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 2,000,000l. 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 2,000,000l. were demanded for assuring horses. Of this it was said:—

Of an office for marine assurance:—

The life and fire-companies were also epigrammatised with as much point as the epigrammatist could confer. Thus, on the former he wrote:—

With regard to fire-companies:—

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 1,200,000l., 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 600,000l., 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 1000l. yearly. No person could be a director of the London Assurance and Royal Exchange at the same time. Each corporation was to pay 300,000l. 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 300,000l. 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, 2,000,000l.

4. For granting annuities by way of survivorship, and providing for widows, orphans, &c., at the Rainbow, Cornhill, 1,200,000l.

5. For insuring houses and goods from fire, at Sadler’s Hall, 2,000,000l.

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, 2,000,000l.

8. Friendly society for insurances.

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

10. British Insurance Company.

11. For preventing and suppressing thieves and robbers, and for insuring all persons’ goods from the same, at Cooper’s, 2,000,000l.

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 2,000,000l., at Robin’s.

17. Insurance Office for all masters and mistresses against losses they shall sustain by servants, thefts, &c., 3000 shares of 1000l. 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.

Of course, schemes were plentiful enough, and many plans were commenced with no other view than that of receiving deposits and spending them. One of the offices was started by an old man called Le Brun. In 1690, he had promised to bring up pearls and gold from sunken ships. In 1710, he had been conspicuous in offering strange benefits to all who joined his Marriage and Widows’ Assurance Company; and in 1720, he was ready with something new. His life had been one of adventurous daring. He had owned a privateer when privateers were pirates. He had been, as a boy, with Sir Henry Morgan in his bucaneering attack on Panama. He had accompanied Paterson in his ill-fated Darien expedition. But in all had he failed to procure the gold for which his soul thirsted, and that which he did obtain was spent in riot. When the Mississippi scheme was acting he was in Paris, and now he came over in time to propose a wonderful project for the benefit of all who would risk 5l. By this “Office of assurance and annuity for every body,” any person who paid 5l. was to be assured of receiving 100l. per annum, “as soon as a sufficient number had subscribed;” and it need hardly be added that, as this “sufficient number” never did subscribe, the assurance of M. le Brun was all that the unhappy subscribers beheld for their money. To prevent the public from suffering by the arts of such men as these, legal proceedings were resorted to; and when the proclamation was issued, not only did it destroy the bubbles, but it produced a serious effect on the two chartered companies. It is probable that they had been “rigging the market,” as the directors were ordered to attend the authorities, in order that they might receive a fitting rebuke; and it must have been a very impressive, though not a very picturesque sight, to see a body of respectable, square-toed, elderly gentlemen, with brown coats and cocked hats, listening with subdued awe, as they were sternly cautioned “to keep strictly to the limitation of their respective charters, or it would be the worse for them.”

That they took warning from this caution may be deduced from the circumstance already stated, that when they petitioned to be released from the payment of so much of the 300,000l. as was not paid[9], the Chancellor of the Exchequer signified his consent, and a clause was inserted to that effect in a bill then passing through the House.

It must not be supposed that any more scientific system than that adopted by the Amicable Society guided these companies. On the contrary, whether an applicant were 12 or whether he were 45, one premium was asked. The policy was granted for a single year, and renewed without reference to age or to health. The earliest document possessed by either of these companies is dated 25th November, 1721. It was granted by the London Assurance to Mr. Thomas Baldwin, on the life of Nicholas Bourne, for 100l., five guineas being the premium for twelve months; and this was the annual per centage paid for many years. With such a system, it is not to be wondered that the success of the company was slow.