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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 z 
 
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 a ^ 
 
 o X 
 
 < 
 
 w > 
 
 X o 
 
 c 
 
 0) 
 .5! 
 
 1^ 
 
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. 
 

 
 Date Due 
 
 
 i 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Library Bureau Cat. No. 1137