Chapter I (1)

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 EXPLANATIONS.--LIFE OF SIR WILLIAM PETTY--HIS CAREER
AND CHARACTER.

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 says:--

“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.

FOOTNOTES:

[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.

CHAP. II.

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.--ASSURERS.--UNCERTAINTY
OF LIFE.--ANNUITIES.--AUDLEY THE USURER--HIS HISTORY--ANECDOTES
CONCERNING HIM.--THE USURER’S WIDOW.

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 passage.

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 penny.

“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 adventure.”

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 usury.”

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 enter.

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.