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most advantageous. But it is hardly possible for a nation when it is in distress by any means to make a profitable bargain with a money-lender, particularly on the principle of granting temporary annu. Thus, when annu, for lives are granted, the creditor takes care to pitch upon the persons who are the most likely to live long, and who consequently will prove, for the longest period, a burden upon the State. Nor have all the flattering hopes which Tontines held forth to the avarice of mankind been able to procure money by life annu, on advantageous terms to the public.
In 1789 the Great English Tontine was set on foot under the authority of 29 Geo. III. c. 41. It was to raise the sum of £1,002,500 for the public service by way of Tontine. Every subs. for the sum of £100 5s. was to be entitled to an annu. upon the life of his nominee at a rate proportioned to the age of the person of from £4 35. to £5 125., with benefit of increase arising from survivorship, till the annu. upon the orig. share should amount to 1000 a year, the excess then falling in to the public. The gentlemen who contracted with Government for the whole of the Tontine not being able to get it disposed of in time, an option was afterwards given, by 30 Geo. III. c. 45 (1790), to the subs. to convert it into terminable (long) annuities for 69 years. A considerable number of the orig. contributors held their subs,-to the number of 4129 out of 10,000 shares. These were held upon 3495 lives. The mort. of this particular class was given in Mr. Finlaison's Obs. in 1829. [GOVERNMENT ANNUITY TABLES.]
In 1789 the Westminster So. for Granting and Purchasing Annu. and Ins. upon Lives and Survivorships applied to Parl. for a charter, and was refused. Three years later (1792) the asso. was founded under a Deed of Sett.
In 1792 Mr. Wm. Blewert pub. Perpetual and Determinable Annu. reduced to a level; or a comparative view of long and short annu., with 3 p.c. reduced, and 3 p. c. Consols at the Bank of England, etc. But neither in this, nor in his work in 1783, did he treat of life annu.
Dr. Waring, in a small pamp. On the Principles of translating Algebraic Quantities into probable relations, etc., pub. 1792, devoted about 30 pages to the consideration of the subject of annu. and assu. "His style and manner (says Francis Baily) will not be much admired by those who have read the works of preceding writers on this subject."
In 1793 the Royal Exchange Marine and Fire Corps. applied to Parl. for add. corporate powers to enable them to grant, purchase, and sell annuities for lives and on survivorship; and by the 33 Geo. III. c. 14, they were empowered so to deal in annuities under the name of the Royal Ex. Assu. Annuity Co. The preamble of this Act deserves particular
Whereas it would tend to public utility, if the said Corps, were empowered to grant, sell, or purchase annu, upon lives, or by or with survivorship, which no other Corps, now are; the granting and purchasing such annu. being in the hands of improper persons, who make an exorbitant gain thereby, to the great detriment of individuals and the public in general, which would be in a great measure (if not wholly) prevented if a known office, long estab., were empowered to do so. May it therefore, etc.
It is necessary also to see the precautions with which this power was fenced round. It is provided by the Act that, in order to render full security to the annuitants, the money received for the annuities should (as often as it should amount to £1000) be laid out in Gov. security; the interest or dividends on which the corp. might from time to time receive: but they were prohibited from touching any part of the principal until the extinction of the life on which the annuity was granted. And for the sake of preventing any fraud in this respect it was enacted that the time and place of the death and burial of each annuitant should be inserted twice at least in the Lond. Gazette, and that a certificate of such death or burial, with an account of the annuity depending, should be left at the office in London, to be inspected without fee or reward by any person interested in any annuity granted by virtue of that Act. And it was likewise further enacted that no agreement for the selling or purchasing of any annu. should be valid unless at the price stated in a table which was directed to be prepared and hung up in some conspicuous place in the office; and which table should be remaining in the office at the time of granting the annu.
In 1794 Rev. David Wilkie pub. The Theory of Int., Simple and Compound, derived from first principles, and applied to Annu, of all descriptions; of Tontines, etc., etc. In 1796 a new Legacy Duty Act-36 Geo. III. c. 52-came into force. Acts had imposed simply a stamp duty upon legacies of specific amounts, and had not reached annu. on lives. This Act therefore opened a new and large source of revenue; for it had become customary to bequeath annuities in order to escape the duty. Where an annu. was bequeathed for life or for years, it became necessary to value the same in order to assess the duty (sec. 8). A series of annu. tables was therefore appended to the Act, based upon the Northampton T. The use of these tables was superseded in 1853 by those appended to the Succession Duty Act of that year. [LEGACY DUTY.] [SUCCESSION DUTY.]
In 1796 Mr. Thomas Tremlet pub. Strictures on a proposed plan for adopting a Loan, with a view of instituting Rev. Annu., or Government Dividends payable at a future period. In the same year Mr. Wm. Hunt pub. A Collection of Cases on the Annuity Act; with an Epitome of the Practice relative to the Inrolment of Memorials.
In the same year also was pub, A Treatise upon Law of Usury and Annuities, by Francis Plowden.
In 1799 Sir Frederick M. Eden and several other persons of position in the City of Lond. having conceived the idea of founding a new Ins. Office with corp. powers, a Bill was introduced to the House of Commons and passed. The preamble of the Act recited, that "it would in many respects be greatly advantageous to the public if a corp. were estab. for making or effecting ins. on lives, and ins. against loss or damage by fire, and for granting, purchasing, or selling annuities for lives or on survivorship."
A draft-charter to incorp. a co. pursuant to the powers of this Act was prepared, and in due course submitted to the law officers of the Crown. The name to be the Globe Ins Co.; among its objects the granting of annuities.
In the report of the law officers upon the charter and its proposed powers, it was pointed out that there should be
Some restraint on the terms of the Co.'s dealings in annu., post obits, and other traffick of the same description in which they understood it was the intention of the Co. to adventure, and in which the example of a great co. authorized by Parl. and by Your Majesty's Charter might be highly injurious if their dealings should be for the same unconscientious advantages as were usually extorted by those who deal with necessitous persons in such trans.: which in general can only be carried on with necessitous persons, and most frequently with many persons subsisting on expectancies. In this view, it appeared to them that publicity in such transactions is highly important; and that all post obits to be granted to the Co. ought to be subject to provisions similar to those respecting annu. contained in the Act of Parl. of 17th year of Your Majesty's reign for registering grants of life annu., and for the better protection of infants against such frauds; but they conceived that could not be done without the aid of Parl.;
In consequence of this report, some modifications were made in the proposed charter ; and another set of law officers (in 1802) reported upon the amended charter-but having before them the objections of their predecessors in office just quoted-as follows:
We conceive that this objection applies principally to post obits and dealings of that description: so far as it so applies, it is wholly removed by an express renunciation on the part of the co. of all dealings of that kind, and a consent to be restrained therefrom by the terms of their Charter, as to the mere dealing in annu, if it had stood alone, as it now will do, we do not apprehend that it would have been objected to on the part of our predecessors; and so standing we do not ourselves feel it to be fairly objectionable.
The promoters of the Globe, after encountering a good deal more of this pre-precautionary legislative attention, determined upon the prudent course of commencing bus. under an ordinary deed of asso. and without a charter. [GLOBE INS. Co.]
In 1800 Mr. Robert Withy pub. A Practical Treatise of the Law of Annu., wherein the different securities for annu. and the remedies for the recovery thereof were fully exemplified. Together with the determination of the Courts on the construction of the Annu. Act. To which was added a large collection of precedents.
In 1802 we reach a name that will require more prominent mention as we proceed. It is that of Mr. Francis Baily, author of various works bearing upon L. Annu. and L. Ins. In a work on Leases, pub. in this year, there was an appendix, containing besides analytical demonstrations, Some remarks on the method by Dr. Price and Mr. Morgan for finding the Value of Annu. Payable Half-yearly, Quarterly, etc., together with some formulæ for determining the rate of Int. in Annu. (see again 1805 and 1810.)
In 1803 the Globe Ins. Co. was founded. Its founders, as we have seen, contemplated making the grant of life annuities an important feature of its business. Hence one of the reasons for the security of a large capital. Its active projector, Sir F. M. Eden, said (1804):
With respect to annu. on lives and on survivorship, the creation of a new corp. with an adequate capital for this branch of bus., may afford great accommodation to the public. It is more wanted in this country, as the public funds do not in this respect furnish those facilities for the purchase of annu. which were formerly met with in France. The grant of an annu. is often a measure greatly beneficial to the seller, as well as the purchaser. Important family arrangements might in many instances be effected thro' the medium of life annu., if a new office were sanctioned by legislative authority on safe and equitable principles. The land-tax of a very considerable estate of a nobleman of high rank has been redeemed by means of a sum raised by the grant of life annu.
In 1803-4 Sir John Sinclair, Bart., pub. the 3rd ed. of his famous Hist. of the Revenue, and therein he offers the following remarks upon the granting of L. annuities as a scheme of national finance :
In time of war, when a State is immersed in difficulties, every idea of obtaining money to advantage upon contigent annu. is absurd: but during peace the same rule does not hold good. Were the public therefore to estab. regulations similar to those by which private sos. are enriched, considering that it may act on a much greater scale, the granting of such annu, might prove a very important resource, more particularly in a luxurious age like the present, when every individual aspires to rival his neighbour in expense, and would grasp at so desirable and certain a mode of increasing his income. But care should be taken to grant annu. only on the life of the person by whom the money is paid; nor should the creditor be suffered to search everywhere for the best lives, or for people who from the strength of their constitutions, or other circumstances in their favour, are likely to live beyond the usual short space of human existence.
In 1804 Mr. Newman pub. A Collection of Mercantile Tables upon a New and Improved Method; and among them were Annuity and Compound Int. Tables, "compiled from the best authorities."
In 1805 Mr. Francis Bailey pub. his work on the Docrine of Int. and Annu, analytically
investigated and explained; together with several useful Tables connected with the subject. We shall give an outline of his views upon L. annu. under date 1810.
The Provident Life was founded in 1806, and commenced at once to grant L. annu. At that date only one other ins. office had pub. its rates for life annu., and that was the Royal Exchange. The following table gives the "year's purchase" required by each of these offices for life annu. of £1. The Royal Exchange paid its annu. quarterly, the Provident half-yearly.
In 1806 also Mr. John Clark pub.: An Enquiry into the Nature and Value of Leasehold Property, Reversionary Int. in Estates, and Life Annu., with a variety of Tables, etc.
In the same year M. Duvillard pub. T. of Mort. for France, before the Revolution, based upon obs. extending over a considerable portion of the kingdom. The annu. values deduced from this table have been considered too small to be used with safety. The table is regarded in France much as the Northampton T. is regarded in England. We give the annn. values deduced from it for the purposes of comparison.
We have seen how in the early part of the last century life annu. were applied for the purpose of raising money for Trading Corp. A century later, and they were very constantly employed as a means of raising money for parish improvements, as building, lighting, repairing churches, etc., etc. The speculation in them also continued. If we take a turn at the newspapers of this period, we shall find numerous examples of each class. We will quote such as best illustrate the practice then prevailing.
In the Morning Advertiser of 31st October, 1806, there ap. peared the following advertisements :
Cash for good bills and annu. to any amount during bus. hours at Humphryes and Co's., Navy Agents, No. 1, Sion Gardens, Aldermanbury, where the most liberal price will be given for well-secured annu. and merchandize. N.B. Tradesmen of credit accommodated on their own security, but no money agent will be treated with; nor letter received, unless post paid. Money on Annuity.-Wanted immediately £100, for which an annu. of 10 guineas will be granted on the security of landed property of ample value. Letters from principals (post paid) appointing an interview addressed to K. R., at Peele's Coffee-house, Fleet-st., will be duly attended to and satisfactory references given.
Money-£127,000 ready to be advanced on good security. Messrs. Lucan and Co. beg leave to inform those who may be in want, and desirous of borrowing temporary or permanent sums of money, and possessed of any property that can be assigned, that any part of the above money will be lent in sums from £100 to £10,000, on paying a fair and equitable annu, int. for the same, etc., etc.
In the Times, 3rd July, 1807:
Two thousand pounds will be given immediately for a well-secured annu. of £220-the grantor ins. his life. Address to S. D., Post-office, Grantham, Lincolnshire. More money to be laid out on the same terms. This is 11 p.c. for money, and 9 years' purchase nearly.
In the Morning Advertiser, 20th April, 1807, there was the following:
The Commissioners appointed to carry into execution an Act for better Paving, Lighting, and Watering the Parish of St. Nicholas, Deptford, in the County of Kent, will meet in the Vestry room of the said parish on Tuesday, the 28th April inst., at 6 o'clock in the evening, to receive proposals from such persons as are willing to purchase annu, to be paid quarterly during the natural life of the purchaser or any person to be nominated by him or them, out of the rates or assessments directed to be made by the said Act. No annu. will be granted to any person under 40 years of age, nor will more than £600 be taken for the purchase of any one annu. Proposals to be sent, sealed up, to the office of Mr. Parrell, solicitor, Slades place, Deptford, Kent.
In the Morning Advertiser, 8th June, 1807:
Annuities.-St. Mary at Hill, Lond. The vestry of this parish do hereby give notice that they are ready to receive proposals from such person or persons as may be willing to advance the said parish the sum of £700 upon one or more annuity or annuities to be secured for the life or lives of the person or persons advancing the same, but redeemable at the option of the said parish on six months' notice. Proposals in writing, sealed up, to be delivered at the office of Mr. Ludlow, No. 4 Monument yard, Lond., on or before the 18th June inst.
In the same year there appeared:
Life Annuities.-Greenwich, 7th August, 1807.-The parishioners of this parish being desirous to raise the sum of £1500 by annu. on lives, for the purpose of enlarging the Burial-ground of the said parish, do hereby give notice that all persons intending to propose for any part of the said annu. may leave their proposals (in writing, sealed up) with either of the churchwardens on any day (Sunday excepted) between 10 in the morning and two in the afternoon, setting forth the name and residence, the age, sum proposed for (which is not to be less than £50, nor more than £200 on any one life), the rate of int. required, and the day for the delivery of the proposal. Further particulars may be had by applying at the office of Messrs. Everett and Martyr, the Vestry Clerks, at Greenwich.
In the Times, 15th January, 1808, there was the following adv.:
Annuities for Lives.-Wanted to be borrowed by the united parishes of St. Mary-le-Bow, St. Pancras, Soper-lane, and Allhallows, Honey-lane, Lond., for the repairs of the parish church of St. Mary-le-Bow, in Cheapside, a further sum of money, not exceeding the sum of £600, upon annu. for
lives to be named by the lenders. No sum to be accepted less than the sum of £200. All persons willing to advance money for the purposes aforesaid are desired to send their proposals in writing, mentioning the sum they are willing to advance, the life or lives, and the terms upon which they are willing to advance the same, to Messrs. Nettleshipps, solicitors for the said parishes, at their office, at Grocers Hall, Poultry, of whom further particulars may be known.
In the Morning Advertiser, 5th March, 1808:
Parish of Woolwich, in the County of Kent.-The Commissioners under an Act of Parl. lately passed for improving the town of Woolwich, do hereby give notice that they will meet at the Poor House of the said Parish, on Friday next, the 19th February inst., at 6 o'clock in the evening, and every subsequent Friday evening at the same place and hour, for receiving the proposals of such person or persons who may be desirous of purchasing annu. directed to be raised by virtue of the said acts, and to be charged on the parish rates. And all persons making such proposals are desired to take notice that they will be required to produce a copy of the Register of his or her Baptism or Birth, to identify their respective ages, and also certificate of his or her residence, under the hands of the minister, churchwarden, and overseer of the parish or place where he or she shall dwell.
In the Morning Advertiser, 25th April, 1808:
Annuities on Lives.-St. Luke, Middlesex.-The Commissioners for paving the said parish will meet at the house known by the sign of the St. Luke, opposite the Church, in Old-st., on Wednesday, 27th April inst., at 4 o'clock in the afternoon precisely, to receive proposals for the absolute purchase of one or more annuity or annuities not exceeding in the whole the sum of £1000. The contributor or nominee must be of the age of 45 years or upwards. The annuity or annuities not to exceed £9 p.c. p.a., and to be paid quarterly out of the moneys to arise by or from the rates to be made on the houses situate in the streets called the Baltic-st., Honduras-st., Domingo-st., Memel-st., situate between Goswell-road and Golden-lane. No proposal will be received after half-past 5 o'clock.
Dale had said in reference to this class of security and the high annuities offered in common therewith, as early as 1772:
If parishes give at any time extraordinary int., it is on some emergency, such as building or repairing churches, workhouses, etc., and in such cases the annu, granted may perhaps be above the common rate, for the sake of obtaining ready-money to execute the work immediately.
Various other Corp. bodies of a trading character have permanent powers to grant money by means of life annu. We may mention two, the New River Co. and the
Manchester Waterworks Co.
The exemption in favour of Corporate Bodies in the Annu. Act of 1777 only applied to those cos. having special charters of incorp., or which were empowered by Act of Parl. to transact annu. business, of which there were very few; and when early in the present century several new offices were estab., they found themselves unable to grant annu., as they could not inrol the names of all their proprietors. To obviate this difficulty, several of the cos., as the Globe, Albion, London Life, Pelican, and Provident, obtained in 1807 Acts allowing them to inrol the names of trustees only; and these Acts were very carefully worded to show that they conferred no really corporate privileges, this alone excepted. [LEGISLATION, ETC., FOR INS. Asso.]
In 1807 the Amicable So. was, by a new charter then obtained, authorized to grant life annu. in lieu. of payment of the sums secured to the representatives of deceased members. It was also authorized to grant annu. in exchange for policies of ins. in the event of members desiring to exchange. We believe the transactions of the So. under this power were very limited.
In 1808 it was provided by 48 Geo. III., c. 142, that from and after 1st August in that year, it should be lawful for the Commissioners for the Reduction of the National Debt to accept transfers of 3 p.c., consolidated or reduced, Bank annu. in exchange for the purchase of life annu. on single lives, or on two lives, or on the longest liver of two lives, subject to certain limitations and restrictions therein mentioned. Persons so desirous of exchanging might nominate other lives than their own, but such nominees were not to be under the age of 35 years, and must reside in Gt. Brit. or Ireland. Proof of age and certificate of identity were required; and no annuity or annuities on the life of any one nominee should exceed 1000, or for two nominees £1500. Extensive tables were appended to the Act, regulating the values of the annu. not only by reason of the age of the annuitant, but also by reason of the price of the stock at the time of transfer. The highest age in the tables is 75, the prices at that age counting for "75 and upwards." The following is an abstract of the Tables:
Survivor of Two Lives of Equal Ages, or not more than five years' difference. first col. gives the ages of the two lives, or of the younger of the two :
60 and under 61.
Note The first two columns of this Table were not included in the Act of 1808. They were supplemented by the Act of 1812.
No values beyond £80-81 are given in the tables, nor at that period did the stock ever reach that price. The scheme was propounded with a view to the reduction of the National Debt, and the annu. granted under it are called sinking fund annu.
Returns of the amount of stock exchanged for such annu. were ordered to be laid ann. before Parl. In the following year the limit of the annuity or annuities to be granted on any one life was extended (by 49 Geo. III., c. 64) to £3000; and the personating of nominees, or forging certificates, made felony. In 1812, 1816, and 1817, further modifications.
We believe the recommendations from time to time made to the Gov. by Mr. Francis Baily, regarding the desirability of exchanging Gov. stocks for life annu., led to the passing of this measure. The annuitants of this class were included in the Obs. of Mr. John Finlaison in 1829, and of Mr. A. G. Finlaison in 1860.
Mr. Milne informs us that he mentioned the subject of these annu. more than once to a very able and well-informed member of the Gov., not long after the practice of granting them commenced. None were then granted on lives under 35 years of age; and the gentleman alluded to remarked that the applicants for annu. were chiefly aged persons, and it was desirable that a safe and advantageous mode of employing their savings should be afforded them. After 1816, those annu. were granted to persons of all ages above 21 years.
In 1808 Rev. Jeremiah Joyce pub. The Arithmetic of Real Life, which was stated to include "a complete reformation of all tables for calculation of annu., etc." We have never been able to meet with the work.
In 1809 Mr. Fortune, of the Stock Exchange, pub. a treatise on National L. Annu. In 1810 was pub. the first vol. of Mr. Francis Baily's famous work: The Doctrine of Life Annu., and Assu. analytically investigated and practically explained; together with several useful Tables connected with the subject. To which is now added an Appendix containing a new method of calculating and arranging such Tables. The 2nd and concluding vol. was not pub. until 1813; but it will be more convenient to speak of the entire work at one time, and we propose to do so under the first date. The author says:
In the year 1808 I pub. a Treatise on the Doctrine of Int. and Annu., wherein I entered into a full investigation of all the principles relative to that science; together with its application in the various questions arising from any commercial, political, or financial inquiries. In the preface to that work, I signified my intention of prosecuting the subject still further, so as to take in the whole doctrine of life annu. and assu. The present treatise therefore must be regarded as a continuation of the work above alluded to; and will, I believe, contain all that is useful or interesting in the science. The importance of the subject in the present day cannot be doubted. The incomes likewise annexed to all places, civil and military; all pensions and most charitable donations; these and others of a like kind are annu. for life. Moreover the dividends arising from a great part of the cap. in the public funds are, by the wills of the donors, and from other causes, rendered of the same nature. Besides which, many life annu. have been granted by individuals, by parishes, by corp. bodies, and by the Gov. itself. So that a great part of the personal estate also of this country is involved in a consideration of this subject.
This work, from which we shall have occasion to quote very frequently in these pages, was in many respects the most practical and the most able which had appeared on the subject of Life Annu.
An appendix to the 2nd vol. was principally devoted to the purpose of explaining the construction and uses of tables for determining values of Life Annu., calculated at a vast sacrifice of time and labour by Mr. George Barrett since deceased; formula were given for calculating from tables of that kind the values of temporary and deferred Life Annu. and Assu., and also for determining the values of Annu. and Assu. when the annu. or the sum assu., instead of remaining always the same, increases or decreases from year to year by equal differences, with considerably greater facility and expedition than the same things could have been effected with by the tables and methods of calculation in previous use.-Milne.
In this year (1810) also Mr. Wm. Campbell pub. The Values of Annu., from 1 to £1000 p.a. on single lives from the age of 1 to 90 years; with the number of years' purchase each annuity is worth, and the rate of int. the purchaser receives. With the amount of the several rates of the legacy duty payable according to the statute on the value of annu. This vol. had absorbed a vast amount of labour. Its use has now passed