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Full text of "The Royal Exchange : a note on the occasion of the bicentenary of the Royal Exchange Assurance"

THE LIBRARY 

OF 

THE UNIVERSITY 

OF CALIFORNIA 

RIVERSIDE 



THE ROYAL EXCHANGE 




THE ROYAL EXCHANGE. LONDON. 



THE 

ROYAL EXCHANGE 

A NOTE ON THE OCCASION OF 
THE BICENTENARY OF THE 
ROYAL EXCHANGE ASSURANCE 



A. E. W. MASON 



ROYAL EXCHANGE 

LONDON 

1920 



CONTENTS. 



PART I. THE HOUSE. 
CHAPTER I. 

FAGS 

Str Thomas Gresham and the First Royal 

Exchange .. .. .. .. .. zx 

CHAPTER n. 

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. 



The First Royal Exchange 



FACING 
PAGE 



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 estabhshed 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 



11 

B3 



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 Fenelon, 
to whom we are indebted for an account of 
his share in that great woman's conversa- 
tion. 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 

12 



had the honour to "write to her from Bruges : 
" The Stillj^ard hath been the chief est 
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 Cornliill with the great gilt 
Grasshopper of Sir Thomas Gresham's crest 
perched on the top of its tall tower. But 
the Exchange v/as not the end of Sir Thomas 

13 



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 EngUshmen were to become mas- 
ters 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 under- 
standing, one of the strangest institutions 
which the world has ever seen. It took its 
origin from the debts of the early Enghsh 
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 estabhshed in rights and privileges 
which no English shared with them ; they 
paid fixed taxes ; they held a monopoly 



14 



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 re- 
sponsible for the upkeep of Bishopsgate, 
except the hinges, for which the Bishop of 
London was responsible, and on account 
of this obHgation they were relieved from 
the tax called " Murage," which was de- 
voted 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 for- 
bidden from dwelling in the City, acting 
as brokers, or buying and selHng 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 par- 
ticular service of keeping watch against the 
Pirates, who from the 13th to the 16th 
Centuries infested the Channel and the 



15 



mouth of the Thames. This exemption is all 
the more remarkable since the Alemanes or 
Alemans another of their many designa- 
tions Shaving 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 pre- 
cautions and safeguards as made it doubly 
difficult to destroy. The Members of the 
Steelyard or Stillyard spelhng was never 
an exact science until a very recent date 
Uved, 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 



16 



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, hnen, cloth and tar in par- 
ticular. The walls were fortified against 
attack a very necessary precaution consid- 
ering the ill-feeling which the Yard aroused 
amongst British Londoners. No member of 
the Still yard 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 

17 



taken in common, and the members sub- 
mitted 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 vigil- 
ance. 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 
poHcy. He meant, while destrojdng it, to 
graft upon Enghsh 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 



18 



upon these grave matters, and she in time 
turning to her companion upon her left. 
La Motte Fenelon 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 Due 
D'Anjou. It seems that EUzabeth Vv^as in 
great good humour that day. She had not 
\dsited 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 
Fenelon that she was well aware that the 
Due D'Anjou had not the best of reputa- 
tions, but that she would, if she married him, 
do her best to be a loving Avife 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 Fenelon replied that she was 
divinely beautiful. He could really under 



19 



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 en- 
tirely of foreign material. The alabaster 
came from the Low Countries ; the stone 
from Flanders ; even the httle 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. 

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 EngUsh commercial 
independence. Is it possible that Sir 
Thomas Gresham had just that touch of 



20 



snobbery in small matters so common a 
trait of the English character, which pro- 
fesses 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. How- 
ever that may be, the first Royal Exchange 
had httle that was Enghsh in its 
composition, even that gallery in which 
Queen EHzabeth 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 Hghted streets 



21 



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 
jQiames. 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 Fenelon, 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 Fenelon 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 Due D'Anjou would 
sit by her side on the Throne of England. 
Very hkely 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, en- 
couraged by Sir William Cecil, afterwards 

22 



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 
StiUyard 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, how- 
ever, 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 



23 



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 dehght that 
many gallants took in that magazine of 
all curious varieties that they could almost 

7 

24 



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 Confec- 
tioners, where they took their supper before 
going home to bed. Thus for ninety years 
the first Royal Exchange played its im- 
portant part in the life of London. In 1666 
the Great Fire swept it away. 



26 



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, mediaeval London 
was neither more wicked nor more un- 
healthy 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 mediaeval town, was especially 
liable to fire ; its streets were narrow to 



2a 



begin with, and, to make things worse, 
permissions Avere 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 j&re 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 



27 

C2 



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 estabhshed, most of the houses, 
especially of the poorer class, were unpro- 
tected by it. Let a fiire 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 

28 



September, in the house of Farryiier, 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 Uttle 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. 
AppUances and regulations there were of a 
kind, but of too primitive a land 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, 

29 



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-v/indow, 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 
Idnd 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 

30 



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 Hke 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 Hberties 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 

31 



at that hour to possess. But some irre- 
parable 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 beauti- 
ful by straight broad streets and central 



" Piazzes," as he called them. But it 
would have been a London a Httle too formal 
perhaps to suit the Enghsh 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 undertaldngs was the Royal 
Exchange. 

Sixteen days after the Fire of London had 
first broken out in Pudding Lane, a com- 
mittee was formed to rebuild the Royal 
Exchange. The business of the Exchange, 
even to the shops of the Pawn, was trans- 
ferred to Gresham College. The shop- 
keepers 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 



83 



improperly given to Sir Christopher Wren, 
but the records of the Building Committee 
make it clear that Mr. Jarman, the second 
Gty Surveyor, was the architect who de- 
signed 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 seK. 
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 manjT" 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, 

84 



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 WilUam 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 dis- 
appointment mingled probably with a good 
deal of outspoken criticism, and not a few 

35 



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 con- 
clusion 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 humiHty 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 

36 



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 dwin- 
dled 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 Httle further on he tells 

37 



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 hghted 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 be- 
tween 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 

38 



the nobles became the officers of Marl- 
borough, 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 con- 
temptuous. 

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 Ex- 
change 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 Ex- 
change 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 

39 



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 chil- 
dren : " We all went to London," writes one 
of them, " and after with Papa in a coach 
to Drnry 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 Ex- 
change 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 

40 



in his coach." Without a doubt, the period 
during which the second Royal Exchange 
stood was one during which the City mer- 
chants lost much of their high position, and 
probably something of their broad outlook 
upon the world. They became concen- 
trated upon their immediate affairs. They 
Uved 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. 

The downfall of Napoleon, however, 
the extension of the Franchise which for 
a time placed the whole power of Govern- 
ment 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 

41 



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 lampHghts, 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. 



42 



CHAPTER III. 

THE THIRD ROYAL EXCHANGE. 

IT is astonishing that no one has imagined 
a curse of iSre upon the Royal Exchange. 
Many a country estate has fallen under 
that ban ^vith 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 downf or the second time. A letter 
from an eye-mtness is happily on record. 
The fire began at night, and our witness, 
the son of the Rector of St. Michaels, Corn- 
hill, 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 ofiices 
open by day and empty at night. It was a 

48 



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 shop- 
keepers who were wont to stand in their 
doorways in the morning and greet each 
other across Cornhill, had to get their 
famiHes into safety as best they could. 
Speed was necessary, for the great tower of 
the second Royal Exchange, never a satis- 
factory feature of the building since aheady 
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 



44 



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 Grin- 
ling 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 Ukely that ancient engravings of 
Palaces and great courts, with the dehcate 
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 



4f 



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 Eliza- 
beth, wrote down the histories of their 
voyages in such great Enghsh as men to-day 
would give their ears to have at their com- 
mand; 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 Parlia- 
ment Street, by the Horse Guards, White- 
hall and Westminster Hall with a bandage 
over their eyes and over their spirit. They 
gave us the Crystal Palace and a\l the 
dreariness of the Cromwell Road. Lon- 
doners 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 

46 



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 buUding. You 
can buy a Uttle 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, onco 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 

47 



stands, the cattle lowed in the Stock 
Market. Endow for a moment that Grass- 
hopper 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. 



48 



PART II. 

THE BUSINESS 



40 



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 reahsed. 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. 



61 



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 con- 
spicuous 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 Ex- 
change, was a tall and ungainly pock- 
marked 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 specula- 
tion. Some southerly wind blew the madness 
over to England, and in 1711 Robert Harley, 
Earl of Oxford, founded the South Sea 



6S 




SOUTH SEA BUBBLE BROADSHEET. 1720. 



Company, to take over England's Floating 
Debt of ten million pounds. The Govern- 
ment 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 specu- 
lation was in the air and they had no 
following. 

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 ; 



58 



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 pUed 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 

54 



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 fioating 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 

56 



Platen ; and the South Sea Company car- 
ried 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 milhon 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 Aristo- 
phanes, 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 
MoHere deterred. The " Precieuses Ridi- 
cules " 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 



56 



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 adver- 
tised 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 thu-d for 
the transmutation of quicksilver into 
malleable fine metal ; a fourth for ensuring 
and increasing children's fortunes; a fifth 

57 



for building and rebuilding houses through- 
out 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 suppl3n[ng 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 hves, 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 primaeval 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 poHte name for a pirate, but 



68 



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 as- 
sured 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 



69 

K 2 



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 discre- 
tion ^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 Hfe. 
They sparkled and gUnted 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 reahse 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 

60 



the Bubble burst. A member of Parliament 
of that day wrote to Lord Chancellor 
Middleton : " The consternation is inex- 
pressible, 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 
milhon 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 com- 
pelled 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 Govern- 
ment 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 

61 



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 
Greorges," 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 sohd business proposals, if ever times 
were, the Royal Exchange Assurance Cor- 
poration was born. A Mr. Case BilHngsley, 
of the firm of Bradley and BiUingsley, 
SoHcitors, himseK a member of the Mercers' 
Company, proposed a scheme for marine 

62 



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 Ust was open, the pro- 
poser of a rival scheme. Sir John Williams, 
amalgamated with him. The list being 
closed. Case BiUingsley appUed to the 
Attorney General for a Charter. A Charter 
was refused, although in this case Sir 
Robert Walpole supported it ; BiUingsley 
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 
pubUc ^no more, no less. 

BiUingsley, however, and his Directors 
did not lie down under the refusal. They 

63 



cast about and bought up for a song an old 
Charter of Queen EUzabeth'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 Hght and extracting from the 
earth a veritable sleet of golden drops, 
the BilHngsley 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 pre- 
sented 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 

34 



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 faith- 
ful 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 Ex- 
change 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 

65 



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, reheved the Royal 
Exchange Assurance Corporation and the 
London Assurance Corporation of their 
Uabihties in this direction, after they had 
paid between them something Hke a quarter 
of a miUion. 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 hfe and fire. 



66 



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 
Phoenicians. And they are wise. Every- 
body has heard of the Phoenicians and that 
they were the first known traders to visit 
Britain from overseas. You can safely 
assert that the Phoenicians 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 assur- 
ance 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 accm-acy. 
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 
Hkely 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 
Hmited the legal rate of interest to 
six per cent, in all cases except that of 
" Foenus Nauticum " ; and " Fcenus 
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 



68 



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 poHcy 
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 consoHdated 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 



69 



his money back with the addition of the 
premium agreed upon. The Shipowner, in 
a word, held the stakes. 

This primitive form of insurance de- 
veloped 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 estabhshment 
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 Estabhshment 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. 

70 



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 Barce- 
lona 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 ItaUans, or 
Lombardy men as they were called, had 
already gained a soHd footing in England, 



71 



and indeed were actually carrying commer- 
cial war into the very camp of the Stillyard. 

The attack of the Grerman Emperor upon 
the Pope in the first haK of the 13th Century, 
and the influence of the Crusades, which 
brought to England in ItaUan Fleets spices, 
carpets, silks and other luxuries from the 
East, were the chief causes of the ItaHan 
invasion. With the expulsion of the Jews by 
Edward the First, their position was greatly 
strengthened, for, in their turn, they be- 
came 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 dis- 
lodged 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 Govern- 
ment of England, the practice of insurance 
was common and regular in the country. 
The first British Marine Insurance Act bears 



72 



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 f orraine nacyons." 
It mentions, in fact, " an Office of Insurance 
within the City of London," where a registry 
of marine insurance poUcies was compiled. 
This Act of Queen EHzabeth estabUshed a 
permanent commission for the hearing of 
cases arising out of pohcies 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 



73 



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 Hke a vivid 
picture of the crowded wooden houses, the 
medley of thatched roofs, which made up a 
mediaeval 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, mortahty and damage, 
fire hmped behind disease. The mediaeval 
house in a dry summer was tinder to a 
spark, but winter or summer it was a place 
of unclean rushes with httle, if any, sanita- 
tion. Readers of the " Young Visiters," 
will recollect that the heroine put some 

74 



" 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 
mediaeval 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 after- 
wards. 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 heaUng the sick 
naturally fell, were forbidden by the Pope 
to shed blood under any conditions what- 
ever. Where the Great Fire barely slew 
a hundred, the Plague carried off its thou- 
sands. It was natural, therefore, that 
men's minds should be set on compensations 
for the loss of Hfe, before they reached the 

76 



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 estabUshed 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 soHd 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 Dutch- 
man, applied it to the subject of life 

76 



annuities. He made a report to his Govern- 
ment, 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 Part 
des arts. Fart de penser," he explained 
saved the essay from obHvion. 

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 " Trent e et un et 
apres " will be seen at the " Trente et 
quarante " table ten times in the course 
of an evening ? It was with the hmping 
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 himseK were ignorant, that 
helped too, and this was more common. 

77 



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 Httle 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, pub- 
hshed 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 

78 



way of the Great Plague to Bills of Mor- 
tality. But still there is hardly a glimmer 
of science. The Bills of Mortality them- 
selves 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 consider- 
able "if" ^the disease were amongst those 
known to the medical faculty. But they 
did not give ages. And without ages the 
probabihties 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 in- 
sured 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 oppor- 
tunities of education than the sons of 
other tradesmen. He left an unknown 
school early for the counter of his 
father, shared in the pubhc work of his 



79 



Ward, and became a Major in the train 
bands ; but some spark in the man set his 
thoughts upon the laws of hfe so far as the 
Bills of Mortahty 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 milHons. 
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 state- 
ment as though it were a matter which 
anyone might expect. 

John Graunt published in 1662 his 
" National and Pohtical Reflections on the 
Bills of Mortahty." 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 swelHng signors who 
only condescended to think in milHons. 
The book, however, within the year, passed 
into a second edition. It set men thinking, 



80 



and it impressed one, whom, most of all, so 
dry a subject would have been Hkely to 
repel no less a person than His Majesty 
Charles himself. Charles the Second recom- 
mended John Graunt to the Royal Society, 
and charged the Fellows in round terms 
" That if they found any more such trades- 
men 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 sur- 
prising odds and ends of calculation. John 
Graunt computed that seven men out of 
every hundred in England Hve 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 ahve 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 dis- 
tinction in land values which has made, 



81 



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 classi- 
fjring the vocations of men, with a word, 
by the way, against Doctors, who persuade 
" credulous and dehcate 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 
Httle 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 ail- 
ments 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 suc- 
ceeded. 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 esti- 
mated 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 

83 



spontaneous advantage that men find by 
living in great societies. 

There is ah-eady, as you will see, a glimmer 
of science, but still not much more than a 
glimmer. Sir Wilham 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, pubUshed 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 Mor- 
tality 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. 



84 



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 gambUng, 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 poHtics and grave risks. Such 
a period was the very soil in which 
gambhng and speculation were sure to 
flourish. But, even so, the rapidity and 
the ingenuity with which the possibihties 
of gambUng, by means of this new-fangled 
fashion of insurance, were recognised are 

85 



quite remarkable. Indeed, during the 
greater part of this period, gambUng 
in poUcies 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 indig- 
nation 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 
I8th Century. When George the Second 
fought at Dettingen, 25 per cent, was 
openly paid against his return. The move- 
ments of Charles Edward, the Young Pre- 
tender, in 1745, provided one with a sen- 
sation 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 

86 




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 in- 
sured 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 



87 



condemned and not shot ? Would he be 
acquitted ? What was the value of the 
life of the Duke of Newcastle, Prime 
Minister when IVIinorca was lost ? Any of 
these questions could form the subject 
of a wager by means of a poHcy 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 poUcy of assurance entered 
into by a person holding no insurable 
interest was against pubhc interest. 

This dispute, which provoked a commo- 
tion almost inconceivable to us, was con- 
cerned with the sex of the Chevaher d'Eon. 
We are apt to take historical events for 
granted, neither marvelling at their strange- 
ness nor speculating upon the manner with 
which contemporaries received them. Can 
you imagine a Frenchman of distinction, 
coming to England upon a confidential 
mission, quarrelHng with the Ambassador 
of his country, accusing pubUcly 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 



88 



Genevieve Louise Augusta d'Eon de Beau- 
mont, 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. PoHcies were 
opened by which it was undertaken that, 
on payment of fifteen guineas down, one 
hundred should be returned whenever the 
ChevaHer was proved to be a woman. 
The ChevaHer, 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 
caU 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, leav- 
ing 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 hfe 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 poHcy on life. 

It is obvious that the system of insurance, 
once it became general, would give oppor- 
tunities 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 be- 
tween 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 hj mean men or women. One 



90 



or two cases, however, do stand out by some- 
thing 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. Wain- 
^vright 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 abihties, to posture was the enjoyment 
and ambition of his hfe. He contributed 
articles to the " London Magazine " at a 
time when Lamb, Barry Cornwall, HasHtt 
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 
personahty, through the eyes of which the 



01 

G2 



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 mis- 
understand his writings, he enforced them 
with his pencil he was an artist 
of no small ability and drew tjrpes of 
female beauty in which " the voluptuous 
trembled on the borders of the indeli- 
cate " 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 



92 



write. He went with his wife on a visit 
to his uncle. After a short iUness 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 Francos Phosbe and 
Madeline Abercrombie, began to haunt the 
insurance offices of the City. Helene 
Frances Phoebe 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 aggre- 
gate amount of no less than 18,000. The 



93 



policies once effected, Wainwright had 
recourse to an ingenious device. Phoebe 
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 
Phoebe'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 leav- 
ing the money to him had been adopted. 

There can be httle doubt that Phoebe, 
and probably MadeHne too, under the 
spell of this man's ascendancy, were parties 
to the plot ^as they understood it. Phoebe 
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 

94 



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 m'ght 
after Phoebe Abercrombie had settled her 
affairs, she went to the theatre with the 
rest of the family. A lobster supper fol- 
lowed upon their return to their lodgings, 
and in the night Phoebe was taken ill. 
She died Oh ! prudent Mr. Wain-\viight ! 
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 Coun- 
sel for the Insurance Company throw upon 
Wainwright's manoeuvres that his claim 
was rejected by the Jury. The Bank of 
England apparently began now to look 
into that Uttle matter of the Power of 
Attorney. Wainwright's forgeries were dis- 
covered, and Wainwright wisely preferred 
to remain at Boulogne. Ho lodged there, 

95 



by the way, with an Enghsh 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 
poHce 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 bHnd aside and looked out. By 
one of those coincidences which are not so 
uncommon as the pedantic would have 
one to beUeve, there was a man passing 
in the street who knew him. The passer-by 
caught a gUmpse of the face peeping out 
from behind the bUnd and cried aloud 
" That's Wainwright, the bank forger." 
He was tried on a charge of forgery, sen- 
tenced 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 Cor- 
poration. 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 Corpora- 
tion. 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 

97 



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 bhthely 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 Hfe 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 f ore-rumier 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 Direc- 
tors appointed ]Mr. Palmer, of Ockingham, 
in Berkshire, its agent. 

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 



93 



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as are proper to be country correspon- 
dents " ; and by the next year, so widely 
had the system been increased, that it 
resolved, by a formal declaration, to under- 
take no responsibiUty 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 ofiice. 
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. IVIr. 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, 

99 



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 poUcy 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 14 J d. 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 com- 
bined were shortly added others, and we 
find in the year 1752 that thirty-six firemen, 
nine porters and four carmen paraded the 

100 



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 
then' separate offices, and those employed 
by the Royal Exchange Assurance Cor- 
poration must have cut a fine figure when 
they paraded the West end of the town, in 
a hvery of yellow fined with pink, with 
music playing in front of them, and five 
shilHngs in their pockets for their dinners. 
The custom by which each separate in- 
surance company kept its own firemen was 
a bad one in the pubHc 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 MetropoHtan Fire Brigade, as we 
know it, came into existence. 

The Royal Exchange Assurance Cor- 
poration stands to-day its own evidence 

101 



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, DubHn, 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 philan- 
thropic 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 pros- 
perity and then disappear. It has remained 
proud in its antiquity, faithful to its 
traditions, and yet alert to each new 



102 



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 seK-preservation is not 
everything. For a Corporation to Hve 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. 



103 



J.i3. TnuscOTT A Sos^, Ltd., London. B.C. 








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Library Bureau Cat. No. 1137