“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.
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.”