*** 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 ***

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