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No. 5
PANAMA-PACIFIC EXPOSITION .
MEMORIAL PUBIvICATlONS OF THE PRUDENTIAI.
INSURANCE COMPANY OF AMERICA
,THE DOCUMENTARY
HISTORY OF INSURANCE
looo B.C. — 1875 A.D.
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PRUDENTIAIv PRESS. NEWARK, NEW JERSEY /
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PREFACE
A comprehensive historical account of insurance would make an
important and useful contribution to knowledge. Insurance within
the past generation has assumed a position of enormous social and
economic importance. As an element of commerce, insurance in all
its branches has become indispensable. As a factor in human progress,
insurance ranks foremost as a means of providing the required security
against the inherent uncertainties of human life. The historical
documents of insurance are evidence of its gradual development from
primitive origins to a high degree of modern perfection in matters
of detail. No branch of historical research is likely to prove of
greater practical value than insurance. Every other social or eco-
nomic institution is more or less related to its development. The place
of insurance in the Law Merchant is well established by indisputable,
though more or less fragmentary, documentary evidences. Research
in this direction should bring to light much valuable information,
useful not only to students of insurance, but also to those interested in
the historical development of coinmerce and navigation. The evolu-
tion of the fundamental principle of contributionship, which underlies
all insurance, can be traced by an almost unbroken record from the
Rhodian Sea Law, which dates from about 1000 B. C. The pres-
ent effort is limited to a brief presentation of the salient facts
of the history of this great institution from the earliest times
to the establishment of Industrial insurance in America, in 1875.
Within the unavoidable limitations of space it has not been feasible
to do more than visualize the most interesting documentary evidences
of insurance progress, with a due regard to the preeminent importance
of the life insurance branch of the business, which in its totality has
become universal and all-comprehensive throughout the civilized
world. The forty charts shown on this occasion exhibit either the
original documentary evidence of insurance methods or facsimile
reproductions of original documents. It would obviously not have
been feasible to have exhibited the original works on insurance
in the library of The Prudential, many of which, if lost, could
not be replaced. In a number of cases, however, original documents
are shown and in some cases rare illustrations, which have probably
never before been made public. The following brief descriptive ac-
count refers to the forty charts, shown in five cases under glass for
the proper protection of the exhibits.
The Prudential Insurance Company of America
Home Office, Newark, N. J.
ENGLISH TRANSLATION OF THE EARLIEST KNOWN
CONTRACT OF INSURANCE*
In the name of God, Amen. I, Georgius Lecavellum,
citizen of Genoa, acknowledge to you, Bartholomeus
Bassus, son of Bartholomeus, that I have received and
accepted from you in Genoa, one hundred and seven
pounds (of silver) as a free and friendly loan. I renounce
every advantage in law of requiring proof of having ac-
quired, accepted or counted said money. These one
hundred and seven pounds, in Genoa, or its equivalent in
money, I agree and promise in solemn covenant to return
and restore to you or your acknowledged messenger by
myself or my representative.
Being well preserved and sound in mind, that if your
ship, called the Santa Clara, which is now being prepared
in the port of Genoa, God willing, to go and sail presently
to Majorca, shall have gone and sailed, having been navi-
gated by direct route from the port of Genoa to Majorca,
shall have arrived at that place safe and sound before the
expiration of the next six months coming, then in that
case the present instrument is null and void as if it had
not been made. I personally assume all the risk and re-
sponsibility for said amount of money until said boat
shall have arrived at Majorca, being navigated by direct
route as above. And also if said boat shall be safe and
sound in some other place, before said six months, the
present instrument is likewise null and void as if it had
not been made. And likewise if said boat shall have
changed its course said instrument is null and void and
as if it had not been made.
In said manner and under said conditions I promise to
make said settlement, otherwise I promise to you to pay
and incur the penalty of double the stipulated amount
of said money together with restitution of damages and
expenses which may arise on that account or be sustained
in litigation, the aforesaid remaining secure under the
pledge and security of my property, goods and possessions.
Made in Genoa, in a room in the house of Carlus and
Bonifacus brothers of Ususmares, in the year from the
birth of our Lord 1347, following the custom in Genoa, on
the 23d. day October about eventide.
Witnesses Nicolaus of Tacius, draper, and Johannes of
Rachus son of Bonanatus a citizen of Genoa.
•Chart No. 206.
Chart No. 201
THE ISI.AND OF RHODES, B. C. 1000*
The Rhodian Sea Law and the Principle of Contribution
The Rhodian Sea Law, of which the original text, in part, has been
preserved and made accessible in the great work of Ashburner, in 1909,
provided, according to the English text, that "If a ship is caught in a
storm and makes jettison of its cargo, and breaks its sailyards and mast
and tillers and anchors and rudders, let all these come into contribu-
tion together with the value of the ship and of the goods which are
saved." This fundamental principle of contribution underlies all in-
surance. As pointed out in the classical report of the first Committee
on Friendly Societies (1825), "Wherever there is a contingency, the
cheapest way of providing against it is by uniting with others, so
that each man may subject himself to a small deprivation in order
that no man may be subjected to a great loss." The Rhodian Sea Law
is the most ancient principle governing commerce by sea which has
been preserved and the law was in its time of such superior excel-
lence that it was engrafted by the Romans into the Justinian Code,
A. D. 533. According to the English text, "The Rhodian law provides,
that, if goods are thrown overboard in order to lighten the ship, what
is sacrificed for the common benefit should be made good by a common
contribution." The Rhodian Sea Law was first quoted in an
American Admiralty Decision of 1795, in the case of Thompson,
Jacobson and others vs. the Ship Catherina, and thus made to
apply as a ruling principle in American admiralty law, which may
be said to govern the construction of all marine contracts of the
present day. In addition to the Greek and Latin texts of the
Rhodian Sea Law, the chart shows a map of the Island of Rhodes
and a reproduction of the harbor, after the painting by Turner.
Chart No. 202
THE ROMAN EMPIRE, A. D. 133
Burial Society {Collegium Cultorum Dianae et Antinoi), Lanuvium
In 1816 in an excavation near Rome a tablet was found in the ruins of
the Temple of Antinous which contains in their entirety the rules of
*The date 1000 B, C. is only approximate. Some authorities place the earliest references to the
Rhodian Sea Law at 900 B. C; others at a later period. The term is used either in the sing-
ular or the plural. The Sea Law was first published in 1561. There are six chapters in the Sea Law
which deal with maritime loans. Loans of this character "often resemble an ordinary loan upon a
contingency." The principles of average, jettison, and contribution were thoroughly well understood
in ancient times, and they all find expression in the Rhodian Sea Law. According to Ashburner,
"There is no question here of a sacrifice for the common safety. It is only necessary that a loss shall
occur in the course of the maritime adventure for which neither the owner of the property lost nor
any other partaker in the maritime adventure can be held responsible. The result of the principle is
that, by entering into the maritime adventure, you insul e to a certain extent the ship on which you
sail and the goods of your co-adventurers, while on the other hand you are insured to the same extent
by the owners of ship and the other goods on board." This properly constitutes the fundamental
principle of all insurance.
5
a burial society, as it now would be called, or, in the lyatin, a collegium,
which appears to have combined social and economic functions on the
principle of a stated contribution, primarily for the purpose of pro-
viding for the decent and ceremonial burial of the dead. The chart
shows, first, the original lyatin inscription as derived from the work
by Mommsen* and, second, the English translation as given by Lam-
bert in "Two Thousand Years of Gild Life." The chart also exhibits
a map of the vicinity of Rome, indicating the location of Lanuvium,
and a photographic reproduction of a sketch of a temple of the period,
together with a portrait of the Emperor Hadrian, during whose reign,
in the year 133 A. D., the society or gild seems to have been estab-
lished. The great historical importance of this document consists
in the evidence that at this early period the economic necessity of a
mutual aid society was clearly recognized, for the gild at Lanuvium
was but one of many typical of this period of the Roman Empire.
Some of the rules of the gild of Lanuvium conform quite closely to
the regulations of the English gilds of the 13th and 14th centuries,
which, though derived from preexisting Anglo-Saxon institutions,
may quite probably have in part had their origin in these ancient
Roman institutions, which may have been brought to England dur-
ing the period of the Roman invasion. f
Chart No. 203
ROMAN EMPIRE, A. D. 220
Roman Life Table for the Calculation of Annuities and Perpetuities
In a letter addressed to the late Sheppard Homans, a well-known
actuary of his time. Justice J. P. Bradley, of the United States Su-
preme Court, and at one time the actuary of the Mutual Benefit Life
Insurance Company, contributed a brief historical account of a
Roman Life Table derived from the Justinian Pandects, attributed to
Ulpian, a great lawyer of the period and himself one of the most
eminent commentators on the Justinian Code. It is not known upon
what basis this table was constructed, but it conforms in a general
way to the observed law of human decrement with increasing age.
The chart shows the Ulpian Life Table, as expressed in Years Purchase
as given in an article by Hendriks, contributed to the Journal of
the Institute of Actuaries in 1851, together with an outline of the
*Mommsen: "Sodales legem quam volent, dum ne quid expublica lege comirapant, sibi serunto."
fFor suggestive references to the Anglo-Saxon gilds, see "The History of Crime in England," by
L. Owen Pike, London, 1873, Vol. I, pp. 23 et seq. Also, "The History of the Anglo-Saxons," by Sharon
Turner, Philadelphia, 1841, Vol. II, ch. 10, and, with special reference to burial ceremonies, ch. 14,
Two additional works of great value m this' connection are a brief treatise on "The History and Develop-
ment of Gilds," by Lujo Brentano, London, 1870, and the reprint of the original ordinances of more than
one hundred early English gilds in the publications of the Early English Text Society, 1870, reprinted
in 1892. (This volume also includes the essay by Brentano.) A brief but interesting discussion of
Anglo-Saxon gilds occurs in the "Anglo-Saxon Home," by John Thrupp, London, 1862, pp. 160 et seq.
Expectation of L,ife at the time of the Roman Kmpire, compared with
the corresponding Expectation of Life for England and Wales for the
decade ending with 1900. The chart also exhibits a reproduction of
the text of Justice Bradley's letter and a brief supplementary note to
the effect that "Ulpian's Table was officially authorized for the valua-
tion of life annuities by the Tuscan Government in an Act passed
under date of December 30, 1814. The table constructed by him
was the most accurate and useful in existence until the close of the
17th century. It is the first known measure of life annuity values,
graduated with reference to age."
Chart No. 204
LAWS OF OLERON AND WISBUY, A. D. 1266-1798
Compulsory Sickness Provision for Mariners
These ancient sea laws established the principle of care and protection
of seamen in sickness and distress. The Laws of Oleron, which is a
small island off the coast of France, were first published in 1542, but
they apparently date back to the early part of the 13th century. The
Sea Laws of Wisbuy, which is an ancient town on the Island of Goth-
land, in the Baltic Sea, date back approximately to the year 1288.
Some writers- hold that they were more ancient than the Laws of
Oleron. The first definite reference to insurance appears in Article
LXVI in the Laws of Wisbuy, which reads that "If the merchant
obliges the master to insure the ship, the merchant shall be obliged to
insure the master's life against the hazards of the sea." "Here," in
the words of Parsons, in his treatise on Maritime Law, "is a distinct
recognition of the contract of insurance; and in terms which imply
that it was familiarly known to mercantile persons." Article VII of
the Laws of Oleron provided that "If it happens that sickness seizes
on any one of the mariners, while in the service of the ship, the master
ought to set him ashore, to provide lodging and candlelight for him,
and also to spare him one of the ship-boys, or hire a woman to attend
him, and likewise to afford him such diet as is usual in the ship ; that is
to say, so much as he had on shipboard in his health, and nothing more,
unless it please the master to allow it him; and if he will have better
diet, the master shall not be bound to provide it for him, unless it be at
the mariner's own cost and charges;" etc. The same provision occurs
in other sea laws, including the Laws of Wisbuy, the Hanseatic Laws,
the Sea Laws of the Low Countries, etc. It was thus that the compul-
sory sickness provision for seamen became the universal rule of mari-
time nations, and acting upon this principle, the United States Con-
gress in 1798 established the United States Marine Hospital Service
on the basis of compulsory deductions from seamen's wages *
*Most of the ancient sea laws were reprinted in the treatise by Magens, first published in German,
Hamburg, 1753, and subsequently in English, London. 1755. An excellent work of reference on the law
Chart No. 205
ENGI.AND, A. D. 1283-1385
Gild Ordinances Regarding Burial and Support of the Poor
The Gilds of the Middle Ages, as one of their functions, provided as a
rule for the decent burial of their members and adequate support in
sickness or poverty. Many original Gild ordinances have been pre-
served and have been reprinted in the publications of the Early English
Text Society, with an introduction by the late Toulmin Smith. The
chart gives brief extracts from these ordinances, covering the period
1283-1385, but all typical of the time. The extracts are derived
from the article on Gilds in Walford's Cyclopaedia of Insurance. The
Gilds were among the most ancient social institutions, and even in
China they typify the spirit of Chinese philanthropy as the equivalent
of applied doctrines of mutual aid. The Gilds, together with the
monasteries, secret fraternities and hospitals under ecclesiastical ad-
ministration, were abolished by Henry VIII in the year 1545, and their
funds and possessions were confiscated by the state.*
Chart No. 206
ITALY, A. D. 1347
The Earliest Known Contract of Insurance^
The reproduction of this contract is derived from an early translation
of an ItaUan treatise on commerce based entirely on original documents
discovered in the archives of Pisa. The carefully framed phraseology
of the contract, dating from the middle of the 14th century, suggests
that the practice of insurance by that time had become practically
universal with the maritime nations of the period. The chart exhibits
both the original Latin and the English translation of the text.
of maritime commerce was published by James Reddie (London, 1S41), but the most useful source of
information is the elaborate work of Pardessus, entitled "Collection des Lois Maritimes," a copy of
which treatise, in seven volumes, is in the law library of The Prudential. The laws of Oleron were re-
printed in the Black Book of the Admiralty, London, 1871, of which a copy is in the New York public
library. The title page in the chart has been derived from this work. The laws of the United States
for the government and regulation of seamen in the merchant service relating to this period, and the
provision for compulsory insurance, are contained in the Appendix to the first volume of Peters' Ad-
miralty Decisions, Philadelphia, 1807.
*See in this connection "The Gilds of China," by H. B. Morse, London, 1909, "Die Gilden in den
Holsteinischen Elbmarschen mit Besonderer Beriicksichtigung des Versicherungswesens," an inaugural
dissertation by Julius Kahler, Itzehoe, 1904, and the "English Craft Gilds and the Government," by
Stella Kramer, New York, 1905. The most recent discussion of the Gild system and its particular
relation to the development of life insurance is to be found in "An Introduction to the History of Life
Assurance," by Fingland Jack, London, 1912.
fThis contract is printed in full in the original Italian, together with other important documents, in
the chapter on Sales and Contracts of "An Essay on the Early History of the Law Merchant," by W.
Mitchell, B. A., Cambridge, 1904. For English translation see page 4 of this publication.
Chart No. 207
ITALY, A. D. 1523
Government Supervision of Insurance
The development of marine insurance during the early part of the 16th
century attained to such proportions that a more or less drastic form
of government regulation of insurance practices became necessary.
One of the earliest laws is the Ordinance of Florence, which was then
one of the leading commercial powers, dated January 28, 1523. On
account of its length, it has not been feasible to reproduce the original
ordinance in its entirety, but the chart gives, first, the English transla-
tion of a section, as derived from the classical work of Magens, second,
a portion of the original Latin and an early German translation of
the same, and, third, in English, a copy of the form of policy prescribed
by this early ordinance, as a concrete illustiration of the relatively
high degree to which the practice of insurance regulation had devel-
oped by this time.*
Chart No. 208
ENGLAND, A. D. 1547-1686
Early Marine and Fire Insurance Policies
The practice of insurance, in the modern acceptance of the term, had
its origin in Italy, particularly Lombardy and Florence. Through
Italian merchants and navigators the practice of insurance was car-
ried to England, the Low Countries and North Germany. The earliest
existing insurance contract in England bears the date 1547, a large por-
tion of the writing of which is in the Italian language. This poUcy
is known as the "Broke Sea Insurance Policy," dated September 20,
1547, and is reproduced in the Select Pleas in the Court of Admiralty,
published by the Selden Society. The chart exhibits a photographic
reproduction of the original document, made available through the
courtesy of the Honorary Librarian to the Insurance Institute of
Manchester, Mr. William Witt Blackstock. The chart also contains
a facsimile reproduction of the eariiest known EngUsh fire policy, dated
1686, and derived from the same source, in connection with a disserta-
tion on the historical literature of sea and fire insturance in Great
Britain, 1547-1810. The fire policy is of special significance in that
*Aside from the work of Magens, the following are most valuable sources of information regarding
the early history and practice of insurance: "A Complete Digest of the Theory, Laws, and Practice
of Insurance," by John Weskett, Merchant, London, 1781 ; "The Universal Dictionary of Trade and
Commerce," by Savary, translated and revised by Malachy Postlethwayt, London, 1751 (Vol. I) and
1755 (Vol. II); "Lex Mercatoria Rediviva: or, The Merchant's Directory," by Wyndham Beawes
London, 1752. See, also, in this connection, the extended historical introduction on insurance in the
treatise on "The Law and Practice of Marine Insurance," by John Duer, New York, 1845.
it is in printed form, so that obviously at this early date the practice
of fire insurance had attained to considerable proportions.*
Chart No. 209
ENGLAND, A. D. 1S60-1793
The Development of Early Friendly Societies
After the destruction of the Gilds by Henry VIII, numerous small
mutual-aid societies came into existence, chiefly for the purpose of
providing for the decent burial of departed members. The earliest
known of these societies was The Incorporation of Carters, dating
from the year 1560, which, according to Walford, "was probably pre-
viously a Gild, which, losing some of its privileges, reconstituted itself
into an Association in the nature of a Friendly Society." The chart
gives several other typical illustrations of such- societies, down to the
year 1719, and an extract from an Act passed in 1757, providing for a
system of compulsory sickness insurance, limited to laborers employed
in the unloading of vessels, and requiring the compulsory deduction of
two shillings in the pound (sterling) out of the wages earned, which was
considered sufficient to provide for the needs of widows and orphans
of deceased laborers and for the burial of the dead. The first hypoth-
esis of a law of sickness was advanced by Dr. Price in 1789, and
in 1 793 the first regulative Act was passed by Parliament, known as
the Rose Act, for the protection and encouragement of Friendly
Societies in the United Kingdom. The extracts given in the chart
establish the historic continuity of the Friendly Society movement
and the development of these useful institutions out of preexisting
Gilds and Fraternities. All of the extracts reproduced are from
the article on Friendly Societies in Walford' s Insurance Cyclopaedia, f
Chart No. 210
ENGLAND, A. D. 1601
Origin of Government Supervision of Insurance in England
This is an exceptionally interesting chart; including a facsimile repro-
duction of the first Act passed by Parliament for the regulation of in-
*The best account of early fire insurance companies and practice is a treatise by Charles Povey,
compiled by Francis Boyer Relton, late Office Secretary of the Sun Fire Office. London, 1893.
tThere is a mass of historical information regarding Friendly Societies in the reports of the Royal
Commission on Friendly Societies, London, 1870-1874. Among extremely interesting early docu-
ments in the library of The Prudential are the following: "An Appeal to the Public on the General
Utility of Benefit Societies, Instituted by and for the Relief of Their Respective Members," etc.,
London, 1792; "Tables Showing the Amount of Contributions for Providing Relief in Sickness
and Old Age, for Payments at Death, and Endowments for Children, Computed by John Finlaison."
London, 1833; "Report on Friendly or Benefit Societies, exhibiting the Law of Sickness, as Deduced
from Returns by Friendly Societies in Different Parts of Scotland. . . Drawn up by a Committee
of the Highland Society of Scotland," Edinburgh, 1824; "A Proposal for' Improving the System of
Friendly Societies, or, of Poor Assurance Offices," etc., by Jerome Count de Sails, London, 1814. An
exceptionally useful work in connection with the study of Friendly Societies is "The History, Present
Position, and Social Importance of Friendly Societies," by Charles Hardwick, London. 1859.
10
surance through a Court of Assurances. The Act was passed in the
year 1601, or the 43d Elizabeth, which is also memorable as the year
in which the English Poor I^aw came into being. The facsimile is
derived from the survey of Historical I/iterature on Sea and Fire In-
surance in Great Britain, by William Witt Blackstock. The chart
also contains a reproduction of the parliamentary debates in connec-
tion with the bill estabUshing a Court of Assurances, the same hav-
ing been introduced by Sir Francis Bacon, who probably drafted the
bill, which on its second reading was committed to Sir Walter
Raleigh. It has seemed appropriate to reproduce the portraits of
these two distinguished Englishmen, whose names are inseparably
connected with the history of England, and also, as is here shown,
with the history of insurance.*
Chart No. 211
ENGLAND, A. D. 1622-1685
Insurance as an Element of A ncient Commerce
Insurance as an element of the ancient Law Merchant, or Lex Mer-
catoria, appears to have received its first systematic consideration by
an English authority in a work pubhshed in 1622, of which a copy
of the third edition, published in 1685, is the only one available in
this country. The chart shows photographic reproductions of the
more important pages of this work, obtained through the courtesy
of the New York Public Library. The author of the work was Gerard
Malynes, a merchant, who, aside from other matters, discussed in
considerable detail the origin and practice of insurance, attributing
the same to the Roman's and subsequently to the Italians, who brought
the custom first to the knowledge of the inhabitants of Oleron and
later to England, where marine insurance became established among
the merchants, who then met chiefly in Lombard Street. This gave
rise subsequently to the phrase common to all early English and
American marine insurance policies, that the interpretation of the
contract should be in conformity to the practice and usages of
Lombard Street. According to Blackstock, Malynes was a merchant
of considerable reputation at the close of the 16th century and he
attended the Committee on the Insurance Bill of 1601, establishing
the Court of Assurances. This work is of great historical and practi-
cal importance and one of the first publications on insurance.
•For additional information regarding this Court of Assurances see Walford's Insurance Cyclopedia,
article "Chambers of Insurance." Also, Park's System of Marine Insurance, Vol. I, p. xi, and Wam-
baugh, "Cases on Insurance," which gives in full the act establishing the Court of Commissioners.
For a fairly full account see Postlethwayt's "Universal Dictionary of Trade and Commerce," London,
1751 and 1755. and the "Lex MercatoriaRediviva," by Wyndham Beawes, London, 1752. An mteresting
letter with reference to the early practice of insurance, originaUy published m the Post Magazine
and Insurance Monitor, of London, July 25, 1908, has been reprinted in my "Insurance Science
and Economics," New York, 1911, p. 151.
11
Chart No. 212
ITALY AND GERMANY, A. D. 1622
Early Insurance Law, Custom and Usage
In 1622 there was published at Cologne, Germany, an elaborate
treatise on Commerce and Insurance, the title page of which, in a
free translation, reads in part, "Decisions and Various "Treatises on
Trade and on matters pertaining to the same; in which are contained
the writings and compositions of all authors previously referred to,
principally Benvenutus Stiraccha, a most eminent lawyer, who has
written on Commerce, Exchange, Agreements, Creditors, Sureties,
Debtors, Bankrupts, Ships, Shipping, Insurance, Sales by Auction,
and other affairs of trade; at the same time also are explained mat-
ters which are likely to arise in daily practice in connection with these
topics. Now for the first time here in Germany they have been ar-
ranged in a new publication in the best way, enlarged for the con-
venience of those skilled in the law, compiled in a volume, and
published with variety of styles and with separate imperial re-
scripts." This venerable work is the oldest publication on insurance
in the possession of The Prudential, and the chart exhibits the
beautifully engraved title page, a photographic reproduction of the
volume itself and the first page of the topical index. Of Straccha
himself nothing appears to be known definitely, except that he was
an Italian jurist of Ancona, who lived about the year 1550. A
treatise on Insurance by Straccha was published in Amsterdam in
1658, in Latin. The work is an excellent illustration of the practical
importance of insurance as an element of early commerce and its
recognition as such by the most eminent jurists and merchants of
the time.
Chart No. 213
HAMBURG, GERMANY, A. D. 1628-1750
Early German Insurance Practice
The practice of insurance, having been developed to a considerable
extent in Italy, was carried by the Italians first to the Netherlands,
particularly to the great city of Bruges, which appears to have been
the first center of northern commerce to recognize the practical utility
of the insurance contract. There are records of insurance policies
dating from the year 1359, in Italian, contracting for insurance be-
tween Genoa, Naples, etc., and Bruges. In the commercial trans-
actions of the period 1444—1459 the insurance contract is called the
"assurance obligation." In the year 1469 the expression "letter of
assurance" is used and during the period 1468-1470 the term "assur-
ance policy," or, in brief, "policy," came into use. In the original
Italian, the expression was "scritta di siqurta." From the Nether-
lands the practice of insurance was carried to the Free City of Ham-
burg, then one of the most important members of the Hanseatic
I/eague. The chart shows a reproduction of a pohcy of the year
1628, the printed portion of which is in the Dutch text, and the
written portion of which is in the Low German of the period.* The
chart further shows a printed reproduction of the earliest known life
and ransom policy, of about the year 1750, in the original German,
as well as in the English translation, derived from the work of Magens.
The practice of ransom insurance became subsequently well estab-
lished in the United States for the protection of American captains
trading on the Barbary coast of the Mediterranean. f
Chart No. 214
HOLLAND, A. D. 1671-1749
The beginning of modern life insurance may be said to date from the
time when John De Witt, Grand Pensionary of Holland, and one of
the foremost statesmen of the period, published his "Observations on
Life Annuities," translated by Robert Gibbons Barnwell, U. S. Consul
in Amsterdam in 1856, and published in New York, that year. The
treatise by De Witt established the superior importance of strict con-
formity to the law of mortality in the calculations of premiums for
insurance and the required consideration in life insurance finance
of the principles of compound interest. De Witt was followed by
other eminent Hollanders, who contributed much towards the theory
of life contingencies, and the portraits of Huygens and Struyck are
reproduced in this chart, together with a facsimile of a painting of
the year 1749, commemorating the public and highly ceremonial
establishment of a widows' fund.f
Chart No. 215
ENGLAND, A. D. 1677-1800
Lombard Street, London
Lombard Street appears to have been the meeting-place of London
merchants from a time considerably anterior to the year 1547, which
*A full account of the early insurance history of the Hanse towns, by F. Plass and F. R. Ehlers, was
published in Hamburg in 1902. The replica of the Hamburg policy of 1750 shown on this chart is from
this work.
tFor an explanation of the custom of Ransom Insurance, see page 304, "Lex Mercatoria Rediviva,' '
by Wyndham Beawes, London, 1752.
{Additional references to John De Witt and the early insurance history of Holland are the following :
"John DeWitt, Grand Pensionary of Holland, or Twenty Years of a Parliamentary Republic," by M.
Antonin Lef^vre Pontalis, translated by S. E. and A. Stephenson, 2 vols., London, 1885; "Memoires
pour Servir a L'Histoire des Assurances sur la Vie et des Rentes Viageres aux Pays-Bas," published by
the Soci^td G&erale N^erlandaise d' Assurances sur la Vie et de Rentes Viageres, Amsterdam, 1898:
"Les Oeuvres de Nicolas Struyck" (1687-1769), translated from the Dutch by J. A. VoUgrafl, published
by the Soci^td G6n6rale Nderlandaise d'Assurances sur la Vie et de Rentes Viageres, Amsterdam, 1912;
"Johan deWitt enZijnTijd," by H. S. M. Van Wickevoort Crommelin, published by the "Conserva-
trix" Life Insurance Company, Amsterdam, 191.3.
13
is the date of the Broke policy, the oldest existing insurance contract
in England. A clause in the contract reads, in the quaint English
oi the period:
"It is to be understoode that this preasente writinge hathe as muche
forse as the beste made or dieted byll of surance which is used to be made
in this Lombarde Streets of London."
Italian traders and immigrants to England during the 1 3th and
14th centuries had mostly come from Lombardy, in northern Italy,
and it is a safe assumption that, being chiefly merchants, money-
changers, pawn-brokers, etc., they brought with them the practice
of insurance, just as they are deemed to have introduced bills of
exchange.* By 1677 Eombard Street had become the established
center of insurance, and the reference in English marine insurance
policies to the customs and usages of Lombard Street has continued
to the present day. The chart shows two ancient maps of Lombard
Street, dating from 1677, and several pictorial illustrations of the
street and its buildings down to the early part of the 19th century.
Chart No. 216
ENGLAND, A. D. 1680-1914
Lloyd's
The history of Lloyd's is, in a large measure, the history of marine
insurance. This name is derived from the Coffee House kept by Mr.
Edward Lloyd, in Tower Street, London, in the 17th century, where
underwriters met to transact their business. In 1692 Lloyd's Coffee
House was removed to Lombard Street, and in 1774 Lloyd's, which by
this time had become an association of marine underwriters, left the
Coffee House in Lombard Street for premises in the Royal Exchange,
where it has continued in business to the present time. This chart is
therefore of unusual historic interest. It includes a copy of a policy
dated January 20, 1680, and preserved at Lloyd's, which, in modern
English, emphasizes all of the essentials of the underwriting prac-
tices of the period as they have been preserved and continued to
the present time The term "underwriter" had its origin in the
practice of each individual on assuming a portion of the risk to place
his name under the policy opposite the amount of risk assumed.
The chart also contains an excellent early lithograph of Lloyd's
Subscription Room and pictures of the Royal Exchange of 1620 and
1912. To the right of the chart is exhibited an original copy of
Lloyd's Evening Post, dated February 9-11, 1785, containing a re-
turn of the amount paid in taxes on policies of insurance, printed by
order of the House of Commons. Below is a reprint of the earhest
*The influence ot Lombard immigrants on tlie commerce and insurance of England is fully discussed
in Martin's "History of Lloyd's," London, 1876, pp. 17-32.
known Lloyd's policy issued in the United States, containing, with
other names, the signature of Stephen Girard.*
Chart No. 217
FRANCE, A. D. 1681
Marine Ordinances of Louis XIV
This remarkable code ranks foremost in the documentary history of
insurance. The world is indebted to the genius of Colbert, the cele-
brated Minister of Finance of Louis XIV, for this formidable piece of
legislation, of enduring value to the entire world. The code may be
said to form the basis of French commercial law, and many of its
excellent provisions were subsequently adopted by all other civilized
countries. These ordinances appeai: first to have been quoted in
American literature in the case of Morgan and Price vs. The Insurance
Company of North America, decided by the Supreme Court of Penn-
sylvania in 1807. The chart is of unusual interest and gives in detail
extracts from the French and English texts relating to the contract of
bottomry, the contract of marine insurance, the practice of life insur-
ance and of ransom insurance, the former being unconditionally pro-
hibited and the latter, as a matter of commercial necessity, being
allowed. The chart also gives the original French text of the intro-
duction, as contained in the classical collection Le Loi Maritimes, by
J. M. Pardessus.f The chart is further illustrated by a portrait of
Louis XIV and of M. Colbert.
Chart No. 218
ENGLAND, A. D. 1693
The Breslau Table of Mortality
The science of life insurance rests upon the fundamental principles
of the law of mortality and compound interest. The fact that the
chances of death vary with every year of life was not clearly recognized
until the end of the 17th century. Ulpian's famous table of A. D. 220
merely approximates the rate of mortality, though with some ap-
proach to accuracy. A persistent effort to visualize the varying
chances of death, f according to age and condition of life,may be seen in
*For a full account of Uoyd's, see "The History of Lloyd's and of Marine Insurance in Great 6rit-
ain," by Frederick Martin, London, 1876, and the sketch of "Lloyd's, Yesterday and To-day," by
Henry M. Grey, London, 1893. For an interesting discussion of the origin of Lloyd's Coffee House
and the use of Lombard Street for commercial and insurance purposes, see Wilson's "Description of the
New Royal Exchange," London, 1844. "The Machinery of Lloyd's" has been fully described in two
lectures by Sir Henry M. Hozier, the Secretary of Lloyd's, 1874-1906.
t A complete English translation of this ordinance is contained in Volume I of the Admiralty Decisions
in the District Court of the United States for the Pennsylvania District, by the Hon, Richard Peters,
Philadelphia, 1807. This work also contains an English translation of the laws of Oleron and Wisbujr,
as well as of the Hanse towns.
tFot a brief discussion of certain problems of mortality, see an essay on "The Chances of Death
and the Ministry of Health," Prudential Press, Newark, N. J., 1914.
the pictorial representation of the Dance of Death during the Middle
Ages. The first table of mortality in conformity to scientific princi-
ples was constructed in the year 1693 by Edmund Halley, the famous
astronomer, on the basis of the mortality returns of the city of
Breslau, of the Province of Silesia, Germany. The resulting "estimate
of the degrees of the mortality of mankind" was communicated by
Halley to the Royal Society and subsequently published in the Philo-
sophical Transactions. The chart shows, first, in part, a reprint of the
original paper, second, a graphic demonstration of the law of mortality,
as illustrated by the number, out of a thousand born, surviving to
specified ages, as determined by Halley for the year 1693, and, third, the
corresponding information for England and Wales for the period 1891—
1900. The results are in marked contrast and establish the very con-
siderable improvement in human longevity during the long intervening
period of time. Finally, the chart, as a tribute to the author of the
table, includes a portrait of Edmund Halley, of an early period of
the art of steel engraving. Halley's Table of Mortality was specifi-
cally constructed, as indicated by the table, for the purpose of pro-
viding a scientific basis for the correct ascertainment of the cost and
the principles of premium calculation in the assurance of lives.
Chart No. 219
ENGLAND, A. D. 1706
The Amicable Society
According to Walford, the formation of this society dates back to the
24th of January, 1705, but it was not until the 25th of July in the fol-
lowing year that the promoters, the Lord Bishop of Oxford, Sir Thomas
Aelyn, Bart., and others, obtained from Queen Anne a charter (granted
in the fifth year of her reign) "incorporating them and their successors,
by the name above given, with power to purchase land, sue and be
sued, and to have a common seal." This society was the first life
insurance society established upon sound principles of mortality and
finance, and though originally carried on with much difficulty, on
account of the want of knowledge and lack of experience, the society
enjoyed a prosperous career, until absorbed in the year 1866 by the
Norwich Union Life Assurance Company. That the society at the
outset was conceived as a trading concern is made evident by the
inclusion of its original charter in the Collection of Select Charters of
Trading Companies, A. D. 1530-1707, published by the Selden Society,
London, 1913. It has not been feasible, on account of the length of
this remarkable document, to reproduce the same in the chart, which
shows among other interesting items a portrait of the Lord Bishop of
Oxford, who was one of the founders of the society, a facsimile of the
first contractual obligation in printed form, a pictorial illustration of
16
the southeastern prospect of the Church of St. Dunstan in the West,
opposite which "at Mr. Hartley's house," a bookseller, the society was
established. The chart further includes a facsimile reproduction of
the first table of mortality from the experience of the society,
covering the period 1706-1777. All of these illustrations are derived
from a memorial published by the Norwich Union I^ife Assurance
Company in 1908. The history of the Amicable, together with that
of the London Equitable, established in 1765, is to a considerable
extent the history of life insurance during its formative period.
Chart No. 220
ENGLAND, A. D. 1725-1838
Development of Actuarial Science
Actuarial science comprehends that branch of applied mathematics
which concerns itself with the periodical analysis of the experience of
life insurance companies. Since the contracts entered into extend
over a more or less extended period of years, coinciding in most cases
with the subsequent after-lifetime of the insured, the ascertainment of
the present value of the existing obligation is necessarily a somewhat
complex and difficult process. Originally, in Roman courts of
justice, an actuary was a person, according to Walford, "who drew up
writings, contracts, etc., in the presence of the magistrate, whence his
name, from "actus," an instrument. Subsequently, in the early years
of insurance, the term "actuary" was more or less indifferently em-
ployed by persons familiar with mathematics and accounting, but as a
rule not essentially with the actual practices and experience of life
insurance institutions. With the rise of the business to considerable
magnitude, the position of the actuary became better defined, and it is
now strictly limited to an officer of an insurance company trained to
apply the doctrine of mathematical problems to the needs of the life
insurance business, inclusive of practically all the questions and con-
siderations, whether legal or financial, which affect the insurance con-
tract and have a bearing upon the correct valuation of policies, the
adequate protection of the insured, the safeguarding of public interests
and the required modifications from time to time of the methods
employed. The official status of the actuary is, by modern usuage,
limited to persons who are members of recognized actuarial institutions
or societies.
The development of actuarial science coincides, for practical pur-
poses, with the history of life insurance. The chart contains facsimiles
of nine standard works on the valuation of annuities and reversions,
life contingencies, etc., published during the period 1725-1838. The
earliest of these in the library of The Prudential is the treatise by De
Moivre on "Annuities upon Lives : or. The Valuation of Annuities upon
17
any Number of Ivives ; as also, of Reversions. To which is added, An
Appendix concerning the Expectations of Life, and Probabilities of
Survivorship," pubHshed, London, 1725. Other important works
are by Thomas Simpson, 1742, James Hodgson, 1747, Baron Francis
Maseres (a friend of Benjamin Franklin), 1783, Francis Bailey, who
in time became a leading authority, 1811, Benjamin Gompertz, who
was the discoverer of new principles of the law of mortality and a new
mode of determining the value of life contingencies, 1825, Charles
Babbage, a learned authority on the practice of insurance, 1826, Fran-
cis Corbaux, who on the basis of original researches established new
natural and mathematical laws concerning population, vitality and
mortality, 1833, and, finally, Augustus de Morgan, one of the most re-
markable men of his time, who, in 1838, published a famous "Essay
on Probabilities, and their Application to Life Contingencies and
Insurance Offices."*
Chart No. 221
UNITED STATES OF AMERICA, A. D. 1735
First Insurance Institution in America
The first insurance institution established in the United States was
the Friendly Society for the Mutual Insuring of Houses against Fire,
organized under a Royal Charter, in Charleston, S. C, in the year 1735 .
The South Carolina Gazette contains frequent advertisements and
notices of this society during the period beginning with November
15, 1735, and ending with February 19, 1741. The list of persons
connected with the enterprise includes the names of some of the most
prosperous and prominent men of what was then the Province of
South Carolina. On November 18, 1740, a conflagration occurred
which consumed half of the town. The loss was estimated at one
and a half mi,llion dollars, arid over three hundred houses were de-
stroyed. This fire, in all probability, proved ruinous to the society,
regarding which nothing is known subsequently to February 19, 1741.
No policy or other documentary records appear to have been preserved,
but the original agreement was, fortunately, printed in full in the South
Carolina Gazette of September 27, 1735. A facsimile photographic
reproduction of this agreement is shown on this chart. A brief ac-
*Among other extremely interesting early works on actuarial' science and related subjects are the
following:
"The Doctrine of Annuities and Assurances on Lives and Survivorships," by the Rev. Dr. Price,
London, 1779; "The Principles of the Doctrine of Life-Annuities," by Francis Maseres, London, 1783;
"The Doctrine of Permutations and Combinations, being an Essential and Fundamental Part of the
Doctrine of Chances; as it is delivered by Mr. James Bernoulli," etc., published by Francis Maseres,
London, 1795 (Maseres was the author of "The Principles of the Doctrine of Life-Annuities," pub-
lished London, 1783); "A Practical Treatise upon the Law of Annuities," by Robert Withy, London,
1800; "The Doctrine of Interest and Annuities Analytically Investigated and Explained," by Francis
Baily, London, 1808, "Tables for Renewing and Purchasing of Leases, Annuities, and Reversions,"
by Sir Isaac Newton (sixth edition), London, 1808. The third edition of this work was published
in 1 729, "Essai Philosophique sur les Probabilit^s," by M. Le Marquis de Laplace, Paris, 1825.
18
count of the society was published in the South Carolina Historical
and Genealogical Magazine ioT 1907*
Chart No. 222
UNITED STATES OF AMERICA, A. D. 1746-1800
Early Boston Marine Insurance Policies
In the natural course of its development, insurance as an element of
commerce was carried from England to the colonial possessions of that
country in America. The earliest existing American insurance con-
tract is a policy issued in Boston on the 13th day of March, 1746, at
an insurance office kept in King Street, near the Ivong Wharf, by an
underwriter by the name of Dowse. This policy contains the custom-
ary reference to Lombard Street and the Royal Exchange. After the
Revolution, this clause was eliminated from American policies and in
place thereof, in a contract issued in Boston in 1784, the clause reads
"And it is agreed by us, the insurers, that this Writing or Policy of
Assurance shall be of as much Force and Effect as the surest Writing
or PoUcy of Insurance heretofore made in any of the United States
of America, or else- where." The chart contains facsimile repro-
ductions of pohcies issued in 1746, 1784 and 1800, all typical of the
period and representative of individual underwriting practices com-
mon to the country previously to the rise of insurance corporations.
The facsimiles are from "An Account of the Early Insurance Offices
in Massachusetts from 1724 to 1801," published in 1901, by E. R.
Hardy, librarian of the Insurance Library of Boston.
Chart No. 223
ENGLAND, A. D. 1752-1782
Insurance as an Element of Commerce and Public Finance
The place of insurance in the development of commerce and navigation
is of such exceptional importance that the present chart has been in-
cluded, additionally to other evidence, in support of the view that, by
custom and usage, throughout the centuries, insurance has been an
integral factor in the progress of commerce and navigation. In 1752
an important work was issued in London under the title "Lex Merca-
toria Rediviva: or, The Merchant's Directory. Being a Compleat
Guide to all Men in Business, whether as Traders, Freighters, In-
surers, etc." The author of the work was Wyndham Beawes, mer-
chant. The work was published with the approval of George II, who
granted in return for its value a copyright for fourteen years. The
chart, in addition to the royal authority and the title page, shows
facsimiles of the Act of George III relating to stamp duties on pohcies
♦See also my "Insurance Science and Economics,"?. 170,ajid The Spectator, N. Y., Dec. 31, 1914.
19
of insurance on property "in any Foreign Kingdom or State from Loss
by Fire."
Chart No. 224
FNGLAND, A. D. 1756-1828
Early History of the London Equitable Society
The London Equitable is at the present time the oldest existing life
insurance corporation in the world. The Amicable, established in
1706, was absorbed by the Norwich Union in 1866. The Equitable
has the unique distinction of never having employed agents, which
largely accounts for the relatively small amount of insurance written
during the long intervening period of years. The experience of the
Society, however, has been invaluable to life insurance throughout the
world. The chart is limited to a reproduction of four title pages of
historical publications, dated 1756, 1780, 1823 and 1828.* The mor-
tality experience of the Equitable Society, according to Walford,
"was the first pure life experience, as distinguished from annuitants
and tontine lives, which became available for actuarial purposes." The
first actuary of the Society was Mr. W. Morgan, who, in 1779, pub-
lished a treatise on Annuities, and subsequently an introduction to
the classical "Observations on Reversionary Payments," by the cele-
brated Dr. Richard Price. The chart also exhibits a diagram con-
structed after a table showing the probability of the duration of
human life, according to the experience of the Equitable, published
in 1828.
Chart No. 225
NEW YORK, A. D. 1759-1800
The Early New York Coffee Houses and Insurance
The early insurance transactions were chiefly carried on in Coffee
Houses, which were then the convenient meeting-places of merchants
and navigators. They were exclusively individual transactions, each
underwriter assuming a given portion of the total amount at risk.
Sometimes a group of underwriters would call themselves a company,
but it was not until 1792 that the first American insurance corporation
came into existence. In New York City the Merchants' Coffee House
was a center of insurance activity, as shown in the chart by the fac-
simile reproduction of a tablet recently erected under the auspices of
the Lower Wall Street Business Men's Association. There has been
preserved an advertisement of the so-called Mutual Assurance Com-
pany of New York, dated April 2, 1785, inserted by Carlie PoUick, of
*For a number of interesting historical references to tlie early history of the Equitable Society, see
my lectures on the History of Insurance, published in the Life Insurance Educator, November and
December, 1913, and January, 1914.
20
the Commercial Insurance Office, which reads "Fire Office — the Scheme
of an Institution under the name of 'The Mutual Assurance Company
of New York' for insuring houses and merchandise against loss or dam-
age by iire, will be submitted to the citizens at the Long Room in the
Coffee House on Friday next." According to Mr. A. Wakeman, the his-
torian of the old Merchants' Coffee House of New York, "As early
as 1759 insurance business was carried on at the Coffee House. Business
was done twice a day, morning and evening." The chart shows a
lithograph of the famous Coffee House Slip and Coffee House of New
York, and also an illustration of lower Wall Street in 1800, showing
the Tontine Coffee House on one side and the Merchants' Coffee House
on the other. The following historical note regarding the business
of Tontine insurance is from Valentine's Manual of the Common
Council of New York, 1866:
"The Tontine Coffee-house, on the northwest corner of Wall and
Water streets, was commenced about the year 1792 by an association
of merchants, and finished in 1794, at a cost of about $43,000, its
professed object being to provide a convenient place of meeting for the
merchants. It was erected on the northwesterly corner of Wall and
Water streets, and was considered in its day a creditable piece of archi-
tecture. The ownership was estabhshed on the Tontine principle of
survivors. Two hundred and three shares were subscribed for at
^200 per share, each depending on a life selected by the several sub-
scribers, who stated in a memorandum, at the time of subscription,
the age, parentage, and sex of the nominee during whose existence he
was entitled to receive his share of the net income of the establishment.
On the death of the nominee the interest of the subscriber ceased, and
his share became merged in those remaining. The shares were as-
signable and held as personal estate. The property being vested in
trustees to hold until the nominees were reduced to seven, when the
holders of the shares became entitled to a conveyance in fee in equal
proportions."
The lithograph in the chart of the New York Tontine Coffee
House is derived from the same source.
Chart No. 226
UNITED STATES OF AMERICA, A. D. 1761-1772
Early Annuity Plans and Projects
The first life insurance efforts in America, as in England, were plans
and projects for annuities. The need of providing for aged clergymen
and their widows early suggested the establishment of ecclesiastical
annuity societies. The earliest known project of this kind in England
was started in 1698 by the Rev. William Assheton, D.D., Rector of
Middleton in Lancashire, for the benefit of widows of clergymen and
21
others and for the settling of jointures and annuities. The first cor-
responding effort of this kind in the United States was the Presby-
terian Ministers' Fund, established in the city of Philadelphia in 1761.
A facsimile of a contract issued by this Fund in what was then the
Province of Pennsylvania, dated May 22, 1761, is reproduced in
the chart, together with three title pages of documents of considerable
historical importance. Under date of February 7, 1769, the pro-
prietors of the Province of Pennsylvania had issued a charter for the
establishment of a "Corporation for the Relief of Widows and Children
of Clergymen of the Communion of the Church of Fngland in
America. " The chart shows the facsimile of the title page of a sermon
by the Rev. William Smith, D.D., delivered in Philadelphia in 1769,
published by order for the benefit of the charity, and also a title page
of an exceedingly rare tract, issued in Boston in 1772, being the plan
of a society for making provision for widows by annuities for the
remainder of life and for granting annuities to persons of certain ages,
with the proper tables, etc., by William Gordon. The Presbyterian
Ministers' Fund continued as an ecclesiastical corporation until 1876,
when the same was converted into a business corporation, which has
cbntinued in active and successful operation to the present day.
The first American life insurance company, properly so-called, was
the Pennsylvania Company for Insurances on I/ives, established in
the year 1812.
Chart No. 227
ENGLAND, A. D. 1774-1854
Early English Law and Litigation
The development of insurance law naturally coincides with the growth
of insurance as a commercial and social institution. Abuses and fraud
were common to insurance during the early period, largely because of
the fact that the principles and methods were but imperfectly under-
stood. Miscalculations in premium rates frequently led to disaster,
and harsh policy provisions were often essential as much for the pro-
tection of the public as for the security of the insuring company. In
1774 the first notable act for regulating insurance upon lives was passed
by Parliament, under which all insurances were prohibited, excepting
cases in which the persons insuring had an interest in the life or death
of the person insured. This act is known as the Gambling Act and
in the chart the same is reproduced in full, though not in facsimile.
That the principles of the Gambling Act have become adopted in
American law and legislation is made evident by the fact that the
principle of insurable interest, as a condition precedent to the legality
of the contract, has become universal throughout the world. In
addition to the reproduction of the Gambling Act, the chart shows
facsimiles' of the title pages of five interesting tracts, including a full
account of the proceedings in a case regarding pulmonary consump-
tion, a report of the classical case of the Rev. Robert Gilbert vs. M.
M. Sykes, being an action brought by the plaintiff to recover a sum
of money won on the life of Napoleon, being purely a speculation
dependent upon the duration of the Emperor's life. The other title
pages include a treatise on the Law of Fire and Life Assurance, by
Charles EUis, issued in 1832, a controversial tract regarding an attack
upon the Professional Life Assurance Company, by Edward Baylis,
1853, and a classical treatise on the Law of Life Assurance, by Charles
John Bunyon, London, 1854.
Chart No. 228
ENGLAND, A. D. 1783
Northampton Table of Mortality
The author of the Northampton Table was the Rev. Richard Price,
who in 1771 published the first edition of his famous "Observations on
Reversionary Payments," containing, with other instructive data on
insurance, two tables of mortality based on the accounts of the ages at
death of persons who had been buried in the Parish of All Saints,
Northampton. In 1783 the fourth edition of the work was published
in a more comprehensive form, with tables of money values for life
insurance purposes, deduced from the Northampton Table of Mortal-
ity. As shown by the chart, the expectation of life was assumed to be
very low and the resulting premium rates were, therefore, excessive,
except for tropical countries. The Northampton Table continued in
force for many years and it is occasionally employed at the present
time. In 1815 Mr. Joshua Milne constructed a new table from the
mortality data of the Parishes of St. Mary and St. Cuthbert, Carlisle,
for the years 1780-1787. At the time of its publication the table was a
decided improvement on the Northampton Table, its chief defect in
connection with its use for life insurance purposes being the erroneous
assumption regarding the proportion of the sexes, but otherwise the
premium rates cloSfely approximate the required degree of accuracy.
The Carlisle and Northampton Tables were based upon data de-
rived from locaUties not necessarily typical or representative of the
United Kingdom. It was not until 1843 that the first life table based
upon the census returns and deaths for the whole of England and Wales
was pubUshed, followed by a second table, in 1853, and a third, for the
period 1835-1854, in 1864. The author of these tables was Dr.
WilHam Farr, of the Registrar-General's Office, and Table No. 3
subsequently became known as Farr's Life Table, and as such it has
been recognized as a standard for valuation purposes in connection
with Industrial insurance. The chart is limited to a diagram iUus-
trating the mortality curve, as deduced from the Northampton experi-
ence, together with the expectation of life for England and Wales for
1891-1900. In addition, the chart shows a title page of the work of
Price on Reversionary Payments (1783 edition) and a portrait of Dr.
Price.
Chart No. 229
UNITED STATES OF AMERICA, A. D. 1788-1840
Insurance in American Arithmetic and Accounting
In its final analysis, insurance in all its branches is more a matter of
simple arithmetic than of higher mathematics. From comparatively
early times it has been the practice to include insurance problems in
text -books on arithmetic, bookkeeping and accounting. The chart
gives in facsimile the title page of the first American treatise on arith-
metic, by Nicolas Pike, published at Newbury-Port, in 1788. Two
pages of the contents are also reproduced, illustrating calculations in
marine insurance and problems in annuities or pensions. The second
insert on the chart is a facsimile title page of "The Counting- House
Assistant," published in Pittsburgh, in 1818, also illustrated by a re-
production of the contents, in which insurance is included as one of the
subjects of maritime law. The third insert is a reproduction of the
title page of "A System of Practical Arithmetic for the Use of Schools;
Adapted to the Commerce of the United States," by J. Walker, pub-
lished in Baltimore, in 1819. From this interesting work four pages
of the contents are reproduced, showing the expectation of life
according to the Northampton Table of Mortality and problems in
the calculation of life annuities. The fourth insert is the title page
of a treatise on the Laws of Trade, by Jacob B. Moore, published,
New York, 1840, with abstracts of the Bankruptcy Bill of 1840, then
under consideration by the Assembly of the State of New York, in-
cluding a suggestive reference to insurance.
Chart No, 230
UNITED STATES OF AMERICA, A. D. 1789-1845
Law and Legislation
The first treatise on the law of insurance published in the United
States was issued in Philadelphia in 1789, being a reprint of the
"System of the Law of Marine Insurances," with three chapters, on
Bottomry, on Insurances on Lives, and on Insurances against Fire, by
James Allan Park. Numerous editions of this work exist, but the title
page reproduced is of the first American edition. In 1810 the second
edition (American) of an English treatise on the Law of Insurance, by
Samuel Marshall, was published in Philadelphia. This work includes
24
numerous references to American cases, and the work was a standard
work of reference for many years. What appears to be the first
United States document on insurance was issued in the form of a
Letter from the .Secretary of the Treasury, transmitting a statement
containing information in relation to the Incorporated Banks and In-
surance Companies within the District of Columbia [1814]. An equally
interesting document of historical importance, particularly with ref-
erence to the commercial aspects of insurance, is a tract entitled "An
Argument in Support of the Marine Insurance Companies of Baltimore
to the Congress of the United States, Praying Compensation for
Losses Sustained under the treaty with Spain of the 22d of February,
1819," by Robt. B. Taylor, published, Norfolk, 1826. The first
Treatise on the Law of Insurance by an American author was published
in a second edition in 1840. The author of this work was Willard
Phillips, who subsequently became a commanding figure in the de-
velopment of insurance in New England. The work was published
in Boston. Of even greater importance in the development of Ameri-
can insurance law and legislation was the issue in 1845 of an elaborate
treatise on the Law and Practice of Marine Insurance, deduced from a
critical examination of the Adjudged Cases, the Nature and Analogies
of the Subject and the General Usage of Commercial Nations by John
Duer, LL. C one of the late revisers of the statute laws of New York.
This woirk was published in two volumes in 1845 and to this day consti-
tutes a standard work of reference in the settlement of difficult and
involved questions in marine insurance law.* In 1850 appeared a work
on Admiralty, by Erastus C. Benedict, which included an extremely
suggestive historical reference to insurance in a commission of Vice
Admiralty, issued to the Hon. Richard Morris, dated October 15, 1762,
which reads, in part, as follows :
"George the Third, by the grace oj God,, of Great Britain, France and
Ireland, King, defender of the faith: To our beloved Richard Morris,
Esquire, greeting: We do by these presents, make, ordain, nominate and
appoint you, the said Richard Morris, Esquire, to be our Commissary in
our provinces and colonies of New York, Connecticut, and East and West
Jerseys, in America, and Territories thereunto belonging, in the room of
the former judge, deceased, hereby granting unto you full power to take
cognizance of, and proceed in all causes, civil and maritime, and in com-
plaints, contracts, offences, or suspected offences, crimes, pleas, debts, ex-
changes, policies of assurance, accounts, charter parties, agreements, bills
of loading of ships, and all matters and contracts which, in any manner
whatsoever, relate to freight due for skips, hired and let out, transport
money or maritime usury, {otherwise bottomry), etc., etc."
*Of considerable interest in this connection is a tract entitled "A Curiosity of Law, or a Respondent
in the Supreme Judicial Court, as a Judge in the General Court, and what possibly came of it," by
Elizur Wright, Boston, 1866.
Chart No. 231
UNITED STATES OF AMERICA, A. D. 1791
Philadelphia Underwriters' Marine Insurance Policy
This chart shows an original contract, issued in Philadelphia in the
year 1791. The policy bears the signature of sixteen individual
underwriters for sums from ^100 to .^200 sterling. The policy is of
special historic interest on account of the fact that one of the under-
writers (John Morton) was a signer of the Declaration of Independence.
Chart No. 232
ENGLAND, A. D. 1792-1855
Friendly Societies and Sickness Insurance
The possibilities of utilizing life insurance methods in efforts to im-
prove the economic condition of the poor were first suggested in a
famous tract, entitled "Essays on Projects," by Defoe, the celebrated
author of Robinson Crusoe, in 1697. It was soon realized that the
thrift function, as reduced to its most simple form of individual saving,
would be insufficient to meet the pecuniary needs of the poor in the
event of sickness and premature death. A most interesting tract,
suggestive of the early development of the function of saving, was
published in 1677, under the title "The Worth of a Penny." It was not
until near the end of the 18th century that the economic utility of
friendly societies was clearly recognized, and in 1792, or the year
before the passage of the Rose Act, a treatise was published, entitled
"An appeal to the Public on the General Utility of Benefit Societies
Instituted by and for the Relief of their Respective Members ; Proving
the Necessity of Securing their Property by the Sanction of an Act
of Parliament, with Remarks and Observations on the Present System
of the Poor-La ws." Four years later there was published a treatise on
"The Prevention of Poverty by Beneficial Clubs," by Edward Jones.
In 1814 Jerome Count de Salis advanced "A Proposal for Improving
the System of Friendly Societies, or of Poor Assurance Offices; and,
by Increasing their Funds, Rendering, in Process of Time, on the
Principle of Accumulation, all Parochial Taxation for the Relief of the
Poor unnecessary." The chart shows a reproduction of the title pages
of these three publications, which are now extremely rare. In addi-
tion, facsimile copies of title pages are shown of a Report on Friendly
Societies, exhibiting the Law of Sickness, as Deduced from Returns by
Friendly Societies in Different Parts of Scotland. This was the fam.ous
report drawn up by the Committee of the Highland Society, which for
the first time presented sickness rates derived from insurance experi-
ence. The report was issued in Edinburgh in 1824. A more impor-
tant publication of Tables, showing the Amount of Contributions for
providing Relief in Sickness and Old Age, for Payments at Death and
Endowments for Children, was published in I^ondon, 1833, by John
Finlaison, Government Actuary, and Recommended for the Use of
Benefit Societies by John Tidd Pratt. This treatise emphasizes the
progress made in the scientific development of sickness insurance as a
first requisite for the actuarial solvency of the societies transacting this
form of insurance. John Tidd Pratt was the Registrar of Friendly
Societies in England and it was largely due to his indefatigable efforts
that the methods of government supervision and control over these
societies were materially improved. In 1855 Pratt issued some "Sug-
gestions for the Establishment of Friendly Societies with Tables of
Contributions for Payments in Sickness, etc., and also for the Purchase
of Government Annuities, " authorized by the 16 and 17 Victoria, which
laid the foundation for far-reaching ithprovements in friendly society
management. All of the title pages reproduced in facsimile on this
chart are of documents in the possession of The Prudential.*
Chart No. 233
UNITED STATES OF AMERICA, A. D. 1792
The Insurance Company of North America
This interesting chart contains eight facsimile reproductions of illus-
trations and documents having a bearing on the early history of the
first insurance corporation established in the United States, in 1792,
which has survived to the present day. All of the documents shown
are derived from the history of the company, published in 1885. The
chart shows the first office building of the company, occupied during
the years 1792-1794, a copV of a page of the first book of accounts, a
copy of an act passed by the General Assembly, April 2, 1793, for the
incorporation of what was then called "The Insurance Company of
North America." A portrait of Eben Hazard, secretary of the com-
pany, is shown, followed by the facsimile reproduction of four early
marine and fire policies. The Insurance Company of North America
had the right to transact life insurance business, but little was done in
this field, which at the end of the 18th century was apparently of small
promise in the United States. The first action on the part of the
company with reference to the clause of the article of incorporation
permitting life insurance was taken on January 20, 1794, when a
committee was appointed to consider the issuing of a policy "for
insuring persons against capture by Algerines." On February 11,
1794, a Captain John Collett was insured "on his person against
Algerines and other Barbary Corsairs in a Voyage from Philadelphia to
*The Friendly Societies of England have been utiU^ed to a considerable extent in the establishment
of national insurance in Great Britain in 1911. What is called an "Approved Society" is practically a
Friendly Society receiving the contributions and administermg the benefits payable under the National
Insurance Act.
London, in the Ship George Barclay, himself Master, Valuing himself
at $5,000," the premium being two per cent. This was apparently the
first life policy issued by an insurance corporation in America. The
practice to insure against the risk of capture was very ingenious, in
that it provided the requisite amount usually exacted as ransom, which
otherwise might not have been forthcoming. The practice was quite
general at the time with Continental insurance companies, particularly
those of Hamburg.
Chart No. 234
UNITED STATES OF AMERICA, A. D. 1797
Original Policy Contract of the Insurance Company of North A merica
The document shown on this chart is an original policy issued by the
Insurance Company of North America and one of the earliest existing
contracts of its kind. It is signed by Charles Pettit, the president of
the company, whose portrait is reproduced on the chart. In addition,
the chart shows a facsimile of the simple method of accounting in use
by the company at the time. The policy is dated March 7, 1797.
Chart No. 235
UNITED STATES OF AMERICA, A. D. 1812
Pennsylvania Company for Insurances on Lives and Granting Annuities
All of the documents exhibited on this chart are originals. The policy
is dated May 13, 1822. It is a contract of exceptional historic interest
signed jointly by the president of the company, Mr. R. M. Patterson,
and the actuary, Mr. Jacob Shoemaker. The chart also shows an
original application for life insurance, a table of premium rates, and the
title page of an address from the president and directors, together with
a copy of a portion of the act incorporating the company, under date
of March 10, 1812. A table of premium rates is reproduced below:
LIFE INSURANCE PREMIUM RATES (IN 1814)
PER $100 OP INSURANCE
Age
15
20
25
30
35
40
45
50
55
60
65
28
One Year
Premium
$0.99.
Seven Years
Annual Premium
$1.25
Whole I.ife
Annual Premium
$2.12
1.50
1.62
2.39
1.68
1.77
2.65
1.82
1.92
2.93
2.00
2.13
3.28
2.23
2.43
3.72
2.56
2.79
4.29
3.03
3.34
4.99
3.57
3.96
5.85
4.29
4.80
7.00
5.23
6.09
8.62
Chart No. 236
UNITED STATES OF AMERICA, A. D. 1818-1823
Two Early American Life Insurance Companies
The documentary records of early American life insurance companies
which have been preserved or made available are quite rare. The
official literature is available to-day for only a few institutions organ-
ized during the first half of the 19th century. The chart illustrates
two typical early insurance companies, by pages from the original
prospectuses of the Union Insurance Company of New York, estab-
lished in 1818, and the Massachusetts Hospital Life Insurance Com-
pany of Boston, established in 1823. The hst of officers of the last-
named institution shows that Mr. Nathaniel Bowditch was the actu-
ary. The application for insurance was simple and the premium
rates were limited to one year, seven years and for life. The chart
also shows an original application for an annuity in trust as issued
by the Massachusetts Hospital Life Insurance Company and the
table of rates at which the company was willing to grant immediate
annuities for $100 on a single life. An interesting insert is a small
table of endowments on children, beginning with birth and ending
with the twentieth year, the amounts insured for to be payable at the
age of twenty-one, if then alive.
Chart No. 237
UNITED STATES OF AMERICA, A. D. 1823
Slave Insurance in the South
This was an extremely interesting form of insurance, for the twofold
purpose of insuring slaves as cargo under marine insurance contracts
and of providing life insurance protection for the owners in the usual
form. The business was carried on by quite a number of institutions
previous to the outbreak of the Civil War. The chart shows an original
contract issued by the Louisiana Insurance Company for the amount
of $25,200, the date of the policy beingMay 27, 1823. The policy msures
the safe delivery of seventy-two slaves, valued at $350 each, for the
term of the voyage from Norfolk to New Orleans, at the rate of l}i
per cent. The policy specifically excludes the risk of natural death,
insurrection, elopement, and suicide. The chart also shows an original
copy of the prospectus of the Mutual Benefit Life and Fire Insurance
Company of Louisiana and the rates charged for the insurance of
negro slaves. In order to show the advantages to owners of negroes
of insuring them, a list of the losses paid by the company, giving the
names of owners and the causes of death of slaves, is given.* It is of
interest in this connection to add that beginning with May, 1845,
the New York Life Insurance Compiany insured slaves, and it is stated
in the history of that company that of the first thousand policies
issued 339 were on the lives of negroes. The amounts were usually less
than $500. The first death claim paid by the company was under a
slave policy. The issue of such contracts was discontinued by
direction of the trustees on April 19, 1848. Of equal interest is the
early practice of the Manhattan Life of New York, which assumed
risks on the lives of coolies transported to the Isthmus of Panama for
the purpose of constructing the Panama Railway. An original policy
of this kind has been preserved by the company, but it has not been
feasible to show a facsimile of the same on the present chart.
Chart No. 238
UNITED STATES OF AMERICA, A. D. 1830-1854
Early American Insurance Companies
This is a collection of title pages of e'ai-ly life insurance prospectuses,
commencing with the proposals and r^ates of the Pennsylvania Insur-
a'nce Compa'ny for Insurances on Lives and Granting Annuities. The
company was incorporated March 10, 1812, under a perpetual charter,
with a capital of $500,000. This was the first American life insurance
company. The office, in 1845, was at No. 66 Walnut street. The
president of the company at that time was Mr. Hyman Gratz, and the
actuary Mr. WilUam B. Hill.
The Massachusetts Hospital Life Insurance Company was estab-
lished in 1823. The title page of the Proposals is for the year 1835.
The offices of the company at this time were at No. 50 State street,
Boston.
The Rates and Proposals of the New York Life Insurance and
Trust Company are for the year 1830. The office of the company was
at No. 38 Wall street. The act of incorporation was dated March 19,
1830.
The first life insurance company of the central west was the Ohio
Life Insurance and Trust Company, of Cincinnati. The first annual
report was issued under date of December 24, 1835. The failure of
the company in 1857 was the immediate cause of the panic of that
*SIave insurance was also transacted by the Southern Mutual Insurance Company of Mobile. Ala.,
which, under date of February 1, 1851, issued a special set of instructions, according to which slaves
performing the duties of house servants, field hands, and general laborers, ages 20-30, were accepted at
a premium of 4.5 per cent.; but for slaves employed as boat hands navigating waters emptying into
Mobile Bay or engaged in the lake trade to New Orleans, a premium of 7,5 per cent, was charged.
Another company transacting slave insurance was the Lexington Fire, Life and Marine Insurance
Company, chartered by the Legislature of Kentucky in 1836. This company charged a premium of
$2.62 per $100 of insurance on the life of a slave at age 30, whereas the corresponding rate on the life
of a white person was $1.31, or exactly one-half. For a brief discussion of insurance in the South, see
my article "Life Insurance in the South,'' in "The South in the Building of the Nation," 1865-1910,
Vol. 6, ij. 625.
30
year. The life business of the company, however, was reinsured, and
the policyholders sustained no loss.
The first company established in the United States on strictly
mutual principles was the Mutual lyife Insurance Company of New
York, organized in 1842. The title page in the present collection is of
a treatise on life insurance published by this company in 1844 as an
explanation of the principles and of the useful application of the
mutual system to the different situations of life, including a sum-
mary of its charter, its progress, terms and conditions of insurance,
and mode of effecting it.
One of the earliest life insurance companies of the South was the
Mutual Benefit Life and Fire Insurance Company of Louisiana, in-
corporated in April, 1849. This prospectus contains the plans,
principles, regulations and rates. The home office of the company was
at No. 38 Camp street. New Orleans.
A propectus entitled, "Life Insurance, Its Principles, Operations
and Benefits, as Presented by the Connecticut Mutual Life Insurance
Company of Hartford," was published in 1852. The company had
been incorporated in 1846.
An interesting tract circulated at about the same time was a small
treatise on "Practical Reasons and Illustrations of the Necessities of
Life Insurance as a Duty," published in New York, 1852.
One of the most interesting documents in this collection is the
circular of California Life Insurance, offered by a company the name
of which is not known, with a guaranteed capital of $100,000, and an
office at No. 4 State street. The circular was issued at Boston,
October, 1849, or soon after the discovery of gold in CaUfornia.
The leafi[et gives the premiums for the insurance of $100 on the
one-year, seven-year, and whole-life plans. It is particularly urged
that, "Persons leaving for California may obtain all necessary in-
formation on application at the office. No. 4 State street."
The New England Mutual Life Insurance Company was incorpor-
ated in 1835 and commenced business in 1843. A prospectus on the
basis, principles and regulations of the company calls attention to the
fact that the net accumulations by November 1, 1855, had reached
$745,000. The president of the company was Mr. Willard PhiUips, a
distingusihed authority on the law of insurance.
The Hartford Life Insurance Company was incorporated under date
of May, 1849, with a capital of $100,000.
The State Mutual Life Assurance Company, of Worcester, was
incorporated in 1844, and the title page of the prospectus refers to the
charter and by-laws, the guaranteed capital of $100,000, and the
explanation of the principles and plans upon which the company was
established, with practical observations on the various situations and
circumstances in which Hfe insurance may be employed, and the terms
and the mode of effecting insurance. The office of the company was at
No. 98 Main street, Worcester.
Chart No. 239
ENGI.AND, A. D. 1545-1854
Evolution of Industrial Insurance in England
In 1853 a Select Committee of the House of Commons, on Assurance
Associations, made a report, which, with other important observa-
tions, included £he suggestive statement that "Your Committee feel
that the ground hitherto occupied by these useful institutions (Ordi-
nary life insurance companies) has been comparatively limited and
that their application is capable of a great extension not only among
the higher and model classes of society, but also among the humbler
classes, to whom it has recently been very considerably applied."
Largely influenced by this suggestion, the Prudential Assurance Com-
pany of London, which had been organized for the transaction of
Ordinary business, in 1848, commenced to issue, in 1854, policies for
small amounts, on the principle of family insurance, with the premium
payments collected weekly from the houses of the insured. The re-
markable success of this new form of insurance was largely due to the
indefatigable efforts of Mr. (afterwards Sir) Henry Harben, at that
time the secretary and subsequently the president of the company.
Industrial insurance forms the connecting link between the early provi-
dent institutions of England, as typified by the ancient gilds and the
more modern burial and friendly societies. The chart includes a brief
historical reference to the evolution of Industrial insurance and the
chronology of the principal acts of parliament having reference to
friendly societies and Industrial insurance companies. It has also
seemed fitting to include in the chart an early portrait of Sir Henry
Harben, who was born in 1823 and who died December 2, 1911. The
Prudential Assurance Company, as measured by the number of policies
in force (20,695,226 on December 31, 1913), is the largest life insurance
company in the world.
Chart No. 240
UNITED STATES OF AMERICA, A. D. 1875-1914
Evolution of Industrial Insurance in A merica
Largely influenced by the English agitation for reform in friendly-
society management and general life insurance practice as reflected
in some of the early reports of the Insurance Commissioners for
Massachusetts and New York, Mr. (afterwards U. S. Senator) John
F. Dryden, in 1875, established in the city of Newark, N. J., THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA, in
conformity to the fundamental principles of Industrial insurance, suc-
cessfully developed by the Prudential Assurance Company of England.
The original title of The Prudential Insurance Company of America
was The Prudential Friendly Society, it having, at the outset, been
Mr. Dryden's intention to develop a national provident institution
insuring not only payments at death but also amounts payable in the
event of sickness and small annuities in old age. Actual experience
soon demonstrated that this project could not be carried through, and
the business of the Company was therefore subsequently limited to the
insurance of sums payable at death. In 1886, however, the Company
commenced also the issue of Ordinary policies, and on December 31,
1913, 60.8 per cent, of the Company's business, as measured by
amount, was on the Industrial plan, and 39.2 per cent, on the Ordi-
nary plan. The chart exhibits four photographic illustrations of the
buildings occupied by the Company at different periods, from a small
basement office, at 812 Broad Street, to a group of four large office
buildings, at 761 Broad Street, and adjoining properties. A model of
the buildings is shown elsewhere in this exhibit. The chart also shows
a photographic reproduction of the first application for insurance
received by The Prudential and accepted on November 10, 1875, and
an early steel engraving of the late Mr. Dryden, together with a brief
historical note regarding the present status of Industrial insurance in
the United States.
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