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diff --git a/75944-0.txt b/75944-0.txt new file mode 100644 index 0000000..0f2d4ed --- /dev/null +++ b/75944-0.txt @@ -0,0 +1,1692 @@ + +*** START OF THE PROJECT GUTENBERG EBOOK 75944 *** + + + + + + THE ROYAL EXCHANGE + + + + + [Illustration: THE ROYAL EXCHANGE, LONDON.] + + + + + THE + ROYAL EXCHANGE + + A NOTE ON THE OCCASION OF + THE BICENTENARY OF THE + ROYAL EXCHANGE ASSURANCE + + BY + A. E. W. MASON + + ROYAL EXCHANGE + LONDON + 1920 + + + + +CONTENTS. + + + PART I.--THE HOUSE. + + CHAPTER I. + + PAGE + + SIR THOMAS GRESHAM AND THE FIRST ROYAL + EXCHANGE 11 + + CHAPTER II. + + THE GREAT FIRE AND THE SECOND ROYAL + EXCHANGE 26 + + CHAPTER III. + + THE THIRD ROYAL EXCHANGE 43 + + + PART II.--THE BUSINESS. + + CHAPTER IV. + + THE SOUTH SEA BUBBLE AND THE BIRTH OF THE + ROYAL EXCHANGE ASSURANCE CORPORATION 51 + + CHAPTER V. + + ON ASSURANCE 67 + + CHAPTER VI. + + SOME ODDS AND ENDS 85 + + CHAPTER VII. + + THE CORPORATION 97 + + + + +LIST OF ILLUSTRATIONS. + + + THE ROYAL EXCHANGE _Frontispiece._ + + FACING + PAGE + + THE FIRST ROYAL EXCHANGE 20 + + THE SECOND ROYAL EXCHANGE 34 + + INTERIOR OF THE SECOND ROYAL EXCHANGE 41 + + THE DESTRUCTION OF THE SECOND ROYAL + EXCHANGE BY FIRE, 1838 43 + + SOUTH SEA BUBBLE BROADSHEET, 1720 52 + + THE SECOND ROYAL EXCHANGE--PROOF OF + FIRST HEADING ON FIRE POLICIES, 1721 99 + + + + +PART I. + +THE HOUSE. + + + + +CHAPTER I. + +SIR THOMAS GRESHAM AND THE FIRST ROYAL EXCHANGE. + + +On the afternoon of January 23rd, in the year 1571, Queen Elizabeth +went from her Palace of Somerset House to dine with Sir Thomas Gresham +at his fine mansion in Austin Friars. She went in state with her +Trumpeters and Halberdiers, but the visit was no such great mark of +distinction as in these days it would be. For one thing, Sir Thomas +was a person of much importance in the Realm. He was a member of the +Mercers’ Company which was established as long ago as 1172; he was the +Royal Agent in the Low Countries, and by other important services had +Her Majesty in his debt. There was another reason not to be lost sight +of in any narrative which is concerned with the City of London. The +social barriers--which at a later date were to divide the City from +the Court for the best part of a couple of centuries--had not yet been +erected. Wars and the art of soldiering have been from time immemorial +the great origins of social divisions, and these were times of peace. +Seventeen years had still to come before the Armada was to sail out of +Corunna harbour. Moreover, there was no West End. Great nobles lived +cheek by jowl with the great merchants, and the latter held their own +in social esteem much as they have done during the last fifty years. + +The Queen was on her way to open Sir Thomas Gresham’s new Burse, and +she sat at dinner with Sir Thomas Gresham upon her right hand, and +upon her left the French Ambassador, Monsieur La Motte Fénélon, to +whom we are indebted for an account of his share in that great woman’s +conversation. We have no record, worse luck, of what passed between +her and Sir Thomas Gresham. But no doubt she whispered to him her +intention to dignify his Exchange with the epithet of “Royal,” and no +doubt he took the occasion to embroider upon certain passages from a +letter which he had had the honour to write to her from Bruges: “The +Stillyard hath been the chiefest point in the undoing of this your +Realm and the Merchants of the same.” + +We are not to picture Sir Thomas as unduly elated; the building was, +to be sure, a great thing in the history of London and a definite help +to the commerce of England. It had been mooted before. His father, +Sir Richard Gresham, Master of the Mercers’ Company and Lord Mayor of +London, for many years had advocated the erection of an Exchange in +London and to him credit for the original conception must be given. +Henry the Eighth in the twenty-sixth year of his reign sent his letters +to the City for the making of a new Burse at Leadenhall, but by a show +of hands the City had refused it, preferring that the merchants should +still meet to conduct their business on the cobble stones of Lombard +Street. Now, however, the Exchange was a fact. It stood facing Cornhill +with the great gilt Grasshopper of Sir Thomas Gresham’s crest perched +on the top of its tall tower. But the Exchange was not the end of Sir +Thomas Gresham’s policy--it was no more than the half-way house on +the road of his high ambitions. It was to be one of the means by which +Englishmen were to become masters in their own City and the pernicious +rule of the Lombardy men, and above all of the Stillyard was to be +destroyed. + +The Stillyard was, to the modern understanding, one of the strangest +institutions which the world has ever seen. It took its origin from +the debts of the early English kings and the money with which the +German traders from the Baltic, the Easterlings as they were called, +were able to provide them. These Easterlings or Emperor’s men--the +latter designation in time came to supersede the earlier--were the +representatives in England of the famous Hanseatic League, and for the +greater part of the five centuries which followed upon the reign of +Edward the Confessor, they used England’s inability to finance her wars +on the Continent, and her Crusades in the East, to fix a stranglehold +upon British Commerce. They were established in rights and privileges +which no English shared with them; they paid fixed taxes; they held +a monopoly of the export of the most valuable raw materials, such +as wool, and of the import of the most valuable finished products. +The early history of this country gives many a significant little +proof of the great power which they held. They were responsible for +the upkeep of Bishopsgate, except the hinges, for which the Bishop +of London was responsible, and on account of this obligation they +were relieved from the tax called “Murage,” which was devoted to the +upkeep of the City walls. In 1303, Edward the First, when replying to +a Petition, presented by the Mayor, Aldermen and Commoners of the City +of London, asking that the Lombards might be forbidden from dwelling +in the City, acting as brokers, or buying and selling by retail, +stated, that if the Citizens would put the City under good government, +no foreigner should be allowed so to dwell or act in the City or its +Liberties, save and except the merchants of the Hanseatic towns. +They were exempted, moreover, from the particular service of keeping +watch against the Pirates, who from the 13th to the 16th Centuries +infested the Channel and the mouth of the Thames. This exemption +is all the more remarkable since the Alemanes or Alemans--another +of their many designations--having practically the monopoly of the +sea-borne commerce, were the first to benefit by that vigilance. +How dangerous these Pirates were, can be easily understood from the +fact that when Henry the Fourth crossed the Thames from Queenborough +in Sheppey to Leigh in Essex, in order to escape a pestilence which +was raging in London, one of his ships, containing his baggage and +some of his retinue, fell into the hands of Pirates, while the King +narrowly escaped capture himself. The power of the Stillyard was +thus a formidable thing, and its governors had surrounded it by such +precautions and safeguards as made it doubly difficult to destroy. +The Members of the Steelyard or Stillyard--spelling was never an +exact science until a very recent date--lived, for instance, upon the +Monastic plan. No guild or corporation or trades union which ever +existed set so strict a limit to the number of its members. Its great +yards and buildings stood upon the bank of the Thames where to-day the +arches of the South Eastern Railway carry the lines into Cannon Street +Station. They were known first of all as the “Stapelhof,” the Stapel +House; this name was contracted into “Staelhof”; the Staelhof in its +turn became anglicised into “Stilliards,” and then, by a change which +had nothing to do with the meaning of the institution, was transmuted +in common parlance into “the Steelyard.” The Steelyard, which had +subsidiary houses at Boston and Lynn, was the great storage building of +England. The raw products for exportation, of which tin, hides and wool +were the chief, were assembled there. Thither, too, came the imports +from abroad--wheat, rye, grain, cables, wax, steel, linen, cloth and +tar in particular. The walls were fortified against attack--a very +necessary precaution considering the ill-feeling which the Yard aroused +amongst British Londoners. No member of the Stillyard was allowed to +marry or even to visit any person of the other sex. At a fixed hour in +the evening, all had to be at home, and the gates were rigidly closed; +and at a fixed hour in the morning the gates were opened again. All +meals were taken in common, and the members submitted themselves +to a Government which consisted of a Master, two assessors and nine +common councilmen. This committee held office for a year, the election +taking place upon New Year’s Eve, and the new Master, with his council, +solemnly took oath upon the following day to uphold all the rights +and privileges entrusted to his vigilance. It can be easily imagined, +therefore, what power a body of this kind possessed, a body without +home life or any interests except its commerce, having besides not only +the crown of England in its fee, but the monopoly of its sea-borne +commerce, and the monopoly of its great product, wool--for it was said +in the 14th Century that England with its wool kept the whole world +warm--and the stupendous efforts required to destroy it. Yet to destroy +it, was again not all of Sir Thomas Gresham’s policy. He meant, while +destroying it, to graft upon English commerce the business methods by +which the Hanseatic League had achieved its pre-eminence. Amongst these +methods, by the way, was insurance. + +We are to imagine, then, Sir Thomas Gresham conversing with his great +guest upon these grave matters, and she in time turning to her +companion upon her left. La Motte Fénélon was an old friend of hers, +and it is clear that they did some pretty sparring over the vexed +question whether she should or should not marry the Duc D’Anjou. It +seems that Elizabeth was in great good humour that day. She had not +visited the City for two years, and was received with so loving a +welcome that probably nothing like to it was afterwards seen until the +Jubilee processions of Queen Victoria. But “Gloriana” was not the woman +to lose her head, and to hold out hopes that she would marry a foreign +prince was one of her favourite tricks with foreign ambassadors. She +told Monsieur La Motte Fénélon that she was well aware that the Duc +D’Anjou had not the best of reputations, but that she would, if she +married him, do her best to be a loving wife and the mother of a fine +boy. She broke off to ask him how he thought she was looking--we may +be very sure she did not put this question to the great Sir Thomas +Gresham. La Motte Fénélon replied that she was divinely beautiful. He +could really under the circumstances say no less. He does not go quite +so far in his account of this dinner party to his own Government, but +he admits that since she was rising forty, as the phrase goes, she was +really surprising. + +We must take it that the dinner was a success, for it was nearly seven +o’clock in the evening--a late hour for those days--when, accompanied +by a great escort of torch bearers, she went on to the Exchange. The +building was constructed almost entirely of foreign material. The +alabaster came from the Low Countries; the stone from Flanders; even +the little blocks of hone stones which still to-day pave the centre of +the quadrangle came from Turkey. The Master who superintended the work +was Flemish--one Henrik--and almost to a man the builders were from +overseas. + +[Illustration: THE FIRST ROYAL EXCHANGE.] + +It is curious that an Englishman, who was devoting his energies to the +release of British commerce from the grasp of the foreigner, should +have gone abroad for the material and the workmen for what was to +be the monument of English commercial independence. Is it possible +that Sir Thomas Gresham had just that touch of snobbery in small +matters--so common a trait of the English character, which professes +admiration for everything foreign so long as English interests are not +seriously attacked?--the same sort of snobbery which a few years ago +filled a suburban drawing room with cheap books and photographs of the +Rhine and Switzerland, and found no place for any views of England. +However that may be, the first Royal Exchange had little that was +English in its composition, even that gallery in which Queen Elizabeth +made her clear speech, declaring that henceforth the building was to +be the Royal Exchange, must have an outlandish name. It was called the +“Pawn,” and like the rest of the Exchange, was lit up--brilliantly +for those days--in the Italian style with coloured glass cups full of +burning grease, and great wax torches burning in sconces on the walls. +The Pawn was decorated with rich hangings and carpets from the East, +and the shops glittered with glass and jewellery, silver and gold. + +From the ceremony the Queen returned to Somerset House through the +lighted streets by way of Cheapside and Temple Bar--all London was +abroad, jostling in the narrow ways, a torrent of splendid colour, +ringing cheers, and the orange splashes of torch flames. The Queen +could not but be moved. “It does my heart good,” she cried, “to see +my subjects so loyal and myself so well beloved.” The tears came into +her eyes, and she whispered to La Motte Fénélon, who rode at her side, +“My people have only one regret--they know me to be mortal and that I +have no child to reign over them after my death.” La Motte Fénélon was +touched, as no doubt he was meant to be. Her sincerity was apparent to +him, and he had greater hopes than ever that the Duc D’Anjou would sit +by her side on the Throne of England. Very likely she _was_ sincere, +but she was too subtle a woman and too wary a Queen not to make use of +her sincerity to fortify that throne of hers which meant so much to the +prosperity of her people. + +Thus ended a great day in the history of London, and seven years later +Sir Thomas Gresham had his way. The Queen, encouraged by Sir William +Cecil, afterwards Lord Burleigh, and Sir Thomas Gresham, declared all +the privileges of the Stillyard merchants of whatever nature, null and +void for ever. The next year she struck a harder blow. She forbade them +to export wool, thus depriving them of the most profitable branch of +their business. The Stillyard merchants were unwise enough to appeal to +the Diet of the Hanseatic League at Bruges. The Diet responded to the +appeal. It threatened England that, unless the Stillyard was restored +to its former privileges and rights, the English Company of Merchant +Adventurers would be expelled from every town in Germany in which it +had established a branch. The Diet, however, did not know the Lady with +whom it had to deal. The answer came prompt and sharp in a proclamation +which not only closed the Stillyard itself peremptorily, but bade every +German merchant leave the Kingdom before the last day of February, +1597. This proclamation was carried out, the German merchants left, the +Stillyard was handed over as a store house to the Admiralty, and thus +disappeared an institution as pernicious to the trade of England as +the Kingdom has ever known. + +But these Germans had built their house well and the great walls of the +Yard were still standing in 1863, when the South Eastern Railway built +Cannon Street Station. + +As for the Royal Exchange itself, it became at once the meeting place +of merchants and the promenade of men of fashion. In the day-time grave +people of business paced those Turkish hone stones, adjusted their +disputes and engaged in transactions with outlandish people from all +the then known countries in the world. In the evening the butterflies +of fashion would flit from Paul’s Walk to the gaily lighted shops of +the Pawn, where all they could want from lace, glass, strange curios, +to that queer new useful invention--the common pin--was laid out to +attract them. “What artificial thing,” says an old writer, “was there +that could entertain the senses or the phantasies of man that was not +there to be had? Such was the delight that many gallants took in that +magazine of all curious varieties that they could almost have dwelt +there, going from shop to shop like bees from flower to flower if they +had but had the fountain of money that could not have been drawn dry.” +The evening, however, was not apparently ended in the Pawn. There was a +certain routine in the amusements of the people of fashion as there is +to-day. From the Pawn the stream of gay people flowed to Bucklersbury, +where were the Indian shops with their scents and perfumes, and the +Italian Confectioners, where they took their supper before going home +to bed. Thus for ninety years the first Royal Exchange played its +important part in the life of London. In 1666 the Great Fire swept it +away. + + + + +CHAPTER II. + +THE GREAT FIRE AND THE SECOND ROYAL EXCHANGE. + + +Popular faith for a long time swayed between two ultimate reasons for +the Great Fire. It was either a visitation from God upon London for its +vices and its lack of religion, or it was a dispensation of Providence +to clear the City altogether from the germs of the Plague. But, as +a fact, mediæval London was neither more wicked nor more unhealthy +than any large city of those days. More than one foreign Chronicler, +indeed, pays his tribute to the beauty of the City, its gardens and +clear springs, and to the orderly character of its inhabitants; though, +to be sure, we must measure those eulogies by the standards of the +times. London, like any other mediæval town, was especially liable +to fire; its streets were narrow to begin with, and, to make things +worse, permissions were readily granted for the extensions of the +upper storeys upon pillars. These extensions called “Hautpas,” were no +doubt conceded because they formed a protection against the weather to +passers-by and the shops beneath. They were no less warmly welcomed +by the owner because they increased the size of his house without +necessitating the purchase of additional ground. London, indeed, was as +crowded then as it is to-day. The streets and alleyways were thick with +a jostle of people from morning until late at night, and decree after +decree of the City Fathers sought in vain to restrain the invasion from +the countryside. All this press of people made carelessness more common +and the danger of fire more likely, and when the King with his Court +came to the Tower of London, the demand upon the City space became +almost intolerable, for there was never room within the Tower for the +retinue which he carried with him. There was a permanent officer upon +his staff called the “Sergeant Harbourer,” whose business it was to +find lodgings for the household servants and dependants of the King. + +The houses were built of wood and roofed with thatch. Glass was +rare--probably none was imported into England until the reign of Henry +the Third, and although a hundred years afterwards, in the reign of +Edward the Third, glass was so far known that a Guild of Verrers or +Glaziers was definitely established, most of the houses, especially +of the poorer class, were unprotected by it. Let a fire once get hold +of one of these houses, in a dry season, it would roar through the +narrow streets as through a funnel, driving burning fragments of wood +and cloth and paper through the unglazed windows into the mansions on +either side. London was thus ripe for fires, but she was chastised out +of all measure. Both in the first year of Stephen’s reign and in 1212, +fires ravaged the City. Indeed, in the latter case, many more lives +were lost than in the Great Fire of 1666. + +A singular feature of all these fires is that they took their origin +in the neighbourhood of London Bridge. Thus the great Fire began early +on a Sunday morning, the 2nd September, in the house of Farryner, the +King’s baker, in Pudding Lane. Pepys, from a window of his house in +Seething Lane, noticed the blaze at about 3 o’clock in the morning, but +thought little of it and returned to his bed. The summer, however, had +been hot; the houses were little better than tinder and a high wind +was blowing. Appliances and regulations there were of a kind, but of +too primitive a kind to check the progress of this fire. Each Ward, +for instance, was equipped with a hook to pull down houses, two chains +and two strong cords, all in charge of the Beadle. Large houses were +compelled to keep one or two ladders and, during the summer, a barrel +of water in the courtyard. Certain houses too had stone partitioned +walls, since, by the Assize of Fitz-Ailwyne, special civic privileges +were given to those who built in stone rather than in wood. But such +houses were few. For instance, if a stone house stood at any boundary +which you wished to indicate, you had but to say “The Stone House” and +no one would mistake you. The fire spread up Thames Street, drove north +and west along Gracechurch Street, Lombard Street, Cornhill, Austin +Friars, Lothbury, Bartholomew Lane. All were devoured. The Exchange was +utterly destroyed. “A sad sight,” says Pepys, “nothing standing there +of all the statues or pillars, but Sir Thomas Gresham’s picture in the +corner.” By September 4th the flames had reached St. Paul’s, round +about the roof of which a mass of scaffolding had been erected, so that +it fell an easy prey. The stones of the walls burst asunder with the +noise of cannon under the heat, and the lead rolled down in streams. +To recall the glory of that historic building with its marvellous +rose-window, only Dr. Donne’s tomb and the charred stumps of a few +cloister pillars remained. Eighty-four of the old City churches were +swept away with St. Paul’s, and but for the courage and energy of the +Duke of York, the Temple Church would have vanished too. Every kind of +ill-luck, indeed, seemed to help on the work of destruction. London was +afflicted by a weak and inefficient Lord Mayor, Sir Thomas Bludworth. +“Lord, what can I do?” he fluttered; “I am spent and my people pay me +no heed. We pull down houses, but Oh! Lord, the fire goeth on the same, +and burns others before we have done.” + +On the other hand, Charles the Second and his brother kept their heads. +They were about from morning till night. Westminster Abbey, the Tower +although its outer precincts caught fire, Temple Bar, Lincoln’s Inn +Gateway, Gresham College, Smithfield, Bishopsgate Street and Aldgate +were saved. The river was crowded with the boats of fugitives; the +heights of Hampstead were covered with tents and such rough huts as +could be speedily set up. Volumes of black suffocating smoke hung over +the burning city like a pall. Of the four hundred and fifty acres +within the City walls from Ludgate to the Tower and from the river to +Cripplegate, only seventy-five were left with houses still standing +upon them, while of the liberties beyond the walls, sixty-three acres +were consumed. Houses, however, could be rebuilt, even wonderful +churches could be replaced if there were an architect with the genius +to design them--and such an architect England had the good fortune at +that hour to possess. But some irreparable losses were sustained, and +amongst them none more grievous than the losses of the manuscripts of +Shakespeare and his fellow dramatists. It seems that a great many of +these were taken from Paternoster Row, and placed for security in the +crypt of St. Paul’s, where indeed they were safe from the actual touch +of flame, even in such a fire as that which had raged during this first +week of September, but so great was the heat that the manuscripts were +all reduced to ashes. + +On the afternoon of September 6th the fire was finally stopped at +Temple Bar; and it must be reckoned an astounding example of the +courage of the race that the houseless population set itself at once +methodically to work to rebuild their city. Within a week, three plans +for a new London were presented to Charles the Second; one made by +John Evelyn, famous for his diary; the second by Robert Hook, the +philosopher; the third by Sir Christopher Wren. This last was accepted. +Had it been carried out, we should have had a London made beautiful +by straight broad streets and central “Piazzes,” as he called them. +But it would have been a London a little too formal perhaps to suit +the English independence. As a matter of fact, the citizens did not +wait for any plans, but returning to the sites of their old houses +which must have been still smouldering and hot to the foot, they began +forthwith to rebuild. Amongst the first of such undertakings was the +Royal Exchange. + +[Illustration: THE SECOND ROYAL EXCHANGE.] + +Sixteen days after the Fire of London had first broken out in +Pudding Lane, a committee was formed to rebuild the Royal Exchange. +The business of the Exchange, even to the shops of the Pawn, was +transferred to Gresham College. The shopkeepers offered to pave the +quadrangle of the new building in exchange for their accommodation in +Gresham College: and with the hope--a vain hope as it proved to be--of +preventing destruction by another fire, the City Surveyors determined +to draw a street on the west and on the east of the new building. The +credit for this second building, which was erected from materials as +far as possible resembling those which had been used in the original +building, has been improperly given to Sir Christopher Wren, but the +records of the Building Committee make it clear that Mr. Jarman, the +second City Surveyor, was the architect who designed the plan. It +is to be noticed that once more the front of the Royal Exchange was +upon Cornhill, with a fine portico, which earned the special favour +of Charles the Second, no doubt because in a nitch upon one side was +a statue of Charles the First, and in a nitch upon the other, one of +his royal self. It is possible that his approbation would have been +less hearty if he could have foreseen that after the next fire that +same statue of him would be put up to auction and sold for £9. Almost +within a year of the burning there was once more a royal procession, +when Charles the Second rode on horseback with several persons of +quality. He placed the first stone with the usual ceremonies in the +presence of a great many people, and then in a special shed upon the +new Scottish Walk, roofed with a canopy and hung with tapestry, he was +entertained to dinner by the City and the Mercers’ Company. Pepys saw +the King pass with his kettle drums and his trumpets on the way to +the Exchange, and in his busy way hurried after him, but the poor +man found the gates shut when he arrived at the building, and could +only get in to see it after the stone had been laid and the King had +departed. A month later, the Duke of York laid the foundation stone +of the pillar on the east side of the north entrance, and a fortnight +afterwards Prince Rupert performed the same ceremony on the east side +of the south entrance. There was some delay in the building, and for +reasons which strike home to-day. Bricks were dear; the only suitable +bricks were to be got from Walham Green, and the supply was below the +demand. The work however, except for the statues and no doubt other +ornamentations, was completed within three years, and was opened +without any great ceremony by Sir William Turner, the Lord Mayor +of the day, who “came and walked twice about it and congratulated +the merchants of the ’Change on its account.” Charles the Second +was expected, but he did not come: and we picture to ourselves the +disappointment of the assemblage--disappointment mingled probably with +a good deal of outspoken criticism, and not a few sarcasms as to +whether some new beauty had not come to Court; and, probably, on the +part of the Committee, sharpened by an uneasy recollection of a certain +fine equestrian statue in white marble upon which they had turned +their backs. This was a statue of the King on horseback, and it was +offered by Sir Robert Vyner to stand in the middle of the Quadrangle. +The Committee, however, came to the conclusion that it was too big for +the site and would interfere with the main business of the building, +which was the transaction of business by the merchants of the City. +Charles the Second was not a man to take with humility any disregard +for his Royal dignity, and it is quite possible that, with a chuckle +of pleasure, he left his good citizens to wait for him on the Royal +Exchange as a lesson to them in the future. + +The quadrangle, however, was not long to be deprived of the patronage +of his presence, for a statue of him by Grinling Gibbons, in the dress +of a Roman Emperor, with a laurel wreath on his head and a truncheon +in his hand, was set up in the centre fifteen years later. This statue +you may still see in a niche in the south-east corner of the third +Royal Exchange: while its own brother, a statue in bronze of James the +Second in the same remarkable garb, by the same artist, still stands +chillily in the open air with its back to the red Admiralty building, +and looks across St. James’s Park towards Buckingham Palace. + +It cannot be said that, beautiful in its architecture as the second +Royal Exchange was, the building held the same importance as the first +Exchange had done in the days of Queen Elizabeth. Social conditions +were changing quickly in England. Coffee houses sprang into a rapid +popularity and the merchants drifted to them more and more for the +interchange of business. The shops became difficult to let and rents +dwindled away. Over the Exchange there came to hang an air of disuse +and squalor. The frequenters in the time of Queen Anne are thus +described by the “Spectator”: “Instead of the assembly of honourable +merchants, substantial tradesmen and knowing masters of shops, the +mumpers, the halt, the lame and the blind or vendors of trash--apples, +plums....” A little further on he tells us “the benches are so filthy +that no one could sit down, yet the Beadles at Christmas have the +impudence to ask for their boxes though they deserve strapado.” This is +a far cry from those gaily lighted galleries where of an evening the +gallants of Queen Elizabeth’s day used to loiter. Fashion had moved +to the West--chiefly because fashion had been in banishment upon the +Continent during the Commonwealth--and when it returned with Charles +the Second into England, it found its houses already occupied. + +London had spread out consequently through Lincoln’s Inn Fields to +Bloomsbury and Soho; Pall Mall was laid out in great mansions; nobles +moved westwards, and a new city of shops, clubs and coffee houses grew +up in the neighbourhood of their new homes. The factor of numbers had +thus become a cause of that gulf between the gentry and the “cit,” +which the next hundred years was more and more to widen. The great +wars of the 18th century dug the trench deeper. Soldiering became an +ill-paid occupation demanding the monopoly of a man’s life. The sons +of the nobles became the officers of Marlborough, and later on of +Wellington; they were transformed into a class apart; they lost their +touch with the business side of London; they even became a trifle +contemptuous. + +How great the change was from the days when Sir Thomas Gresham +entertained Queen Elizabeth in Austin Friars any man may see by such +diaries as time has handed down to us. There remain two, still kept by +the descendants of Edward Forster, for many years a Governor of the +Royal Exchange Assurance Corporation. Mr. Forster was a commercial +magnate in the grand style. He was at one time head of three great City +Corporations: The Royal Exchange Assurance; the Russia Company; the +Mercers’ Company; and he added to these duties that of Deputy-Governor +to the London Docks. In a word, he was the very type of citizen, who +two hundred years before would have been hand in glove with the great +statesmen of the Realm. The diaries give us a picture of a gentleman +living quietly at Walthamstow--a man with a love of nature and a taste +for art, and possessed of a queer gift for painting landscapes with +reeds. We read of him being robbed of his purse by a footpad on his way +to the City. We read of certain simple treats to his children: “We all +went to London,” writes one of them, “and after with Papa in a coach to +Drury Lane Playhouse, getting in at half price with the 4th Act”--Oh! +frugal Papa! But perhaps it was just as well, for the play was “Measure +for Measure,” and hardly suitable for young Benjamin and Thomas. On +this occasion, the family saw Mrs. Siddons in the part of Isabella. +At another time, “Mama, Aunt Sukey, Miss Ward and I went to the Royal +Exchange Assurance in a coach. But Pa and Ned were there; uncle came +afterwards. We went into the room which looks into Cornhill, with a +balcony.” This was in October of 1783, and the family went to the +Royal Exchange to see and hear peace proclaimed with France and Spain. +“The Heralds proclaimed it betwixt 1 and 2 o’clock. There was a long +procession of horse soldiers--some men with hatchets on horseback, some +with trumpets, which they sounded. Afterwards came the Lord Mayor in +his coach.” Without a doubt, the period during which the second Royal +Exchange stood was one during which the City merchants lost much of +their high position, and probably something of their broad outlook upon +the world. They became concentrated upon their immediate affairs. They +lived often over their business premises in the very heart of the City +itself, or, if they travelled further afield, they made their homes in +suburbs like Denmark Hill, and kept on the whole to themselves. + +[Illustration: INTERIOR OF THE SECOND ROYAL EXCHANGE.] + +The downfall of Napoleon, however, the extension of the +Franchise--which for a time placed the whole power of Government in +the hands of the middle class--and the prosperity of which steam +power was the source in a hundred directions, began, in the reign of +Queen Victoria, to break down that very real though intangible Temple +Bar between the City and the West End. These factors did their work +thoroughly in the end, but while the Royal Exchange was burning for +the second time in 1838, the City of London had still a social side of +its own, which it is difficult to-day even to imagine. Walk through +the City streets at ten o’clock of the night now, and the echo of your +footsteps will sound to you solitary and strange. You will pass beneath +a chain of lamplights, gleaming upon empty pathways, looked down upon +by lightless windows. If you could put yourself back to 1838, you +would find the upper storeys noisy with the laughter and the games of +children, while below, behind rep curtains, the elders sat over their +port round their mahogany dinner tables. + +[Illustration: THE DESTRUCTION OF THE SECOND ROYAL EXCHANGE BY FIRE, +1838.] + + + + +CHAPTER III. + +THE THIRD ROYAL EXCHANGE. + + +It is astonishing that no one has imagined a curse of fire upon the +Royal Exchange. + +Many a country estate has fallen under that ban with less reason. For +on the night of the 10th January 1838--a night of so hard a frost +that the very water from the fire engines froze in mid air--the +Royal Exchange was burnt down for the second time. A letter from an +eye-witness is happily on record. The fire began at night, and our +witness, the son of the Rector of St. Michaels, Cornhill, then a boy +of four and a half years, was awakened in his nursery by the cries of +warning in the street, and the noise made in dragging the Parish fire +engine from the old Watch-house beneath his windows. At this time, as +our last chapter has shown us, Cornhill was not merely a street of +offices open by day and empty at night. It was a street of family +residences, and consequently fire in that crowded neighbourhood was +more than usually terrible. + +Mr. Norville, the hatter, Mr. Leggett, the print seller, and a dozen +other small shopkeepers who were wont to stand in their doorways in the +morning and greet each other across Cornhill, had to get their families +into safety as best they could. Speed was necessary, for the great +tower of the second Royal Exchange, never a satisfactory feature of the +building--since already it had had once to be replaced--threatened to +fall across the street and crush the houses opposite. A good many of +these inhabitants found refuge in the Rectory of St. Michaels, while +the valuable contents of the shops were safely stored in the Church. +It seems as if some freakish spirit of humour lurked about the burning +edifice, for while the tower was yet tottering, the bells started +playing “There is nae luck about the house,” and then fell with a crash +into the flames below. + +The destruction was almost complete. A few relics testified by their +paucity to the completeness of the disaster. Amongst them we must not +count those statues of the Kings of England which were said to have +fallen down on their faces during the first fire leaving the statue of +Sir Thomas Gresham alone proudly erect. The Grinling Gibbons figure of +Charles the Second as a Roman Emperor, which, as we have seen, held +the post of honour in the middle of the Quadrangle, was saved with the +Bushnill figures on the right and left of the Portico in Cornhill, +and strangely enough, the great gilt grasshopper, which if report +speaks truly, not only rode on high above the second Royal Exchange, +but even above the original building of Sir Thomas Gresham. The work +of restoration was quickly taken in hand by the Mercers’ Company and +the City Corporation, and before the decade was out the Third Royal +Exchange was opened by Queen Victoria and the Prince Consort. + +It is very likely that ancient engravings of Palaces and great courts, +with the delicate flourishes of their lettering and their dainty +ornamentations, lend to the buildings they portray a greater beauty +than they actually possess. But it is difficult to look at any old +pictures of the first two Exchanges and flatter oneself into the +belief that the third Exchange vies with either of them in grace. Art +is the strangest and most illusive creature--at one time it will visit +a whole race of men, so that nothing they do will be insignificant or +mean. Thus, the adventurers, who sailed out to the Spanish Main in the +days of Queen Elizabeth, wrote down the histories of their voyages in +such great English as men to-day would give their ears to have at their +command; and, moreover, they wrote it easily and with a running pen. +At other times Art has refused to touch with inspiration a single soul +of them. The architects of the Victorian Age were not men who dreamed +in stone. They could pass down Parliament Street, by the Horse Guards, +Whitehall and Westminster Hall with a bandage over their eyes and over +their spirit. They gave us the Crystal Palace and all the dreariness +of the Cromwell Road. Londoners may be thankful when they look upon +the Royal Exchange as it stands to-day. The best of it is undoubtedly +the front, with its great Corinthian Pillars, its high flight of steps +and the open spread of pavement in front of it. For the rest, if the +building is plain, it is plain to the very point of dignity, and with +its great and handsome offices, it serves its purpose to-day as the +other Exchanges served theirs. + +It is not the purpose of this chapter to give you an account of the +building. You can buy a little book for sixpence, rich in detail and +curious information, from the Beadle at the door. You can walk out past +the doors of Lloyd’s offices to the Peabody statue--if you will--and +looking upwards see the gilt Grasshopper of Sir Thomas Gresham’s crest +on the summit of the tower turning to the wind. + +Over what a curious succession of scenes and pageants has that gilt +Grasshopper presided! Visits of kings and queens, now dressed in one +way, now another, now riding on horseback, now drawn in great gilt +carriages, now gliding silently in motor cars; proclamations of war and +peace, the nation once your friend now your enemy, once your enemy now +your friend! The Bank of England was not built when the Grasshopper was +first lifted to its place, and where the Mansion House now stands, the +cattle lowed in the Stock Market. Endow for a moment that Grasshopper +with life and recollection! It has seen London spread out in an almost +unimaginable growth. The sails upon the river have given place to the +chimney stack, and the quiet nights of other days are now broken by +the hooting of syrens. And it heard in 1914 the tramp of London men +drilling upon the Gresham hone stones to fit themselves for war. We may +hope that for a century at least it will hear that sound no more. + + + + +PART II. + +THE BUSINESS + + + + +CHAPTER IV. + +THE SOUTH SEA BUBBLE AND THE BIRTH OF THE ROYAL EXCHANGE ASSURANCE +CORPORATION. + + +To get rich quick in the shortest possible space of time with the least +possible expenditure of effort is a natural ambition. To a man we want +to acquire riches, and at all events when we are young we encourage +a secret hope that we shall wake up on some glorious morning to find +we have achieved them. So much of honourable ambition presumes wealth +as its starting-point. With the most of us, however, the hope is kept +secret--a dream to be played with rather than a definite project to be +realised. But every now and then the hope breaks its bounds and spreads +with the rapidity and the violence of a contagion, from man to man, +and from woman to woman. There have been several periods during which +the contagion has raged. Many will remember the autumn of the year +which ended with the Jameson Raid. In those months women were almost +as conspicuous as men in Throgmorton Street. Dealers in South African +securities would buy in the morning and sell in the afternoon and put +any sum up to £10,000 in their pockets as a consequence. But the fever +has never exhibited itself in so virulent and blatant a degree as +during the second decade of the 18th Century--a decade made famous by +the South Sea Bubble. + +It is strange to realise that the man, who brought all that hubbub of +fashion back to the neighbourhood of the Royal Exchange, was a tall +and ungainly pockmarked Scotchman, Law by name--at one time lying in a +London Prison under sentence of death for murder. Law escaped to Paris +and there founded the Mississippi Company, which, during the first +years of the century sent France wild with a frenzy of speculation. +Some southerly wind blew the madness over to England, and in 1711 +Robert Harley, Earl of Oxford, founded the South Sea Company, to +take over England’s Floating Debt of ten million pounds. The Government +guaranteed six per cent. for a term of years, and the Company was given +the monopoly of trade with the Southern Atlantic Coasts of America. One +or two solid brains, such as Sir Robert Walpole, stood out against the +scheme, but speculation was in the air and they had no following. + +[Illustration: SOUTH SEA BUBBLE BROADSHEET. 1720.] + +It must be conceded that the name of the company was in itself a stroke +of genius. The South Seas! The words have from the earliest days of +Elizabeth had some queer romantic appeal to the people of England. +Read “Hakluyt’s Voyages,” and you cannot but rise from your reading +with a recognition that, beyond all the visions of gold and jewels and +wealth which they may suggest, the South Seas have their own particular +call. Even that pedestrian century--the 18th--could not be deaf to it; +and there never was an idea so sure to arouse your imagination or to +loosen your purse-strings as that of adventure in the South Seas. Your +adventure might be vicarious; it might only be visible to you in the +swelling of your banking account, but you had a hand in the voyage--in +a sense you sailed those sunlit and wind-ruffled waters. + +It seemed as if in response to the call, Change Alley had become the +centre of England. Sedan chairs and coaches so jostled one another +in the streets which surrounded it that a man on foot was known to +have taken one good hour before he could cross the roadway. Women +filled that narrow alley with their hoops, and so loud was the noise +between the walls that the stock would be at one price at one end and +at another price at the other and no one in the middle would know the +difference. + + “Then stars and garters did appear + Among the meaner rabble; + To buy and sell, to see and hear + The Jews and Gentiles squabble. + + The greater ladies thither came, + And plied in chariots daily, + Or pawned their jewels for a sum + To venture in the Alley.” + +All were for getting rich quickly. Life was costly--in some respects +more costly comparatively than it is to-day. A fine gentleman would +pay £126 for a suit of clothes, and that sum left out of account his +silk stockings and his shoe buckles, his embroidered gloves and his +clouded cane. Lord Mayor Sawbridge was stopped by highwaymen on Turnham +Green, when he was returning home from Kew, and sent back to the +Mansion House as naked as on the day when he was born--of so much value +were the fine clothes he wore. Money was the great need and throughout +the day such a roar arose from Exchange Alley as must have set the old +Grasshopper trembling and quivering on the top of the Exchange. + +In 1720, George the First proposed that the South Sea Company should +take over not merely the floating but the entire debt of England, +which at that time amounted to £31,000,000. Even the staid Bank of +England could stand it no longer. It came in with a proposal to take +over the debt itself in the place of this upstart Company. But the +upstart Company had several notable people behind it, amongst them the +famous--or shall we say infamous?--Countess Von Platen; and the South +Sea Company carried the day against the Bank of England. The shares +jumped from 130 to 300. The King’s proposal was debated for two months +in the House of Commons and for forty-eight hours in the House of +Lords, and on April 7th of that year the Bill became law. + +Strangely enough, the South Sea Stock immediately fell. The Directors +asked for a million more capital, offering £300 for £100. They got it, +and they got more. Before Midsummer, the stock had risen to 800 per +cent. The satirists, as you can imagine, got to work, but what did +they matter? Satire, from the days of Aristophanes, has never stopped +a rush. It will hold up this or that person, this or that group of +people, to the ridicule of future generations, but it has no check +upon them while they live. Neither Juvenal nor Molière deterred. The +“Precieuses Ridicules” died not of satire but of their own inanition. +The satirist and his fellows might rave as they liked against Change +Alley and the South Seas but not one sedan chair dropped out of the +crowd in consequence. + +It was not everybody, however, who was able to get near enough, or, if +he did get near enough, to purchase the coveted stock. Other companies, +therefore, with other projects no more unreasonable, sprang up in the +same neighbourhood. The advertised capital of these companies ran, as +a rule, into millions. And why not? The public was gullible. It was +a matter of prestige--of the appeal rather than of actual cash. The +nominal capital of the various undertakings floated during the years +when the South Sea Company was at its zenith amounted to five times the +entire currency of England and Europe. No one asked any questions--all +were too anxious to buy. + +Here are a few of the proposals: a scheme for furnishing funerals to +any part of Great Britain; another for making looking glasses and coach +glasses, with a capital of £2,000,000; a third for the transmutation +of quicksilver into malleable fine metal; a fourth for ensuring and +increasing children’s fortunes; a fifth for building and rebuilding +houses throughout all England, with a capital of £3,000,000 (this, by +the way, is a scheme which might have a chance to-day). Yet a further +philanthropic set of gentlemen floated a scheme for supplying the +town of Deal with fresh water. Another set, this time more ingenious +than philanthropic, proposed to make deal boards out of sawdust. And +all these schemes obtained their votaries. The cry went up “Give us +something to buy,” and the response was not inadequate. + +Two schemes stand out especially through the grandeur of their +simplicity. The longer one lives, the more clearly it is proved to one +that the old and simple dodges never fail. If you want to practice +that amiable form of robbery known as the confidence trick, be sure to +practice it in its most primæval form. An old man named Le Brun knew +the ropes. He had been suitably educated, for as a boy he had sailed +with Sir Henry Morgan when Morgan devastated Panama. He had been with +Patterson in Darien. He had owned a privateer himself in the days when +a privateer was a polite name for a pirate, but like the men of his +class he had lived like a fighting cock when he had the money, and in +his old age he was poor. The fame of Law in Paris attracted him over +the Channel. The fame of the South Sea Company and the doings in Change +Alley brought him hot-foot back again. He was, as it were, in his own +country. He set out a wonderful project. You had only to possess £5 +to reap the full benefit of it. He had an office in Change Alley. It +was called simply, broadly, sympathetically--“Office of Insurance and +Annuity for Everybody.” “Anybody,” Mr. Le Brun announced, “who paid him +five pounds was to be assured of receiving a life income of £100 per +annum, as soon as a sufficient number had subscribed!” A great number +subscribed--but not a sufficient number. The number had to be ever so +great before Mr. Le Brun could be able to put his wonderful scheme into +operation. + +A still simpler device was imagined by a gentleman whose name (alas!) +is not known. He propounded a company for carrying on an undertaking +of great advantage, “but nobody to know what it is.” The capital of +this singular undertaking was to be a mere fleabite--half a million +pounds in five thousand £100 shares. But--and here the anonymous +benefactor showed his discretion--you had only to deposit £2 a share +and you obtained by the mere fact of that deposit £100 a year on each +share. This worthy person opened his office in the morning. By the time +business in Change Alley ceased and the ladies and gentlemen retired +to the lighted candles of the West End, he had secured deposits to the +tune of £2,000. The next morning the office was closed and it was never +opened again. These schemes were iridescent as the mayfly, and had just +as long a life. They sparkled and glinted in the sunlight through a +day, and the next morning they were not. + +After the shares of the South Sea Company had risen to 800 per cent., +a good many prudent people began to realise their fortunes, and stocks +accordingly fell. The Directors asked for more money, obtained it, and +the shares in August had risen to no less than a thousand per cent. But +the end was near, and in the month of September the Bubble burst. A +member of Parliament of that day wrote to Lord Chancellor Middleton: +“The consternation is inexpressible, the rage beyond description, +and the case altogether so desperate that I do not see any plan or +scheme so much as thought of for averting the blow, so that I cannot +pretend to guess what is next to be done.” The Bank of England made an +effort. It asked for a subscription of three million pounds for the +restoration of credit, but did not get it. The South Sea Stock fell to +135, and bankers and goldsmiths who had lent money on South Sea Bonds +were compelled to fly the country. Parliament was summoned to meet, +and George the First returned post haste from Hanover. An enquiry was +instituted into the management of the Company and a series of frauds +was discovered in which members of the Government were shamefully +involved. Mr. Secretary Craggs and Mr. Aislabie, the Chancellor of +the Exchequer, went down with a crash. People did not exact from +the Ministers of the Crown in those days the same high standard of +propriety which is demanded to-day. But the scandal in this case +was too great for extenuation. Aislabie went to prison, and bonfires +were lighted in the London streets on the day he was sent there. Mr. +Secretary Craggs no doubt would have gone on the same road but his son, +for whose sake, it was currently said, he had amassed a million and a +half out of the Bubble, died suddenly, and the father was stricken with +apoplexy. The Countess Von Platen, with her two nieces, was proved to +have been given £20,000 worth of fictitious stock as an inducement to +her to use her influence to push the Bill through Parliament. There +were reasons why action could not be taken against her. The curious may +turn to Thackeray’s wonderful picture of the Court of Hanover in the +“Four Georges,” where he will be rewarded by one of the most startling +and dramatic stories which history has ever had to tell. + +In the midst of these times, inauspicious for solid business proposals, +if ever times were, the Royal Exchange Assurance Corporation was +born. A Mr. Case Billingsley, of the firm of Bradley and Billingsley, +Solicitors, himself a member of the Mercers’ Company, proposed a +scheme for marine insurance, and gave to it the title of the “Public +Assurance Office.” He opened a list at the Mercers’ Hall on the 12th +August, 1717, and asked for a subscription of £1,250,000, of which +£100,000 was to be paid up. The list was closed in January of the +following year. But during the months when the list was open, the +proposer of a rival scheme, Sir John Williams, amalgamated with him. +The list being closed, Case Billingsley applied to the Attorney General +for a Charter. A Charter was refused, although in this case Sir Robert +Walpole supported it; Billingsley had moreover the support of Lord +Onslow, a member of the Government, and of Lord Chetwynd, who was +interested in a similar scheme. A good many people did not look further +than the end of their noses. Lady Cowper, the wife of Lord Chancellor +Cowper, frankly wrote of both Onslow’s and Chetwynd’s proposals as +“Bubbles,” and stated that they were on the same plane as the South Sea +Company--frauds upon the public--no more, no less. + +Billingsley, however, and his Directors did not lie down under the +refusal. They cast about and bought up for a song an old Charter of +Queen Elizabeth’s time, which had nothing whatever to do with Assurance +in any form. It was a Charter of the Mines Royal, Mineral and Battery +Works, which in itself was an amalgamation dating back three years. +Under this Charter, with its curious coat of arms of a miner working +by candle light and extracting from the earth a veritable sleet of +golden drops, the Billingsley Assurance Company set up to practice +Marine Insurance. From the outset it is clear that the Company did a +profitable business, for it declared, and so far as we know paid, a +dividend in 1719. + +It did not, however, pursue its affairs without opposition. Petitions +were presented against the Company by private underwriters who foresaw +ruin ahead of them, on the ground that it was doing business which the +Charter did not entitle it to do. It is impossible to say what might +have happened to this Company had not some ingenious mind amongst its +Directors recognised, or had not some hint been given by one of His +Majesty’s Ministers, that King George’s Civil List was short of six +hundred thousand pounds. The two Insurance Companies--that fathered +by Lord Chetwynd and now known as the “London Assurance Corporation,” +and the “Royal Exchange Assurance Corporation,” which was covered by +the wing of Lord Onslow--proposed to make good this deficiency in +return for their Charters. Accordingly in the year 1720, on May 4th, +King George recommended his faithful Commons to grant the requests of +these Corporations, and the Bill conceding them their Charters received +the Royal Assent on June 10th. It was after the Charter was granted +that the Royal Exchange Assurance Corporation took the title which it +has since retained. Billingsley was, as we have said, a member of the +Mercers’ Company. He had established the offices of the Corporation in +the Royal Exchange, and no name could have been more suitable. + +But it is to be observed that this was the year during which the South +Sea Bubble swelled and burst. The Royal Exchange Assurance Corporation +failed to fulfil the conditions of its Charter almost as soon as it had +received it. The Corporation was organised on a sound financial basis, +for in 1720, it had a surplus of £14,000 odd, after all obligations had +been discharged. But it owned stock in the South Sea Company, and when +that Company crumbled and all credit was shaken to its foundations, +the Royal Exchange Assurance Corporation passed through a troublous +time. It declared a dividend, but it could not pay it, and by September +of that year it was short of two instalments of £50,000 each, which +it owed to the Civil List. A subsequent Act of Parliament, however, +relieved the Royal Exchange Assurance Corporation and the London +Assurance Corporation of their liabilities in this direction, after +they had paid between them something like a quarter of a million. +The subsequent history of the Royal Exchange Assurance has been one +of sound business and consequent prosperity. It began with Marine +insurance and in 1721 added life and fire. + + + + +CHAPTER V. + +ON ASSURANCE. + + +The history of assurance is not a sprightly theme. It is so hedged +about with details of old ordinances, tables of mortality and specimens +of fire marks, as are enough to drive the general reader into the next +parish. The historians begin as a rule with the Phœnicians. And they +are wise. Everybody has heard of the Phœnicians and that they were the +first known traders to visit Britain from overseas. You can safely +assert that the Phœnicians practised marine insurance; and on the +other hand, you can equally safely deny that they knew anything about +assurance at all for there is no one to contradict you. There is no +evidence of any kind. + +This, however, is certain. Marine assurance was the first form of +assurance practised amongst men; and, inevitably, the first form. For +the risk was evident and above all could be estimated with accuracy. +The value of the ship and the worth of its cargo were known, and a +fair reckoning could be made of the perils which were likely to be +encountered on the voyage. Probably the very first edict concerning +this practice was issued when Justinian was Emperor, in the year 533. +He limited the legal rate of interest to six per cent. in all cases +except that of “Fœnus Nauticum”; and “Fœnus Nauticum” was that early +form of marine assurance which we know by the name of Bottomry. In this +one case, interest was allowed to be exacted at the rate of twelve per +cent. + +Upon the heels of Justinian, however, followed the Middle Ages, and +they wiped out Justinian’s edict and any arrangement of a similar +nature, which was to be found in any parts over which the Church ruled. +Interest upon the investment of capital was accounted as usury and an +offence against God, to be corrected by burnings and floggings, and the +other delicate persuasions of those days. We have no sure knowledge +when marine insurance was revived, but we may be fairly certain that +its revival was due to the far-sighted policy of the Hanseatic League, +which had made its merchants the great sea-carriers of the Northern +nations. The League published various sea codes during the 13th century +and consolidated them at the beginning of the 14th in an authoritative +pronouncement known as “The Laws of Wisby.” Wisby was a town on the +western side of the Isle of Gothland in the Baltic, and at that time +one of the most flourishing staple towns of the North. These Laws of +Wisby do actually for the first time mention the word Bottomry, but in +such a way as to make it clear that Bottomry had long been practised. +Bottomry was a wager. The Underwriter bet the Shipowner that his ship +with its cargo would arrive safely at its port of destination. The +great difference between Bottomry and an ordinary wager, and between +Bottomry and a modern form of assurance, was this: the Underwriter paid +the money over at once, and, if he won--that is, if a ship arrived +in safety--received his money back with the addition of the premium +agreed upon. The Shipowner, in a word, held the stakes. + +This primitive form of insurance developed quickly. It became insurance +as we understand it to-day. Thus in the “Chronyk Van Vlaenden”--an +ancient history--it is written:-- + + “On the demand of the inhabitants of Bruges, the Count of Flanders + permitted in the year 1310, the establishment in this town of a + Chamber of Assurance, by means of which the Merchants could insure + their goods, exposed to the Risks of the Sea, or elsewhere, in paying + a stipulated Percentage. But, in order that an Establishment so useful + to Commerce might not be dissolved as soon as formed, he ordered the + laying down of several Laws and Regulations which the Assurers as well + as the Assured, are bound to observe.” + +Bruges was at this period the very capital of the commerce of the +North. It was the great storehouse, the chief market and the main +sea-port of that far-flung League. It was no uncommon thing for a +hundred and fifty tall ships to enter on a single tide into Sluys, the +outer harbour of Bruges. + +The first definite ordinances concerning marine insurance, however, +came from a very different part of the world. The Magistrates of +Barcelona, certainly on four separate occasions during the 15th +Century, formulated Rules which were one and all intended to prevent +the over insurance of unseaworthy ships--a growing scandal and danger +of those times. The Barcelona trade was mainly with the Ports of Italy; +and the Grand Council of Venice, before the century was over, followed +in the footsteps of Barcelona. The Venetian Decree starts by declaring +that, owing to the perverse nature of mankind, people _will_ quarrel +about money matters, and proceeds to deal with such very modern dangers +as that arising from carrying an excessive cargo on deck. Ordinances +issued in Venice were certain to find their way into England, for the +Italians, or Lombardy men as they were called, had already gained a +solid footing in England, and indeed were actually carrying commercial +war into the very camp of the Stillyard. + +The attack of the German Emperor upon the Pope in the first half of +the 13th Century, and the influence of the Crusades, which brought to +England in Italian Fleets spices, carpets, silks and other luxuries +from the East, were the chief causes of the Italian invasion. With +the expulsion of the Jews by Edward the First, their position was +greatly strengthened, for, in their turn, they became the usurers. +We find the Lord Mayor, at the King’s command setting aside for them +a district of London in which to reside--the district now known as +Lombard Street--and so powerful did they become that even though their +unpopularity made them objects of continual attacks by the populace and +continual Petitions for their expulsion to successive Kings, they were +only dislodged in the end by their own fears for their personal safety. + +Thus, long before any decree with regard to marine insurance was +issued by a Government of England, the practice of insurance was +common and regular in the country. The first British Marine Insurance +Act bears the date of 1601, and states in its Preamble that Marine +Insurance has been “tyme out of mynde an usuage amongste merchantes, +both of this realme and of forraine nacyons.” It mentions, in fact, +“an Office of Insurance within the City of London,” where a registry +of marine insurance policies was compiled. This Act of Queen Elizabeth +established a permanent commission for the hearing of cases arising +out of policies of marine insurance. The Commission was to sit for the +time being under the presidency of the Judge of the Admiralty and the +Recorder of London. It was to consist of two members of Civil Law, two +common lawyers and eight grave and discreet merchants, and was to hold +its Sessions once a week. + +The Act, however, found no favour with the Merchants of the City of +London, chiefly, no doubt, because it allowed appeals to the Court of +Chancery, which in the slowness of its procedure seems in those days +not to have lagged behind the Court of Chancery, as Dickens found +it in the days of “Jarndyce versus Jarndyce.” The Act accordingly +fell, after a generation, into disuse. But the practice of assurance +steadily increased and, with the coming of Lloyds and the granting +of the Charters to the two great Corporations--the Royal Exchange +Assurance and the London Assurance--was gradually placed upon a legal +and scientific basis. + +In the order of history, life insurance followed upon marine, and fire +insurance upon life. At first sight, to anyone who forms in his mind +anything like a vivid picture of the crowded wooden houses, the medley +of thatched roofs, which made up a mediæval city, the order may seem +strange. One might imagine that the danger of fire, and the necessity +of guarding against its widespread terrors, would be ever present. But +it is necessary to remember that, as before the Great Fire went the +Great Plague in the sequence of facts, so, also, in the sequence of +loss, mortality and damage, fire limped behind disease. The mediæval +house in a dry summer was tinder to a spark, but winter or summer it +was a place of unclean rushes with little, if any, sanitation. Readers +of the “Young Visiters,” will recollect that the heroine put some “red +ruge” on her cheeks because, as she declared, she was pale owing to +the drains of the house. The demand for “red ruge” must have been very +extensive in mediæval London. There was a disease called the “sweating +sickness,” which carried off inhabitants in a few hours. The Plague +had visited the City many times before the winter of 1665, and was +to visit it afterwards. There was a violence in the ordinary conduct +of life, such as you may know after the conclusion of any great war. +Medicine was in its infancy. If your child had scarlet fever, you +wrapped it up in a scarlet cloth; if you had the stone, as likely as +not your Doctor would make a disgusting plaster, of which the chief +ingredients were headless crickets and beetles, and would rub you with +it; whilst the Clergy, into whose hands much of the duty of healing the +sick naturally fell, were forbidden by the Pope to shed blood under +any conditions whatever. Where the Great Fire barely slew a hundred, +the Plague carried off its thousands. It was natural, therefore, that +men’s minds should be set on compensations for the loss of life, before +they reached the idea of compensations for the damage done by fire. +The ancient Saxon Guilds did, in fact, attain the rudiments of life +insurance in their provisions for the payment of funerals, and for the +maintenance of dependents left in distress by the death of a member of +the Guild. + +Life insurance, indeed, would no doubt have long since become as +established a fact as the insurance of ships, but for one fatal +difference. You knew the value of the ship; you knew the price which +its cargo would fetch in the market; you were upon solid ground. But +with regard to life you had nothing whatever to go upon. There were no +figures by which you could calculate the probabilities of its duration. +Life insurance was the merest gamble, and, even so late as the days of +Charles the Second, you could buy a Government annuity for ninety-nine +years for a cash payment equal to fifteen and a half year’s annuity. + +The Provincial Letters of Pascal drew attention first of all to the +doctrine of probabilities, and John de Witt, a Dutchman, applied it to +the subject of life annuities. He made a report to his Government, +in which he used for the first time mathematical calculations in +considering the probabilities of life. His report had no immediate +effect. But he had sown the seed, and Leibnitz, who devoted much time +to an investigation of the theory of chances--“c’est pour perfectionner +l’art des arts, l’art de penser,” he explained--saved the essay from +oblivion. + +But still there were no facts to go upon. It was the chance of the +gaming table. How many times would Number 17 or Number 26 turn up on +the Roulette board in a given evening, if neither of them had turned +up, say, for a week before? What are the odds that “Trente et un +et après” will be seen at the “Trente et quarante” table ten times +in the course of an evening? It was with the limping guidance of +such questions as these that the early forms of life assurance were +arranged. If the grantor of the annuity were generous, that helped to a +solution, but it was rare. If the annuitant himself were ignorant, that +helped too, and this was more common. Until quite recently, the value +of a life was accounted at seven years’ purchase. + +The Great Plague, however, which spread so much desolation, lent a +little help in this direction. Such was the terror which the Plague +inspired, so overwhelming was the fear of its return, that what we +should now call the _morale_ of the race was shaken. The people of +those days were as vague in their computations of numbers as in their +spelling, and rumour would exaggerate into millions the deaths of +thousands. In order, therefore, to reassure the public mind after the +Great Plague, Bills of Mortality were issued by the various Parishes +by Order of the Government. Up to the end of the 17th Century the +appearance of these Bills was sporadic. But, with the beginning of the +18th Century, so useful had they already proved, they became a regular +element in Parish life. They were made up on Wednesdays, published on +Thursdays, and anyone who cared to pay 4s. a year could subscribe for a +copy. + +The progress towards a system of Assurance, as will be seen, is so +far slow. We have got from the gaming tables by way of the Great +Plague to Bills of Mortality. But still there is hardly a glimmer of +science. The Bills of Mortality themselves suffered from a grievous +defect from the point of view of insurance. They included a statement +of the cause of death, and even of the particular disease from which +the patients died, if--and it is a considerable “if”--the disease were +amongst those known to the medical faculty. But they did not give ages. +And without ages the probabilities of the duration of life were still +mere guesswork. Life insurance, as we understand it, is based upon a +scientific computation in which the ages of the insured are the first +consideration. During that Century, however, three men appeared, to +whose efforts the real science of insurance owes its chief debt. + +The first of these men--one John Graunt, the son of a tradesman, who +had migrated from Lancaster and settled in Birchin Lane--enjoyed +no more of the opportunities of education than the sons of other +tradesmen. He left an unknown school early for the counter of his +father, shared in the public work of his Ward, and became a Major +in the train bands; but some spark in the man set his thoughts upon +the laws of life so far as the Bills of Mortality helped to their +elucidation. He seems to have been impressed, and even annoyed, by the +extraordinary carelessness with which men reckoned the population of +London. It was spoken of in millions. One grave writer, indeed, went so +far as calmly to assert that there were two million less people living +in London in one particular year than in the year which had preceded +it; and he made this astounding statement as though it were a matter +which anyone might expect. + +John Graunt published in 1662 his “National and Political Reflections +on the Bills of Mortality.” The work made a great stir, and did not, +by the way, increase its author’s popularity, for he accounted the +population of London at 384,000, and this calculation, which was very +near the truth, did not find favour in the eyes of those swelling +signors who only condescended to think in millions. The book, however, +within the year, passed into a second edition. It set men thinking, +and it impressed one, whom, most of all, so dry a subject would have +been likely to repel--no less a person than His Majesty Charles +himself. Charles the Second recommended John Graunt to the Royal +Society, and charged the Fellows in round terms “That if they found any +more such tradesmen they should admit them all.” The book found its way +across the Channel, and in consequence Louis XIV. ordered a register of +births and deaths to be kept in France, of a character much more strict +than was observed in any other country of Europe. + +The Reflections contained many surprising odds and ends of calculation. +John Graunt computed that seven men out of every hundred in England +live to the age of seventy; that only three women out of two hundred +died in childbed and only one in labour; and that out of one hundred +people, only one will be left alive at the age of 76 and none at the +age of 80. He deduced from his calculations that the world was not +more than 100,000 years old, and he drew, probably for the first time, +that distinction in land values which has made, and continues to +make, so loud a stir in our generation. For, in putting questions as +to the amount of hay an acre that a meadow might bear, or the number +of cattle which it might feed, he adds “of which particulars I quote +the intrinsic value, for there is another value, merely accidental or +extrinsic, consisting of the causes why a parcel of land lying for a +good market may be worth double another parcel, though but of the same +intrinsic goodness; which answers the question why lands in the North +of England are worth but sixteen years’ purchase and those of the West +above twenty-eight.” He aimed at classifying the vocations of men, +with a word, by the way, against Doctors, who persuade “credulous and +delicate people that their bodies are out of tune.” He thus raised a +number of interesting problems for the speculation of thinking men, and +there is little doubt that to the influence of his book was due a vital +amendment in the Bills of Mortality. In 1728, the ages of the dead were +included as well as the ailments from which they had died. + +The second of the three men was Sir William Petty, a man of a very +different stamp. He was a speculator; he had a great love of money and +a great love of land. He probably had a sense of humour, for, when +challenged to fight a duel and having the privilege of choosing the +place and the weapons, he selected a dark cellar and a carpenter’s axe. +He certainly had the ambition to found a great family and leave to it a +great inheritance, and in this he succeeded. He was the son of a Romsey +tailor, and he left the house of Lansdowne. + +Petty wrote “An Essay on Arithmetic concerning the Growth of the +City of London, with the Measures, Periods, Causes and Consequences +thereof.” Petty estimated that in 1682 the population of London was +670,000, it having doubled itself within the preceding forty years. He +was at a loss, however, to account for the increase. He could, he said, +pick up some remarkable accident and declare it to be the cause, “as +vulgar people make the cause of every man’s sickness to be, what he did +last eat.” But Petty was not content with such a device, and preferred +to attribute the swelling numbers to some natural and spontaneous +advantage that men find by living in great societies. + +There is already, as you will see, a glimmer of science, but still not +much more than a glimmer. Sir William Petty was led on to some curious +prophecies. For instance, the world would be fully peopled within the +next 2,000 years, and the growth of London must stop of its own accord +before the year 1800 was reached. + +The influence of these two men upon thought continued to grow, and in +the year 1693, the most important year in the history of the science of +insurance, Doctor Halley, the Astronomer Royal, published in a pamphlet +a table of probabilities of the duration of human life at every age. He +at last had something to go upon. He had discovered that the town of +Breslau, in Silesia, had regularly issued Bills of Mortality in which +the ages of the dead were recorded. He took the rate of mortality in +that town during five successive years, and for the first time based +the calculation of the duration of life upon a scientific foundation. + + + + +CHAPTER VI. + +SOME ODDS AND ENDS. + + +It is curious that, although the idea of insurance is utterly opposed +to that of gambling--the one aiming at rapid gains, the other merely at +protection from loss--still insurance took its origin from the doctrine +of chance as observed at the gaming tables, and led to the discovery +of quite a new form of gambling, which achieved an extraordinary vogue +in the first half of the 18th Century. It was a period of fine clothes +and callous natures; of high costs and lavish expenditure; of turbulent +politics and grave risks. Such a period was the very soil in which +gambling and speculation were sure to flourish. But, even so, the +rapidity and the ingenuity with which the possibilities of gambling, +by means of this new-fangled fashion of insurance, were recognised +are quite remarkable. Indeed, during the greater part of this period, +gambling in policies altogether superseded the legitimate business of +insurance. The life of Sir Robert Walpole, whose person seemed at one +time in peril from popular tumult, at another from party hatred, was +always there to be insured, if less attractive propositions were not +that morning to be discovered. + +It is difficult to imagine the state of indignation which would have +been aroused if, during the late war when the King went to his troops +in France, great premiums had been asked and paid against his return. +Yet that happened to his predecessor in the 18th Century. When George +the Second fought at Dettingen, 25 per cent. was openly paid against +his return. The movements of Charles Edward, the Young Pretender, in +1745, provided one with a sensation of terror in the morning and an +opportunity of putting some cash into one’s pocket in the afternoon. +There were no daily newspapers, and in much later days, when Wellington +was fighting in the Peninsula, the news of Busaco and Badajoz took +a fortnight to reach London. Charles Edward’s march to Derby at the +head of his dreaded Highlanders, and his retreat, put a good deal of +money into the hands of the assurers of Lloyd’s and the members of +Garraway’s. Nor, when this rabble had melted away, and he himself was +a fugitive in the Western Islands, was their ingenuity at a loss. The +Young Pretender was insured against capture; he was insured against +decapitation; and if the poor youth could only have gathered up the +money which was wagered one way or another upon his luckless head, he +would have had enough for another fling at the Throne. + +But even though Charles Edward was not captured, many of his followers +were. Everyone remembers how Lady Nithsdale rescued her husband from +the Tower by dressing him in her clothes and remaining behind in his. +You would hardly believe that that gallant exploit raised the wildest +indignation in the City of London because so many underwriters stood to +lose if Lord Nithsdale kept his head upon his shoulders. Would Admiral +Byng be condemned and shot? Would he be condemned and not shot? +Would he be acquitted? What was the value of the life of the Duke of +Newcastle, Prime Minister when Minorca was lost? Any of these questions +could form the subject of a wager by means of a policy of assurance. +The strangest dispute of all, however, finally led to the intervention +of the Law, and a decision by Lord Chief Justice Mansfield, that a +policy of assurance entered into by a person holding no insurable +interest was against public interest. + +This dispute, which provoked a commotion almost inconceivable to us, +was concerned with the sex of the Chevalier d’Eon. We are apt to take +historical events for granted, neither marvelling at their strangeness +nor speculating upon the manner with which contemporaries received +them. Can you imagine a Frenchman of distinction, coming to England +upon a confidential mission, quarrelling with the Ambassador of his +country, accusing publicly this or that statesman of treachery, and +finally arousing the most widespread doubts as to whether he was a +man or a woman? Yet this very thing did happen to Charles Geneviève +Louise Auguste d’Eon de Beaumont, and we hardly need to be told +that the assurance brokers of the City of London found this spicy +problem very much to their taste. Policies were opened by which it +was undertaken that, on payment of fifteen guineas down, one hundred +should be returned whenever the Chevalier was proved to be a woman. +The Chevalier, after some passing pretence of indignation, graciously +allowed, that at a certain Coffee House, at the hour of noon, he +would satisfy all whom it might concern. As may be easily imagined, +the assurances were immediately and greatly increased, and there +should be no reasonable doubt that the Chevalier got in return for his +condescension what nowadays we should call a “rake off.” + +At the appointed hour, the Chevalier appeared in the uniform and the +decorations of an officer, and, claiming to belong to the sex whose +dress he wore, challenged anyone present to disprove it with sword or +cudgel. + +This was not the sort of solution of the problem which commended itself +to the citizens of that day, and all the more, since the Chevalier +was known to be remarkably expert with the small sword. The crowd of +underwriters and brokers dissolved, leaving the great question of +the day unanswered. An action was brought in the Court of Lord Chief +Justice Mansfield, who gave the decision to which we have already +referred. An Act had already been passed that insurance made on the +life of any person on the account of another who had no interest in +that life should be void. Lord Chief Justice Mansfield laid it down +that the same principle should be held even when the policy was not a +policy on life. + +It is obvious that the system of insurance, once it became general, +would give opportunities to the ingenious criminal. The cases, however, +of such frauds or such attempted frauds are, comparatively to the +vast volume of insurance business done, astonishingly few. Still +fewer present those conflicts of emotion--those struggles between +ill-assorted natures thrown together in the jumble of life--which alone +give interest to the study of crime. Most of the insurance frauds +represent no more than sordid efforts by mean men or women. One or +two cases, however, do stand out by something especial in the way of +audacity or imagination on the part of the chief criminal. + +That of Thomas Griffith Wainwright is probably the most remarkable. +Wainwright was a person of amazing vanity and considerable good looks, +who affected the military style of dress which was the last word of +male fashion in the days when he lived. You may read a description of +the man in Bulwer Lytton’s novel “Lucretia,” where Wainwright postures +as Gabriel Verney. Postures is the word, for though Wainwright was not +without talents and high abilities, to posture was the enjoyment and +ambition of his life. He contributed articles to the “London Magazine” +at a time when Lamb, Barry Cornwall, Haslitt and Alan Cunningham were +the chief contributors. Under the name of “Janus Weathercock” he wrote +on Art, the Ballet and the Opera. He wrote in a fashion which has +become much more common to-day than it was then: the fashion, I mean, +of creating first of all a personality, through the eyes of which the +subjects to be reviewed are seen. The “Eye Witness” whom Wainwright +described to the readers of the “London Magazine” was, needless to +say, himself, and he drew the picture of himself with so loving a pen, +such luxuriant details of his elegant dress, his fine appearance and +his exquisite manners, as would make the very effigy of a coxcomb. +That one might not misunderstand his writings, he enforced them with +his pencil--he was an artist of no small ability--and drew types of +female beauty in which “the voluptuous trembled on the borders of the +indelicate”--we quote his own luscious phrase. As you can imagine, he +had no high opinion of the artistic capabilities of other men, and like +all persons endowed with so triumphant a vanity, he impressed those +more modest craftsmen who were conscious of their imperfections. He +fairly took in Charles Lamb, for instance, who spoke of him as kind and +light-hearted. + +Never were two epithets so misapplied by a man with a genius for +insight, for “Janus Weathercock” was a forger and had even then murder +in his mind. He ceased to write. He went with his wife on a visit +to his uncle. After a short illness the uncle died, and Wainwright +inherited the property. It was not nearly enough to satisfy this +high-flown gentleman’s needs. Moreover, it was held by trustees, so +that only the interest reached his hands. He forged the names of his +trustees to a Power of Attorney apparently with so much success, that +for a long while no suspicion was aroused. He apparently forged five +such documents, but, even so, poverty was always at his door. + +At what particular date he turned his thoughts to the possibilities +of insurance we do not know, but it was in the year 1830 that the two +young step-sisters of his wife, Helene Frances Phœbe and Madeline +Abercrombie, began to haunt the insurance offices of the City. Helene +Frances Phœbe wanted her life insured for sums ranging from £2,000 to +£3,000 for periods of not longer than two to three years. From office +to office these young ladies went, and they were actually able to +effect these insurance policies for an aggregate amount of no less +than £18,000. The policies once effected, Wainwright had recourse to +an ingenious device. Phœbe gave out that she was going abroad and made +her will in favour of her sister, Madeline, with Wainwright as the +sole executor. He would have, in the event of Phœbe’s death, complete +control over the money paid by the Insurance Companies, although he +would not stand in the suspicious position of one who had had the money +bequeathed to him by will. He might still, of course, be suspected, but +he would be a long step further from suspicion than if the crude method +of leaving the money to him had been adopted. + +There can be little doubt that Phœbe, and probably Madeline too, under +the spell of this man’s ascendancy, were parties to the plot--as they +understood it. Phœbe was to disappear on the Continent. By means of +forged papers Wainwright was to prove her death, collect the insurance +money, and join her with the rest of the family on the Continent. +This was no doubt the plan talked over of an evening in those shabby +furnished rooms in Conduit Street to which the family had been now +reduced. But this was merely the plan by which Wainwright had secured +the help of the two young and attractive girls. Unspoken, at the back +of his mind, lay a much more sinister project. The night after Phœbe +Abercrombie had settled her affairs, she went to the theatre with the +rest of the family. A lobster supper followed upon their return to +their lodgings, and in the night Phœbe was taken ill. She died--Oh! +prudent Mr. Wainwright!--at a time when he was out walking with his +wife. The body was examined and a certificate of death was issued by +the doctor in the ordinary way. Wainwright began to demand his £18,000 +from the various Insurance offices. They declined to pay. Wainwright +left England and commenced an action. But such a light did the Counsel +for the Insurance Company throw upon Wainwright’s manœuvres that +his claim was rejected by the Jury. The Bank of England apparently +began now to look into that little matter of the Power of Attorney. +Wainwright’s forgeries were discovered, and Wainwright wisely preferred +to remain at Boulogne. He lodged there, by the way, with an English +officer whose life he managed to insure for £5,000, and after one +premium had been paid the English officer died. Wainwright seems then +to have wandered for a while in France. He certainly was arrested by +the French police and imprisoned at Paris for six months. Impelled +by some interest of which we do not know, he returned to London for +forty-eight hours; and during those forty-eight hours he made the one +small fatal mistake which put an end to his activities. He stayed in +an hotel close to Covent Garden, but, startled by some disturbance in +the street, he for a moment drew the blind aside and looked out. By one +of those coincidences which are not so uncommon as the pedantic would +have one to believe, there was a man passing in the street who knew +him. The passer-by caught a glimpse of the face peeping out from behind +the blind and cried aloud “That’s Wainwright, the bank forger.” He was +tried on a charge of forgery, sentenced to transportation for life, and +died miserably, years afterwards, in Sydney. + + + + +CHAPTER VII. + +THE CORPORATION. + + +An earlier chapter gave some account of the origin and beginnings of +the Royal Exchange Assurance Corporation. It would not be in keeping +with this note on the occasion of the Bicentenary of the Corporation to +enter into those details of profits, advantages and benefits, which are +more suitable to a prospectus. But certain landmarks may well be noted. + +The year 1720 was, as we have seen, the difficult year in the history +of the Corporation. It was the first year when the Corporation worked +under its new Charter, and under its present name. It was the one year +of all its two hundred in which for reasons which we have understood +it paid no dividend upon its stock. Yet, during this one year of 1720, +it gave such proofs of courage and vitality as must have inspired all +intimately interested in its operations, with a very stout confidence; +for although the threat of disaster was at the door, its Directors went +blithely on their way, organising the extension of its business. + +In 1720 it absorbed the Sadler’s Hall Company, which with a nominal +capital of two millions was unable to obtain a Charter under which it +could do business. In 1721, the Royal Exchange Assurance Corporation +added to the Charter which it already possessed, another, granting it +power to insure for life and against fire. In 1721, it appointed its +first agent. Let us set down the actual date and record the name of +the man, the fore-runner of so many thousands who were to carry on the +torch, each in his turn, through the next two hundred years. On 22nd +May, the Directors appointed Mr. Palmer, of Ockingham, in Berkshire, +its agent. + +[Illustration: THE SECOND ROYAL EXCHANGE. + +Proof of First Heading on Fire Policies, 1721.] + +After that day the Corporation set to work very quickly to extend +its agencies, for on the 31st of the same month it agreed to +appoint “as many country postmasters as are proper to be country +correspondents”; and by the next year, so widely had the system been +increased, that it resolved, by a formal declaration, to undertake no +responsibility in any town of America where it had not already an agent +appointed. + +The Corporation’s machinery for dealing with fires was at this time, +primitive as all such arrangements then were. It appointed one man +whose business it was to fix the firemarks upon the houses insured, +and in his odd times to run messages for the office. The firemark +itself was an object of some discussion at the meetings of the Board. +It was too heavy, and it seems there was too much gilding to satisfy +the frugality of the Directors. Mr. Spelman, the Fire Clerk, was +accordingly ordered to provide two new samples from which the Directors +might choose; and he was especially enjoined to inform the Committee +of the exact price of the mark “distinguishing what the lead will cost +and what the gilding will come to.” It seems that the unfortunate Mr. +Spelman, even with this sharp hint to remind him of his duties, could +not restrain his passion for gilding. The Fire Committee accordingly +took the matter out of Mr. Spelman’s hands and ordered “the Plumber +that used to serve the Company to make a model of the mark with a +large crown, and lay the expense before the Committee.” The Plumber +understood his Committee better than Mr. Spelman, and the Firemark with +the large crown, which to-day decorates some of the houses originally +insured under a policy with the Royal Exchange Assurance Corporation, +is the very same mark which was designed in 1721 by that economical and +understanding plumber. Mr. Smith, who founded the plumber’s design, +received 14½d. for each firemark. The ha’penny alone should have been +sufficient by the confidence which it inspired in the economical +management of the Company to have brought hundreds of annuitants on to +those hone stones which paved the second Royal Exchange as they had +done the first. + +To the one fireman and messenger combined were shortly added others, +and we find in the year 1752 that thirty-six firemen, nine porters and +four carmen paraded the West end of the town--it is to be supposed as +an advertisement for the Corporation. It was the custom of those days +to employ as firemen, watermen who plied habitually on the Thames. +These were stout and handy men, although since the Thames was the +general highway of London, it looks as if their ordinary occupation +must have suffered. They wore the liveries of their separate offices, +and those employed by the Royal Exchange Assurance Corporation must +have cut a fine figure when they paraded the West end of the town, in a +livery of yellow lined with pink, with music playing in front of them, +and five shillings in their pockets for their dinners. The custom by +which each separate insurance company kept its own firemen was a bad +one in the public interest. For it meant that if the house in flames +bore the firemark of a different company, the firemen simply went home +and left the building burning. It was not until January 1866, that the +Metropolitan Fire Brigade, as we know it, came into existence. + +The Royal Exchange Assurance Corporation stands to-day its own +evidence and justification. It was the first Insurance Office to +extend its work to the troubled country of Ireland, where fires were +more than ordinarily common, for it opened its first office in Abbey +Street, Dublin, in the year 1722: and it retains to-day by the activity +of its agents and the extension of its business that pre-eminence which +its priority in time first gave to it. Of late years it has undertaken +much work which in other days would have been deemed quite outside the +scope of an Insurance Corporation. It was the first Insurance Office +in England to set up a Trustee branch. This was in 1904, when as yet +there was no Public Trustee, and many a legatee’s affairs were plunged +into confusion by the death or business inexperience of an Executor. +Thus, though not a philanthropic institution, the Corporation has +pursued its business by beneficent means. It has seen companies--such +as that which was originated by the famed Mr. Montague Tigg--blaze for +a moment in a false prosperity and then disappear. It has remained +proud in its antiquity, faithful to its traditions, and yet alert to +each new development of the machinery of life which could strengthen +its foundations and extend its influence. It has survived the most +momentous changes and the most difficult crises in the national life +of Great Britain. Yes, but self-preservation is not everything. For a +Corporation to live for two hundred years is very well in itself; but +to live at the end of that time amidst the increasing confidence and +good will of those who have entrusted their interests to its care is a +greater matter of which the Royal Exchange Assurance Corporation may +well be infinitely proud. + + A. E. W. MASON. + + +JAS. TRUSCOTT & SON, LTD., London. E.C. + + + + + Transcriber's Notes: + + Italics are shown thus: _sloping_. + + Variations in spelling and hyphenation are retained. + + Perceived typographical errors have been changed. + + + +*** END OF THE PROJECT GUTENBERG EBOOK 75944 *** |