Chapter I (2)

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 cursing.”

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 regret.

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.”

FOOTNOTES:

[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.

CHAP. III.

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.

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 5,500,000.

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 respect.

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.

FOOTNOTE:

[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 ”

CHAP. IV.

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.

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 ruinous.

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 persons.”

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.

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.

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, 2,000,000_l._

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, 2,000,000_l._

8. Friendly society for insurances.

9. For insuring ships and merchandise, at the Marine Coffee-house, 2,000,000_l._

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 kingdom.

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.