FRAUDULENT ANNUITIES--ACT TO PREVENT THEM.--SALVADOR THE
JEW.--DAVID CUNNINGHAM THE SCOTCHMAN--HIS CAREER--HIS ANNUITY
COMPANY--ITS SUCCESS--HIS DOUBLE CHARACTER--HIS FATE.--MORTUARY
REGISTRATION.--JOHN PERROTT--HIS PASSION FOR CHINA--TRICK PLAYED
HIM.--CURIOUS FRAUD.--WESTMINSTER SOCIETY.--PELICAN.
When it was found that a fraudulent system of assurance would no longer
be permitted, a fraudulent system of annuities usurped its place, and
parliament was once more compelled to legislate. By an act passed in
1777, it was determined that, “owing to the pernicious practice of
raising money by the sale of life annuities having greatly increased,
and being much promoted by its secrecy, the particulars of all deeds,
bonds, &c., for granting these annuities shall, within twenty days of
the execution thereof, be enrolled in the Court of Chancery, otherwise
such bond shall be void. All future deeds also for granting annuities,
to contain the consideration and the names of the parties; and that
if any part of the consideration be returned, or is paid in bills not
honoured, or is paid in goods, or any part retained under pretence
of securing the future payments of the annuity, or under any other
pretence, the Court may order the deed to be cancelled. All contracts
with persons under twenty-one to be void; and no solicitor, scrivener,
or broker, to take more than 10_s._ per cent., under penalty of fine
and imprisonment.”
A long course of evil doing had led to this enactment. From the
commencement of the eighteenth century, Jews, and Christians worse than
Jews; usurers, and bankers worse than usurers; had habitually sold
life annuities: before this, it was less common, being reserved almost
entirely for usurers and goldsmiths. It was a branch of business of
which, little as the seller might know, the annuitant knew nothing.
But if such men as Snow the banker, Samson Gideon the founder of the
house of Eardley[15], Fordyce the insolvent banker, and Colebrooke
the bankrupt East India director, undertook to grant payments, it may
easily be guessed, that they were either unmercifully fleeced, or got
nothing at all, when the great millionnaire was in the Gazette. Nor
was the practice confined to these men; Exchange Alley was pre-eminent
in buying or in selling annuities, in undertaking to pay, or in
willingness to receive any amount of money. They were as ready to
assure the life of, or to promise an annuity to a country clergyman,
as they were to trade in the fall of a prime minister, or to traffic
in the blood of an admiral. They took the hoard of the servant with as
much coolness as they coined false intelligence; and when a reverse of
fortune made them penniless, it involved hundreds of innocent persons
with them.
The frauds which now attend the loans of money to the spendthrift,
are nothing compared to the gigantic scale with which, under the
name of annuities, they were then carried on. If a man granted one
on a fine estate for a consideration, that consideration was rarely
paid in money. The unhappy borrower was obliged to take whatever he
could get. Thus the stock-jobber made his prey receive consols at a
price much above that of the market. The merchant gave him a bill of
lading for some indifferent kind of merchandise. The banker handed him
long-dated bills, and sometimes was a bankrupt before they were due.
The large tradesmen--many of whom then, as now, surreptitiously carried
on the trade of money lending--got rid of goods which were otherwise
unsaleable. One piece of plate did yeoman’s service to its owner; into
whatever transaction of the kind he entered, it was always introduced.
It was valued at 600_l._ to the recipient, and it was always bought
back by the usurer for 70_l._ This man, a wealthy jeweller named
Salvador, was a specimen of another class, common enough in the middle
of the eighteenth century. His shop in Cornhill was the general resort
of those who wanted money and could give good security. He ran from
his house to ’Change Alley twenty times a day, to ascertain the price
of the funds, in which he dealt largely; and his agony was excessive
when it went against him. He would tear his hair and gnash his teeth;
he truly rent his heart, but not his garments, for the latter cost
money. During these paroxysms, the youngsters of the day were made to
suffer most exorbitantly, and one of them openly calling him Shylock
Salvador--the name he was usually known by--nearly paid the penalty of
his life; for the incensed Jew threw himself on the young profligate
and almost killed him. The idiosyncrasy of this man made him mad when
he lost his money, and as mad to regain it. Yet he evinced touches of
benevolence which redeemed his character, and traits of kindness which
made him much loved and respected by all his tribe. To Christians he
was as mischievous as a monkey, taking a delight in giving a crown
piece to a beggar, and then following him to demand it back, under
pretence that he had given it instead of a penny, with which, however,
he always failed to redeem it.
It need not be added that he was loud in his reprobation of the act
against gambling in annuities, as it promised to strike a deep blow at
his profits. The bill met with much opposition, especially in the upper
house, but while the Earl of Abingdon deemed it his duty to denounce
its unconstitutional tendency, and to declare, “it was not calculated
for the genius of a free nation,” the Earl of Mansfield, a higher
authority, said, his experience had long since taught him that some
bill was wanting to put a stop to the usurious contracts and fraudulent
transactions which had been practised for many years, and which were
now carried to an height of enormity.
At this period, various brokers and merchants devoted their capital
entirely to annuities, and many most honourable men experienced a
pleasure in aiding the endeavours of the poor, scorning at the same
time to take a mean advantage of the spendthrift; but there were others
who would have jobbed in the lives of their fathers, and sold their own
souls to perdition in their love of mammon.
There were also the annuity companies which were unsafe, because they
were unsound in principles, and of which Dr. Price said that they cared
little about it; and that in addition to these there were likewise
fraudulent companies established by fraudulent men; let the following
sketch bear witness.
Among those who misemployed their capacity in the formation of bubble
annuity societies, was one David Cunningham, whose career, so far as it
can be gathered, is a strange illustration of perverted powers. Born
in the shire of Inverness, of which his father was a native, bred a
presbyterian, with the confined if respectable notions of the class,
and meant “to wag his pow” in a pulpit, from whence in due time he is
even said to have held forth; Cunningham might have been respectable
and respected, had not his zeal for proselytism with a fair daughter
of his flock carried him beyond the borders of propriety. Like Adam
Blair he sinned, but unlike Adam Blair he repented not, and suddenly
disappearing from his native place, he left the victim of his passion
to repent her misdeed, and his parents to bear the agony of an only
son’s shame. As a boy he had been remarkable for acuteness and ability,
had at an early period devoted himself to arithmetical studies, and,
indebted to the pedlar--then the only communication between town
and country--for some odd books which treated of the science of
mathematics, had studied them to so much purpose that if the money had
been spent on his secular which was spent on his spiritual education,
he would probably have been a great mathematician and possibly a good
man. Possessed of a fine person and specious address, nothing is known
of him until twenty years afterwards, when he appeared in London with
a tolerable supply of money, and more than a proportionate supply of
audacity. Here he commenced the vocation of schoolmaster. At this time
the preaching of Whitfield and Wesley was a passion. Parties of titled
people were made up to hear them exhort and used up ladies of rank
experienced new sensations when Wesley expounded the religion they had
neglected, and Whitfield described the tortures they would endure.
Among the votaries of the new apostle, who, with the restlessness of
genius soon aspired to lead where hitherto he had followed, was David
Cunningham.
He still kept on his school and made use of his gifts in prayer, which
were very remarkable, to procure introductions to the better class of
London society, among whom he moved with an air of pious humility,
alike distinguished for his toadying and his teaching. These he used
as levers for the artful design of forming an annuity company--next
to religion, annuity companies being the fashion--to be founded on a
new principle for indigent persons and widows. This principle was,
that it should be partly self-supporting and partly philanthropic, and
that annuities bought by the poor should be aided by the charitable
contributions of the rich.
Cunningham was rather late in the market, for the volume of Dr.
Price, which dispersed the assurance bubbles, was on the point of
publication as he made his announcement; but the Scot was a crafty
man, and his prospectus breathed benevolence, not personal benefit; it
talked of charity and forgot allusion to per centages. Others might
weary themselves in striving to establish a purely self-supporting
institution, Cunningham struck into a new path. He showed that of the
existing companies some did not ask enough, and some demanded too
much. Other societies were often carried on in taverns; his fastidious
taste revolted from the idea. The whole mind of this scheming man was
bent upon betraying the public, and he determined to establish an
Imperial Annuity and Charitable Pension Society, the terms of which
should be lower than all others, while any awkward questions as to
its responsibilities should be checked by pointing to a long list of
patrons, against whose names should be placed large sums as donations
and subscriptions. Directors were not more difficult to procure then
than now, but Cunningham chose to be his own manager, and to represent
his own board. Persons of rank were as proud of seeing their names to a
charity as at the present day, and so plausible and persevering was the
Scotchman that he soon procured duchesses and peeresses to herald his
speculation.
He was shrewd enough to vary his premiums to the position of the
applicant. He would take less than the established rates under cover
of a charitable institution; and the poor brought their money to him
because they could buy a larger annuity with less cash than anywhere
else. He tempted the general public with low rates of premium as he
pointed to the character of a board which never met. He would sell a
life annuity for whatever he could get, as he never refused an offer;
and, with a list of patrons like that which he paraded at the head of
his advertisements, it was almost impossible to doubt the solidity
of the company. His speculation answered. He had a large office; he
employed a considerable number of dependants; and the money which he
gained easily he spent freely. More customers came to his office than
to any other’s; for while the poor sought him with their savings, the
rich advised with him as to investment. He was consulted by widows,
and made the trustee of orphans. No one inveighed against mammon with
more solemn sanctity, and no one received money with a more demure
aspect. He gave great parties; he contrived to connect his name with a
certain class of the aristocracy; he dabbled in literature, and, like
an enthusiast of the present day, who is said to tell those who connect
themselves with his office that neither they nor their children,
nor their children’s children, can ever know want, he succeeded in
impressing on the public a conviction of his worth.
The remarkable character of this man enabled him to play many parts.
In his office, and with the Hallifaxes, the Dents, the Glyns, and
the Ladbrokes of the time, he was the close, cool, methodical man of
business. Punctual to his time, his lightest word his bond, and ready
with his payments; he was respected in the City. Connected, as it has
been seen, with the sect of Whitfield, he seemed a reverent, devout
attender on the rites of religion. Though he gave up preaching when he
had attained his object, he yet retained a prominent position in the
chapel where he once held forth. But it was afterwards whispered by
those who knew him well, that he had another and less worthy character.
That some one marvellously like him was seen in places which sectarians
hold in horror; that when with persons he could trust, his orgies
were as wild as the worst of a wild time; and close observers might
have added that the sweet smile and the unctuous bearing were but the
cloak to cover his real designs, had not his purse and his reputation
disposed them to be short-sighted.
The game he meant to play is uncertain, as his career was cut short by
the publication of the work of Dr. Price, on reversionary payments,
which had drawn notice to these societies generally. Some were
discovered to be false and hollow; others merely founded in ignorance.
Attention became naturally pointed to their framers. Questions were
asked as to the promoter of the last new company, which were more
easily asked than answered. Cunningham took the alarm, withdrew his
cash in gold from the bankers, told his subordinates to continue the
business until he returned, and left an address for his correspondence.
From that time he was heard of no more, and the only conjecture that
could be made, was from the intelligence that a vessel trading to
Ireland had been wrecked, and that one of the bodies was that of a
gentleman supposed to be David Cunningham, the founder of the Imperial
Annuity and Charitable Pension Society.
The misery caused to all whom this man had wronged was great; but it is
impossible to teach wisdom, and recent annals have shown us that the
world, in this respect, has not grown wiser as it has grown older.
The act just given, entitled, “An Act to prevent Gambling in
Annuities,” struck a severe blow at annuity companies like these, as
well as at those which were for the sake of gambling merely, or for
which an unfair consideration had been given. It might be evaded by
some, or it might be defied by a few; but it at least had the effect
of sending the purchasers to those legitimate offices from which alone
they were certain of receiving their due.
By this time the subject of mortuary registrations was mooted in
magazines and periodicals, and many ideas may be found scattered over
contemporaneous literature, which probably assisted to perfect the
necrological system which we now enjoy. It may seem trite to relate
that in 1773 it was recommended to keep a table of christenings,
marriages, and burials in every church, chapel, and place of
religious worship, to be published annually; but this was a grasp of
intelligence not previously attained; and when, too, it was advised
that the tables of christenings should specify the sexes, and the
tables of deaths divide the males into children, bachelors, married
men, and widowers, and the females into corresponding denominations,
it was really no trifling advance in the objects of life assurance,
although it was not thought so at the time. It was said, also, and
said justly, “The establishment of a judicious and accurate register
of the births and burials in every town and parish, would be attended
with the most important advantages,--medical, political, and moral. By
such an institution, the increase or decrease of certain diseases, the
comparative healthiness of different situations, climates, and seasons,
the influence of particular trades and manufactures on longevity,
with many other circumstances not more interesting to physicians than
beneficial to mankind, would be ascertained with tolerable precision.
In the Pays de Vaud and in a country parish in Brandenburgh, 1 in 45
of the inhabitants die annually, and at Stoke Demerell, in Devonshire,
1 in 54. Whereas in Vienna and Edinburgh the yearly mortality appears
to be 1 in 20; in London, 1 in 21; in Amsterdam and Rome, 1 in 22; in
Northampton 1 in 26; and in the parish of Holy Cross, near Shrewsbury,
1 in 33. In the Pays de Vaud the proportion of inhabitants who attain
the age of 80 is 1 in 21-1/2; in Brandenburgh, 1 in 22-1/2; in Norwich,
1 in 27; in Manchester, 1 in 30; in London, 1 in 40; and in Edinburgh,
1 in 42.”
This was in 1773, and the intelligent reader will necessarily be
reminded of the period when life annuities were paid for without regard
to youth or age, and when a life insurance office commenced business,
and received equal premiums from the young and from the old, from the
healthy and the sick. But people were beginning to think. In 1777 fault
was found with the charges of the Equitable, and the following scale
proposed:--
3_l._ per cent. 4_l._ per cent. 5_l._ per cent.
21 years of age 2 17 7 2 16 0 2 15 0
30 ” 3 13 4 3 12 8 3 12 5
40 ” 4 11 6 4 13 11 4 14 1
50 ” 5 15 5 5 18 0 5 17 4
In 1779 a proposal was made for an universal assurance of lives, by
means of a tax to be levied by Government. By this all want was to be
abolished, and various Utopian benefits to be received. As, however,
the scheme was never carried out, it is only worthy of notice as
indicative of a growing spirit of inquiry.
In 1783 Mr. Baron Maseres endeavoured to familiarise the mind with
the doctrines of life annuities. It is to his discernment that we owe
the confirmation of Mr. de Moivre having recourse to an hypothesis
concerning the probabilities of the duration of human life, which he
yet knew to be untrue, in order to facilitate the computation. This
work of Francis Maseres is less referred to than it deserves; but there
is reason to believe that the value of his tables for all ages under 75
or 80 were nearer the truth for the average of this country, than any
other then extant.
During the mania for insuring anything and everything, there was a man
named John Perrott of considerable repute in the coffee-houses and on
the Exchange. He resided in a large mansion many miles out of town,
and rode to Lloyd’s in his coach and four, after the fashion of the
magnates of the day. He had come from the country a poor but clever
boy, and had worked his way until he could boast that he was worth
a plum. His avocations were various. He was a member of Lloyd’s; he
was a speculator on the money market; he was an insurer of lives, of
merchandise, and of anything that was offered, and so daring was his
character that he would take any risk however desperate, his motto
being, “Everything is insurable--at a premium.” He was liberal in his
dealings in business, and in his annuity transactions would often
grant more than he was asked if the applicant seemed to require and
deserve it. He affected an expensive style of living; his agents bought
rare pictures; but his chief delight was to collect fine china, a taste
in which he indulged to an extravagant extent. The uglier the monster
the dearer it was to John Perrott, and the more he was willing to pay
for it. His clerks were employed to board the vessels from the East
directly they reached the Thames, and he would at any time leave off
business to listen to information about pottery and porcelain. When
a man came to insure his life or his ship, to buy an annuity or to
sell one, he was sure of a favourable bargain if he could but produce
some vase or jar which had been seen by no one else. He had one fine
specimen in his collection, which however required a second and similar
one to complete its value in his eyes. This he once possessed, but
being lost or broken, it afforded him a constant topic of complaint,
and out of it arose a characteristic story of the man.
One day he was applied to by a merchant to effect an assurance on
a ship which had been long absent, and of the safety of which many
doubts were entertained. Perrott demanded a very high premium, and
the applicant demurred. In the course of conversation, however, he
carelessly alluded to a fine porcelain jar of which a friend was
possessed, and which he thought he could procure. Perrott’s eyes opened
as the description proceeded. It was the apple of his eye, the very
specimen his soul desired, and his visitor, on witnessing the anxiety
he evinced, offered to go for it, good-naturedly declaring it was of
no value to him, and at the express solicitation of Perrott went off
immediately to fetch the valued prize. The merchant seemed a long time
gone, but Perrott attributed this to his own impatience, and felt fully
rewarded when he saw him return bearing the porcelain he coveted. With
eager hands he grasped it; the assurance on the missing ship was most
advantageously concluded for his client; and Perrott went home a happy
man. On entering the place where all his treasures were deposited,
lo! his own jar was missing, and he found on inquiry that he had been
outwitted by his City friend, who had tempted him to a low assurance
with information about his own property, and at his urgent wish had
procured it from his own home by a deception on his own housekeeper.
Burning with rage, and vowing vengeance against the crafty merchant,
whom he determined to expose on ’Change, Perrott went to town the next
morning, where the first information which greeted him was the arrival
of the vessel he had just assured. Finding the tables turned in his
favour he wisely held his peace, merely making an especial visit to
the merchant to congratulate him on the arrival of his merchandise so
immediately after he had assured it.
The following fraud, which was perpetrated in 1780, was perhaps the
first instance of a deception which has since been often repeated.
An application was made to the London to insure the life of a lady
for 2000_l._ The references were satisfactory. The lady’s health was
sound, her habits were good, her constitution was excellent. The
usual certificates were handed in and the assurance was concluded.
Within six months a claim was made for the money. The ordinary forms
were lodged and found to be regular, the disease was certified to be
that of the lungs, which of all others should have been discovered
in the earliest stages. The directors looked grave and questioned
the secretary, and the secretary questioned the doctor. There was no
accounting for it; it all seemed regular; no fraud could be alleged,
and the policy was discharged. Scarcely had it been paid when certain
information was given. Inquiries were again instituted, and it was
discovered that one sister being ill and utterly given over, the other
brought a certificate of the invalid’s birth, personated her at the
assurance office, deceived the medical man, sent in the certificate of
her sister’s death, and obtained the money. No sooner did the office
commence its inquiries than the lady was missing, and the company
compelled to abide by its first loss.
An annuity and assurance office, stimulated by the success of the
Equitable, was commenced under the title of “the Universal,” but
history is silent as to its results. Many other attempts were made,
some of a purely local character, which were very successful; others,
more ambitious, failed in their endeavours. In 1792 the present
Westminster Society commenced business, and in 1797 was followed by the
Pelican, now in active existence. Some time prior to these, there was
an advertisement of a new assurance office on the lives of men, women
and children at the Bell and Dragon, otherwise called “Lincoln’s Inn
Eating-house in Portugal Street, Lincoln’s Inn, Back Gate.” It need not
be added that it was not by means of the “back gate to the Bell and
Dragon” that the Westminster and the Pelican obtained their deserved
success.