with a
certain class of the aristocracy; he dabbled in literature, and, like
an enthusiast of the present day, who is said to tell those who connect
themselves with his office that neither they nor their children,
nor their children’s children, can ever know want, he succeeded in
impressing on the public a conviction of his worth.

The remarkable character of this man enabled him to play many parts.
In his office, and with the Hallifaxes, the Dents, the Glyns, and
the Ladbrokes of the time, he was the close, cool, methodical man of
business. Punctual to his time, his lightest word his bond, and ready
with his payments; he was respected in the City. Connected, as it has
been seen, with the sect of Whitfield, he seemed a reverent, devout
attender on the rites of religion. Though he gave up preaching when he
had attained his object, he yet retained a prominent position in the
chapel where he once held forth. But it was afterwards whispered by
those who knew him well, that he had another and less worthy character.
That some one marvellously like him was seen in places which sectarians
hold in horror; that when with persons he could trust, his orgies
were as wild as the worst of a wild time; and close observers might
have added that the sweet smile and the unctuous bearing were but the
cloak to cover his real designs, had not his purse and his reputation
disposed them to be short-sighted.

The game he meant to play is uncertain, as his career was cut short by
the publication of the work of Dr. Price, on reversionary payments,
which had drawn notice to these societies generally. Some were
discovered to be false and hollow; others merely founded in ignorance.
Attention became naturally pointed to their framers. Questions were
asked as to the promoter of the last new company, which were more
easily asked than answered. Cunningham took the alarm, withdrew his
cash in gold from the bankers, told his subordinates to continue the
business until he returned, and left an address for his correspondence.

From that time he was heard of no more, and the only conjecture that
could be made, was from the intelligence that a vessel trading to
Ireland had been wrecked, and that one of the bodies was that of a
gentleman supposed to be David Cunningham, the founder of the Imperial
Annuity and Charitable Pension Society.

The misery caused to all whom this man had wronged was great; but it is
impossible to teach wisdom, and recent annals have shown us that the
world, in this respect, has not grown wiser as it has grown older.

The act just given, entitled, “An Act to prevent Gambling in
Annuities,” struck a severe blow at annuity companies like these, as
well as at those which were for the sake of gambling merely, or for
which an unfair consideration had been given. It might be evaded by
some, or it might be defied by a few; but it at least had the effect
of sending the purchasers to those legitimate offices from which alone
they were certain of receiving their due.

By this time the subject of mortuary registrations was mooted in
magazines and periodicals, and many ideas may be found scattered over
contemporaneous literature, which probably assisted to perfect the
necrological system which we now enjoy. It may seem trite to relate
that in 1773 it was recommended to keep a table of christenings,
marriages, and burials in every church, chapel, and place of
religious worship, to be published annually; but this was a grasp of
intelligence not previously attained; and when, too, it was advised
that the tables of christenings should specify the sexes, and the
tables of deaths divide the males into children, bachelors, married
men, and widowers, and the females into corresponding denominations,
it was really no trifling advance in the objects of life assurance,
although it was not thought so at the time. It was said, also, and
said justly, “The establishment of a judicious and accurate register
of the births and burials in every town and parish, would be attended
with the most important advantages,--medical, political, and moral. By
such an institution, the increase or decrease of certain diseases, the
comparative healthiness of different situations, climates, and seasons,
the influence of particular trades and manufactures on longevity,
with many other circumstances not more interesting to physicians than
beneficial to mankind, would be ascertained with tolerable precision.
In the Pays de Vaud and in a country parish in Brandenburgh, 1 in 45
of the inhabitants die annually, and at Stoke Demerell, in Devonshire,
1 in 54. Whereas in Vienna and Edinburgh the yearly mortality appears
to be 1 in 20; in London, 1 in 21; in Amsterdam and Rome, 1 in 22; in
Northampton 1 in 26; and in the parish of Holy Cross, near Shrewsbury,
1 in 33. In the Pays de Vaud the proportion of inhabitants who attain
the age of 80 is 1 in 21-1/2; in Brandenburgh, 1 in 22-1/2; in Norwich,
1 in 27; in Manchester, 1 in 30; in London, 1 in 40; and in Edinburgh,
1 in 42.”

This was in 1773, and the intelligent reader will necessarily be
reminded of the period when life annuities were paid for without regard
to youth or age, and when a life insurance office commenced business,
and received equal premiums from the young and from the old, from the
healthy and the sick. But people were beginning to think. In 1777 fault
was found with the charges of the Equitable, and the following scale

                3_l._ per cent.  4_l._ per cent.  5_l._ per cent.
  21 years of age    2 17 7          2 16  0          2 15 0
  30      ”          3 13 4          3 12  8          3 12 5
  40      ”          4 11 6          4 13 11          4 14 1
  50      ”          5 15 5          5 18  0          5 17 4

In 1779 a proposal was made for an universal assurance of lives, by
means of a tax to be levied by Government. By this all want was to be
abolished, and various Utopian benefits to be received. As, however,
the scheme was never carried out, it is only worthy of notice as
indicative of a growing spirit of inquiry.

In 1783 Mr. Baron Maseres endeavoured to familiarise the mind with
the doctrines of life annuities. It is to his discernment that we owe
the confirmation of Mr. de Moivre having recourse to an hypothesis
concerning the probabilities of the duration of human life, which he
yet knew to be untrue, in order to facilitate the computation. This
work of Francis Maseres is less referred to than it deserves; but there
is reason to believe that the value of his tables for all ages under 75
or 80 were nearer the truth for the average of this country, than any
other then extant.

During the mania for insuring anything and everything, there was a man
named John Perrott of considerable repute in the coffee-houses and on
the Exchange. He resided in a large mansion many miles out of town,
and rode to Lloyd’s in his coach and four, after the fashion of the
magnates of the day. He had come from the country a poor but clever
boy, and had worked his way until he could boast that he was worth
a plum. His avocations were various. He was a member of Lloyd’s; he
was a speculator on the money market; he was an insurer of lives, of
merchandise, and of anything that was offered, and so daring was his
character that he would take any risk however desperate, his motto
being, “Everything is insurable--at a premium.” He was liberal in his
dealings in business, and in his annuity transactions would often
grant more than he was asked if the applicant seemed to require and
deserve it. He affected an expensive style of living; his agents bought
rare pictures; but his chief delight was to collect fine china, a taste
in which he indulged to an extravagant extent. The uglier the monster
the dearer it was to John Perrott, and the more he was willing to pay
for it. His clerks were employed to board the vessels from the East
directly they reached the Thames, and he would at any time leave off
business to listen to information about pottery and porcelain. When
a man came to insure his life or his ship, to buy an annuity or to
sell one, he was sure of a favourable bargain if he could but produce
some vase or jar which had been seen by no one else. He had one fine
specimen in his collection, which however required a second and similar
one to complete its value in his eyes. This he once possessed, but
being lost or broken, it afforded him a constant topic of complaint,
and out of it arose a characteristic story of the man.

One day he was applied to by a merchant to effect an assurance on
a ship which had been long absent, and of the safety of which many
doubts were entertained. Perrott demanded a very high premium, and
the applicant demurred. In the course of conversation, however, he
carelessly alluded to a fine porcelain jar of which a friend was
possessed, and which he thought he could procure. Perrott’s eyes opened
as the description proceeded. It was the apple of his eye, the very
specimen his soul desired, and his visitor, on witnessing the anxiety
he evinced, offered to go for it, good-naturedly declaring it was of
no value to him, and at the express solicitation of Perrott went off
immediately to fetch the valued prize. The merchant seemed a long time
gone, but Perrott attributed this to his own impatience, and felt fully
rewarded when he saw him return bearing the porcelain he coveted. With
eager hands he grasped it; the assurance on the missing ship was most
advantageously concluded for his client; and Perrott went home a happy
man. On entering the place where all his treasures were deposited,
lo! his own jar was missing, and he found on inquiry that he had been
outwitted by his City friend, who had tempted him to a low assurance
with information about his own property, and at his urgent wish had
procured it from his own home by a deception on his own housekeeper.

Burning with rage, and vowing vengeance against the crafty merchant,
whom he determined to expose on ’Change, Perrott went to town the next
morning, where the first information which greeted him was the arrival
of the vessel he had just assured. Finding the tables turned in his
favour he wisely held his peace, merely making an especial visit to
the merchant to congratulate him on the arrival of his merchandise so
immediately after he had assured it.

The following fraud, which was perpetrated in 1780, was perhaps the
first instance of a deception which has since been often repeated.
An application was made to the London to insure the life of a lady
for 2000_l._ The references were satisfactory. The lady’s health was
sound, her habits were good, her constitution was excellent. The
usual certificates were handed in and the assurance was concluded.
Within six months a claim was made for the money. The ordinary forms
were lodged and found to be regular, the disease was certified to be
that of the lungs, which of all others should have been discovered
in the earliest stages. The directors looked grave and questioned
the secretary, and the secretary questioned the doctor. There was no
accounting for it; it all seemed regular; no fraud could be alleged,
and the policy was discharged. Scarcely had it been paid when certain
information was given. Inquiries were again instituted, and it was
discovered that one sister being ill and utterly given over, the other
brought a certificate of the invalid’s birth, personated her at the
assurance office, deceived the medical man, sent in the certificate of
her sister’s death, and obtained the money. No sooner did the office
commence its inquiries than the lady was missing, and the company
compelled to abide by its first loss.

An annuity and assurance office, stimulated by the success of the
Equitable, was commenced under the title of “the Universal,” but
history is silent as to its results. Many other attempts were made,
some of a purely local character, which were very successful; others,
more ambitious, failed in their endeavours. In 1792 the present
Westminster Society commenced business, and in 1797 was followed by the
Pelican, now in active existence. Some time prior to these, there was
an advertisement of a new assurance office on the lives of men, women
and children at the Bell and Dragon, otherwise called “Lincoln’s Inn
Eating-house in Portugal Street, Lincoln’s Inn, Back Gate.” It need not
be added that it was not by means of the “back gate to the Bell and
Dragon” that the Westminster and the Pelican obtained their deserved


[15] “Never grant life annuities to old women,” Gideon would say; “they
wither, but they never die;” and if the proposed annuitant coughed on
approaching the room door, Gideon would call out, “Ay, ay, you may
cough, but it shan’t save you six months’ purchase.”--“Chronicles and
Characters of the Stock Exchange. By John Francis.” 2nd. Edition.



It has been said that corporations have no souls to be saved or bodies
to be kicked; but it may be added that they have a wild kind of justice
meted to them when they appeal to a jury. So early as 1801, this was
proved in a case of life assurance.

In 1799, a Mr. Robson, at the instance of a Mr. Kerslake, who was to
grant the former an annuity, proposed his life for insurance to the
Westminster Insurance Company. The usual forms were passed through, the
usual undertaking entered into that the assured was in good health,
his age being only twenty-three, and the policy was issued by the
office. In three months he died. The Westminster Society made inquiries
which perhaps they should have made before, and those inquiries
discovered that Mr. Robson had been labouring for some time under
what is popularly known as a tendency to consumption; that in 1797 he
had suffered from hæmorrhage in the lungs, but had recovered; that in
February, 1799, though he had another similar attack in a more violent
degree, he had said nothing about it, opening the policy on his life
in March. In the autumn he took cold, fell into a rapid decline and
died. There was clearly a predisposition to disease, and though it is a
very important consideration, whether a policy once open should not be
indisputable, yet until this is so, there is in a case like the present
but one view to be taken. The company rightly refused to pay, and an
action was brought to compel them.

  “Who shall decide when doctors disagree?”

One party swore there were no symptoms which indicated consumption.
The other took their oaths that consumption was inevitable with such
symptoms. In vain Lord Kenyon charged the jury in favour of the
Westminster, the jury knew better than his lordship, and had no notion
of a policy being opened without being discharged, whatever the deceit
might be. They decided against the company. Another trial was sought
and granted, but in vain. The new jury maintained the principles of the
old, and the company lost its money and gained the vituperation of the

The great minister of the past century died insolvent, and from this
arose one of those actions, which at once confirm a law and establish
a principle. In 1803 William Pitt was indebted to Godsoll and Co.,
his coachmakers, upwards of 1000_l._ To secure some part of this in
the event of his demise, they assured his life for seven years with
the Pelican Company, for 500_l._ at the rate of 3_l._ 3_s._ per cent.
In 1806, three years after this, the premier died without sufficient
assets to meet his liabilities. The greatness of his services to
the country, the fact that he had died in debt being a proof of his
self-abnegation, demanded an acknowledgment, and the state very
properly determined to pay his creditors. This was not sufficient for
the coachmakers; an immediate claim was made by them for payment of the
500_l._ assured. As Godsoll and Co., however, had received the entire
amount of their bill when Mr. Pitt’s other debts were discharged, the
Pelican refused to pay, on the ground that their insurable interest
in the life of the deceased had been terminated by the payment of his
debts, and that as the insurance was to meet a special debt, since
discharged, they could not recover.

On the one hand, Godsoll and Co., possessed an insurable interest at
and from the time of the opening the policy, to the death of Mr. Pitt.
On the other, the assurance being for a special purpose, to procure the
payment of a debt otherwise discharged, there could be no justice in
paying it twice. The company therefore offered to return the premiums,
but refused to pay the policy. There was an immense amount of special
pleading by the counsel of Godsoll and Co. to make the worse appear the
better cause. It was contended that, having had the necessary insurable
interest up to the death of Mr. Pitt, the after payment of his debts
did not vitiate their right; that, in other words, having paid the
premiums for a special purpose, which purpose was effected, they ought
to receive their 500_l._ instead of being satisfied with the return of
the mere premiums. It was now to be resolved whether, under any form or
by any subtlety of argument, the statute which said so distinctly an
insurable interest was necessary, could be broken through.

Had Godsolls carried their point, every creditor might have insured the
life of his debtor and received a double payment of his debt. Every
tradesman in London might have speculated on his customers’ health,
and the act which was to destroy gambling policies, would have been
practically repealed. The judgment of Lord Ellenborough, when he gave
the decision in favour of the Pelican, is worth transcribing.

“The interest which the plaintiffs had in the life of Mr. Pitt was
that of creditors, a description of interest which was held to be
an insurable one. That interest depended on the life of Mr. Pitt in
respect of the means and of the probability of payment which the
continuance of his life afforded to such creditors, and the probability
of loss which resulted from his death. The event against which the
indemnity was sought by this assurance, was the consequence of his
death as affecting the interest of these individuals assured in the
loss of their debt. This action is, in point of law, founded upon a
supposed damnification of the plaintiffs, occasioned by his death
existing at the time of the action, and being so founded, it follows
that if before the action was brought, the damage was obviated by the
payment of his debt to them, the foundation of any action on their
part on the ground of such assurance fails. And it is no objection to
this answer that the fund out of which their debt was paid did not
originally belong to the executors, as a part of the assets of the
deceased; for though it was devised to them _aliunde_, the debt of the
testator was equally satisfied by them thereout, and the damnification
of the creditors, in respect of which their action upon the insurance
contract is alone maintainable, was fully obviated before their action
was brought. Upon this ground, therefore, that the plaintiffs had in
this case no subsisting cause of action in point of law, in respect of
their contract, we are of opinion that a verdict must be entered for
the defendants.”

In one of the eastern possessions of this country, there resided a lady
who, when gold was sought there by adventurous men, and when young
ladies were regularly educated for the Indian matrimonial market, had
left England on an expedition of this character. Her craft and cunning
would have insured success, had not her beauty, which is described as
exceedingly great, been a sufficient guarantee. She was consigned to
the care of a lady who had gone out on a similar adventure herself, and
who then held a somewhat high position in her own circle. The arrival
of the young adventuress as a new article was marked by a succession
of amusements: whispers of love and offers of settlement were not
wanting, though, being ineligible, they were disregarded, until she
became acquainted with a civilian reputed to be very wealthy, and known
to be rather old. This gentleman she married. Unhappily, the wealth
was only reputed; and the stormy indignation of the young beauty
when she discovered her error,--when she found her requests for new
carriages were disputed, and for new jewellery were refused,--somewhat
astounded the indolent Anglo-Indian, who had been the woo’d rather than
the wooer, and been married rather than he had married. So soon as she
discovered that she had wedded a poor instead of a wealthy man, and
that all her care and cunning had been in vain, she grew gloomy, dark,
and discontented; but at last, on representing to her husband that
she would be comparatively penniless if he were to die, accompanied
by blandishments which were the more welcome from their rarity, he
procured an insurance on his life, from the agent of a London company,
for some thousands.

Among others attached to the household of this gentleman was a native
domestic, who at first had received the authority of his new mistress
with discontent, for until she came he had been paramount. But it was
not long before he succumbed, being suspected of a warmer attachment
than could be reconciled with the connection of servant and mistress.
There were many whispers circulated concerning them, in the dissipated
circle in which the lady moved; though so long as open decency was
preserved, the manners of the time allowed a considerable latitude;
and rather than disturb the _dolce far niente_ of their indolent and
luxuriant existence, they were content to give her the benefit of
the doubt. It was not long before symptoms of decaying health--“the
liver disease,” said the doctor, for every thing was then and there
so called--began to appear in the insured man. Whether he declined to
apply for leave of absence, or whether some backstairs influence was
used to prevent it, is uncertain; at any rate, he still kept at his
old quarters, dying gradually away, wasted by slow disease. During
this period, the behaviour of his wife was exemplary: his pillow was
smoothed, his medicine was administered, his cough was hung over by
her: and if she left him for a time, the Hindoo, gliding about like a
shadow, was ever by his master’s side, to complete what his mistress
began. It was noticed, however, that the patient seemed to suffer,
rather than desire so close a connection; and to shrink from, rather
than claim such attention. This, however, was thought little of, being
attributed to an irritability of temper arising from disease.

In due time the unhappy man died; the insurance money was claimed by
the widow, and paid by the insurers. The household was broken up, and
the widow came to England. For a few years she lived in great luxury,
indulging expensive tastes on the money she had received, until only a
few hundred pounds were left in the hands of her bankers. Being a woman
of such remarkable beauty, it is somewhat surprising that she had not
married a second time in accordance with the extravagant and voluptuous
tastes, which her residence in the East had engendered. Instead of
this, she formed an acquaintance with a young man of inferior position;
a proposal of marriage followed, and she induced him to offer his life
for insurance, undertaking to pay the premiums out of her own funds.
The banker with whom her money was lodged was amazed when he heard what
she was about to do, and made some inquiries of an old East Indian, who
was then in England, concerning her former life. The replies of this
gentleman, although cautious, were sufficient to point the lady out as
a very doubtful character; and whether, on this, a hint was given to
the intended bridegroom is uncertain, but that gentleman declared off;
and the condition of the insurance not being complied with, the dark
purpose was foiled. A few months after other offices were applied to,
with proposals for an insurance on the life of a young relative of the
same lady, accompanied by a reference to the gentleman who acted as
her banker. Inquiries were necessarily instituted as to the reasons
for insuring, but no sufficient cause could be shown. It was found,
too, that she had no money to pay more than one insurance; and, coupled
with the reports which were afloat concerning her first husband’s
death, a very dark purpose was assigned to her present movement.
Awkward questions were raised--information was received, which pointed
to her as the poisoner of her husband, and to the Indian servant as
an agent in the infamous deed. A prompt negative was given to her
application for insurance; and whether conscience aroused her to a
sense of her frightful position, or whether she saw her way to success
on the continent or in India, is uncertain. She drew her money from
her agents, and disappeared for ever from the society in which she had
glided like an incarnation of evil.

Up to 1800, six offices only were in existence. The Globe, however,
followed in 1803, being founded by Sir Richard Glyn; and though purely
proprietary, answered the requirements of the time. When it endeavoured
to obtain a charter, the vested interests rose against it, using the
same arguments to prevent its establishment, which the Globe itself has
since brought against the formation of the new companies in 1850. It
may be noticed that this insurance bill was introduced by Lord Henry
Petty[16], descended from that Sir William Petty whose services in the
cause of vital statistics have already been mentioned. Sir Charles
Price, Sir William Curtis, and Mr. Grenfell, opposed it in behalf of
the Royal Exchange and London Assurance Companies, on the ground that
it would be an infringement of their rights. On behalf of the Globe,
it was argued that competition was necessary--that the population and
trade of the country had vastly increased since 1720--that a large
amount of insurance was effected out of England, for want of chartered
companies--and, above all, that the Globe would give 100,000_l._ to the
public. The last consideration carried the point, and the Globe was
chartered. In 1805, a movement began in these institutions, occasioned
by a great excitement in the money market. In 1806, in 1807, and 1808,
eight new offices more were established; and from that year to 1821,
out of a great number which were proposed, commenced, and failed, eight
additional companies maintained their ground. In 1823, four; in 1824,
seven; in 1825, four; and in 1826, three more were added to the list,
making, by that year, a total of 41.

There was room, in 1825, for an augmentation of companies. The
population of London in 1821 was 1,225,694; of these very few had
assured their lives; and if a city like London were behind in
this matter, it may be supposed that the inhabitants of the rural
districts were difficult to impress with its importance. Up to 1825,
assurance could not be said to have made much advance--certainly not
in proportion to the general advance of commerce. There had, indeed,
been much to alarm the public as to the safety of life institutions.
From 1806 to 1826 more companies had been broken up than had been
successful. In the first-named year only 9 were in existence; since
which, out of 30 which were commenced, 20 were compelled to abandon
their business.[17] Some went down in total insolvency; others lost
a large portion of their capital; another set of directors paid the
Provident Life 21,000_l._ to take their risks off their hands. Very
extravagant promises had been made by these companies. One gentleman
announced of the Union Life, “that every feature of its plan was marked
by superior liberality and with a decided contempt of all the petty
advantages which swell the profits of other offices.” A second society,
the Provincial Union, offered to take lives at 10 per cent. under
others; while another, with a spirit of “extra superior liberality,”
would do it at 20 per cent. less. Of course such as these were
never meant to last; but it was said, “they are persevered in until
everything is consumed, while the chief actors laugh in their sleeve
and enjoy their profits as long as the bubble lasts, and impunity when
it bursts.”

Among the companies which were started in 1825, and which attracted
attention from the importance of its promoters, was the Alliance. In
its marine capacity it broke down the charters of the old corporations,
and was at once successful, not from any special merit, but because
it numbered among its members the representatives of the first city
firms. It may be added, that, among them, four men more alike in the
one desire of making money, but more dissimilar in tastes, pursuits,
and habits, were never before united. These were John Irving, Baron
Goldsmid, Moses Montefiore, and Samuel Gurney. The first of them, John
Irving, affected West End company and aristocratic tastes, by virtue
of the friendship of the House of Rutland. He was familiar with men in
Lothbury who were never able to meet his eye in Hyde Park. He knew many
a merchant on ’Change whom he could not recognise in St. James’s. “He
shakes me by the hand in the City,” growled Rothschild to a friend;
“but he can never see me in Piccadilly when he is walking with a
duke.” Moses Montefiore, the huge capitalist, and Isaac Goldsmid, the
hereditary financier, are familiar to the reader. The last on the list
is Samuel Gurney, whose simple garb of russet brown and unassuming
speech, contrast as much with his great wealth, as his massive,
masculine, and almost leonine face does with his single-minded and
benevolent character. These were the men who gave at once success and
security to the Alliance.

The increased number of offices had the tendency to extend public
information, and to draw the attention of many who had hitherto thought
nothing on the subject. The original object of life assurance was
simply to enable a person to secure to his family the receipt of a
certain sum at his death. But by 1825 it was applied to a variety of
purposes; assurances were effected by creditors on the lives of their
debtors. If money were borrowed for a year the life of the borrower was
assured. In marriage settlements, where the capital would pass from the
husband at the death of the wife, an assurance was effected on the life
of the latter. “In every form,” says Mr. Gilbart, “the system seems to
produce unmingled good. It promotes habits of forethought and economy
on the part of the assured; it tends, by the accumulation of saving, to
increase the amount of the national capital.”

The knowledge connected with the population was constantly increasing;
and, though it was imperfect enough, still it was in advance of our
previous information. In 1801 an approximation was made to that of
London, which was supposed to be 864,845; and when it is remembered
that Captain Graunt, so early as 1664, calculated it at 384,000, the
numbering of the people in 1801 was no small benefit. In 1811, when a
second census was taken, the population was stated to be 1,009,546; and
a further increase was declared in 1821, when the population showed
itself as 1,225,694. These calculations were not effected without
difficulty, and many objections were made by good but narrow-minded
men, who, from press and from pulpit, did not fail to remind our rulers
that David was rebuked by the prophet, and punished by God, for
attempting to do that which they had done.

The health of London was also improved. It was estimated that the
introduction of vaccination had increased the mean duration of human
life about 3-1/2 years. There had been a great advance in medical
skill. Discoveries in chemistry had been brought to bear upon disease.
The arrangements of our hospitals had enabled students to graduate
under men of distinguished attainments; the discipline of the medical
school had been increased; and, though ignorance was often in the
ascendant, and quackery was encouraged as a revenue to the state,
men--somewhat different to those who were licensed to kill in the
days of Fielding and of Smollett--were employed in invigorating the
constitutions and prolonging the lives of their fellow-countrymen. We
must not also forget, that by 1825 a vast improvement had occurred
in the manners and habits of social life. Our fathers still remember
their visits when the bottle kept so constant a round that few remained
sober; when to be asked to a dinner-party was to be asked to get
intoxicated; when two and three-bottle men boasted their acquirements;
when the wild orgy disgraced humanity, and the wild debauch destroyed
life. We of the present day boast of this improvement to our children,
and whatever new vice may have usurped the place of the old, it is,
at least, less open in its defiance, and less baneful in its results.
When Petty first published, the streets were confined, cleanliness
was disregarded, refuse and offal accumulated in the highways, and
ventilation was laughed at. There may still be many receptacles of
filth in London, but they do not meet us in our daily avocations. The
kennels of Southwark do not run blood two days in every week, as they
did in the last century; nor are hogs “bred, kept, and fed,” in our
populous neighbourhoods. If, therefore, there were any thing in the
advance of chemistry, in draining, in ventilation, in more wholesome
living, in the absence of open debauchery, it followed that there
would be a considerable decrease in the rate of mortality. From 1700
to 1780, the deaths averaged about one in thirty-eight of the existing
population. But in 1790 it became about one in forty-five, in 1800
one in forty-eight, in 1810 one in fifty-four, and in the ten years
preceding 1820 one in sixty, in England and Wales.

But though these important facts had gradually become known; although
it was also clear that people lived longer; that the wealthy classes
attained a greater age than the indigent; that the value of a lady’s
life, commercially, and not in the spirit of gallantry, was superior to
that of a gentleman; it could scarcely be said to be acted on. So late
as 1819, Dr. Rees suggested the importance of specifying the sexes, and
discriminating them in the burial registers, advising also that the
numbers of both sexes dying of every distemper in every manner and at
every age should be specified. “This would afford the necessary data
for ascertaining the difference between the duration of human life
among males and females, for such a difference there certainly is much
in favour of females.”

The tables on which the rates of the companies had been founded, had
given the continuance of life at a far lower estimate than time had
proved it to possess. The enormous success of the original societies
had proved this; and, by 1821, it was generally understood that the
Northampton table was only an approximation to the truth. This table
was chiefly in use until the Carlisle table of Mr. Milne gradually made
its way, up to which period the following were the principal sources
whence information was derived:--

A Record of the Births and Burials in Breslau from 1687 to 1691.

London Bills of Mortality from 1728 to 1737.

Register of Assignable Annuities in Holland from 1623 to 1748.

Lists of the Tontine Schemes and the Necrologies of Religious Houses in

Mortality of Northampton for forty-six years prior to 1780.

  ”       of Norwich thirty years prior to 1769.

  ”       of Holy Cross thirty years prior to 1780.

  ”       Warrington for nine years.

  ”       Chester for ten years.

  ”       Vienna, Berlin, and Brandenburgh.

  ”       Seven enumerations of the entire population of

  ”       of similar materials from the Canton de Vaud.

Notwithstanding these varied materials, and although they were quoted
as authorities for maintaining a high rate of premium, the societies in
existence were well aware that their rates were fixed on too ascending
a scale. They had found unexpected sources of profits in lapsed
policies; they had estimated an employment of their money at 3 per
cent., and, at the very lowest calculation, their receipts had averaged
4 per cent. Nor was this likely to diminish, for there can be no doubt
that laws as unerring as those which govern health govern the annual
value of money. In 1810, Mr. George Barrett had presented to the Royal
Society a new mode of calculating life annuities. This the Society
declined to publish, but that which was refused by a public body was
adopted by a private individual, and Mr. Bailey gave it to the world
in the appendix to his valuable work on “Annuities.” The method of
Mr. Barrett was extended and improved by Mr. Davies, in 1825, in his
tables of life contingencies; a proof that the Royal Society had made a
mistake in refusing to publish the contribution of Mr. Barrett.

In 1830 it was decided that a policy was vitiated because the person
insured had only answered the questions demanded, and had not stated
all the features of his case. The following is a digest of the

The life of the Duke of Saxe Gotha, after the fashion of the Germans
half a century since, was said to have been a dissolute one, and by
1825 had debilitated his constitution. He had lost the use of his
speech, and whatever mental faculties he had originally possessed,
became materially decreased. Private reports to the directors hinted
at these material circumstances, “little as they were believed to
have an influence on his natural life.” No hint of the kind, however,
escaped the friends of the assured, and the directors, trusting to
the honour of the duke more than as traders they ought to have done,
granted a policy. One year after, Death, respecting not the person of
his highness, seized him for his prey, and it was discovered that a
tumour, of some years’ standing, had pressed upon his brain and caused
his decease.

With only one year’s premium received, the office found this claim
very unpleasant, and refused to pay. They said the mental state of the
duke had not been mentioned, that they were ignorant of his loss of
speech, and they fought very vigorously against discharging the policy.
The question which rose was, whether it was necessary to give special
information which was not asked; whether, in fact, a truthful answer
to all queries was not enough. When the trial came on, the verdict was
given for the office, because, according to Mr. Justice Littledale,
it was the duty of the assured in every case to disclose all material
facts within their knowledge: “In cases of life assurance, certain
specific questions are proposed as to points affecting all mankind. But
there may also be circumstances affecting particular individuals which
are not likely to be known to the insurers, and which, had they been
known, would have been made the subject of specific inquiries.” However
legal this might be, it was scarcely equitable. The directors had
insured the life of this gentleman, knowing, from private information,
that his career had been gay, and his constitution debilitated, and
they ought, on every principle of justice, to have been compelled to
pay their obligation.

In the same year another very important decision was arrived at. A
gentleman assured the life of his son in the Asylum for 5000_l._ After
the payment of two years’ premium the son died, and the office refused
to honour the policy, because the father had no insurable interest in
the life of his son. When the case was tried, the grounds on which
the counsel endeavoured to prove an insurable interest were, that the
father had expended a large sum in maintaining and in educating the
deceased; that if a man had an insurable interest in his own life,
he certainly had in that of his son; that a father might have many
valuable rights and expectations depending on it which he could only
protect by an insurance; that, by the statute of Elizabeth, if a father
became poor in his old age, and his son was capable of maintaining him,
he was bound to do so, and therefore the chance of the father being
maintained in his old age was decreased by the death of his son.

The special pleading evident in this line of argument was not
calculated to be successful. But though a strict interpretation of the
act might justify the refusal to pay, it does not appear that such a
decision is strictly equitable.

The reason which induced the office to refuse payment may possibly be
found in the fact that only two years’ premium was received, and that,
as a young office, they were galled at having made an unfortunate
bargain. But there does not seem justice in the interpretation of a law
which decides that a father has no interest in the life of his son,
although there are many reasons to justify it as expedient. Yet so it
was ruled; and this decision affected property to the amount of half a
million. Mr. Justice Bayley, in giving judgment, said: “If a father,
wishing to give his son some property to dispose of, made an insurance
on his son’s life, not for the father’s own benefit, but for the
benefit of his son, there was no law to prevent his doing so; but that
was a transaction quite different from the present; and if the notion
prevailed that such an insurance as the one in question was valid, the
sooner it was corrected the better.”


[16] The present Marquis of Lansdowne.


  London Commercial.
  Royal Institution.
  St. James’s.
  St. Patrick.
  South Devon.
  Southwark and Surrey.



Up to the year 1808 there was no mode of investing money in life
annuities at once safe and profitable. Although the assurance were also
annuity offices, yet, at this period, only three of any standing were
in existence, and the public had seen and suffered so much from the
failure of various joint stock companies, that they regarded all new
societies with a proper degree of jealousy. At the time above named
there had been a speculative excitement in the money market, followed
by a disastrous panic. Many companies had been compelled to wind up
their business, and others, having no business to wind up, had been
left to their fate. And of annuities granted by private persons, the
public had a well-founded horror; for the persons who had chiefly
granted them were bankers, stock-jobbers, and mock millionnaires, who
had often been swept away by panics on the Stock Exchange. In 1809
complaints were instituted that persons wishing to make provision
for themselves or their families had no certain fund on which such
annuities could be secured, and the ministers were made aware of many
infamous practices which often plunged whole families into ruin. The
Government, therefore, determined to become dealers in life annuities,
and in the very outset made a considerable and almost fatal mistake.
The tables of mortality known as the Northampton were the chief basis
on which the various life assurance companies founded their premiums;
and, by a singular error, the state adopted the same basis on which to
grant annuities for life; but as the most intelligent men of the day
were employed in calculating and constructing tables, the Government
was scarcely to blame, particularly as they sought no profit, entering
into the undertaking solely from a consideration of its advantages to
the community.

From 1809 to 1819 this system continued. The speculators soon found
out that the Government charge for a life annuity afforded a very
remunerative investment, and the insurance offices made considerable
profit by purchasing and reselling them. The Commissioners of Greenwich
Hospital also selected many of the most healthy of their pensioners,
and bought large annuities on them,--a proceeding productive of as
much profit to the commissioners as of loss to the state. The mistake
made by Government in its calculations was no secret. Actuaries and
accountants were well aware of it; and Mr. Moses Wing wrote to the
chancellor, informing him that the tables on which they were granted
were productive of great loss to the revenue. The ordinary lassitude
of Government was displayed in the chancellor’s reply, that it was not
expedient to make any alteration, as “the compilation of new tables
would be attended with much difficulty.” Mr. Wing then wrote again,
showing that there was a loss of 15 per cent. on some, and on others
of 20 and 24 per cent.; and that on a transfer of 12,000,000_l._ stock
there was a loss of not less than 2,691,200_l._, and from this, the
chancellor took refuge in a dignified silence.

In 1819 the attention of the authorities was again drawn to the same
fact. But vainly for many years had they been informed that the
public money was wasted; that no capitalist in London would grant
annuities on the same terms; and that a serious loss was incurred.
Government servants, like kings, can do no wrong, and the information
was officially pooh-poohed! Letters might be written, and the receipt
acknowledged; but the letters were shelved with due determination not
to recur to them in a hurry. Among the assailants, however, was one
who was important as well as vigorous, and very annoying questions
were put in the House of Commons. It was the day when large majorities
answered every unpleasant topic, and for a time the querists were
silenced. At last it was stated that Mr. Finlaison had informed the
Chancellor of the Exchequer that Government was losing 8000_l._ per
month by its supineness, and “the patriots,”--so miscalled because
they were in opposition,--seized on this important point to harass
their opponents. It was triumphantly replied that the bill had been
in operation since 1808, and was founded on the Northampton bills of
mortality. As Dr. Price passed for an authority, and as a name goes a
great way, the patriots were dumb, until one of more mark than the rest
hinted that the value of life, as estimated by a life assurance company
for its own benefit, and on which enormous profits had been made by
them, would be just as unfavourable to the granters of life annuities;
that the proportion of gain to the office would be the proportion of
loss to the Government. The ministers shook their heads at this, and
required time to consider. The economical members pressed their point,
and urged an investigation. Night after night they pursued their foes
with clamour, and day by day they reiterated their assertions in the
clubs. The reports and rumours which were spreading in the financial
world, and the assertions which were everywhere made, were, indeed,
somewhat alarming. It was said that, according to Mr. Finlaison’s
report, 400,000_l._ a-year was being lost; many, determined not to be
outdone, asserted 100,000_l._ a-week was the lowest estimate; others,
that an insurance office had realised 60 per cent. by dealing in them.
Statements like these were so injurious to the financial character
of the Government, that it was found necessary to stop them; and the
chancellor said that, as only 640,000_l._ had been granted in the shape
of life annuities, it was not very likely we were losing 100,000_l._
weekly; that Mr. Finlaison was employed in constructing tables; and
that, though this gentleman had certainly stated the terms were too
favourable, yet the true amount of loss would be difficult to attain,
Mr. Finlaison’s estimate being an abstruse calculation as to the amount
of the National Debt which would be redeemed in sixty years, compared
with the amount which would have been redeemed had no annuities been
granted. This he estimated at 3,200,000_l._ less than would have
been attained by the Sinking Fund. At last, in 1829, Mr. Finlaison
reported to the House, and the tables in connexion were certainly the
most valuable of the kind then published. Access had been given to
every document bearing on the subject. The registries of the tontines,
the ages attained by the lives on which annuities had been granted a
century previous--the experience of the offices--procured a mass of
information which was turned to great advantage. The tables fill fifty
folio pages, and show the rates of mortality, the value of annuities on
single lives at all ages, among many classes of annuitants, separate
and combined; the sexes being distinguished, both in exhibiting the law
of mortality and the value of annuities.

These tables were satisfactory in the evidence they gave of a material
improvement in the average duration of life. In forty years so great
a change had taken place in the condition of the people, that the
decrease of mortality was from 1 in 40 to 1 in 56. They proved, also,
to demonstration, the extraordinary difference between the longevity of
men and women, a circumstance not hitherto known to a certainty, but
one which was most important to the granters of annuities. The result
of all these calculations was comprised in the fact mentioned,--that
the public, at the end of thirty-five years, will be burthened with
a perpetual annuity of 96,000_l._, owing to the error so tardily
rectified. We shall now see the mode in which these errors were amended.

There is something very provocative of mirth in the economical
movements of Government. They had just been obliged to annul tables
which had been in operation for twenty years; they had been compelled
to acknowledge to the House that they had been wasting the public
money; they had employed an actuary for ten years in procuring
information on which new tables could be constructed, and scarcely
had these been brought into operation than they found they were again
in error. While the new act was preparing which was to enable the
Government to sell life annuities and annuities for certain terms of
years, the tables were shown to a gentleman in the Bank of England, who
at once declared that those which were framed for lives above a certain
age were too low in price. It was replied that they were taken from
the experience of the assurance offices, and that they represented the
average value of life at that period. “Yes!” was the reply, “but if
select lives are brought, what becomes of your average?”

The act was passed; and by the tables which it authorized a man of
ninety by paying 100_l._ would receive for life an annuity of 62_l._
The first payment commenced three months after the purchase, and if the
nominee lived one year and a quarter, the nominator received back all
the purchase money, so that every half year the annuitant lived after
this was pure gain.[18]

The shrewd gentlemen of the Stock Exchange immediately saw and
seized the advantage. Agents were employed to seek out in Scotland
and elsewhere robust men of ninety years of age, to select none but
those who were free from the hard labour which tells on advanced
life, and to forward a list of their names. The Marquis of Hertford,
of unenviable notoriety, added to his vast wealth by choosing as
nominees those who were remarkable for high health; on two only,
taking annuities of 2,600_l._ Wherever a person was found at the age
of ninety, touched gently by the hand of time, he was sure to be
discovered by the agents of the money market, the members of which
speculated with, but scarcely perilled their wealth on the lives of
these men, on such terms.

The inhabitants of the rural districts of Scotland, of Westmoreland,
and of Cumberland, were surprised by the sudden and extraordinary
attention paid to many of their aged members. If they were sick, the
surgeon attended them at the cost of some good genius; and if they
were poor, the comforts of life were granted them. In one village
the clergyman was empowered to supply the wants of three old, hale
fishermen during the winter season, to the envy of his sick and ailing
parishioners. In another, all the cottagers were rendered jealous by
the incessant watchful attention paid to a nonogenarian by the magnate
of the place. It was whispered by the less favoured that he had been
given a home near the great house; that the cook had orders to supply
him with whatever was nice and nourishing; that the laird had been
heard to say he took a great interest in his life, and that he even
allowed the doctor twenty-five golden guineas a year, so long as he
kept his ancient patient alive.

One man was chosen of above ninety who would walk eight miles any day
for 6_d._ The hills and dales of the north of England, with the wild
moors and heaths of Scotland, peopled by those who never breathed
the air of cities, furnished nominees; and, lest there should be
any lurking disease, they were examined by a medical man to confirm
the appearance they bore. There were several curious anecdotes in
connection with these shrewd speculations. There were two baronets
offered, illustrative of an old story. Both were nonogenarians, both
were sound, wind and limb; the one was remarkable for his extreme
temperance, the other for drinking two bottles of wine daily, but both
first-rate lives.

The offices were besieged with contracts on such men as these.
Notwithstanding the heavy losses which Government had sustained by
the previous tables, they lost much more by the present oversight,
for against lives chosen with so much care and nursed with so much
attention, there was not a chance.

One legend is extant to show the trouble which the nominators would
take, in order to procure a person on which they could safely invest
their money.

An eccentric, simple old man, an amateur angler in the streams which
adorn the dales of Cumberland and Westmoreland, gave rise to the
following attempt to procure him:--This man, named John Wilson, had
not been born in the dales, but had come at an early age to take his
lot among the single-minded people who dwell there. He had bought a
small farm, on the produce of which, tilled by his sons and grandsons,
he lived. He was soon found out by the agents of the speculators; but
for some reason, known only to himself, refused to be speculated on,
and as the secret of his birthplace was confined to his own breast, no
register of his age could be procured without his consent. At ninety
he would have passed for seventy. He would wander for whole days with
only his fishing-rod and basket among the lakes and rivers of his
adopted home. For a week together he would be away from his dwelling,
lodging, when the night came, wherever he could procure a bed. In vain
was he tempted with presents of fishing-rods; in vain the choicest
London-made fly was offered; he turned away with an air of indifference
and defied the temptation.

There came to reside in the village, apparently on account of his
health, a young gentleman who took John’s fancy, for he was fond of
fishing and had never asked the old man where he was born. To him he
showed his choicest retreats for casting the fly, told him stories of
wonderful throws he had made, and wonderful fish he had caught, and
pleasant were the long summer days passed by these two in the deep
recesses of the hills, following the course of rivers, and tracing
streams to their rise. It never entered into the old man’s thoughts,
that one of those who were interested in knowing his birthplace was
becoming a bosom friend. But so it was. The invalid had only sought
the neighbourhood for that purpose, and when he had thoroughly gained
his confidence, he turned the conversation very cautiously to the old
man’s early history. The latter showed no symptoms of anxiety, and the
Londoner went yet further: still there was no alarm apparent. But the
next question, which, if answered, would have settled the point, was
too abruptly put. The ancient angler wheeled round, faced his companion
sorrowfully, and merely saying--“Eh! man, the ways of the world, the
ways of the world!” shouldered his rod, and disappeared down a ravine
close by, leaving his companion to find his way home as best he could,
and far too much annoyed to remain any longer in the neighbourhood
where he had been so unsuccessful.

When schemes like these were resorted to, and this is only one of
many[19], it is obvious that the expected gain must have been great.
One house alone entered into contracts on the lives of men similar
to those described, for thousands, and the first to open a contract
was the Marquis of Hertford, whose attention was probably drawn to
the speculation by Mr. Croker. Philip Courtenay, Queen’s Counsel and
Member for Bridgewater, was another. He availed himself of his tour on
the Northern Circuit to seek out old and healthy lives. Just at this
time the House of Lords refused so resolutely to pass the Reform Bill,
that the monarch was expected to force them into compliance. The mind
of the people was greatly excited; and, unable to account for Mr.
Courtenay’s avidity, a Yorkshire paper gravely asserted that Earl Grey,
being determined to carry the Reform Bill, had employed the Member for
Bridgewater to choose a sufficient number of aged persons to receive
the honour of peerage, the prime minister being determined to swamp the
Upper House with nonogenarians rather than fail in his purpose.

One firm alone, that of Benjamin and Mark Boyd of the Stock Exchange,
took three-fourths of the entire contracts for their friends; and
as the lives chosen by them were good, it is probable that their
constituents averaged a profit of 100 per cent. The desire to speculate
on nonogenarian lives soon became a mania. Barristers with a few
thousands,--ladies with a small capital,--noblemen with cash at their
bankers, availed themselves of the mistake. It is difficult to say
to what extent it would have proceeded, had not Mr. Goulburn availed
himself of a clause in the act, to cease granting annuities which might
prove unfavourable to government.


[18] The following table will show the precise action of an investment
of 100_l._ on a nominee aged 90:--

                                                        £ _s._
  100_l._ paid on Jan. 4. 1830, would produce
            ”               ”        on 6th April 1830  31  0
            ”               ”        on 10th Oct. 1830  31  0
            ”               ”        on April 5th 1831  31  0
                                                        93  0
  If the nominee lived only one day longer, say to
  April 6th, 1831, there would be due an additional     15 10
                                                      £108 10

Thus the capital and interest at 8-1/2 per cent. were returned in one
year, three months, and two days.

[19] One gentleman thinking that the Greenwich pensioners would afford
good subjects, went to the hospital with that purpose. But they all
gave their ages at 90 and above, and when the parish registers were
searched for the dates of their birth, it was discovered that they had
exaggerated, in some cases ten and in others twenty years. Every one
claimed the distinction of being nonogenarian, and the consequence was
that the stock-broker was completely baffled in his attempt.



In 1830, two ladies, both young and both attractive, were in the habit
of visiting various offices, with proposals to insure the life of the
younger and unmarried one. The visits of these persons became at last a
somewhat pleasing feature in the monotony of business, and were often
made a topic of conversation. No sooner was a policy effected with
one company than a visit was paid to another, with the same purpose.
From the Hope to the Provident, from the Alliance to the Pelican,
and from the Eagle to the Imperial, did these strange visitors pass
almost daily. Surprise was naturally excited at two of the gentler sex
appearing so often alone in places of business resort, and it was a
nine days’ wonder.

Behind the curtain, and rarely appearing as an actor, was one who, to
the literary reader versed in the periodical productions of thirty
years ago, will be familiar under the name of Janus Weathercock;
while to the student of our criminal annals, a name will be recalled
which is only to be remembered as an omen of evil. The former will be
reminded of the “London Magazine,” when Elia and Barry Cornwall were
conspicuous in its pages, and where Hazlitt, with Allan Cunningham,
added to its attractions. But with these names it will recall to them
also the face and form of one with the craft and beauty of the serpent;
of one too who, if he broke not into “the bloody house of life,”
has been singularly wronged. The writings of this man in the above
periodical were very characteristic of his nature; and under the _nom
de guerre_ of Janus Weathercock, Thomas Griffith Wainwright wrote with
a fluent pleasant egotistical coxcombry, which was then new to English
literature, a series of papers on art and artists. An _habitué_ of the
opera and a fastidious critic of the _ballet_, a mover among the most
fashionable crowds into which he could make his way, a lounger in the
parks and the foremost among the visitors at our pictorial exhibitions,
the fine person and superfine manners of Wainwright were ever
prominent. The articles which he penned for the “London,” were lovingly
illustrative of self and its enjoyments. He adorned his writings with
descriptions of his appearance, and--an artist of no mean ability
himself--sketched boldly and graphically “drawings of female beauty, in
which the voluptuous trembled on the borders of the indelicate;” and
while he idolised his own, he depreciated the productions of others.
This self-styled fashionist appears to have created a sensation in the
circle where he adventured. His good-natured, though “pretentious”
manner; his handsome, though sinister countenance; even his braided
surtout, his gay attire, and semi-military aspect, made him a
favourite. “Kind, light-hearted Janus Weathercock,” wrote Charles Lamb.
No one knew anything of his previous life. He was said to have been in
the army--it was whispered that he had spent more than one fortune;
and an air of mystery, which he well knew how to assume, magnified him
into a hero. About 1825, he ceased to contribute to the magazine; and
from this period, the man whose writings were replete with an intense
luxurious enjoyment--whose organisation was so exquisite, that his love
of the beautiful became a passion, and whose mind was a significant
union of the ideal with the voluptuous--was dogged in his footsteps
by death. It was death to stand in his path--it was death to be his
friend--it was death to occupy the very house with him. Well might
his associates join in that portion of our litany which prays to be
delivered “from battle, from murder, and from _sudden death_,” for
sudden death was ever by his side.

In 1829, Wainwright went with his wife to visit his uncle, by whose
bounty he had been educated, and from whom he had expectancies.
His uncle died after a brief illness, and Wainwright inherited his
property. Nor was he long in expending it. A further supply was
needed; and Helen Frances Phœbe Abercrombie, with her sister Madeline,
step-sisters to his wife, came to reside with Wainwright; it being soon
after this that those extraordinary visits were made at the various
life offices, to which allusion has been made.

On 28th March, 1830, Mrs. Wainwright, with her step-sister, made their
first appearance at an insurance office, the Palladium; and by the
20th April a policy was opened on the life of Helen Frances Phœbe
Abercrombie, a “buxom handsome girl of one-and-twenty,” for 3000_l._,
for three years only. About the same time a further premium was paid
for an insurance with another office, also for 3000_l._, but for only
two years. The Provident, the Pelican, the Hope, the Imperial, were
soon similarly favoured; and in six months from granting the first
policy, 12,000_l._ more had been insured on the life of the same
person, and still for only two years.[20] But 18,000_l._ was not enough
for “kind light-hearted Janus Weathercock;” 2000_l._ more was proposed
to the Eagle, 5000_l._ to the Globe, and 5000_l._ to the Alliance; all
of whom, however, had learned wisdom. At the Globe Miss Abercrombie
professed scarcely to know why she insured; telling a palpable and
foolish falsehood, by saying that she had applied to no other office.
At the Alliance, the secretary took her to a private room, asking
such pertinent and close questions, that she grew irritated, and said
she supposed her health, and not her reasons for insuring, was most
important. Mr. Hamilton then gave her the outline of a case in which a
young lady had met with a violent death for the sake of the insurance
money. “There is no one,” she said in reply, “likely to murder me for
the sake of my money.” No more insurances, however, being accepted,
the visits which had so often relieved the tedium of official routine
ceased to be paid. These applications being unsuccessful, there
remained 18,000_l._ dependent on the life of Helen Abercrombie.

In the mean time Wainwright’s affairs waxed desperate, and the man
grew familiar with crime. Some stock had been vested in the names
of trustees in the books of the Bank of England, the interest only
of which was receivable by himself and his wife; and determined to
possess part of the principal, he imitated the names of the trustees
to a power of attorney. This was too successful not to be improved on,
and five successive similar deeds, forged by Wainwright, proved his
utter disregard to moral restraint. But this money was soon spent, till
everything which he possessed, to the very furniture of his house,
became pledged; and he took furnished apartments in Conduit Street for
himself, his wife, and his sisters-in-law. Immediately after this,
Miss Abercrombie, on pretence or plea that she was going abroad, made
her will in favour of her sister Madeline, appointing Wainwright sole
executor, by which, in the event of her death, he would have the entire
control of all she might leave.

She then procured a form of assignment from the Palladium, and made
over the policy in that office to her brother-in-law. Whether she
really meant to travel or not is uncertain; it is possible, however,
that this might have been part of the plan, and that Wainwright hoped,
with forged papers and documents, to prove her demise while she was
still living, for it is difficult to comprehend why she should have
voluntarily stated she was going abroad, unless she really meant to do
so. In this there is a gleam of light on Wainwright’s character, who,
when he first insured the life of Miss Abercrombie, might have meant
to treat the offices with a “fraudulent,” and not a positive death.
Whatever her _rôle_ in this tragic drama, however, it was soon played.
On the night which followed the assignment of her policy, she went with
her brother and sister-in-law to the theatre. The evening proved wet;
but they walked home together, and partook of lobsters or oysters and
porter for supper. That night she was taken ill. In a day or two Dr.
Locock attended her. He attributed the indisposition to a mere stomach
derangement, and gave some simple remedies, no serious apprehension
being entertained by him.

On the 14th December, she had completed her will, and assigned her
property. On the 21st she died. On that day she had partaken of a
powder, which Dr. Locock did not remember prescribing; and when Mr. and
Mrs. Wainwright--who had left her with the intention of taking a long
walk--returned, they found that she was dead. The body was examined;
but there was no reason to attribute the death to any other cause than
pressure on the brain, which obviously produced it.

Mr. Wainwright was now in a position to demand 18,000_l._ from the
various offices, but the claim was resisted; and being called on to
prove an insurable interest, he left England. In 1835, he commenced
an action against the Imperial. The reason for resisting payment was
the alleged ground of deception; but the counsel went further; and
so fearful were the allegations on which he rested his defence, that
the jury were almost petrified, and the judge shrunk aghast from the
implicated crime. The former separated unable to agree; while the
latter said, a criminal, and not a civil court should have been the
theatre of such a charge. In the following December, the company
gained a verdict; and as the forgery on the Bank of England had been
discovered, Wainwright, afraid of apprehension, remained in France.
Here his adventures are unknown. At Boulogne, he lived with an English
officer; and while he resided there, his host’s life was insured by
him in the Pelican for 5000_l._ One premium only was paid, the officer
dying in a few months after the insurance was effected. Wainwright
then left Boulogne, passed through France under a feigned name, was
apprehended by the French police; and that fearful poison known as
strychnine being found in his possession, he was confined at Paris for
six months.

After his release he ventured to London, intending to remain only
forty-eight hours. In an hotel near Covent Garden he drew down the
blind and fancied himself safe. But for one fatal moment he forgot
his habitual craft. A noise in the streets startled him: incautiously
he went to the window and drew back the blind. At the very moment “a
person passing by” caught a glimpse of his countenance, and exclaimed,
“That’s Wainwright, the Bank forger.” Immediate information was given
to Forrester; he was soon apprehended, and his position became fearful

The difficulty which then arose was, whether the insurance offices
should prosecute him for attempted fraud, whether the yet more terrible
charge in connection with Helen Abercrombie should be opened, or
whether advantage should be taken of his forgery on the Bank, to
procure his expatriation for life. A consultation was held by those
interested, the Home Secretary was apprised of the question, the
opinions of the law officers of the crown were taken, and the result
was that, under the circumstances, it would be advisable to try him for
the forgery only. This plan was carried out, the capital punishment was
foregone, and when found guilty he was condemned to transportation for

His vanity never forsook him. Even in Newgate he maintained his
exquisite assumption, triumphing over his companions by virtue of his
crime. “They think I am here for 10,000_l._, and they respect me,” he
wrote to one of his friends, who would not desert him. He pointed the
attention of another to the fact, that while the remaining convicts
were compelled to sweep the yard, he was exempted from the degrading
task. Even here his superfine dandyism stuck to him. Drawing down his
dirty wristbands with an ineffable air of coxcombry, he exclaimed,
“They are convicts like me, but no one dare offer me the broom.”

But bad as this might be for such a man, he brought yet harsher
treatment on his head. As, previously to Helen Abercrombie’s death, she
had made her will in favour of her sister, the claim of the latter was
placed before the various offices in which the life had been insured.
While this was pending, Wainwright, thinking that if he could save the
directors from paying such large sums, they would gratefully interfere
for the alleviation of his misery, wrote a letter giving them certain
information, coupled with a request or condition that they should
procure a mitigation of punishment. What this revelation was may be
judged from the united facts, that it saved the offices from paying the
policies, and that when they communicated it to the Secretary of State,
an order was immediately sent to place him in irons, and to forward
him instantly to the convict ship. If his position were bad before, it
was worse now; and he whose luxury a rose leaf would have ruffled, and
whose nerves were so delicately attuned that a harsh note would jar
them, must have been fearfully situated. He had played his last card,
and he had lost. When he wrote from Newgate he had claimed for himself
“a soul whose nutriment was love, and its offspring art, music, divine
song, and still holier philosophy.” In the convict ship he shrunk from
the companionship of the men with whom he was associated, and his pride
revolted from being placed in irons without distinction, like them.
“They think me a desperado! Me! the companion of poets, philosophers,
artists, and musicians, a desperado! You will smile at this--no, I
think you will feel for the man, educated and reared as a gentleman,
now the mate of vulgar ruffians and country bumpkins.”

It is evident there was no change in him. He was just as much a
selfish, coxcombical charlatan as when, fifteen years before, he wrote
in one of his art papers of “exchanging our smart, tight-waisted,
stiff-collared coat for an easy chintz gown with pink ribbons;” when
he touched so lightly but luxuriantly on “our muse or maid-servant,
a good-natured Venetian-shaped girl,” and of “our complacent
consideration of our rather elegant figure, as seen in a large glass
placed opposite our chimney mirror.” Others might be ashamed of
self-idolatry; he gloried in it. Such was his description of himself;
and who that has read it will ever forget that other description of
him as exemplified by Gabriel Varney? “Pale, abject, cowering, all the
bravery rent from his garb, all the gay insolence vanished from his
brow, can that hollow-eyed, haggard wretch, be the same man whose
senses opened on every joy, whose nerves mocked at every peril?”[21]

The career of Wainwright is instructive. From the time that he quitted
the simple rule of right, he wandered over the world under influences
too fearful to detail, and he died in a hospital at Sydney under
circumstances too painful to be recapitulated.

From 1825 to 1835, there was a huge outcry against all the new offices,
principally, however, raised by the old companies, who seemed to claim
a patent right of preservation. They forgot that competition is the
very soul of business, and mourned greatly as every new office made
its appearance, although by 1835 only fourteen more were established.
The following fraud was held in the light of a providence, and has
long been quoted by them, though few are aware of the many remarkable
circumstances in connection with the infamous “Independent and West

An old man, between sixty and seventy, ignorant, uneducated, and in
want; who had been at one time a smuggler, and at another a journeyman
shoemaker, thought, in the year 1836, that the best mode of supplying
his necessities would be to open an office for the receipt of moneys
in exchange for the sale of annuities. The plan was notable, but
required assistance, and a coadjutor worthy his friendship was soon
found in one William Hole, a tallow-chandler, a smuggler, a footman,
and a bankrupt. These friends at once confederated together, and
found no great difficulty in their way. The chief capital demanded
by such an undertaking on the part of the proprietor, was unbounded
impudence; and on that of the public, unbounded credulity. Having
joined their purses to produce a prospectus, and having taken an office
in what Theodore Hooke called “the respectable neighbourhood” of Baker
Street, Portman Square, their next plan was to concoct a directory
of gentlemen who, while they attracted public attention and seemed
a pledge for the respectability of the company, should yet mislead
those who were not familiar with the financial world. This was an
easy task, and in due time the most honourable names in London were
openly published as managers of the “INDEPENDENT AND WEST MIDDLESEX
FIRE AND LIFE INSURANCE COMPANY.” Trusting to the faith of people in
great mercantile firms, there was scarcely a banker, a brewer, or
a merchant whose patronymic, with different initials, was not used
by these ex-smugglers to forward their views. Drummonds, Perkins,
Smith, Price, and Lloyd were all produced as fancy directors, to adorn
one of the most impudent prospectuses which was ever composed. They
then turned their attention to the working men of the establishment,
and Mr. Hole having a brother-in-law named Taylor[22], sufficiently
respectable to be a journeyman bell-hanger, sought him out, saying
“he was going to make a gentleman of him,” undertaking to pay him 100
guineas yearly, provided he attended the board when it was required,
and did not “get drunk or behave disorderly.” Finding some difficulty
in procuring a sufficient number, and being applied to by a William
Wilson for a menial situation, they at once advanced him to the post
of director, paying the liberal sum of five shillings weekly. A boy of
sixteen, who went on errands, who signed annuity deeds for thousands,
or who swept the floors, was also appointed to a similar post; while
the gentleman who undertook the onerous position of auditor, was also
porter in general to this respectable establishment. On board days
they were told to dress in their “Sunday’s best,” to place brooches in
their dirty shirts, and rings on their clumsy fingers; the huge fine
of half-a-crown being inflicted, should they appear in the native
simplicity of their work-a-day attire; and it is no unremarkable
feature of this establishment, that Taylor duly, on board days, left
his master the bell-hanger to go to his master the director, to sign
the deeds which duped the public. Their next requirement was a banker;
and none other was good enough save the Bank of England, which was
added to the list of attractions of this commercial bill of the play.

Everything thus prepared, they turned their attention to statistics;
and here again there was no great obstacle. In order to procure
business, it was necessary to offer tempting terms, so they liberally
proposed to serve the public 30 per cent. lower than any other office,
although with all the existing competition the greatest difference
hitherto had been but from 1 to 1-1/2 per cent.; and in addition to
this, these bad men committed the glaring impudence of granting life
assurances for much smaller premiums, and selling annuities on much
lower terms than any one else; terms so palpably wrong that a man of 30
by paying 1000_l._ could obtain a life annuity of 80_l._, and by paying
17_l._ 10_s._ of this to insure his life, could receive 6-1/4 per cent.
for his money and secure his capital to his successors.[23]

Having thus arranged preliminaries, they opened their office and
commenced business. They had the precaution to select respectable
agents, and by giving 25 per cent. where other companies only gave 5
per cent., stimulated them to say all they could in their favour. The
terms were very attractive; there is always a large ignorant class
ready and willing to be duped; and the business went on swimmingly. If
a man wanted to insure his life, there was no great difficulty about
his health. If another wished to purchase an annuity, they were quite
willing to dispense with baptismal certificates in London, Dublin,
Edinburgh, and Glasgow; large and handsome offices were opened, and
the public induced to play its part in this most serious drama of
real life. The poor and less intelligent portion of the community,
lured by terms which had never before tempted them, took their spare
cash and invested it in the West Middlesex. Rich men were not less
dazzled by the golden promises; and one, disposed to sink a large sum
in so profitable a concern, desired his solicitor to inquire about its
solidity. The solicitor went to the manager, and questioned him as
to the directors and the capital. Knowles at once said the directors
were not the men whose names they took, nor was the capital so much
as a million. But the former, he vowed, were respectable men, and the
latter was quite enough for their purpose. As, however, he declined
to give the residences of the directors, or to say where the capital
was invested, the solicitor also declined to risk the money of his
client. The success, however, which they experienced in other cases,
justified their daring. One person who had toiled, and worked, and
grown prematurely old in the service of Mammon, invested his all in the
purchase of an annuity, and in order to secure the capital, insured his
life. In two years he was a beggar. A family which with great industry,
and by doing without a servant for forty years, had saved enough to
retire from business, placed the principal portion with the West
Middlesex, in time to be informed that the directors had absconded. A
governess who had been left a small property, and bought a deferred
annuity with the proceeds, died of a low fever soon after the bubble
burst. Half-pay captains, clergymen, servants, tradesmen, all came with
their spare cash to get 6-1/4 per cent. and secure their capital.

From remote districts where their prospectuses had been circulated,
money came pouring in. Any one who chooses to refer to the current
literature of that time, will perceive that these fellows availed
themselves of every vehicle to make their claims public. The daily and
weekly papers, the monthly and quarterly journals, all bear testimony
to their zeal in the shape of shameless advertisements, and the walls
of provincial towns absolutely blazed with their attractive terms.

The money thus obtained was liberally spent. The promoters kept
carriage-horses and saddle-horses; servants in gorgeous liveries
waited on them; they fared, like Dives, sumptuously every day. One
of the directors lived in the house in Baker Street, and being of a
convivial character, astonished that quiet street with gay parties,
lighted rooms, musical _soirées_, and expensive dinners. His wine was
rare and _recherché_, his cook was sufficiently good for his guests,
and he found himself surrounded by the first people of this lively
locality. But there were very dark rumours afloat, which should have
made men hesitate before they gave this fellow their countenance. By
1839, there was a general feeling that there was something wrong; Mr.
Barber Beaumont wrote a letter to the “Times” about it; and had it not
been for the wonderful boldness of the adventurers, they must have
broken up long before. It was known that they had thrown a difficulty
in the way of paying some annuities in the country; and that, without
any justice, they had refused to discharge a fire insurance which had
become due. Still what is every one’s business is nobody’s business,
and they had hedged themselves with such a conventional respectability,
they looked so grave, they talked so properly, and they gave such good
dinners, that it was long before they were compelled to yield. So great
was their _prestige_, that though one of their victims came fierce
and furious, and bearded them in their own house, and before the very
faces of their friends--though he told the party assembled that he was
swindled, and their hosts were the swindlers,--it produced no effect,
and he was absolutely obliged to leave the place for fear of personal
violence. In addition to the dinners which they gave their friends,
they had small pleasant parties of their own, with toasts sardonically
applicable to themselves, the first standing sentiment being in
mocking, reckless contempt,--

  “An honest man’s the noblest work of God!”

The unpleasant rumours continuing to spread very rapidly, it became
desirable to procure a director with something like respectability
attached to his name; so Mr. Knowles wrote to Sir John Rae Reid,
Governor of the Bank of England, stating, that as he was a native of
Dover he could assist Sir John with his constituents, provided that
gentleman would give his name as director to the falling establishment.
The only reply was a contemptuous refusal, and an unceremonious request
that Mr. Knowles would withdraw the accounts of the West Middlesex from
the custody of the Bank.

In the mean time the established institutions looked on in wonder,
asking themselves when this bold violation of probity would cease. It
was certain that, so long as the new office could procure money from
the public, they would continue to do so. There was no law, indeed,
which could touch them; and when some of their victims hesitated at
continuing their payments, the following specious letter was written by
the agent whom the gang at Baker Street had found means to blind:--

“I have been to London purposely to examine the affairs of this
society, and I can assure you the reports issued against them are
wholly without foundation; the principal part of them are gentlemen
living on their own property. The following is the result of my
investigation, which must surely satisfy the mind of any person as
to their respectability:--63,000_l._ in the Bank of England to meet
emergencies; 160,000_l._ on mortgage property in London, at 7 per cent.
and 8 per cent.; 40,000_l._ on reversionary property; 120,000_l._
on different funded securities; 3000_l._ in the Bank of Scotland;
30,000_l._ on mortgage security in that country; 3000_l._ in the Bank
of Ireland; 10,000_l._ on landed security in that country; and their
paid-up capital is 375,000_l._”

But even this brilliant array of securities failed at last in its
effect, and it was left to the shrewdness and daring of a Scottish
gentleman to encounter single-handed, this most unprincipled
combination. Among those who had entered into transactions with the
Glasgow branch was Mr. Peter Mackenzie, editor of the “Scottish
Reformers’ Gazette,” whose attention became naturally drawn to a
question which involved the happiness or misery of a great number of
his countrymen; and as the opinion of Sir John Reid had been very
mendaciously quoted in favour of the West Middlesex, Mr. Mackenzie
addressed him to ascertain the truth of this assertion; in reply to
which the Governor of the Bank stated, “I know nothing of the parties
in question, and I consider it highly improper that any reference
should be made to me on the subject.” This was decided enough; and as
Mr. Mackenzie was doubtful whether the Independent and West Middlesex
had not grown out of a similar company under another name, which had
advertised the duke of Wellington as a patron, he wrote to his grace,
receiving the straightforward reply, “that the duke did not doubt a
gang of swindlers had advertised his name as patron, that the same or
another gang had played a similar trick in Southwark, and that Mr.
Mackenzie was authorised to state to the public that the duke had not
sanctioned the publication of his name in that or any other similar

Although the company had so long a list of directors, Mr. Mackenzie
observed that the policies were always signed by the same three
individuals, that no designations or addresses were annexed to
the names, and that there was an accumulation of functions in the
respective office-bearers, quite unusual. He then determined, believing
that the company was radically wrong, to discharge his duties at all
risks. And most manfully did he perform that determination. In March,
1839, under the head of “EXPOSURE,”[24] he inserted an article in his
“Reformers’ Gazette;” and it is hardly possible to exaggerate the
sensation which the exposure produced in Glasgow. Men of all parties
congratulated him on his fearless attack; the people who were assured
in the West Middlesex ran wildly to the office, where they were
told, “that the reasonableness and moderation with which they had
done business had been the cause of great jealousy and offence, and
had brought down on them a variety of assertions of the most false,
calumnious, and slanderous character.”

They threatened Mr. Mackenzie with the terror of the law; but on the
9th March that gentleman again attacked them, asking, “Will the mere
statement of a parcel of swindlers in their own favour secure for them
public confidence, when it has been directly and specially assailed?”

The more they were attacked, however, the more they advertised. All
the London and provincial papers were employed to spread their terms,
and 2000_l._ were placed in the hands of their law agent to ruin, if
possible, Mr. Peter Mackenzie. Undauntedly, however, did he continue
week after week to attack them; and it is impossible not to admire
the mingled gallantry and audacity with which they defended outpost
and citadel. Though they lost one action they had brought against Mr.
Mackenzie, they commenced another, declaring that their terms were fair
and liberal, that the public could insure with them at favourable rates
to themselves and reasonable profit to the company, “and, above all,
that Mr. Mackenzie was false, calumnious, and slanderous.”

The position in which they were placed was curious enough. It was
plain that a most disgraceful fraud was in existence; but while no act
of insolvency was committed, the law could not interfere. There was,
indeed, no way of stopping them; and it was evident that they would
only cease business when the public ceased to pay its money. While
they discharged the annuities as they became due, and paid the life or
fire policies which fell in, they were utterly uncontrollable, save by
the moral power of the press. This power, so far as Mr. Mackenzie was
concerned, was most unsparingly used; but he availed himself of another
weapon. The name of Peter Mackenzie is rarely mentioned in England in
connection with this company, that of Sir Peter Laurie and the West
Middlesex being always associated; and this is owing to the fact that,
not content with the powerful articles in his paper, he sent a letter,
with the report of the trial, to Sir Peter, to inform him that “the
company called the West Middlesex was a company of swindlers,” begging
him to use his influence as chief magistrate of the city of London, to
stop this crying iniquity. Sir Peter went to the Bank of England, and
inquired if they knew anything of the company. “Yes,” was the reply,
“they are the greatest swindlers that ever existed in London.” “On
this hint he spake;” and from his seat at the Mansion House the “first
Scotch Lord Mayor” let all England know that the Independent and West
Middlesex Insurance Company was a sham, and that Sir Peter was going to
put it down. The declarations he openly made, and the information he
procured, produced an enormous number of letters from the victims. The
company became a theme of public conversation--the assurance offices
rejoiced at the discovery of their rival’s infamy--and those who were
insured were rudely startled from their dream of security.

In the mean time, Mr. Mackenzie pressed them closely in Glasgow. He
defied them and the damages they sought to obtain. There was no word
too bad to give them--no assertion which had its foundation in truth,
which he was not bold enough to publish. Actions involving damages
to the extent of 20,000_l._ were brought against him in vain--he was
indomitable in determination and invincible in spirit. Week after week
he poured forth the vials of his wrath; and it is scarcely possible
to say how much longer he must have continued his attacks, had not
intestine strife assisted his endeavours. The worthy Mr. Knowles and
the excellent Mr. Hole quarrelled, and the latter wrote the following
elegant epistle to his coadjutor:--


  “Thou art a scoundrel, and thy son no better. I shall print and
  publish all the by-laws and proceedings which relate to any
  transactions which I had with the company, and expose your villainy
  to Mackenzie and others; and I give you and your lying rascal of a
  ---- notice, that if you or he should dare to publish any slander
  relative to my character, I shall instruct my solicitor to prosecute
  you, you d--d perjured scoundrel!--you base wretch! Swear against
  your own hand-writing! What! swear you never borrowed any money of
  me for the office! O wicked wretch! I have your signature, and my
  solicitor has seen it. Base! base! base! Hang thyself, with thy
  friend Williams.



Another letter of this gentleman concluded in the following
manner:--“Whoever said I had more than this is a liar; and like unto
Peter, who denied his Master, and afterwards went and wept; or, like
unto Judas, who betrayed his Master, and went afterwards and hanged
himself. All that I have said or written I can prove.”

By this time it became pretty clear that the career of the Independent
and West Middlesex was run; the valuables were removed from Baker
Street; two waggons were necessary to remove the wine only; and
the bubble burst. The loss sustained by the public is difficult
to estimate. The confederates boasted of taking 40,000_l._ in one
year; and it is probable that from 200,000_l._ to 250,000_l._ is
no exaggeration. But whatever the pecuniary loss, the moral effect
was much worse. It would be impossible to enumerate the examples of
sorrow and suffering which ensued; yet it is equally painful to think
that the cause of insurance was considerably injured. Some degree
of blame rests with the other offices. They knew--they could even
have demonstrated--that an institution charging such low premiums on
assurances, and allowing such large sums as annuities, must fail; that
it was a mathematical impossibility that it would answer; and when they
found, in addition, that Hole offered their agents half the year’s
premiums as commission, it was a “confirmation strong as proof of Holy
Writ.” Had they applied, like Mr. Mackenzie, to the Lord Mayor, it
would have been stopped in its outset, and many excellent people saved
from ruin. Had he not opened the eyes of the public, there is no saying
to what extent they might have carried their transactions; for though
Sir Peter Laurie indisputably aided him, it is equally true that Mr.
Mackenzie lost 1300_l._ by his exposure of the “Independent and West
Middlesex Life and Fire Insurance Company.”

The death of Mr. Beaumont, in 1841, recalls the name of one who, for
nearly half a century, was a very noticeable man. But though for the
last thirty years of his life he controlled the movements of a large
fire and life assurance office, he was not rendered narrow-minded by
his devotion to business; nor will a brief review of his career be
unacceptable to those who remember his name as one of the earliest
apostles of life assurance.

John Thomas Barber Beaumont, more familiarly known as Barber Beaumont,
was born in 1773. As a youth he was devoted to historic painting, the
talent which he evinced being recognised both by the Royal Academy
and by the Society of Arts, from each of which he won the medals
awarded to excellence in their several departments. He soon, however,
abandoned historical for miniature painting, where again his ability
was acknowledged by his appointment to the post of portrait painter
to the dukes of York and Kent. His connection with royalty probably
stimulated him to raise a rifle corps in defence of England, when the
first Bonaparte threatened invasion. Like all which he undertook, he
gave his heart and soul to it. He published a couple of pamphlets, the
first “by Captain Barber,” and the second anonymously. He recommended
that the people should be armed as sharpshooters and pikemen, and
pointed out the special advantage of the invaded over the invaders;
and so devoted was he to the cause, that he established a paper--the
“Weekly Register”--to stimulate the exertions of others by recording
his own. The corps of which he was captain became an evidence of his
personal zeal. In a trial of skill between the various regiments he
won the first prize; and so satisfied was he of the efficiency of his
men that, on one occasion, in Hyde Park, he held the target while the
entire corps, one after the other, discharged their rifles into the
bull’s eye at the distance of 150 yards. In his hatred of the French
emperor, in his love of boxing, and his belief in Queen Caroline, he
was a “distinguished Englishman.” These were three articles of faith of
that day, and he believed in all.

In 1806, Mr. Beaumont found his true vocation; and the active spirit
which had distinguished itself in painting and in defending his
country, in abusing Bonaparte and lauding our “injured Queen,” turned
its attention to the poor. In conjunction with the County Fire and
Provident Life Offices, he attempted to establish an association for
the working man. Though this did not succeed, it was not for want of
devotion. In every part of the country, agents explained its benefits.
Many thousand pamphlets were distributed, but the artisan and labourer
could not be induced to join it.

The mind of this class was less cultivated and less cared for then than
now, and wherever they got high wages, they spent them recklessly.
They regarded the workhouse as their natural refuge, and claimed its
privileges as their inalienable birthright. We owe the presentation
of many facts concerning them to Mr. Beaumont, who after ten years’
trial, finding that his association failed in its purpose, interested
the inhabitants of Covent Garden and the neighbourhood, in the
establishment of a savings bank. To compass this he presided at various
public meetings, where he spoke with much energy, addressing the
poorer class in an easy familiar tone, and speaking to them as only
one who understood their wants could have spoken. He necessarily won
their confidence by his zeal, and all which he wrote on the subject
evinces a spirit of benevolence, being evidently the production of an
acute and energetic mind. He was the first to point out the various
objections to benefit societies, and his exertions in the cause of
savings banks, though now almost forgotten, were productive of good;
nor is it too much to add, that habits of industry and frugality were
excited, or that the happiness of the working class was increased by
his exertions. That which has hitherto been related of Mr. Beaumont was
but the result of his leisure hours; for he was the originator of an
office, to the service of which he gave the principal part of his time,
and in which he found his reward. There was, indeed, something very
significant in his resolute, earnest spirit, and there must, too, have
been something very honest in the man; for in the outset of his own pet
office, when the members were excited by success, he told them that
the early accounts were not to be relied on, that they were flattering
from the nature of the business, and that they showed more success at
the beginning than the future would confirm. He was an open foe to
all fraudulent offices, and did all he could to stay the progress of
the concocters of the West Middlesex. He called attention to their
proceedings in the “Times;” he proved that the enormous commission
they offered, argued a foregone conclusion of swindling; he attacked
them in a Scotch paper, and drew their wrath upon him, in the shape
of an action for damages, which cost him 100_l._, and for which an
additional claim of 600_l._ was made on his executor.

Unlike many business men, he had both taste and talent for literature.
He wrote a tour in South Wales, and he has given us a very instructive
work on Buenos Ayres, in the colonisation of which he was interested.
The pamphlets he published are principally on social subjects, and
time has confirmed the opinions he expressed. The people and their
requirements seemed his special care, and he appears to have borne in
mind the Divine commission “the poor always ye have with you.” Besides
a close attention to their physical wants, he originated a literary
institution; for he had received too much solace from art, science,
and literature himself, not to spread its moral and mental advantages
among those in whose cause he laboured. Nothing could exceed the ardour
he evinced, or the fatigue he underwent, in carrying out his plan. “He
was on the spot at all times, and in all weathers. His attention was
indefatigable and his vigilance excessive. He paid little regard to
meat, or drink, or sleep; and the consciousness that he was about to
effect a great and lasting good inspired him with augmented energy in
the midst of waning health and a decaying frame.”

At length the sword wore out the scabbard. For thirty years he had been
subject to an incurable asthmatic malady, and for the last ten years
of his life he had never been free from daily and nightly paroxysms
of pain. A long time prior to his death he, in a somewhat eccentric
spirit, ordered a coffin of beautiful oak to be made, and to undergo
the process which would save it from dry rot; this was kept at the
undertaker’s, where he often philosophically went to contemplate the
future depository of his remains. Not satisfied with the good he had
effected in his life, he left at his death 13,000_l._ to maintain the
institution which he had founded. He was buried in his own cemetery;
and there are many wealthy men who may take a lesson from Barber
Beaumont in the employment of their riches, and many poor men who may
copy his unceasing industry, prudence, and perseverance.

Some allusion to the baneful career of the cholera, fortunately more
rare in its visits than the old plague, will not be out of place in a
volume, the basis of which is the mortality of the people. Although
from 1832, when it made its second appearance in England[25], various
rumours had been spread of its approach, it was not until 1849 that it
came again to this country in all its terrible reality. The appalling
disease of that year will not be readily forgotten; for it spared
neither the rich in his mansion, nor the poor in his hovel. It smote
the physician who attempted its cure, and it struck down the priest who
supplicated its departure. It was not, however, indiscriminate in its
attacks; for wherever a squalid population hedged in the lofty terrace
or the aristocratic square, it spread from the meagre workman to his
healthy fellow-citizen. The business of most life-assurance offices
increased with rapidity. Some of them were besieged with applicants.
Men saw their neighbours’ houses closed, and feared that a similar
symbol might soon mark their own. They ran, therefore, while there
was yet time, to do that which they should have done before; and so
great was the influx, that it is doubtful had this new form of plague
lasted in all its intensity, whether some of the companies would not
have shared the panic and shut their doors. It was scarcely possible
to see house after house bearing the signs of mourning, without an
indefinite future pressing its claims; and when it was found that,
in several cases, insurance was followed by rapid death, they who
knew little or nothing of the doctrine of chances, suggested that for
a period the offices should be closed; and as life after life was
insured and fell, and as day by day the gloom of the City increased,
it was even agitated by those who should have been better informed.
But the companies maintained their calling; though then, if ever, they
should have mooted, whether those who insured their lives, and went
to reside among ill-constructed sewers, foul gully holes, and teeming
cesspools, should not have paid a higher premium than those who went
to ventilated houses, breezy suburbs, and well built districts. This
point seems completely lost sight of. Every inquiry is made concerning
gout, asthma, and consumption; but no question is put concerning the
health of a locality. A man determined to commit suicide, and not
void his policy, may as surely effect his purpose as if he visibly
destroyed himself; for wherever scarlet or typhus fever rages, there
may he reside without question. “Whoever has insured his life,”
remarks Mr. Dickens, “may live over a cesspool. He who has taken out a
policy, is not called to give notice of his intention, though he may
purpose removing to some quarter of the town, in which his house may
be ill-ventilated, his neighbourhood confined, his drainage in a state
of horrible neglect. There was a case in point, that attracted public
notice some little time ago. A gentleman, aged thirty-one, in excellent
health, assured his life for a 1000_l._ Having paid only three annual
premiums, he removed to a sickly spot in the Bethnal Green Road, and
died of typhus fever after a few days’ illness.”

These ideas are gaining ground. Mr. Austin first started them, and Mr.
Dickens has reproduced them. They arose during the fatal sickness just
alluded to, and are certainly not unworthy the consideration of all who
are interested on the subject.

A new plan, now known as the half-credit system, was first introduced
in 1834, by the United Kingdom Life Assurance Company; and although
strongly opposed at its commencement, has since been very generally
adopted. By this system a person aged 30, whose annual premium for
insuring 1000_l._ would be 21_l._ 18_s._ 4_d._, may insure 2000_l._ by
paying the same premium annually for five years, after which 43_l._
16_s._ 8_d._ would be required. This would leave 109_l._ 11_s._ 8_d._,
including interest, to be paid off at his convenience, or to be
deducted at his death; but should he die within the first five years,
his family would receive 2000_l._ instead of the 1000_l._ they would
have received under the old system.


[20] It is difficult to avoid blaming the offices. These large and
varied insurances were, probably, known to every company in existence.
The reasons assigned should have been tested, and very little trouble
would have shut the door of every office in London on Wainwright and
his companions. For so much money to be risked on the life of a girl
of twenty-one, described as “remarkably healthy, whose life was one
of a thousand,” and that too for only two years, merely because a
nominal plea of insurable interest was given, was neglectful and almost
culpable; although there is some extenuation in the fact that this lady
assisted to deceive by uttering, or at least coinciding in a false
statement to Mr. Ingall, at the Imperial, is certain. The slightest
inquiry would have discovered that Wainwright was a beggar, that this
young lady had no direct or indirect interest in any property whatever,
and that the premiums must have been paid with some sinister purpose by
a man steeped in difficulties and overwhelmed with debt, on the life of
a healthy but most unhappy girl, entirely under his control.

[21] “Lucretia.”--By Sir E. B. Lytton.

[22] This man appears to have been an innocent tool in the hands of his
acute brother-in-law.

[23] This was first pointed out by the Quarterly Review.

[24] The following form extracts from the above articles of Mr.
Mackenzie:--“Some time ago there was sent to this office a series
of advertisements in favour of the Independent and West Middlesex
Insurance Company, which were entered and paid for in the regular
course of business. We are cautious about quack medical advertisements,
none of them that we are aware has ever been admitted into our columns;
but it never entered into our heads for one moment, that an insurance
company professing to be incorporated by special acts of parliament,
was in truth a quack company, got up for the premeditated purpose
of imposing on the public in matters of fire and life. Hence the
advertisements of this company glided through our columns from time
to time to time.... But we were astonished lately to learn that this
was a spurious insurance company hatched in London two years ago.”
“Under these circumstances, our duty, we humbly conceive, is at once
plain and decisive, and therefore we proceed to discharge it for the
sake of the public, whose faithful and unflinching servants we at all
times profess to be. In a word, we raise our voice and warn the public
against this Independent West Middlesex Insurance Company. It is a
false and fictitious company.” “In their polices of insurance they take
care to provide that ‘the capital stock and funds of the said company
shall alone be answerable to the demands thereupon under this policy.’
Why, what is the value of their capital stock and funds, if as we say
the parties themselves forming the said company are utterly worthless,
being in fact no better than a parcel of tricksters in London,
disowned, or repudiated, or condemned by every respectable person to
whom reference is made? There can scarcely, we think, be anything so
base or so nefarious as taking premiums from unsuspecting people, and
making them believe they are secured against the contingencies of life,
or the risk of fire, and yet mocking them in their calamities when the
bubble bursts.”

[25] The cholera first visited England about the beginning of August
1348. From the seaport towns on the coasts of Dorsetshire, Devonshire,
and Somersetshire, it ran to Bristol, and the men of Gloucester
established a quarantine between the two places. But this “familiar
fury” mocked then as now at the quarantine, and walking in darkness
appeared in Gloucestershire to the horror of its inhabitants. From
thence it passed by way of Oxford to London, finally spreading all over
England, “scattering everywhere such ruin and desolation that of all
sorts hardly the tenth person was left alive.”

In the church and churchyard of Yarmouth, 7052 were buried in one year.
Within six months, in the city of Norwich more than 57,000 died. In
London, death was so outrageously cruel that every day saw twenty,
sometimes forty, and sometimes sixty or more dead bodies flung into
one pit. The churchyards became crowded. Fields and additional places
of burial were set apart, and these soon failed to suffice; the number
of the dead increasing so rapidly that “they were fain to make deep
ditches and pits very broad, wherein they laid a range of carcasses and
a range of earth upon them, and then another range of dead bodies,” and
in this manner the people, except those of the better sort, were placed
in their long home. The cattle died in hedges and ditches by thousands
for want of men to attend them. All suits and pleadings in the King’s
Bench and other places ceased. The sessions of parliament were stopped.
England and France forgot for a time that they were “natural enemies.”
County, city, and town witnessed solemn prayers and public processions
for days together, and God was implored in highway and in byway to
“sheath his angry sword and preserve the residue from the devouring
pestilence.” When this pestilence which yet yearly threatens our coast
had passed away, it was found that its prey had been chiefly old men,
women, and children of the “common sort of people,” and that but few
of the nobility of the land had been seized by it. Property was for
a long period depreciated: that which was previously sold for forty
shillings, only fetched a mark; and the Scots in scorn invented a new
oath, swearing in contempt “by the foul deaths of the English.”



A select committee was appointed in 1841 to consider the laws relating
to joint stock companies. It concluded its labours in 1843. There was
an evident want of amendment in these laws. For about fifteen years
prior to 1840, the world had been at the mercy of any one who chose to
publish an advertisement, call himself a company, and receive money
for assurances and annuities. Vast sums had been obtained, therefore,
by daring adventurers of the Montagu Tigg school, who launched with
avidity into this branch of business. Besides the loss by the West
Middlesex, nearly half a million sterling had passed from the pockets
of the public to those of projectors; and the following instances will
prove that government were not called upon to interfere without a sad

A family of swindlers founded an office. One of them changed his name,
called himself trustee, and acted as chief manager. Who would believe
that this man, without character and without money, induced several
members of parliament to become directors? because “they thought they
were doing a kindness to the promoter;” allowing their names to be used
as lures to a concern whose shareholders, when it broke up, were found
to be “minors, married women, labourers, and small tradesmen.”

In a second office, an uncertificated bankrupt, its promoter, appointed
himself resident manager. Insurances and annuities to a considerable
extent were effected, and then the company, consisting of eleven
shareholders and directors united, vanished, and, “like the baseless
fabric of a vision, left not a wreck behind.”

In another which had been established many years, great names were
at its head, and great business was done. But whether the terms were
not high enough, or the management was bad, it proved a failure. An
extraordinary career was that of the chief manager. Thinking, probably,
to recover himself, he had speculated in newspapers; he had established
a society in connection with natural history; he called the queen
dowager his patron, and had been honoured by a visit from majesty.
As some of these could scarcely be called sound investments for an
annuity society, he was unfortunately compelled to leave off paying the
unhappy annuitants.

These special cases arose from want of sufficient control. On inquiry
it was discovered that the names of persons who had no existence had
been used in some cases, and the names of persons of substance, without
their permission, in others. That false statements of authority--that
fraudulent prospectuses--that tempting rates of commission--banking
accounts with the Bank of England--and, above all, advertisements
appealing to the cupidity of the public,--had always proved successful.

Owing to the information elicited by the committee, it was deemed
necessary to recommend that any future company should be provisionally
registered, stating every particular of its purpose, its promoters, its
directors, its subscribers; and that a complete registration should be
accompanied by a copy of its prospectus, its deed of settlement, its
amount of capital, its number of shares, the names and residences of
the shareholders, the officers of the company, and a written acceptance
of office. These recommendations were carried out by 7 & 8 Vict. c.
110.; but time has proved that the act has scarcely been successful,
even in mitigating the evils it was meant to prevent. “Arguing from the
experience of the present law,” says the “Morning Chronicle,” “during
the past eight years, it does not appear that its effect has been in
any way to restrain the formation of unsound insurance companies;” and
in one respect it assisted them, as it gave the promoters the power
of quoting a special act of parliament in their favour, thus adding a
spurious stability to their character. In seven years from the working
of the new act the number of projected companies averaged three and
a half per month; the number actually opened, two every month, while
about fourteen yearly were compelled to close their operations. It may
be supposed that the old offices were somewhat surprised as project
after project, each proclaiming its principle to be the very essence
of life assurance, was registered. They made, however, a great show of
business. Their annual reports were startling to the ears of staid,
methodical gentlemen of the old school, who, seeing that their own
policies had not increased with the population, thought, when new
companies declared huge profits and boasted augmented policies, that
the world was coming to an end. The assumptions of some of these new
offices were audacious enough; one actuary asserting that a company
might spend all their premiums and great part of their capital, and
be perfectly solvent. The first year’s business of a society which
started at this period produced 3300_l._; a large sum undoubtedly,
but the first year’s expenses were 3000_l._ out of it. The business
of the second year produced 2000_l._; but all the money paid by the
policy holders was spent, with 15 per cent. of the capital in addition.
Rumours like these--exaggerated perhaps by the terrors of those of the
_ancien régime_--soon spread about, and there was a growing disposition
in the public to regard new offices with suspicion. Of about forty
which had been annually projected from 1844 to 1851, many had given up
the ghost; and though the policies in some cases were transferred to
other offices, yet in those which were not so fortunate there must have
been great evil. For some years a cloud had been gathering; but when
Mr. Labouchere moved that the accounts of the various offices should be
printed, and when, in their naked attire and without the opportunity of
re-arranging them, they were presented to the House, they seemed so at
variance with the boasted success of many, that the public, aided by
the old offices, grew frightened at the picture which Mr. Labouchere
had conjured.

This, however, produced no very apparent results in checking the
formation of others; but the letter of Mr. Christie[26] to the
President of the Board of Trade, together with various leading articles
in the morning papers, in which the Chronicle took the lead, aroused
a spirit of mischief in those who thought themselves aggrieved. “The
object I have in view,” says Mr. Christie, “is a thorough scrutiny
and investigation into the affairs and responsibility of every life
and annuity institution in the United Kingdom, with a view to such
enactments as shall protect extensive public interests from the
alarming prospective evils of fraud and of ignorance.”

There does not appear in this profession sufficient reason for the
torrent of pamphlets which appeared, because all offices engaged in
similar business to that of Mr. Christie should possess a similar
desire. Such, however, was the fact, and when the morning papers
unmasked their battery, the fun grew “fast and furious.” Nothing can
be more desirable than that the balance-sheets of these companies
should be clear and uniform; and it seems reasonable that all offices
should so express their returns. But it should not be forgotten that
these accounts were furnished without any idea of publication. Each
institution sent its statement according to the notion of its actuary;
and as actuaries, like doctors, disagree, not only was there no attempt
to make one balance-sheet resemble another, but the very principle
differed on which they founded their valuations. It was, therefore,
not the fault of the actuary, but of the act itself, in not demanding
uniformity, that they appeared in so many and such varied forms--that
they at once produced suspicion, and that they have made the word
“insolvent” commonly used with regard to these new institutions. But
insolvency is a very awkward term, particularly when applied to a life
assurance office. There is scarcely a banker in existence to whom the
same term might not be applied on almost the same principle, for there
is not one ready to pay all his balances on instant demand. But the
banker knows his contingencies as life assurance offices know theirs;
and to that extent only are both prepared to pay. Both are liable to
runs on them; the latter during an epoch in the public health, the
former during an era in the money market. Being, therefore, a question
of contingency with the new mutual office, we must remember, in
fairness, that it was the same with the old; and that, had they been
compelled to publish their balance-sheets when they commenced, very
unpleasant remarks might have been made as to contingencies.[27]

While this subject was being agitated, some awkward cases arose to
startle the mercantile world and depress the feeling of security
so necessary to the perfect fruition of assurance. Several
companies--founded by authority of the Joint-stock Registration
Act--had arisen and fallen to the ground. One deed of settlement after
another had been proved to be as worthless in effect as that of the
West Middlesex. One series of promoters after another had published
elaborate prospectuses, and failed to meet their liabilities. The
directors of these had been from that class which supplied Quirk,
Gammon, and Snap with their business, and the managers had arisen among
those whose names had graced the bankrupt list, or been arraigned at
the Old Bailey. The following will prove that the law, since 1845, any
more than prior to it, has not been effective, and that it is as easy
to establish fraudulent companies now as it was before the passing of
the act. One director had been keeper of a gaming-house. Another,
calling himself a knight, acted as travelling commission agent. A list
of shareholders, which was published for the benefit of the public,
proved that, though one was a holder of no less than 20,000 shares, the
locality assigned to him was ignorant of his whereabouts. Two others
had been bankrupt, another had been insolvent, others were clerks to
the company, one declared his name had been forged, while another had
been dead for many years. The institution had been enormously puffed,
and the result was that many insurances were effected. But when it
became known[28] that a proprietor of 2000 shares in the company was
also a petitioner in the Insolvent Debtors’ Court, and that at the
very time he was advertised as a proprietor of these shares he had
hardly a coat to his back, the premiums became less. In this awkward
position the claims for losses were met by credit notes at fifty-three
days’ date, which of course were duly dishonoured, and, as a natural
consequence, the company was heard of no more. The following will tend
to satisfy the reader that no exaggeration has been used. “I have,”
says Mr. Hartnoll, “from among the worst cases of assurance companies
brought into existence under the facilities for forming such companies
by the Registration Act, exhibited to you the history of one whose
robberies amounted to 60,000_l._ I have dissected another of these
companies, composed of a low set of vagabonds, whose signatures as
shareholders were procured at a pot-house for pints of beer. I have
given you the name of a third, whose secretary was brought, most
wrongfully according to the verdict, to the bar of the Old Bailey, on
a charge of conspiring to obtain money under false pretences; and of a
fourth whose manager is a mendicant, and whose secretary is a fellow
who ought to become one, in order to prevent his becoming something
worse, I have from the middle class of these companies referred to
one, winding up in Chancery, having ‘fictitious names of subscribers
to the deed,’ and from the purer class of new companies, from no
invidious selection, but almost by compulsion, under public challenge
from parties officially connected with two offices. I have analysed the
accounts of one, which, at the end of three years, had only 14,512_l._
left in every shape and form out of 45,081_l._ received in solid
cash; and of another which, although with every shilling of its funds
gone, and 1754_l._ 10_s._ 3_d._ in debt, continues to publish to its
policy-holders and the world at large the very great fib that it has
made a profit of 6015_l._ 9_s._ 2_d._”[29]

Of course the frauds alluded to above strengthened the hands of the old
companies, and though really worth nothing as illustrations against
the existing offices, were quoted with much delight. The chief thing
they did prove was, that while the Registration Act did not prevent
the formation of bubble societies, it aided such men as Mr. Hartnoll
in discovering them before much mischief could be effected. All these
circumstances, however, drew attention to the new companies, eliciting
a variety of opinion on the subject.

The amount assured in all the life offices in the kingdom is variously
calculated. But probably the information collected by Mr. Brown, who
estimated it at 150,000,000_l._, is nearest the mark. On this sum,
5,000,000_l._,--being about one twelfth of the annual revenue of the
country,--are payable yearly as premium. The vastness of this interest,
its domestic character, its mercantile and its social bearings, are
all important; and as life assurance is making rapid strides in public
esteem, it is probable that where one man now insures for the sake of
his family, two will do it in twenty years’ time; always provided no
check be given to the principle, by the failures of offices, through
extravagant expenses, or through want of business.

There is a general objection on the part of commercial men to see the
Government interfere in mercantile affairs. But this is a question of
degree: the principle is sound to a certain extent, though no farther.
It is sound that the State should not interfere with the detail of
management, but it is not therefore unsound that it should propose some
general law by which publicity may be given to certain accounts--by
which the public may be made aware of their liabilities, and a moral
check established which must be beneficial to all.

The wise provisions of the Banking Act of Sir Robert Peel in 1844 are
a proof that our Legislature does interfere in financial affairs, and
life assurance is only an extended form of banking; the joint-stock
banking company receiving deposits and paying them back, with interest,
on demand; the joint-stock assurance company receiving deposits and
paying them back, with interest, at death. If it were thought desirable
for the Bank of England to publish a weekly statement of its financial
position, it is equally desirable, in many respects, for a life
assurance company,--the argument being, in both cases, the general

An examination of the accounts returned by the various offices gives us
some startling facts. Twenty-five of these, the average term of whose
operations has been three years and three-fifths, have expended in that
time 375,328_l._ out of 462,032_l._, great part of which they have
received for policies granted and annuities promised. Nine of them have
spent all their premiums and 30 per cent. of their capital besides.
Mr. Labouchere distinctly stated his opinion that many were insolvent;
and “My impression,” says Mr. Christie, “nay, my entire conviction, as
to others, notwithstanding the flaming accounts of their prosperity
contained in reports and speeches at annual meetings, is, that they are
rotten, and are in effect, though not in design, fraudulent.”

Such statements as these being publicly made, there appears some ground
for examining the question, and for quieting the minds of those who may
have entered into engagements with the junior offices, so far as a fair
and rational consideration will do so. It may be assumed that none of
the offices now in existence have been opened with a fraudulent intent;
but the necessity which exists of spending their money liberally, and
almost lavishly, to procure business, is almost as pernicious. It is
but just to say that an examination of the tables of the new offices
does not show a low rate of premium; not lower, perhaps, than the
increased value of life will allow, and certainly not lower than the
old offices could well afford to charge.

One unfortunate tendency of the new companies is to give life assurance
a speculative character, when nothing is less speculative in reality.
Yet the extraneous temptations and collateral advantages promised by
most are very mischievous. Men now sometimes insure their lives with
a vague belief that in a few years they will have no more premium to
pay; they quarrel with the fair divisions of old offices, and taunt
their managers with the advantages to be derived from the new. As an
example of the language that is sometimes indulged in, one modern
office promises to set apart a portion of its future profits, whether
such should amount to thousands or to tens of thousands, to hundreds of
thousands or to millions, for the support and future provision of any
person in decay who shall have once, for however brief a space of time,
held a single share in such company. “To become a shareholder,” says
the prospectus, “is as it were to effect at once and for ever a policy
of assurance against want.” The reader is left to judge for himself of
this singular specimen of assurance.

But, independently of the expenses which eat up the premiums, it may
be feared that in an anxious search after business, the examining
physician may not be so rigid in his report as those of the older
established companies; the lives admitted by the directors, therefore,
not being so good as they should be for the ultimate safety of the
office. It has been added, in support of this, that in some of these
companies the mortality has been 40 per cent. more than it should have
been, had proper care been taken. But are we not very ignorant of the
laws which govern disease? It is well known by physicians that the
chances of life in individuals are constantly changing. Mr. Gompertz,
the father of our actuaries, has expressed a belief that it would
be difficult to pick out 10 per cent. of really uninsurable lives
from the entire population. Those which are now doubtful, or even
diseased, to-morrow become sound and insurable; while those accepted
with gladness at the ordinary rates of to-day, become in almost the
same proportion ailing and uninsurable afterwards. The chances of
individual health, be it sound or unsound, are as uncertain as those of
individual life, and no effort having hitherto been made, excepting by
Mr. Neison, to discover the law which governs disease in its relation
to life, it follows that any argument against the new companies based
on the low character of the lives which they assure, may prove, however
specious in theory, very unsound in practice. And the mode adopted
by the old offices of conducting their business has certainly, up to
the present time, been too much in their own favour. By well-grounded
tables they establish the fact that out of 1000 lives, taken at random
among the diseased as well as the healthy, a certain number will die
each year, until all are extinct. But though on this they found their
rates, they are much too shrewd to take their lives at random. They
pick the strongest and healthiest, rejecting all else, and make them
pay premiums founded on the contingency tables of mixed lives. This,
therefore, is also somewhat in favour of the calculations of the new
companies. But there is another important item to be regarded;--the
value of money. The funds of all the offices from 1760 to 1815 were
bought when Consols were low, and the price of the Three per Cents.
ranged from 47-1/4 to 97. During the war there was an eager demand for
money. Exchequer bills, mortgages on large landed estates, allotments
of new loans, were all favourable modes of investment. Even since
money has been plentiful, the large capital of the old offices has
enabled them to gain a higher interest, because money lent in large
sums for a lengthened period will always command a higher rate of
interest than small sums for a short period. Thus one old office
announces, in its balance-sheet, that it is receiving 4-1/2 per cent.
on its investments; and probably other offices, with similar funds, are
similarly fortunate.

The new offices may find a difficulty in this which they have not
estimated, and which may materially interfere with their profits;
although it is more than probable that even this objection is
over-rated, because there are principles which govern the interest
of money, quite as certain as those which govern life, and because
the rate of discount of the Bank of England is no safe criterion
to those who are out of the money market. Their anxiety to forward
their interests will also induce them to exert themselves, and
the activity which pervades business when discounts are low, may
more than compensate for a diminished interest. There is, however,
another feature which must always act somewhat in favour of the
old offices, and that is, their liberality in peculiar cases. Rich
and well-established companies do not always confine themselves to
arithmetical calculations, and they often employ the rule of right
in paying demands which no court of law could compel; partially, it
may be, from proper feeling, but principally from an “enlightened

If it be thought that life assurance offices should, for the sake of
the public and of themselves, be interfered with by Government, the
next step is to discover the simplest and the least vexatious mode of
dealing with them. And here at once arises the question whether some
difference should not be made between the mutual and the proprietary
company. Assuming that the mutual system possesses every essential
element of safety, it is equally true that there are hazards in the
path of any company depending merely on its premiums, which do not
attend a company with a respectable proprietary. Hundreds were once
ruined by a mutual fire-company; and had the cholera, in 1849, fallen
on the class which does insure as much as on that which does not
insure, none can say to what extent the new and untried companies would
have suffered, or whether they could have paid the policies which
became due. And there is another point which materially affects an
office with a small business. In the first few years of its existence
the estimated mortality will probably ensue. But let us imagine,
for a moment, this mortality seizing those who are insured for large
amounts, instead of those who are insured for small sums; might not the
demands be too great for its capital, even with no excess of mortality,
especially when it is remembered that the expenses of establishing
the society would necessarily have decreased its resources? A company
with a subscribed and paid-up capital may fairly pay largely for
advertisements; but a mutual company, without any independent funds,
has scarcely the right to use their premiums for any other purpose
than to decrease the annual payments or add to the policies. As mutual
offices, therefore, have no other security than their premiums, these
would require to be looked after more circumspectly and closely than
where a capital and a proprietary are answerable to the insured. The
mode in which the funds are invested by mutual offices might be a fair
subject for publication; nor would this be an invidious distinction,
as an irresponsible office has less claim to an equal latitude of
investment, and less right to keep their secrets than a responsible

One element in the success which the old mutual offices have
experienced is attributable to the high rates they charge. Thus, the
premium of an old mutual company at the age of thirty is 2_l._ 13_s._
6_d._; while that of an old proprietary company is 2_l._ 2_s._ There
may be an ultimate equivalent to the mutual insurer, if he live, in
either a reduced premium or an increased policy; but as the former
is too frequently accepted instead of the latter, the family of the
insured do not receive the same benefit at his death which they would
have done, had he paid the same sum to a proprietary office, and kept
up the premiums as he would have been compelled to do.

A life assurance office with a respectable proprietary and a paid-up
capital, is by virtue of the English law of unlimited partnership as
safe as any company can be, so far as the assured is concerned; and as
the chief end and aim of government interference would be the safety
of the policy-holder, it follows that new legislation on this subject
should in fairness only affect new proprietary companies, to prove the
reality of their capital, and so protect the public from such men as
those who have lately been unkennelled. But though a marked difference
may be claimed by the respectable proprietary companies, and though
a distinction might perhaps in strict justice be drawn betwixt those
with a subscribed capital and those which have only their first years’
premiums, less their expenses, to pay the claims against them, it would
perhaps be politic on the part of government to include all; and it
would be still more politic on the part of the old proprietary offices
to state their readiness to concur in any plan which might be for the
benefit of the body corporate, because any legislative measure, to be
effective as well as protective, must be general. While it must be
such as will be readily acquiesced in by the older offices, it must
not be made unpleasant to the new: it must be at once general in its
application and strict in its inquiries. If it appear inquisitive, it
must not be inquisitorial; and, if possible, the common consent of all
should be obtained. The actuaries, who are intelligent and accomplished
gentlemen, must be propitiated, for they are in possession of a
somewhat occult science, having justly the ear, the confidence, and the
respect of their directors. And when it is borne in mind that these
directors embrace, as a body, the first men in the city of London,
that they possess a commercial, social, and, not seldom, a political
consideration, it follows, that to conciliate them is as necessary
to the well-being of any measure, as to conciliate the actuary is
necessary to the co-operation of the directors. There is no profession
in which subordinates are so respectfully regarded, for the actuary is
master of a science in which the director is generally deficient; and
knowledge, in this case, as in others, is essentially power.

If then it would be wise and prudent for government to interfere with
all, and at the instance of all, the next consideration is how to
produce the greatest amount of good with the least amount of evil: and
one of the essential conditions is, the clearest information published
in the briefest form to give a correct estimate of the position of an
office. Tabular statements may prove whatever the actuary pleases, and
may be made to mean anything and mystify anybody. One concise form,
therefore, so clear that he who runs may read, a form which can deceive
no one and which all can understand, will be necessary.

Many methods by which the safety of the public may be attained have
been proposed; but the first to be dealt with are the publication of
the accounts, the form in which they should appear, and the mode of
determining their correctness.

1st. The publication of the accounts, to be effectual, should be
general. Without this the cry of partiality would be raised, and must
be fatal to the attempt. As well as general, they should also be
uniform, so far as this is possible. They should consist of leading
features stated in the simplest and least complex form, admitting,
as far as practicable, of only one interpretation. They should be
certified by the actuary, examined by the directors, and signed by
the chairman, all of whom should be held responsible, under a heavy
penalty, for their accuracy.

2d. These returns must give the exact money position of the office, the
leading principle being an endeavour to show the funds in proportion
to the risks; and as there is a difference in the mode of estimating
future chances, the form adopted by each should be one and the same.
As each office, also, has business special to itself, with its own
peculiarities, its own interests, and its own mode of investment,
any detailed statement might be dangerous, and form the groundwork
for rivals to copy or to criticise. The points of chief note are the
capital, the amount of liabilities, and the annual returns; and if
the endeavour were made to show the funds in proportion to the risks,
instead of endeavouring to procure a large show of business at any
price, the object of ambition would be the accumulation of capital.

3d. The best way of procuring correct information is the next
condition. Falsified returns are not impossible. If any office
should be failing in its endeavours to keep its business together,
having men at its head whose names are unknown save in a petty and
obscure locality, a strong check is necessary; and it seems scarcely
practicable to avoid the appointment of a competent person as an
arbiter of their correctness. Unpopular as this might be at first,
were the appointment placed in proper hands and judiciously carried
out, it would be of immense benefit. It would indeed be scarcely
necessary for the inspector to be a government officer. The established
companies might fairly say, that they have done no wrong, and that a
close espial by a government agent would be derogatory. But were an
inspector of this kind chosen unitedly by the offices, and paid by the
State, the companies having no voice in his dismissal, excepting under
circumstances which ought to command it, there would be less objection.
The necessity for such an officer would arise from the brevity of the
accounts to be published. It would be his duty to see that the data
from which they were formed was true; that the premiums received were
as large as was stated; and that while the investments were as great,
the liabilities were not greater than the report asserted. The power
to examine and compare these returns with the books of the various
companies is a delicate consideration; but as the offices might appoint
the inspector themselves, it would, after all, be only an additional
check by their own officer on their own affairs. The mode of investing
need not be published, as the power of the inspector to demand an
examination would be a sufficient check on immorally-disposed offices.
Nor is such a case unprecedented, as by a clause in the Bank Charter
Act of 1844, commissioners are empowered to search into and examine the
books of those bankers who issue notes.[30]

If it be desirable, as it undoubtedly is, that assurance offices should
be perfected for the sake of the public, it is doubly so that some
check should be placed on annuity companies. It is from them that most
mischief has ensued. In a life office the promoters may have to pay
claims before they have received sufficient assets to meet them. But
an annuity office, where capital is at once placed down for a future,
but postponed benefit, may do irreparable mischief in less than a year.
In this way the public, and that portion of the public, too, which is
the most deserving of care, have suffered, and are likely to suffer.
All the new offices grant annuities, and though it is difficult to
say the exact amount, (their returns being so cleverly or so clumsily
arrayed), yet it is probable that within the last five years more
than 100,000_l._ has been received on the faith of annuities to be
paid by them; and it will be no consolation to the annuitant to be
told that though his annuity must cease, it is caused by unfortunate
calculations and not by fraudulent design. The granting annuities does
not necessarily, although it may naturally, enter into the business
of a life office. For the first century assurance, and annuities were
distinct, and it is somewhat doubtful whether it is quite wise to
allow, at any rate it is dangerous to the public to deal in annuities
granted by new offices which issue policies of assurance as well as
bonds of annuities. The large sums paid down make a show in the assets
of a new company, and the fact that hundreds of people for many years
rest their entire support on the promises to pay of offices which
have been declared by many to be bankrupt, and whose balance-sheets
certainly evince an irregularity out of keeping with all propriety, is
singularly important. It is a cruel government that will not interfere
in an iniquitous system, and the accounts of the annuities, viz. the
yearly amounts to be paid, the estimated number of years over which
they will extend, and the special capital in hand to meet the demands,
should be published separate and distinct from the assurance accounts,
as the banking and issue departments of the Bank of England.

Another proposition has been made, to the effect that no company should
be allowed without a large paid-up capital. “The public safety,” says
the ‘Morning Chronicle,’ “requires that a sufficient capital should
be provided;” and this the same article suggests should be 50,000_l._
“There are special reasons,” adds the writer, “particularly at this
time, why new insurance offices should be required to provide a
sufficient capital. Causes are in operation which may interfere largely
with the rate of interest procurable on first class investments, and it
is not to be overlooked that the increasing facilities of communication
with distant regions, Australia for example, combined with the wide
discretionary powers which it is the fashion for deeds of settlement to
confer, may lead to remote and hazardous investments, full of promise
when entertained, but liable to great and sudden accidents,--accidents
such as insurance offices without any independent resources could never

In another portion of the very elaborate articles alluded to[31],
it is added:--“The only real remedy is to take care that the parties
who enter into the several speculations have something considerable
to lose, self-interest will then render them infinitely more prudent
and vigilant than all the inspections and certifications in the world.
With the general requirement, however, of the payment of 50,000_l._ as
capital, might very properly be combined certain improvements on the
present law of a minor character.” “It would be proper also to enact
that after a specified date all persons whose names are with their
consent advertised as patrons, vice-patrons, trustees, or honorary
directors, of any insurance company, shall be deemed to be shareholders

How far the suggestion of no office being allowed without a large
capital, should be carried out, is a very serious consideration. A
large paid-up capital does not appear an absolute necessity, although
the faith engendered by it would probably repay the assured, because
the larger the capital, the greater the confidence, and the greater the
power of the subscribers to extend the business, as it does not follow
that all the profits should go to the proprietors. The money invested
would not be idle; it would be the business of the directors to place
it in security at a good interest, and the interest would probably be
greater than the subscribers could obtain elsewhere for their money.

All the old companies, which were once purely proprietary, divide
a portion of their profits among the insured, and nothing can be
fairer or better founded than an office which offers the advantage of
a large paid-up capital, and divides four-fifths or nine-tenths of
the profits among the insured. Still as the entire tendency of the
public has been in favour of the mutual system for the last quarter
of a century, as all authorities have proclaimed it to be the purest
principle of Life Assurance, as innumerable instances of great success
are to be found in its ranks, it follows that an attempt to revert to
the pure, proprietary system would be worse than useless. But with
all the advantages of the mutual system, it is probable that a small
paid-up capital, with responsibility to the extent of the proprietor’s
fortune, would be sufficient for safety: for there is one more point to
be considered relating to the management of a mutual office, which is
too often forgotten. In this the policy-holders have a vote; they know
not when their lives may fall; they are eager to add to the value of
their policies; and the directors feel a pressure from without which
sometimes compels them to give a greater bonus than they ought. This
is the prevailing tendency of the mutual principle, and argues somewhat
against it. In a mixed company, on the contrary, it is the aim of the
directors to maintain their investments intact; they know that what
will destroy the company will destroy them as partners, and there is
a moral power in operation in their case, as there is something very
unlike a moral power in operation in the other.

That there are enough and to spare of companies, none can doubt. That
some are in a position from which their customers would justly shrink
is probable; and that others would be found insolvent if strictly
examined, is to be feared. But, with all this, they are indisputably
beneficial to the cause they represent, as they are spreading its
knowledge, and pressing its necessity, with the earnest spirit of men
whose existence depends on the number of their proselytes.


[26] Letter to the Right Hon. Joseph W. Henley, M.P.--By Robert

[27] The Equitable even was regarded with a very suspicious eye by the
Court of Chancery soon after its commencement, and the names of bankers
and merchants as directors, great in their day and generation, did not
prevent the proprietors of the Royal Exchange, the Amicable, and the
London Assurance corporations from predicting its failure.

[28] The public is greatly indebted to Mr. Hartnoll, the avowed editor,
and Mr. Pateman, the publisher of the Post Magazine, for their great
exertions in the cause of Life Assurance.

[29] “Assurance Companies’ Accounts,” p. 43.

[30] “That the said Commissioners shall have full power to examine all
books, at all seasonable times, of such bankers as issue notes, and
to take copies or extracts from any such books or accounts.”--History
of the Bank of England, its Times and Traditions.--By John Francis: 2
vols. 3rd edition. Longman, Brown, and Co.

[31] The Morning Chronicle.



It has been found that there are unchanging principles which regulate
commercial losses; that the lives which are sacrificed by railway
accident have similar conditions; that the storm which levels the
wheat has its defined courses; that the murrain which devastates the
cattle is as fixed in its movements as the disease which destroys
humanity. To meet these casualties, societies have been started,
founded on laws originating in the doctrine of probabilities, and
regulated by tables to show the chance of their occurrence. Nor is
there any reason against--nay, there is every reason to believe
in--their success, provided only their promoters apply themselves with
diligence to collect sufficient data whereby to rule their operations.
Of one society only may a doubt be evinced and a smile raised at its
presumption, and this is the


for supposing the threepence per week paid by the credulous peasant
be sufficient to satisfy the priest, yet there is every reason to
doubt that the prayers and masses of such mercenary pastors will
be sufficient to satisfy God. There is something half-grand and
half-grotesque in this impudent provision against an indefinite future.


is characteristic enough of a mercantile people. Prior to the
foundation of such an institution, it is obvious that there must have
been some important statistical information connected with commercial

This was submitted to Mr. Finlaison; and his opinion being that the
plan contained the strongest element of success, the society commenced
business; and now any person supplying a number of traders with goods
may secure himself from loss, 90 per cent. of which is paid to the
assured party, the remaining 10 per cent. being placed as a reserve
fund. There is also an annual charge for management, out of which the
interest on the shareholders’ capital of 50,000_l._ is paid. There
are many collateral advantages in connexion with the company, not
the least of which is information concerning the trading community,
so that a subscriber may ascertain the character and credit in the
money-market of a new customer. All legal expenses are borne by the
management commission fund; and there is something very amusing in the
indifference with which any person insured in this society must attend
a meeting of creditors; for while others look with bent brows and
anxious faces, he may remain utterly careless about its proceedings. It
is easy to suppose that this feeling may raise a spirit of recklessness
in some; but the promoters have wisely interested this class, if such
there be, by the deduction of the 10 per cent. on all losses, and by
other wise arrangements which stimulate the careful and deter the
careless. One half the surplus of the year’s premium will be applied
to the reduction of the next payment of those whose losses have not
equalled their annual premium; and as a similar society has been in
operation in France for the last five years, which has met with signal
success, there appears every reason to believe that this society will
prosper. Within the first nine months, insurances have been effected
of more than 3,000,000_l._ The theory of chances is as applicable to
commercial transactions as it is to life. The close observer will not
have failed to notice that the periodical epidemic--whatever form it
may have assumed--has its representative in the commercial crisis.
Every six or seven years, mercantile epidemics--analogous to the
cholera, the influenza, or the typhus of an unhealthy season--which
seem to defy all calculation and to level the lofty as well as the low,
revolutionise our money system. So fixed have they become in their
appearance and re-appearance, that they have ceased to be exceptional;
and there is now plenty of information on which to base some estimate
of the annual losses of special classes from bad debts.


When this company was first started, in 1840, for the insurance of loss
against the dishonesty of clerks, there was a great objection raised.
It was thought one of those vague and speculative undertakings of which
England has seen so many, and one which would necessarily fail, because
the master would hesitate to take an assistant who could only give the
security of a commercial company. “The moral security is wanting!” was
the exclamation of all. It was vain to answer, that this objection
pointed both ways, as the relative would often give the desired bond,
which a mercantile institution would refuse. Still the parrot reply
was heard, and the solemn shake of the head was followed by “The moral
security--where’s the moral security?” and was deemed sufficient to
crush all argument derived from mere statistics.

Time passed, and it was discovered that because a banker’s clerk gave
the security of a company, he did not become a rogue, but he did
become independent. It was found, too, that the master could make his
claim good on the company with far more promptitude than he could on a
relative. It was nothing to say to a board of directors, “I will have
justice and my bond;” but it was something to say to a broken-hearted
parent, “Your son has ruined you as well as himself--discharge your
obligation!” It is well known that bankers and merchants have often
foregone their due rather than thus reimburse their losses: and it has
been found that, notwithstanding the fact of the “moral security” being
wanting, the societies which guarantee the master from loss by the
servant have been very successful, are very serviceable, and are on the


Almost the only objection which could be brought with justice against
the offices prior to 1841, was the habitual practice of refusing
delicate and doubtful lives. Having, in the early part of their career,
taken all who came without inquiry, they rushed into the opposite
extreme, and refused all who were not undeniably strong. There were
indeed a few offices which professed to insure invalids; but they had
no statistical information; and they rarely, if ever, accepted a life
unless it was obviously a good one. In 1833, Mr. Gilbart wrote, “We may
hereafter have tables that shall show the expectation of life, not only
in regard to people in health, but also to those afflicted with every
kind of disease;” and in 1841 Mr. Neison established the above office,
the success of which has confirmed the opinion entertained of his great


In the year of the South Sea bubble, a wit of the day epigrammatised
the proposal to insure horses and cattle, little thinking it would ever
be carried out. Yet that some such institution was necessary may be
gathered from the number of local clubs of this character established
all over the country. These will probably merge in some agricultural
insurance company like the above; and did this institution not take
human life into its business, it might be more successful. The laws
relating to life and to farming stock are very different, and a
company devoted to the latter would be wiser than one which blends the
assurance of agricultural property against disease, accident, fire,
lightning, and the hailstorm, with ordinary life assurance.


This is another instance of the extension of insurance to a purpose
which at one time would have been pronounced Utopian; and which,
addressing itself exclusively to landed proprietors, promises to
collect their income without trouble and without loss. When a tenant
knows that his rent will be rigorously demanded, he feels that he
must provide the money or pay the penalty. There are no qualms of
conscience in companies; and though a man might try to play upon the
easy good nature of his landlord, such tricks would be vain against
them. Determined habits of thrift are thus engendered, property
becomes more valuable, the landlord receives his rents regularly, and
business proceeds like a machine. It may be said that the kindly
feeling between landlord and tenant disappears beneath the iron sway
of a public company; but however this may be regretted, it is only an
inevitable consequence of the changes of capital and the consequent
transfer of estates.


We owe to Mr. Glyn, when chairman of the London and Birmingham Railway,
the first light on the subject of railway accidents. He proved that
they were far less by the iron road than by the coaching system, and
that the loss of life, in proportion to the number which travelled,
was incomparably less. When the yearly railway reports were published,
it was at once seen that a society like the above would have a fair
chance of success. Some of the railway companies have refused their
aid, thinking it would cause a decrease in railway travelling. Others,
again, have assisted, on the broader principle that such an institution
was sound. This company has been severely tried; but it has been
productive of an incalculable amount of good, and the character of the
directors gives a perfect solidity to the concern. In many cases it has
been very effective in mitigating the distress which sudden death so
often entails on survivors.


There are hundreds of thousands who cannot afford to be run over;
to whom a lingering illness would be misery; and whose death would
scatter or starve their families. A serious or severe accident would
probably deprive a clerk of his situation, and a small tradesman of his
business, leaving them with no home but the hospital, and no hope but
the grave. The statistics of general accidents are difficult to arrive
at, but a small annual premium would be an ample safeguard against
such a casualty. There is one point in which both this and the Railway
Assurance Company are wanting, and yet it would be scarcely possible
to amend the error. There is in neither of them any inquiry as to the
health of the party assuring. Now it is obvious that the very life of
a confirmed invalid would be shaken out of him where a strong and hale
man would receive no injury.


Of a somewhat similar character to the Rent Guarantee is the above;
and this is another admirable idea if it can be carried out. Defective
titles, being assured, are rendered absolute and perfect by it. The
actual repayment of loans and mortgages is guaranteed, while copyholds,
lifeholds, and leaseholds are made equal to freeholds for all purposes
of sale or mortgage.


There is a principle involved in the title of this Society which
is much too important to be briefly dismissed. The eagerness with
which all companies claim indisputability for their policies, is
a significant sign of public feeling on the subject. But the term
indisputable at present means nothing. To be effectual, it should be
absolute; and it is doubtful whether it would not benefit the whole
of the offices to adopt indisputability as their motto. There is
great evil, and there is often great wrong, in a disputed claim; but
it seems sometimes a necessity. Where there is conspiracy, fraud, or
concealment, it is manifestly unjust to pay a policy; but it costs
far more to resist it: and it is a point worthy mature consideration
whether an insurance so effected should not be treated as a fraud,
and punished criminally. It might be taken as a rule, that where the
policy is in the possession of any one who has assisted in the fraud,
it should not be paid; but when it has fairly passed into the hands of
a third party, such a course might be honourably avoided. It has been
said by its opponents, that at present there is no company which issues
policies really indisputable; that which is so called, being only
indisputable according as the conditions on the face of the policy are
maintained, and that their title is open to dispute.

There is, however, one merit due to this company. It has opened
a most important question, and one that will eventually lead to
indisputability in its most extended form. It will also render other
offices more cautious in entering a court of justice, and it can never
hope to enter itself with success.

That the power of a company is often vexatiously and unjustly stretched
to its utmost limit, in order to escape the payment of a policy,
the following will prove. It is in itself a strong argument for

When railway travelling was in its infancy, one John Scott, of
Birmingham, being compelled to journey by what was thought a dangerous
conveyance, was urged to insure his life as a provision for his family.
He offered himself to the Norwich Union, answered all their questions,
was examined by their medical man, and reported as perfectly sound.
So good a life was he, that the agent of the Imperial urged him to
abandon his proposition with the Norwich, offering him such inducements
that he consented, though it cost him six pounds to void his nearly
concluded bargain. He then went through all the forms necessary with
the Imperial, was reported again as a perfectly sound life, and gladly
accepted in May, 1840; the policy being for 2000_l._ From 1840 to 1842,
he worked with an untiring energy and an incessant labour utterly
incompatible with failing strength, and in that year he became a
bankrupt. So excellent was his health, that his assignees would not pay
any more premiums until they had ascertained that its market value was
equivalent to the payment, and they then sold it by public auction to
Mr. Beale for 135_l._, the Imperial itself bidding up to 100_l._ The
next premium was paid by Mr. Beale in May, 1843; and in the following
December, Mr. Scott died.

The discharge of this policy was contested with a determination sadly
at variance with unsophisticated justice; but because the Imperial had
a witness to prove that Mr. Scott had suffered from an ulcerated sore
throat in 1836, they refused to pay. And when on the first trial the
jury returned a verdict against the company, they obtained a second
trial on technical grounds, which again they lost, and yet another,
which was once more decided against them; though so great were the
expenses to the claimant that he gained nothing by his public purchase
of the policy granted on the faith of a respectable company.

With a case like this, and there are many like it, is not an
indisputable company desirable?




The stories which are contained in the following pages may in most
cases be relied on as essentially true. But they have been placed
together in one Chapter, because some are merely traditionary, because
the authority was not absolutely reliable in all particulars, or
because they might have been irrelevant in the body of the work.

       *       *       *       *       *

A lady possessed of great personal attractions, and calling herself by
the convenient name of Smith, applied to an office to insure the life
of a woman residing at the west end of the town. When asked the reason,
she replied, that she had advanced various sums to place this person
in business as a milliner, and that to effect an insurance on her life
was the only way of securing the money in case her _protégée_ should
die. The life was a good one, the references were satisfactory, and the
policy was made out. In a few months a fine carriage, with coachman
and footman in splendid livery, drove up to the door of the insurance
office, and Mrs. Smith made her appearance to announce the death of the
person insured. Whether the lady overacted her part, or whether the
carriage excited suspicion, when it was meant to inspire confidence, is
uncertain; but the officers of the society deemed it wise to inquire
into the circumstances of the death. The house where the milliner had
resided was mean; the immediate neighbourhood was poor; there was no
indication of business to justify the assurance of her life for a
large sum. The actuary who made these investigations went farther.
He instituted an inquiry at the other existing offices. At the very
first he went to, the same lady had effected an insurance on another
person’s life. At the next, and the next, and the next, she was known;
at each she had procured policies on various lives for large sums, and
wherever this woman had effected an insurance, within three months the
person insured had died. There was scarcely an office in town where she
had not appeared, and scarcely an institution which had not paid her
various sums of money on lives which had suddenly fallen. Her father,
her mother, her sister, had been insured and had died, like all the
rest, of cholera, and this too at a time when the cholera was not in
active existence. Farther inquiries elicited the information that she
was the mistress of a banker, whose carriage she employed to create an
effect, and whose life it is very fortunate she did not insure.

After mature deliberation, it was resolved to dispute the payment; but
as it was not thought advisable to give the real reasons, a technical
plea was adopted. All the circumstances were, however, stated in the
brief; and as Sir James Scarlett read them, when he saw how one life
after another had fallen directly it was assured, that acute and
able man at once exclaimed, “Good God! she must have murdered them
all.” But whether he were correct or not in this, it was determined
to adopt another reason, and the trial came on. Although Sir James
had instructions not to exceed his brief, he could not resist the
temptation, and he hinted pretty broadly that foul play must have
been used under such extraordinary circumstances. The advocate on the
other side enlisted the sympathies of the jury in his “beautiful,
delicate, and susceptible client;” he wondered at the baseness of the
thought which charged such a crime on such a creature, and invoked the
vengeance of heaven on those who could entertain so unworthy an idea.

One surgeon had been referred to in all the cases, and one surgeon had
testified to the death of all. The effect upon the court was appalling,
as document after document was handed him; and as with each certificate
the question was put, “Did you examine this life?” and the answer came
“I did;” and “Did you certify to this death?” and still the same reply
was given: it seemed as if this series of sudden and insidious deaths
would never end. Both advocates did their duty in this difficult case
according to the most approved rules of art; but that of the lady was
triumphant, and gained the verdict. Still the office was determined
not to pay, for the directors felt certain they were right. The more
inquiries they made, the more extraordinary the circumstances which
were elicited, and they resolved to show cause for a new trial. To do
this effectually, they found it advisable to abandon all technical
objections, to state broadly and boldly the moral grounds on which
they acted, and to insert all the causes which made them thus declare
war to the “knife.” Never was a more serious list of charges brought
against one person; and no sooner did the lady find that so grave an
investigation was in progress, than she left this kingdom for that of
France, in the capital of which she commenced a boarding-school, and
obtained the attendance of some respectable girls, but to what account
she turned them, and of the scenes which were enacted, the less that is
now said the better.

       *       *       *       *       *

Many years had passed since the above facts occurred, when the
secretary of an insurance office at the west end of the town, asked
the actuary who had elicited the above facts, whether his office
was disposed to take a fourth part of 10,000_l._ on the life of a
gentleman just proposed by a lady in connection with some marriage
settlements. An affirmative answer was given, an appointment was made,
and on the following day the lady and her lover met the officials at
the office. The former was a person of great personal attraction,
elegantly dressed, and elaborately ornamented; the latter had nothing
against him as a life, excepting perhaps that he appeared a most
inordinate fool. But the face of the lady, though changed by the lapse
of time, was strangely like that of her who years before had quitted
England so abruptly; and the resemblance, at first deemed ideal, grew
so positive that suspicion ripened almost into certainty. Nothing
occurred, however, on the part of the actuary to indicate it, and when
the cause of the insurance was demanded, a marriage settlement was
mentioned by the lady, who, with a smile and a simper, pointed to the
gentleman by her side as the happy man. To the health of the applicant
there was no objection; and as he was by no means overburdened with
brains, a private interview was sought with him, that he might, to
use an expressive phrase, be well pumped. This was easily done. When
he was asked whether he had any property of his own, he said No; and
it soon appeared that he had acted as agent or traveller for some
wholesale house in the City, and that his knowledge of the lady had
arisen from the introduction of a military gentleman, who thought it
would be a good match for him; and that on this they had proceeded to
some Zadkiel of the day, who had predicted their union. All this gave
no clue to an insurable interest, and when he was asked what reason
there was to believe in her great possessions, he pointed to her gay
dress, and expatiated on her rich jewellery. Such a fool was scarcely
worth a thought, so the place where the lady lodged was applied to;
but no information could be procured, excepting that she was supposed
to be “very respectable,” as she had an abigail and footman. It is
strange that, notwithstanding the difficulties of the case, the woman
succeeded in obtaining the insurance. Before the policies were duly
made out, she wedded the gentleman who wished to better his condition,
and “all went merry as a marriage bell!” One fine morning, however,
the woman where they and their servants lodged, came down in a hurry
to the office to say that on the previous night they had all got tipsy
together; that there had been a violent quarrel among them; and that
the servant had been overheard to accuse her mistress of prompting her
to marry a man to whom she was engaged, to induce him then to insure
his life, and afterwards to go to France, where they could easily make
away with him, and receive the insurance money. In the blindness of
passion, occasioned by the quarrel, they went before a magistrate and
made statements of each other so startling and so fearful, that the
magistrate dismissed the case, believing them all unworthy of credit;
and it may be presumed they did not tempt Providence in a police office

When this news reached the offices, they grew alarmed, and taking
advantage of the false position in which she had placed herself,
insisted on returning the money she had paid them, demanding at the
same time the receipts she had taken. At first she indignantly
refused; but the offices not being very delicate in the threats they
held, this adventuress, as extraordinary a person as ever figured
in romance, yielded the point, and released the companies from the
liabilities they had incurred.

Her future life is quite uncertain, as she went abroad with her
husband, who after some time returned with a constitution as shattered
as if some subtle and poisonous drug had been instilled into his
system. The lady went her way, was seen no more in England, or at least
speculated no more in insurances on lives.

       *       *       *       *       *

A. B. was the proprietor of an entailed estate, and much involved in
his affairs. His life was insured for the benefit of his creditors for
14,000_l._ In 1819 he intimated by letters his intention of putting an
end to his existence in order to free himself from his embarrassments,
and soon after his clothes were found on the banks of a deep river,
from which it was inferred that he had carried his intention into

Circumstances, however, created a suspicion that he was still alive,
and the creditors kept the insurances in force by continuing to pay
the premium for some years; but his existence, though believed, could
not be proved, and was not known for certain until his death actually
occurred in America upwards of five years afterwards, previous to which
the payments had all ceased.

       *       *       *       *       *

The reader need hardly be told that the life of the elder Napoleon
was trafficked with by underwriters during the whole of his wonderful
career. The various combinations in the funds, dependent on his life,
entered into by jobbers, made it very desirable to insure it; and
this was legitimate enough, as the jobber had a tangible interest. In
this way very large speculations were hedged; and as every campaign
and every battle altered the aspect of affairs, the premiums varied.
Sometimes private persons acted as insurers. Thus, in 1809, as Sir Mark
Sykes entertained a dinner party, the conversation turned--as almost
all thoughts then turned--to Buonaparte, and from him to the danger
to which his life was daily exposed. The Baronet, excited partly by
wine and partly by loyalty, offered, on the receipt of 100 guineas, to
pay any one a guinea a day so long as the French Emperor should live.
One of the guests, a clergyman, closed with the offer; but finding
the company object, said that if Sir Mark would ask it as a favour,
he would allow him to be off his bargain. To a high-spirited man this
was by no means pleasant, and the Baronet refused. The clergyman sent
the 100 guineas next day; and for three years Sir Mark Sykes paid 365
guineas; when thinking he had suffered sufficiently for an idle joke,
he refused to pay any longer. The recipient, not disposed to lose his
annuity, brought an action, which was eventually carried to the highest
legal authorities, and there finally decided in favour of Sir Mark
Sykes; the law lords not being disposed to give the plaintiff a life
interest in Buonaparte to the extent of 365 guineas a year.

       *       *       *       *       *

A history of life assurance in Ireland is to be found in its agencies;
but there are many anecdotes extant, of which the following are a
specimen. The statements from the sister country are always looked at
with suspicion, for they are too often at variance with truth.

Twenty years ago an insurance was effected on the life of a gentleman,
and in two months he died, when a claim was made by a physician who
had opened the policy. The circumstances were investigated, and it
was ascertained that the party insured was at the time the insurance
was effected, and for months previously, under the medical treatment
of the physician for a very serious illness: on a _post-mortem_
examination it was found that both heart and lungs were diseased. The
case was more disgraceful, because the physician who had claimed the
money was medical adviser to the company with which the insurance had
been effected, and had availed himself of his position to pass the

       *       *       *       *       *

The managing director of one of our best offices was offered, while
travelling in Ireland, an insurance of 2000_l._ on the life of a
gentleman; and an appointment was made to meet next morning at
breakfast. The applicant looked strong, and seemed healthy; he was
gay, lively, and ready-witted; nothing appeared amiss with him then;
and when the necessary certificates of health and sobriety were given,
his life was willingly accepted. In a year or two he died. In the
meantime information was received that his habits were intemperate,
that he was rarely sober, and therefore that a deception had been
passed on the company. It was discovered that he had been made up for
the occasion, that he had dressed himself smartly, assuming a lively
air and aspect, and that he had thus misled the gentleman by whom he
had been somewhat incautiously accepted. Such a case it was determined
to resist on every ground of public propriety and private right. All
necessary legal steps were taken; “the lawyers prepared--a terrible
show;” and as it was of somewhat doubtful issue, it was deemed wise
to take the most eminent advice which could be procured. That advice
changed the determination of the company; for it was said, that though
in England the deceased would have been pronounced a most intolerable
drunkard, yet no jury in all Ireland would be found to pronounce a man
intemperate who only took a dozen glasses of whisky toddy nightly;
that intemperance in England was temperance in Ireland; and that they
had better pay their money than risk a verdict. This they did; and
doubtless were very cautious in all Irish cases for the future.

       *       *       *       *       *

Great power must always lie with friends in recommending assurance
to those whose circumstances demand it. An instance of this may be
found in the case of a well-known City merchant. The estate of this
gentleman was entailed on the male line; but notwithstanding this, it
was his chief fancy to improve the property, to the detriment of the
female branches, the only mode of obviating this being to insure his
life to the extent of the sum spent in improvements. Those to whom
he was near and dear felt the delicacy of the case, and hesitated
to broach the subject. His land agent was appealed to, a shrewd and
sensible Scotchman, and he took the first opportunity of talking to
Mr. ---- on the subject, who immediately acknowledged its importance,
promising to take the necessary steps on his first visit to town. This
he did; proposals were made to the extent of 15,000_l._; but some
technicalities interfering which prevented so large an amount being
effected in one day, only 10,000_l._ was insured; and the remainder
postponed “until a more convenient season.” That season never arrived.
In less than nine months the beautiful village where he resided, rung
with the news that he and his wife were murdered; and though money
could not soften or subdue the grief of such a tragedy, it tended at
least to alleviate it.

       *       *       *       *       *

When the Corn Law league established its bazaar at Covent Garden, among
others who contributed to the exhibition was a cutler from Sheffield,
who visited London to see this great political feature of the day.
Before he left the city, he applied to an office to insure his life.
He was examined by the medical adviser; and though he seemed somewhat
excited, this was attributed to a prize which had been awarded him,
and he was accepted, subject to the ordinary conditions of payment,
with certificates of sobriety and good habits. The same afternoon he
left town, arrived at Sheffield very late, and probably very hungry, as
he ate heartily of a somewhat indigestible supper. By the morning he
was dead. He had fulfilled no conditions, he had paid no premium, he
had sent no certificate,--but he had been accepted; and as his surgeon
declared him to be in sound health up to his visit to London, and as
his friends vouched for his sobriety, the money was unhesitatingly paid
to his widow, whose chief support it was for herself and five children.

       *       *       *       *       *

C. D., in possession of a good entailed estate, but largely in debt,
had his life insured for the benefit of his creditors for sums
amounting to 10,000_l._

In the autumn of 1834 his death was represented as having occurred
under peculiar circumstances at an English watering-place, and after
a very full investigation, with the depositions of ten witnesses,
who swore to their belief of his having been drowned, and of four
additional, who proved his identity, the insurance offices agreed to
pay the sum in the policies, under the stipulation that the money was
to be repaid if it should be discovered that he was alive.

Two years after his death was alleged to have happened, it was rumoured
that he had been seen, and it soon became a matter of notoriety that
he had visited his native place and had made himself known to one
or two of his personal friends. The facts were not denied, and the
various sums were repaid to the offices under the obligations granted
by the parties who had received the money; but the offices allowed the
surrender values of the policies as at the time of their being brought
to an end.

       *       *       *       *       *

At Berlin, on 24th November, 1848, the funeral ceremonial of the
Catholic Church, amid a numerous circle of weeping friends and
relatives, was performed over the remains of one Franz Thomatscheck,
who, however, had taken care to insure his life, both in London and
in Copenhagen; and who, strange as it may seem, was, in disguise, and
impelled by a strange curiosity, watching the progress of his own
funeral. On 29th September following, the public prosecutor, the police
authorities, and the priest of the Catholic congregation, might be seen
standing over the grave to superintend the disinterment of the coffin,
the contents of which, when opened, proved to be heavy stones, rotten
straw, and an old board.

A surgeon had been bribed to attest the death; his brother had aided
him in effecting his escape; his disconsolate widow had followed the
departed; but the Austrian police, assisted by the telegraph, had
thwarted all these movements by consigning the perpetrators of the
fraud to the tender mercies of the justice they had violated.

       *       *       *       *       *

In the eighteenth century a company was established, the chief feature
in which was the omission of the clause which renders the policy void
in the event of suicide. A man went and insured his life, securing the
privilege of a free-dying Englishman, and then took the insurers to
dine at a tavern to meet several other persons. After dinner he said to
the underwriters, “Gentlemen, it is fit you should be acquainted with
the company. These honest men are tradesmen, to whom I was in debt,
without any means of paying but by your assistance, and now I am your
humble servant.” He pulled out a pistol and shot himself.

       *       *       *       *       *

That the clause which makes the policies of suicides void is not
unnecessary, the following is an additional testimony:--

Among the passengers who filled one of our river steamers on a fine
summer’s evening, the movements of one in particular were calculated
to draw attention. There was something so haggard in his face, there
was so continual an air of restlessness in his person, that it was
evident his mind was ill at ease. He had chosen a position where
scarcely any barricade existed between him and the stream, and casting
his eyes rapidly round to see if he were observed, he, almost at the
same time that he placed a small phial to his mouth, plunged into the
water. An alarm was instantly given, the vessel was stopped, and the
passengers saw him, true to the instincts of humanity, struggling and
buffetting with the water for life. Assistance being soon rendered,
the man was saved; and it was afterwards discovered that, having lost
all his property, and not knowing how to maintain an insurance into
which he had entered in more prosperous days, he had determined on
sacrificing himself for the welfare of those who were dear to him.
Believing that his death would be attributed to accident, he had taken
some prussic acid at the moment he jumped in, unconscious that the
effect of this poison is neutralised by the sudden immersion of the
body in water.[32] It is well to be a chemist when one wishes to be a
fraudulent suicide.

       *       *       *       *       *

As the evening of an autumnal day began to close, four men might
have been seen hiring a boat at one of the numerous stairs below
Blackfriars bridge. Their appearance was that of the middle order, but
the reckless daring which characterised their air and manner, marked
them of the class which lives by others’ losses. By the time they had
rowed some distance up the river, the only light that guided them was
the reflection of the lamps which fringed it; and no sooner were they
shrouded by the darkness of night, than, without any apparent cause,
the boat was upset, and the four were precipitated into the Thames.
They were close to land, and while they buffetted the tide and made
their way, they hallooed lustily for help, which, as the shore was
now ringing with the noise of boats and boatmen putting off to their
assistance, was soon rendered. Of the four who had started, only three
landed together, and great was their outcry for their lost companion.
The alarm was immediately given; all that skill could do to recover
their friend was tried, but the night was too dark to render human aid
of much avail. It was pitiable to the bystanders to witness the grief
of those who were saved, who, finding nothing more could be done, were
obliged to content themselves with offering a reward for the body,
coupled with a promise to return early in the morning. They then went
away, and the scene resumed its ordinary quiet. A few hours after this,
at the dead of night, a second boat, with the same men, pursued its
silent and almost solitary course up the river towards the scene of the
previous misfortune. With them was a large suspicious-looking bundle,
which, when they had arrived at a spot suitable to their purpose, they
lifted in their arms, placing their horrible burden,--for it was the
body of a dead man,--where from their judgment and their knowledge
of the tide, the corpse of their friend would be sought. Favoured by
darkness and by night, they accomplished their object, again rowing
rapidly down the stream to an obscure abode in the neighbourhood of
Greenwich. When morning began to break, they returned once more to the
place which had witnessed their mysterious midnight visit, where, with
much apparent anxiety, they asked for tidings of their companion. The
reply was what they expected. A body had been found,--it was that which
they had placed on the strand,--and this they at once identified as
that of the friend who had been with them in the boat, and for whom
they had offered a reward. A coroner’s jury sate upon the remains,
a verdict of accidental death was recorded, and the object of the
conspirators fairly achieved. That object was to defraud an assurance
office to a very large amount: for the missing man had not been
drowned; the grief expressed was only simulated: and the body which had
been placed on the banks of the Thames had been procured to consummate
the deception.

Against a fraud planned with so much art and carried out with such
skill, no official regulation could guard; and when the papers
containing the report of the inquest and the identity of the body,
were forwarded to the office as the groundwork of a claim for the
representative of the deceased, not a doubt could be entertained of
its justice. It was true that the claimant under his will was his
mistress; that his executors were the persons who perpetrated the
fraud, and were with him at the time of the accident; but there were
the broad and indisputable facts to be disposed of, that the insured
man had met with a sudden and accidental death, and this was attested
by the verdict of a jury. The money was paid, and with that portion of
it which came to the deceased, he went to Paris. In that gay capital,
with a mistress as expensive in her habits as himself, the cash was
soon spent; and so successful had been the first attempt in this line,
that it seemed a pity for gentlemen thus accomplished to abandon a
mine so rich. Very shortly, therefore, after the previous fraud, an
application was made from Liverpool to an office in London, to insure
the life of a gentleman for 2000_l._ The applicant was represented
as a commercial traveller, and permission was sought to extend the
privilege of travelling to America. This insurance was effected, and
when only a few months had elapsed, information was received by the
company that the insured gentleman, while bathing in one of the large
American lakes, had been drowned; that his clothes had been left on the
banks of the water where his body had been found; and in verification
of this, all the necessary documents were lodged in due time. As the
death and identity of the traveller seemed clearly established, the
office intimated its readiness to pay the policy at the end of the
accustomed three months. But three months seemed a very long period
to those who felt the uncertain tenure by which their claim was held,
so, to induce the office to pay ready money, they offered a large and
unbusinesslike discount. This, together, perhaps, with some suspicions
created by the manner of the applicant, placed the office on its
guard. Inquiries were soon instituted, and discoveries made which
induced them to proceed still farther; but no sooner was it found that
a close inquisition was being entered on, than the claim was abandoned,
and the claimant seen no more at the office.


[32] “I tell the tale as ’twas told to me.” It has, however, been
suggested that he failed to take the dose in his extreme agitation.



For more than one century the life assurance companies of England were
sufficient for the requirements of Scotland; and, whatever opinion may
now be formed of institutions founded on the proprietary principle, yet
life assurance would have been still in its infancy without it. And the
reason is obvious. It was the great object of these societies to pay
the best dividend they could. To do this it was necessary to spread
their advantages far and wide, to appoint agents in the remotest parts
of the country, to familiarise the public mind with its principles, and
to advertise its benefits wherever a village or district was ignorant
of them. By 1812, however, a proposal was printed “for establishing
in Scotland a general fund for securing provision to widows, sisters,
&c., and for insuring capital sums on lives, to be called the ‘Scottish
Widows’ Fund and Equitable Assurance Company.’” The northern reader
may not be averse to review the early career of his favourite

Its prospectus rivals the mining advertisements of the present day.
The society was to be supported by 2 Dukes, 1 Marquis, 6 Earls, 2
Viscounts, 2 Lords, 2 Honourable Gentlemen, and 3 Baronets, as patrons
only. It boasted a Viscount as President. There were 4 Vice-presidents,
27 Honorary Directors, 15 Ordinary Directors, and 20 Extraordinary
Directors. Its tables were founded on the Northampton observations
of Dr. Price, and the presumption of improving money was at 4 per
cent. per annum. But though it was ushered in with so brilliant an
array of names, it would seem as though they of Scotland were not to
be thus tempted. It requires hard work to place a new company on a
proper footing, and as dukes, marquises, or peers are not usually hard
workers, it took three years before this company could commence its
operations; and while the little insignificant-looking prospectus which
announced its advent is dated 1812, the society itself, ultimately
attended with such brilliant results, was not able to commence its
operations till 1815. Its first constitutional meeting was marked by a
feature perfectly in keeping with the devotional character of Scottish
life; yet it is strange and almost startling to commercial England
to read that “the venerable and reverend Dr. Johnston, who presided
in a manner beautifully consistent with the exalted piety of his own
character and _the benevolent design of the institution_, opened and
consecrated the business by the utterance of solemn prayer.”

The difficulties incidental to mutual assurance beset the new
society. For a time its sole capital was 34_l._ 12_s._ 6_d._ The most
imminent danger must have been apprehended by its friends; and until
a sufficient fund was accumulated, an accidental death might have
precipitated its ruin. Its early records prove that great anxiety
existed, that various precautions were proposed, and that a natural
alarm overshadowed its progress. This fact is an exposition of the
chances which assurance companies on the mutual principle must run,
and of the dangers to which they are liable during any abnormal or
remarkable period, when with no capital subscribed to back them, a
plague in the shape of the cholera, or an epidemic like the small-pox,
may prove that figures are not facts, and upset the most elaborate
calculations or the most undeniable tables.

The difficulties of the first year were surmounted, and insurers
came to its support. Year after year it gathered strength, and the
following table, giving some idea of its progress for ten years, may
not be uninteresting to new companies:--

                    1818.    1821.   1824.    1827.    1829.
                      £        £       £        £        £
  Annual prems.     2,500    5,100   13,000   22,000   27,000
  Capital           3,500   15,000   50,000   95,000  130,000
  Policies issued  68,219  140,000  380,000  620,000  770,000

A comparison was made between the English Equitable and the Scottish
Widows’ Fund during the first eleven years of each. In the English
Equitable the assurances were only 230,000_l._; in the Scottish they
amounted to 493,000_l._ The annual income of the former was but
9500_l._, of the latter 17,500_l._ The English Society, at the end of
eleven years, possessed an accumulated capital of only 29,000_l._,
while the Scottish boasted one of 72,000_l._ Such was the success
of an institution which could not even commence business for three
years after its advent, which began with a capital of 34_l._ 12_s._
6_d._, and which, by the evidence of its own manager, was doubtful
of its continuance for the first year or two of its existence. That
the Scottish Widows’ Fund has been serviceable to thousands, and that
it has stimulated other companies, is undeniable; but it is equally
undeniable that it is a mere trading institution founded on mercantile
principles; and though its managers may boast that “it is benevolent in
its objects, that it originated in no selfish views, and that it has
been the happy medium of diffusing comfort and security,” it must still
be borne in mind that such benevolence is scarcely compatible with its
interests; and when it is remembered that its meetings were solemnised
by prayer, the thought naturally occurs whether revenue or religion
prompted the exercises, and whether the quackery of trade was not mixed
with the fervour of worship. It is a financial company, governed by its
tables, guided by its physician, and ruled by regulations which are and
ought to be severely enforced. Such was the first mutual institution of

The first proprietary was in 1823, when the North British Fire Company
added life assurance to its ordinary business. A company with a capital
is often of much service to the cause of life assurance in any place
where it is newly introduced. Where a mutual society fears to expend
its money, a proprietary company will send its proposals to every
journal in the place; and by spreading its doctrines among a remote
but intelligent agricultural population--by giving an absolute safety
to the insured, by virtue of its capital,--it is often productive of
inestimable good. And at this period the notion of insurance was vague
and indefinite. In agricultural districts especially, even among the
most thoughtful, it was rarely heard of. One story will illustrate
this more than a hundred assertions. The agent of the Rock Proprietary
Company met in the north of Scotland with an intelligent man who farmed
some thousand acres. This estate he delighted to cultivate; and though
the period was long before that when science was employed by the
agriculturist, he invested all his profits in the estate he rented.
With great and proper pride he took the life assurance agent over his
land, pointed to his improvements, and boasted his gains.

When they returned to the farm-house, the agent, who saw that if his
host died, all that he had done would be for his landlord’s benefit,
only said to him, “You must have spent a large sum on this estate.”

“Many thousands,” was his curt reply.

“And if you die,” was the shrewd retort, “your landlord will receive
the benefit, and your wife and daughter be left penniless. Why not
insure your life?”

The man rose, strode across the room, and drawing himself up as if
to exhibit his huge strength, said, almost in the words of one of
Sir Bulwer Lytton’s heroes[33], “Do I look like a man to die of

The agent was not daunted--he persevered, explained his meaning,
enlisted the kindly feelings of his host, persisted in asking him how
much he would leave his family, and at last induced him to listen. They
examined his accounts, and found that he could spare about 120_l._ a
year. The village apothecary was almost immediately sent for, the life
was accepted, and policies were granted for 3000_l._

In less than nine months this man, so full of vigorous health, took
cold, neglected the symptoms, and died, leaving only the amount for
which he had assured his life to keep his family from want.

There is much in favour of life assurance in this little anecdote, and
there is much too in favour of the proprietary system, for a man like
this would not have risked his savings with a mutual insurance society.

The Edinburgh Life Assurance followed in 1823, having been originated
by the legal bodies in Edinburgh at the same time, and very much upon
the same principles, with the Law Life in London. The Scottish Union
ensued in 1824, the Aberdeen in 1825, and the Scottish Amicable in

It is one advantage of all new life companies that they assist in
forwarding a principle; and there is another feature in them. In most
other speculative societies, their failure produces very painful
results. A railway sees its capital spent, and is obliged to make
farther calls upon its proprietors. An unsuccessful canal company has
only the certainty of having fed and demoralised some thousands of
stalwart navigators in exchange for the ruin of its shareholders, while
the failure of a mine is the melancholy close of many a bright hope.
But it is not so bad with a life assurance company. The insured--except
in offices originated with a fraudulent design, such as the West
Middlesex--has never yet been deceived by the failure of a policy. To
take Scotland as an instance, many of the companies have not been able
to maintain their ground; but in no one case has the policy-holder
risked his premium or lost his assurance. Thus the Scottish Life, when
unable to maintain itself, handed its business to the Mercantile,
which then became responsible. When the Mercantile ceased to be
an independent company, it transferred its policies to the “Life
Association.” The “Scottish Masonic” and the “Bon Accord” business was
taken up by the Northern. In no instance, therefore, has any legitimate
company failed in its engagements. The public has never been
scandalised with tales and traditions of wrong and ruin. Nor has the
improvident man been strengthened in his improvidence, by being able to
plead losses which others have sustained. The progress of the science
in Scotland has been calm and equable. Throughout all her districts,
its agents are spreading a knowledge of its benefits. There are enough
and to spare of companies; and while giving the following list, it may
be remarked, that all the offices which are noticed below as having
transferred their business, were fairly and soundly originated. It is
highly creditable to Scotland, that directly they found they were not
successful, their business was at once handed over to other companies:--

  Scottish Widows’ Fund (mutual). This was the
    first life office in Scotland                1815

  North British (mixed). Commenced fire in       1809

    ”              ”        ”      life in       1823

  Edinburgh (mixed). Nine-tenths of the profits
    allotted to the policies                     1823

  Scottish Union (mixed), divides two-thirds of
    the nett profits every five years            1824

  Standard Life (mixed). Commenced under the
    title of the Life Insurance Company of
    Scotland, and took its present name in 1832  1825

  Scottish Provincial (mixed). Commenced under
    the title of the Aberdeen Fire and Life
    Insurance Office, and took its present
    name in 1852. In
    1840, policies with a right to share in the
    profits were first issued                    1825

  Scottish Amicable (mutual)                     1826

  Scottish Equitable (mutual)                    1831

  Caledonian (mixed). Originally fire            1805

      ”         ”    Extended to life            1833

    Five-sixths of the profits allotted to the policies.

  Northern (mixed). Commenced under the title of
    the North of Scotland, and took its present name
    in 1848. Divides 90 per cent. of its profits
    among the policy-holders                     1836

  Scottish Provident (mutual)                    1837

  City of Glasgow (mixed). Annual investigations
    and yearly bonuses. At the end of five years
    a policy-holder may live out of the limits
    of Europe without extra premium              1838

  Life Association of Scotland (mixed). Commenced
    as the Edinburgh and Glasgow, and took its
    present name about 1841                      1839

  English and Scottish Law Life (mixed)          1839

  National (mixed). Commenced fire               1841

     ”       ”         ”      life               1843

    Four-fifths of the profits allotted to the policies.

  _Offices that have transferred their Business._

  Bon Accord, Life                               1845

      Transferred to _the Northern_ in 1849.

  Commercial, Life (Head Office in Glasgow)      1840
      Transferred to _the Standard_ in 1846.

  East of Scotland, Life (Head Office in Dundee) 1844
      Transferred to _the Colonial_ in 1852.

  Experience, Life                               1843
      Transferred to _the Standard_ in 1850.

  Friendly, Fire                                 1720
      Transferred to _the Sun_ in 1847.

  Hercules, Fire and Life, Fire                  1809

     ”              ”       Life                 1832

  Transferred to _the Scot. Union_, life
    in 1835, and fire in 1849.

  Mercantile, Life                               1844

    Transferred to _the Life Association_
      in 1850.

  Scottish Life and Guarantee, Life              1844
    Transferred to _the Mercantile_ in 1848.

  Scot. Masonic (originally Freemason’s, Life)   1844
    Transferred to _the Northern_ in 1848.

Thus, in Scotland one office was established in 1815; five from 1816 to
1825; three from 1826 to 1838; six from 1836 to 1845.

The united incomes of these are not far short of 1,400,000_l._; and the
assurances now in force amount to about 33,000,000_l._



[33] Night and Morning.

       *       *       *       *       *


       *       *       *       *       *

Transcriber’s Notes:

The original of this book contained a catalog, dated March 31, 1853, of
new works in general and miscellaneous literature published by Messrs.
Longman, Brown, Green, and Longmans, Paternoster Row, London, that is
available as the separate Doctrine Publishing Corporation EBook #49620.

Footnotes have been moved to the end of each chapter and relabeled
consecutively through the document.

Punctuation has been made consistent.

Variations in spelling and hyphenation were retained as they appear in
the original publication, except that obvious typos have been corrected.

Additional comments:

p. 15: Based on the preceding table, the 60 in the second table should
be 66 and the 80 should be 86.

p. 169: Demerell may be a misspelling of Damerel (at Stoke Demerell, in

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