“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:--