merchandize, at sea or going to sea, or from lending any money by way of bottomry, or as makes any such contract void, or declares that the same shall be adjudged usurious, or as imposes any forfeiture or penalty in respect of any policy of assurance, or contract, shall be and the same is hereby repealed." The act winds up with a saving clause as regards the existence of the two chartered corporations. "Provided always," the clause runs, "and be it enacted that nothing in this act contained shall extend, or be construed to extend, to affect the rights and privileges of the Corporations of the Royal Exchange Assurance and London Assurance, otherwise than by making it lawful for other corporations and bodies politick, and for persons acting in society or partnerships, to grant and make such policies of assurance and contracts of bottomry, as herein-before mentioned."

The prevailing impression of the private underwriters being that the establishment of Rothschild's great company would be the ruin of Lloyd's, they made an effort to prevent its foundation while the act of repeal was still being discussed in Parliament, though its final passing was no longer doubtful through the support of the government. In the original prospectus of the Alliance Company there was only, as there indeed only could be, mention made of fire and life insurance, the intention of the founders of the undertaking to add the business of marine insurance to the other two branches being confined to a private agreement between the original promoters, which stated their intention to "form an assurance company for the several purposes at that time allowable by law to assurance companies, and for such other purposes as by any alteration of the laws then in force should be allowable to assurance companies." To prevent the carrying out of the plan thus shadowed forth, Mr. Natusch, an underwriter at Lloyd's, took fifteen shares in the Alliance Company, and, as soon as the directors announced their intention to enter upon marine insurance, proceeded against them for breach of the original conditions of the contract entered into between them and the subscribers.

The trial of the case-known in law as Natusch v. Irving-came on before Lord Chancellor Eldon, who summed up very strongly in favour of the plaintiff. It was laid down by the learned judge that, "if six persons join in a partnership of life assurance, it is clear that neither the majority nor any select part of them, nor five out of six, can engage that partnership in marine insurance, unless the contract of partnership expressly or impliedly gives that power; for if it is otherwise an individual or individuals, by engaging in one specified concern, might be implicated in any other concern whatever, however different in its nature, against his consent." Lord Eldon gave it further as his opinion that "courts must struggle to prevent particular members of those bodies from engaging other members in projects in which they have not consented to be engaged, or the engaging in which they have not encouraged, assented to, or empowered or acquiesced in, expressly or tacitly, so as to make it not equitable that they should seek to restrain them. And the principles which a court would act upon in a partnership of six, must, as far as the nature of things will admit, be applied to a partnership of six hundred.” In conformity with the ruling of the Lord Chancellor, the plaintiff obtained a verdict, under which the Alliance British and Foreign Fire and Life Assurance Company was forbidden to carry on also the business of marine insurance. For a day, it was believed Nathan Rothschild had been defeated; yet those who thought so did not know the man. He quietly submitted to the verdict against him, making no appeal in law against it, but going forward on his own road. Leaving the fire and life department of the Alliance Company simply where they stood, he put at their side, nominally independent of them, the Alliance Marine Insurance Company. So, as Nathan Rothschild placed them, the Siamese twins of the Alliance stand to this day in Bartholomew Lane, close to the Royal Exchange, at the foot of Lloyd's.

The nominal capital of the Alliance Marine Insurance Company was fixed by the founders at the same high figure

as that of the Alliance Fire and Life, namely at five millions sterling in 50,000 shares of £100. Notwithstanding this immense capital, the transactions of the company were for some years on a very limited scale, and it took considerable time before they even approached those of the Royal Exchange Assurance Corporation. It was soon found that capital alone, however unlimited, was insufficient to establish a business so complicated, and requiring so much individual knowledge, as that of marine insurance, and that personal influence of the widest kind could not accomplish it. The influence, besides, was not easily exerted. Nathan Rothschild, and the powerful friends who aided him in starting the new company, had their time far too much. occupied in other and more profitable ways, to be able to give it to thoughts about the underwriting of policies; and the active management of the business soon lapsed, as in all companies, to the actuary, or the chief manager-in this case Mr. Benjamin Gompertz, the already mentioned cousin of Nathan Rothschild.

Mr. Gompertz, born in London in 1779, the son of a Dutch diamond merchant, was a self-taught mathematician of very high attainments, who had distinguished himself early in life by the publication of new logarithms. At the age of thirty, having married Miss Abigail Montefiore, sister of Sir Moses Montefiore, Mr. Gompertz entered his name as a member of the Stock Exchange, doing a large business, but without relinquishing his mathematical pursuits, which gradually turned to calculations connected with life insurance. After working out a new series of tables of mortality, the subject took such hold of his mind that he decided to quit the Stock Exchange, and to devote himself entirely to actuarial science. Appointed actuary of the Alliance Company, under its deed of settlement, he became, both in virtue of his position and through his high connections, its chief manager, doing his work to the satisfaction of the directors. Mr. Benjamin Gompertz, however, aimed to be nothing more than a man of science, his ambition being to

302 REPEAL OF THE COMPANIES' MONOPOLY.

make the best actuarial investigations, and not to do the largest amount of business. Thus it came to pass that in 1840, when the Alliance Marine Insurance Company had been sixteen years in existence, paying at first five, and afterwards six per cent. per annum to the shareholders— dividends naturally unsatisfactory to magnates such as the Rothschilds and the Montefiores-the directors came to the conclusion that they did not require five millions sterling for carrying on their business, and they wisely reduced the capital to one million. It proved fully sufficient. Contrary to all the evil anticipations and fears of the underwriters, neither the Alliance Company, nor any other, ruined Lloyd's.

HE energetic and almost violent resistance made by the private underwriters to the repeal of the act of 1720, based on the generally expressed fear that the unrestricted establishment of companies would lead to the ruin of Lloyd's, was found to have been needless before many years were gone. As often happens in similar cases, when old interests are threatened by new powers, which appear the more redoubtable from being undeveloped, looming forth, as it were, in mere shadowy outlines on the horizon, the members of Lloyd's as much underrated their own strength as they exaggerated that of their supposed adversaries. A very short time sufficed to show that the new companies formed after the repeal act of 1824 not only did not, and what was equally certain could not, ruin the importance of Lloyd's as the great centre of marine insurance, but that even they withdrew no appreciable amount of business from the "Coffee-house," their transactions lying mainly within spheres which they themselves created. To a great extent, the new companies which succeeded owed their success to being mutual insurance societies.