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charged by the underwriters; it was natural that it should be adopted here. If 100 persons died each year out of the 2,000 members, £100 each would be secured. If a larger number of deaths, a smaller sum; if a smaller number of deaths, a larger sum. element of certainty was still wanting.
It has been said that Sir Thomas Aleyn had gained certain notions of the chances of human life from a study of the weekly bills of mort. He had seen by these little blackbordered sheets, issued every Thursday morning, by the Hon. the Co. of Parish Clerks, that about one in every 20 of the estimated pop. of Lond. died ann., and that upon this pivot of knowledge the So. was founded. We suspect, however, this may have been an after-thought, invented or suggested with a view to elevate it a little above the speculative asso. of the period.
The method of selecting lives appears to have been orig. that the persons proposing appeared personally before the court of directors, each director having the privilege of putting any questions he pleased to the applicant for admission, and on his withdrawing to pronounce their opinions, seriatim, as to the eligibility or otherwise of the proposed insurer. There was no formal medical examination. All persons coming within the rules of the So., and appearing in a good state of health, were eligible as members. At a later period of the century all persons applying for membership were required to give, in writing, their names, places of abode, professions, and ages; and such applicants could not be admitted members if they were in the army or navy, or likely to reside in foreign parts, or of dangerous occupations.
The charter authorized the commencement of bus. as from the 25th March, 1706. The number of subs, in that year was 875, of whom 29 died. The share of div. for each was £30 25. 9d. £875 only being divided. In the 2nd year the number of members was the full 2,000, of whom 96 died. The sum divided was £4,000, each share being £41 135. 4d. In the 3rd year, out of 2,000 members, 122 died. £6,000 was divided, each share realizing £50 35. 6d. In the 4th year 87 members died; £8,000 was divided, each share being £91 19s. old. At that time the capital stock of the So. had reached £25,000. In the 5th and subsequent years £10,000 was divided; but we find no return of the number of deaths.
It would appear that the charter given to this So. was regarded by it as a sort of monopoly; for in 1707 or 1708, on some other persons endeavouring to obtain a charter for the ins. of lives, this So. was heard by counsel against the same, and the granting of their charter was stopped at the Great Seal.
Hatton, in his New View of Lond., pub. 1708, speaking of the ins. asso. says:
A third is the Amicable So., or Perpetual Assu., whose office is kept against St. Dunstan's Church, in Fleet Street, settled by patent July anno. 1706, who for 5s. entrance, 5s. into the joint stock, 1s. for the stamp, 111s. p. quarter, do divide among the claimants at the end of every year, at the 25th March, thus: £2000 the first year, £4000 the second, £6000 the third, £8000 the fourth, £10,000 the fifth year, and at least £10,000 ann. ever afterward (the So. to consist of 2000 persons, none to be admitted under 12 nor above 55), and the remainder of the yearly payments to be improved for the benefit of the So.
In 1710 there was pub. : The Charter of the Corp. of the Amicable So. for a Perpetual Assu. Office, together with the bye-laws thereunto belonging; also an account of the numbers that have died in each year, and the sum of the yearly dividends that have been paid.
In 1711 it was announced in the public papers that several policies of ins. out of Mr. Hartley's office were to be sold, Enquire at the Cheshire Cheeze, in Flower de Luce Court, Fleet St."
In a prospectus for another perpetual ins. office, issued in 1712, is the following: "An instance of Her Majesty's favour to incorp. a number of persons, when it is not against the laws of the nation, but for the public good, is that of Mr. Hartley's office, which is proved to be for a general good, and is settled upon a solid foundation."
It will be seen that Mr. Hartley's name was very prominently associated with the So. He had been its acting manager from the beginning, and was named in the charter. It now becomes necessary, as part of the hist. of the So. itself, to give some details concerning him.
Mr. Hartley's salary, under the charter, was settled for 14 years certain, and as many years after as he should live, at £500 p.a. He was to be allowed for two clerks £100 p.a. ; for a messenger, £26 p.a.; and for house-rent, coals, and candles, £40 p.a., making in all £466 p.a. During the earlier years of the So. one of his clerks made some embezzlements amounting in all to £1,700 and upwards. Mr. Hartley “felt bound to make good this amount." He did so by selling to the So. £250 p.a. of his own salary, so that thereafter he received but £50 p.a. for his personal services. This was considered a very honourable proceeding on the part of Mr. Hartley; but unfortunately his next financial act cannot be regarded quite in the same light, and it almost looks as if he had become too honest to remain honest. In May, 1713—but we had better quote from a document pub. under authority:
When the money was got together to pay the claims of the preceding year, and lodged in the hands of the then treasurer [Mr. Hartley] for that purpose, he withdrew himself with a very considerable sum of money, which for a time brought some disrepute upon the So., and involved the So. in great troubles and difficulties. Note. The ballance of cash in his hands on the 29th of April, as afterwards appeared when the books were made up, was £4968 175. 11d., which together with what he received
after that time, and before he withdrew himself, and with tickets in lottery 1710, and lottery 1712, which he sold, amounted to £6500 and upwards. Upon which (continues the report) the treasurer and his securities were prosecuted at law, until at a general court held 13th Nov. last, they offered £4000 by way of composition, and the general court agreed to accept it and some other matters in full. [Note, the £4000 was paid and laid out for the benefit of the So.] And though this has been the greatest less that ever befel the So.; yet 'tis hoped that the great care which has since been taken to estab. a better way of management than was known before, will in great measure compensate that loss.
The document which we quote then attempts at some length to justify the directors in the trust they had placed in Hartley, and which he so sadly abused.
It is proverbial that misfortunes never come singly, and so we again quote from a document of the period :
Another misfortune which befel this corp. about the same time was, that one Wall, who pretended himself to be a very great accountant, and was taken in at first to review the state of the charge against Mr. Hartley, as the same had been made out by the auditors; and who after he had spent a year in the accounts agreed with the auditors in such their charge within a very trifle, and was afterwards continued in the said office under the title of accountant, and a salary of £50 a year was allow'd him; and being in the office, took upon him to fill up receipts for contributions and embezzled the money; but was soon detected and turned away, and will be prosecuted if there be any hopes of getting anything from him. Note. The loss by Wall is about £300.
But, say the managers, notwithstanding all these seeming difficulties which have justly occasioned differences, distrusts, and jealousies among the members of the corporation; the So. is now fix'd on a better foot than ever, and it is hoped will on examination be found to be the best of the kind now known.
In 1713 was pub. A True State of the Amicable So. at the corner of Dean St., Fetter Lane; with reasons for altering the Government of, and estab. that So. on a solid and sure foundation. This pamphlet was pub. by an outside hand, and we have discovered the reasons for his proceeding. We had better give these in the terse phaseology of the period : In August last a person who called himself Proprietor, proposed to the directors a scheme or project, which he pretended would be of very great advantage to the Society, and insisted to have £500 down and £250 p.a. for such his project, if made use of; but on perusing the same, no advantage appeared but to himself, whereupon it was utterly rejected as useless and insignificant, and so far from being worth such an exorbitant reward, that it was not worth the least notice, which is the reason the directors have saved themselves the trouble of exposing him and his fallacious project, he having sufficiently exposed himself thereby.
And as to the airy satisfaction which this famous projector buoys himself up with of getting a new charter, it may be wonder'd what assurance he can have to flatter himself and endeavour to delude others after such a manner. If he would but consider what difficulties the gentlemen concerned in the late office in Raquet Court now labour under on that account, who seem to have as good reasons to hope for the royal favour as any new projector of such a society can have.
The projector must also be told of a charter for ins. on lives, which was passed as far as the Broad Seal, and stop'd there by the late Lord Chancellor Cowper, on hearing this Society's counsel against the same, altho' such charter passed the then Attorney or Solicitor-General, and all other offices.
In the same year (1713) a further bye-law was made as to arrears of the quarterly payments of £1 Is. For non-payment of one quarter, Is. ; two successive quarters, 3s. ; three, 6s.; four, 10s.
In this year also the following notice appeared in the newspapers: "The Corp. of the Amicable So., etc., give notice, that in pursuance of the power given them by their Charter, they will grant annuities to any member not exceeding 50 p.a. on life." This, we suspect, may have been adopted with a view to replenish the exchequer.
We do not discover precisely the nature of the scheme referred to in the “True State, etc." But in the Courant of 19th Feb., 1714, we find the following:
Whereas a scheme was lately proposed to the Corp. of the Amicable So., not only to lessen but to take off their yearly payments of £6 4s. in 7 years. The same proving contrary to their charter could not be made use of, altho' great advantages would have been had thereby; and therefore several members of that So. have encouraged the proprietor to make a new so. of the same number according to the said scheme, which divides £10,000 yearly, or £100 on the death of a nominee. A subs. is to pay 5. entrance, £4 p.a. for 7 years, and a yearly rebate of £4 on every policy, to be deducted when a claim is received. The So. is to commence the 10th June next, and a book for subs. will be opened the roth March, at Owen's coffee-house at Simond's Inn, Chancery-lane.
The directors of the So. replied in the Post-Boy of 18th March following, thus: Whereas it has been lately insinuated in several advts. in the Postman, that a scheme hath been proposed to the Amicable So., the corner of Dean St. in Fetter Lane, but not made use of as being contrary to their charter; the directors of the said So. do hereby certify, that there are several very material objections to the said scheme, that the premium of £500 to be paid the proprietor according to his proposal, and the £250 p.a. demanded by him for a project which would have increased the charge of the So. and lessened the dividends to the members thereof: Wherefore they did not think fit to make any report in favour of the said scheme at any general court of the said corp. And although printed proposals relating to the said scheme were with great industry distributed to many of the members of the said So., and two general courts of the said corp. held within a month after the distribution of such proposals, yet no person thought fit to offer anything in favour of the said scheme or the proprietor thereof at either of the said courts.
N.B.-The Amicable So. by its charter is to divide £10,000 per ann., but the proprietor by his scheme proposes much less for several years, and though he speaks of £6 4s. p.a. as a large contribution, yet by his scheme the members are to contribute £8 4s. yearly, whereas the payments in the Amicable So. will be reduced to £4 4s. p.a. at Lady-day.
Beware of societies without a charter; remember that of Racquet Court.
The agitation in the affairs of the Society still continued; and in the Courant of 14th May, same year, we find the following:
Whereas it has been several times adv. in the Postman that a true state of the Amicable So., the corner of Dean Street, Fetter Lane, was printed and sold by N. Crouch, in the Poultry. To prevent
any persons being imposed on by the said advt., the directors of the said Amicable So. do hereby give notice, that the account contained in the said state is false, and the proposal therein mentioned impracticable, as will appear by a true account, state, and condition of the said So., printed by order of the Court of Directors, and to be had gratis at their office, the corner of Dean Street, Fetter Lane. And all persons who are entitled to any claims on the said So. for the year 1713, are desired to take notice, that attendance will be given by the directors, at their office, every Wednesday, etc., etc., pursuant to a bye-law on that behalf.
Here is the document referred to in the preceding, compiled by Thomas Hodgson, the new registrar of the So. (appointed 1713): An account of the State and Condition of the Corp. and of the joint-stock of the So. as it stood upon the account thereof, made up by the auditors, and brought down to Lady-day, 1714, inclusive; wherein it is stated (for we can give only an extract):
It must be admitted that several persons have thought fit to discontinue their payments and suffer themselves to be excluded either by misfortunes in the world, or because they thought their member lived too long: or otherwise some have suffered exclusions for want of putting in new lives after they have received their claims; and others because the directors would not be imposed upon by bad lives or for that they thought it difficult to get a fit person to appear at the Board of Directors in order to be admitted; and that by these means 137 of the 2000 policies have fallen into the Society's own hands: But then the directors have from time to time admitted new lives thereon for the benefit of the So., after such exclusions were compleated. And in 1712 the So. had two claims, and in 1713 four claims on account of such policies, besides the benefit of the contributions towards the joint stock so long as the excluded members continued to pay their quarteridges; however, the corp. will subsist better by the contributions of others than by contributing to its own joint stock; and the directors taking the same into their consideration, have by the advice and with the concurrence of the acting auditors, proposed methods for sale of all the Society's own policies, which will bring into the Society near £1000 ready money, besides a reasonable price for the joint stock belonging to each policy, and the annual contributions kept up for the future, as may be seen more at large in the printed scheme which has been distributed to the members of the So.
In April, 1715, the following notice was issued by the So. :
This is to advertise the members of the corp. of the Amicable So, for a Perpetual Assu. Office, that over and above the £10,000 annually paid to claims, there will be divided among the members of the said So. a further sum of £4000 yearly, from Lady-day, 1715, which sum of £4000 arises from the surplus and int. of the stock, and will reduce the yearly payments from £6 4s. to £4 4s. for the future; and as this dividend is directed to be made quarterly, 1000 thereof will be distributed among the members at Midsummer next, 1715.
Thus the promised reduction of the ann. contribution to £4 4s. was realized in a contingent form; the members paid the £6 4s. as previously, and received a quarterly return or abatement.
In 1719 and 1720-South-sea period-when various schemes of ins. were being projected, the managers of this So. were on the alert, and took the precaution to lodge a caveat with the Attorney-General against granting a charter to any new undertaking of this description, without this So. first being heard by counsel against it. Thus, on the occasion of the applications to Parl. by the York Buildings Co., and by Sir James Hallet and others, for charters of incorp. to carry on the bus. of life ins., the So. did appear by counsel, and the charters prayed for were not granted. The affidavit of the registrar on that occasion stated the following facts:
That the members of the corp. of the Amicable So, did begin to act under their said charter in the year 1706, and have continued to act ever since; and the directors for the time being have admitted members, granted policies on lives, and improved their joint stock at int. on Government securities and otherwise, which now amounts to £50,000 or thereabouts; and that the said corp. hath made annual dividends to the claimants of the members of the said corp., who have dyed in each year since the charter was obtained, according to the directions thereof; and that in the year 1710, and ever since the said corp. hath divided £10,000 p.a. amongst the claimants.
In 1721, the bus. of the Brotherly So. (annuities) merged into Amicable.
In 1730 (3 Geo. II.), the So. applied for and obtained an additional charter. Its preamble recites that the members had on sundry occasions found themselves reduced to great inconveniences and difficulties for want of some further powers and authorities. These were now granted, and, briefly stated, were as follows: No member was to vote, except real contributors on his or her own life. Directors may administer oaths relating to the health of proposed members, and to the deaths of members; or relating to lost policies. Claims were to be paid as of the year wherein they shall be allowed. Members, their nominees, executors, etc., five quarters in arrear of subscription, were to be excluded on three months' notice in the Lond. Gazette.
These amendments indicate what had been found to be the weak places of the original plan; and show therefore the improvements which were taking place in the management. It appears that some modification was introduced into the working of the So. in 1734; as a general court then determined that a portion of the ann. income of the So. should be retained with a view to equalizing the amounts payable under the policies, and especially for augmenting the sums whenever the ordinary means of division would yield an amount less than £100. It was one of the defects in the orig. scheme that there was no certainty in operations of the So. as to the amount which would be received on the death of a member.
In 1737 all bye-laws, except that of 1713, were repealed, and a fresh series enacted, of which the following are the chief:
No person to be admitted a member under age of 12 or over 45, except in the exchange of policies; and no member to be admitted at all except with the approbation and consent of 7 directors in court assembled.
Persons living within 15 miles of London seeking membership to appear before board personally, and take oath of being in a good state of health, and having been so for six months preceding, except that the court might nominate a person publickly known..
Persons resident more than 15 miles from Lond. might be admitted on certificates from minister and churchwardens as to health, age, business, or occupation of proposed, and that he was a householder paying scot and lot.
Members five quarters in arrear to be pub. in London Gazette. Annual dividends not to be paid until 3 months after death. Blank numbers were to be subject to forfeitures and exclusions in the same manner as filled-up policies. Claimants to allow out of each claim £6 145., or assign blank numbers to the So.
Proof of death to be furnished by means of affidavit and certificate, within 40 days after Lady-day each year. In case of members dying beyond the sea, claimants to give security to the corp.
In the case of claims coming due to infants, guardians to give security.-Under certain conditions members might have double and treble policies.-Lives in policies might be exchanged with consent of directors. In case of lost policies, new ones might be issued on security being given for at least £200 on each number.-Claims under lost policies to stand over one year.
No excluded policy to be disposed of or filled up for the benefit of the corp. but by the consent and approbation of two successive general courts.
Register to be kept of all purchases and securities. Also a register of assignments from and after 25th March, 1733
No part of the capital stock to be divided except with approbation of two successive general courts, except for dividends on claims.
That no more than £1 125. p.a. be paid to each contributor or member on each number out of the profits of the corp.
That four general courts at least be held every year. Registrar to give security for £2000. Directors to be disqualified if Registrar embezzle more than he gives security for. Money might be lent in advance of claims, on bond carrying int.
The bye-laws were 36 in number, and the preceding abstract of them is very brief. There are one or two which deserve more especial notice. Thus No. 2 reads as follows:
That no person be admitted a member of this corp. who shall live in Lond. or within 15 miles thereof, that doth not appear in person before the court of directors, and there voluntarily make oath: "That he or she is in a good state of health, and hath no distemper, which, according to the best of his or her knowledge, judgment, or belief, may tend to the shortening of his or her days: Except in a case where a list containing not less than seven housekeepers living near each other, or other noted persons living within the bills of mort., shall be proposed to the court of directors for the choice of one: "Except also where it shall be left to the court of directors themselves to nominate a proper person.
And No. 20 shows that the meetings of the So. were regarded as of a strictly private character:
That upon every general court day, the messenger of this corp. shall attend at the door of such place where the court shall be held, from the time of opening the same till the court shall be adjourned; and shall take effectual care that no person be suffered to come into the said court, who has not a power to vote in this Corp.
In 1736 there was pub.: A Short Account of the Rise and Present State of the Amicable So. for a Perpetual Assu. Office, together with the Manner, Terms, and Advantages of their Insurances on Lives.
Maitland, the historian, writing of the So. about this period (1739), says:
It was resolved that of the ann. subs. of £6 4s., the sum of £5 only should be carried into account for annnal division. The bal. was to be improved by granting annuities upon the lives of their own members. By which and other good management the So. have a stock of near £30,000; whereby they are not only enabled to defray all the expences of the So., but likewise to reduce the ann. payment of the members to £5 each; and beside this the So. divide about £700 p.a. or so much thereof as shall be requir'd (when the dividend by a great mort. does not amount to £100 on each claim) to pay each claimant 100," whereby all reductions are effectually prevented, and the Corp. kept in a flourishing condition."
In the report issued by the So. in the year 1749, it is stated (inter alia) that: the good intended by the So. on its formation has been steadily pursued, and the So. found to be a common benefit to mankind. This would evidently appear from a statement of the yearly dividends; from Lady-day, 1710, to Lady-day, 1749, being thirty-nine dividends successively, amounting to the sum of £277, 104 and upwards, on 2,967 claims, so that upon an average the amount of each claim had not been less than £93 35. 7d.; but they have been considerably more for the fifteen years last past, in consequence of the altered plan of 1734.
In 1757 the accumulated fund of the So. had become reduced to £25,300-about half the amount it stood at in 1720-and it seemed that the So. was suffering in its popularity by reason of the uncertainty attending the sum to be received on the death of a member or nominee. A general court of the members took the subject under consideration, and resolved that each share should not produce less than £125 to the representatives of a deceased member, although it might produce more than that sum. Thus the element of certainty was first introduced.
By 1770 the accumulated fund had reached the sum of £33,300; and there was then set apart by order of a general court the sum of £4000 consols and £11,000 reduced, together with all future savings arising from the sale of blank numbers and otherwise, as a fund for augmenting the shares of deceased members to the full sum of £150, whenever they might fall short of that sum under the dividend directed by the charter. The effect of this alteration was for several years to increase the number of members, and therefore the amount to be divided in those years. This will appear from the following table :
Table of sums realized per share to the members of the Amicable dying in the following
Some of these recent changes in the plan of the So. were doubtless due to the circumstance of the founding of the Equitable Life in 1762. In comparison with the scheme of that So., the orig. scheme of the Amicable appeared particularly crude and unsatisfactory. It was about this time that the subs. was reduced to an actual cash payment of £5 per share.
The So. now issued a prospectus, a modification of its earlier one, which shows that Life Ins. even yet had hardly come to be regarded so much as a means of making provision for a family, as for temporary business purposes. The advantages (it says) proposed for members of this So. are principally as follows:
To clergymen, physicians, surgeons, lawyers, tradesmen, and particularly persons possessed of place or employments for life [PLACES FOR LIFE], whose incomes are subject to be determined or diminished at their respective deaths, who by insuring their lives, by means of this So., may now leave to their families a claim or right to receive £150 at least for every £5 annually paid in, and many times a larger sum, as appears by the preceding account. To married persons, more especially where a jointure, pension, or annuity depends on both or either of their lives, by ins, the life of the persons entitled to such annuity, pension, or jointure. To dependents upon any other person entitled to a salary, benefaction, or other means of subsistence, during the life of such person, whose life being ins. in this So., either by themselves, or upon the person on whom they are dependent, will entitle them to receive, upon the death of such person, a claim or claims as before mentioned. To persons wanting to borrow money, who by ins. their lives, are enabled to give a collateral security for the money borrowed. To creditors entitled to demands larger than their debtors are able to discharge, may by a like insurance upon the life of the debtor, secure to themselves the principal sums at the death of the debtor. The above-mentioned advantages are offered chiefly with respect to perpetual ins. of life; but temporary ins. may find no less advantages from this So., as may plainly appear from the following instance.
Some examples are then given :
A.B. has agreed for the purchase of an office or employment, but wants £300 or £400 to make up the purchase-money. He is willing to assign a share of the profits or income of his office as a security or pledge for the repayment of the principal with interest, but cannot obtain a loan of that sum without insuring his life till the whole is repaid, which he is enabled to do by the help of this So. He purchases three blanks or vacant numbers, on each of which he ins. his life, and thereby his assigns become entitled to their several claims at his death, which claims will probably not be less than £150 each, and may amount to more. He assigns and deposits his policies with the lender. He pays to the So. beyond the admission money, for the yearly contributions on the three numbers, no more than £15, which is at the rate of £3 6s. 8d. p.c., and the terms easier than any other offices do insure at, who insure for one year only, and after that are at liberty to refuse any further assistance. Whereas in the Amicable the ins. continues till exclusion for the non-payment of the quarterly contributions.
Dr. Price pub. his Observations on Reversionary Payments, etc., in 1762. The 3rd ed. thereof appeared in 1773, and therein, speaking of the Amicable, he says:
This So. was estab. in 1706, and is the only one I am acquainted with which has stood any considerable trial from time and experience. The ann. payment of each member used to be £6 4s. payable quarterly; but it has lately been reduced to £5. The whole ann. income hence arising is equally divided among the nominees or heirs of such members as die every year; and this renders the dividends among the nominees in different years more or less according to the number of members who have happened to die in those years. But the So. now engages that the div. shall not be less than £150 to each claimant, although they may be more. None are admitted whose ages are greater than 45, or less than 12; nor is there any difference of contribution allowed on account of difference of age.
This So. has, I doubt not, been very useful to the public; and its plan is such that it cannot well fail to continue to be so. It might, however, certainly have been much more useful, had it gone from the first on a different plan. It is obvious that regulating the dividends among the nominees by the number of members who die every year is not equitable; because it makes the benefit which a member is to receive to depend not on the value of his contribution, but on a contingency; that is, the number of members that shall happen to die the same year with him. This regulation must also have been disadvantageous to the So.
At the time of the institution of the Amicable Corp. the int. of money was at 6 p.c., and as they admit all between 12 and 45, the mean age of admission cannot prob. be so great as 36. It appears therefore that had they avoided the error now mentioned, and gone from the first on the plan I have described, they might have all along paid to each nominee £172, besides raising a cap. much greater in proportion to the number of members than that I have specified, by the help of the excess of their ann. payments above £5, and some other advantages they have enjoyed. Indeed, I cannot doubt but that with these advantages they might before this time have found themselves able to pay at least £200 to each nominee, and at the same time restricted themselves, as they now do, to an ann. payment of £5. I have already mentioned an instance in which the plan of this So. is not equitable. Another instance of this is their requiring the same payments from all persons under 45, without regard to the difference of their ages: whereas the ann. payments of a person admitted at 45, ought to be double the ann. payments of a person admitted at 12.
Further. The plan of this So. is so narrow, as to confine its usefulness too much. It can be of no service to any person whose age exceeds 45. It is likewise far from being properly adapted to the circumstances of persons who want to make assu. on their lives for only short terms of years.
He goes on to state that all these objections were removed by the plan of the Equitable. The So. had divided from its foundation until 1774 the sum of £425,060 14s. 4ld.