PRACTICE OF ASSURANCE BY THE ROMANS.—SAXON APPROXIMATION TO FRIENDLY SOCIETIES.—MARINE ASSURANCE.—DANGER OF NAVIGATION, AND ITS EFFECT ON LIFE ASSURANCE.—ASSURANCE FOR PALMERS AND PILGRIMS TO THE HOLY LAND.—BULMER’S OFFICE OF ASSURANCE.—ASSURANCE OF NAVIGATORS, MERCHANTS, AND CORPORATIONS.—ASSURERS.—UNCERTAINTY OF LIFE.—ANNUITIES.—AUDLEY THE USURER—HIS HISTORY—ANECDOTES CONCERNING HIM.—THE USURER’S WIDOW.

It has been the endeavour of most writers to trace the practice, if not the principle, of assurance as far back as possible; but in doing this, trifles have been exaggerated into matters of importance. Some authors contend, on the authority of Livy, that it was in use during the Second Punic War: others, arguing from a passage in Suetonius, refer to the Emperor Claudius, as the first insurer; because, in order to encourage the importation of corn, he took all the loss or damage it might sustain upon himself.

These cases are, however, entirely exceptional, and certainly indicate no settled plan, as the very fact that the Emperor guaranteed the contractor against damage, is a proof that there was no other mode of doing so. Cicero is also quoted, because, in one of his epistles, he expresses a hope of finding at Laodicea, security by which he could remit the money of the republic without being exposed to danger in its passage.

If, however, the assertion that marine assurance was known to the ancients is not demonstrable, there is no doubt that life assurance was unknown and unpractised, although the Romans had some wise regulations in connection with the economy of the people. From Servius Tullius downwards, they took a census every fifth year, and the right of citizenship was involved in any one failing to comply with the requirements of his age, name, residence, the age of his wife, the number of his children, slaves, and cattle, together with the value of his property. They do not seem to have kept any exact mortuary register, as the chief object of their census was to levy men and money for the purpose of conquest. One of the commentators on the Justinian Code also gave a calculation of the worth of annuities, which, if it may be accepted as an expectation of life, gives far more correct views of its comparative value at various ages, than was known in Europe until the time of De Witt.

Turning from these vague theories of an antique age to our own country, we find that associations founded on social principles, in which union for good or for ill, and in which provision was made for contingencies, were the prominent features, are to be found in our Saxon annals. The axiom, that “Union is Strength,” the necessity of providing for casualties by mutual assistance, in other words, assurance on its broadest and most rational basis, was practised in the Saxon guild, the origin of which was very simple: Every freeman of fourteen being bound to find sureties to keep the peace, certain neighbours, composed of ten families, became bound for one another, either to produce any one of the number who should offend against the Norman law, or to make pecuniary satisfaction for the offence. To do this, they raised a fund by mutual payments, which they placed in one common stock. This was pure mutual assurance. From this arose other fraternities. The uncertain state of society, the fines which were arbitrarily levied, the liability to loss of life and property in a country divided against itself, rendered association a necessity. And if it was necessary before the Conquest, it became doubly so after it. The mailed hand of the Norman knight was ever ready to grasp the goods of the Saxon serf; and the Norman noble trod the ground he had aided to subdue, with the pride of a conqueror, at the same time that he exercised the rapacity of an Eastern vizier. To meet the pecuniary exigencies which were perpetually arising from fines and forfeitures, and to aid one another in burials, legal exactions, penal mulcts, payments, and compensation,—ancient friendly societies, somewhat similar to those of the present day, were established; and the rules of one which existed at Cambridge prove its approximation to the modern mutual friendly association. The following extracts will satisfy the reader of the truth of this assertion:—

“1. It is ordained, that all the members shall swear by the holy reliques that they will be faithful to each of their fellow-members, as well as in religious as in worldly matters; and that, in all disputes, they will always take part with him that has justice on his side.

“2. When any member shall die, he shall be carried by the whole Society to whatever place of interment he shall have chosen; and whoever shall not come to assist in bearing him shall forfeit a sextarium of honey: the Society making up the rest of the expense, and furnishing each his quota towards the funeral entertainment; and also, secondly, for charitable purposes, out of which as much as is meet and convenient is to be bestowed upon the church of St. Etheldred.

“3. When any member shall stand in need of assistance from his fellow-members, notice thereof shall be given to the Reeve or Warden who dwells nearest that member, unless that member be his immediate neighbour; and the Warden, if he neglect giving him relief, shall forfeit one pound.[5] In like manner, if the President of the Society shall neglect coming to his assistance, he shall forfeit one pound, unless he be detained by the business of his lord or by sickness.

“4. If any one shall take away the life of a member, his reparatory fine shall not exceed eight pounds; but if he obstinately refuse to make reparation, then shall he be prosecuted by and at the expense of the whole Society: and if any individual undertake the prosecution, then each of the rest shall bear an equal share of the expenses. If, however, a member who is poor kill any one, and compensation must be made, then, if the deceased was worth 1200 shillings, each member shall contribute half a mark[6]; but if the deceased was a hind, each member shall contribute two orÆ[7]; if a Welchman, only one.

“5. If any member shall take away the life of another member, he shall make reparation to the relations of the deceased, and besides make atonement for his fellow-member by a fine of eight pounds, or lose his right of fellowship to the society. And if any member, except only in the presence of the king, or bishop, or an alderman, shall eat or drink with him who has taken away the life of a fellow-member, he shall forfeit one pound, unless he can prove, by the evidence of two witnesses on oath, that he did not know the person.

“6. If any member shall treat another member in an abusive manner, or call him names, he shall forfeit a quart of honey; and if he be abusive to any other person, who is not a member, he shall likewise forfeit a quart of honey.

“7. If any member, being at a distance from home, shall die or fall sick, his fellow-members shall send to fetch him, either alive or dead, to whatever place he may have wished, or be liable to the stated penalty; but if a member shall die at home, every member who shall not go to fetch his corpse, and every member who shall absent himself from his obsequies, shall forfeit a sextarium of honey.”

These rules might have been certified by a Pratt, so simple and so excellent is their arrangement. But they must not be regarded as exceptional. The following form a portion of the regulations of another similar society at Exeter:—

“1. At each meeting every member shall contribute two sextaria of barley meal, and every knight one, together with his quota of honey.

“2. When any member is about to go abroad, each of his fellow-members shall contribute five pence; and if any member’s house is burnt, one penny.

“3. If any one should by chance neglect the stated time of meeting, his regular contribution to be doubled.”

Well may Mr. Ansell say, “The guilds or social corporations of the Anglo-Saxons seem, on the whole, to have been friendly associations, made for mutual aid and contribution, to meet the pecuniary exigencies which were perpetually arising.” Nor can the reader fail to be struck with the resemblance these rules bear to those of many of the modern societies; and, as they were framed 800 years ago, the similitude is somewhat remarkable. After the Conquest guilds were established for the express promotion of religion, charity, or trade, and from these fraternities the various companies and city corporations have arisen. The following, forming a portion of the rules of St. Catherine’s Guild, seem like those of some modern fraternity:—

“If a member suffer from fire, water, robbery, or other calamity, the guild is to lend him a sum of money without interest.

“If sick or infirm, through old age, he is to be supported by his guild according to his condition.

“If a member falls into bad courses, he is first to be admonished, and if found to be incorrigible he is to be expelled.

“Those who die poor, and cannot afford themselves burial, are to be buried at the charge of the guild.”

Societies like these, established at a period when

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 100l., 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, 500l. 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 100l. of a man, to give him 8l. in the 100l. 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 1000l. lying by him, and demandeth for his life and his wife’s life 100l. 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 6s. 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 600l. he had saved, bought of a nobleman an annuity of 96l. 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 5000l. 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 200l. Audley bought the debt of the latter for 40l., 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 500l. 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 4000l., and, to avoid it, paid the penalty of 500l.; 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.”