Sitting of 14 February 1810

MARINE INSURANCE COMPANY.
Mr. Manningrose to bring forward his motion, in consequence of the petition he had presented a few days since, praying for a Bill to establish a New Marine Insurance Company. He spoke at considerable length, but in so low a tone, that it was impossible to collect even the substance of his speech with any degree of accuracy. We understood, however, that he made a chronological statement of similar institutions already adopted, from time to time, in this country, and their inadequacy to meet all the objects of commercial men. With respect to the design of the merchants who had signed this petition, any man who read the list must be confident they were not men likely to be actuated by mere views of personal interest; but that they chiefly contemplated the general interests and accommodation of the mercantile world. He then went into a comparative statement of the amount of insurances at the different offices annually, and shewed that in the two now in existence, which offices possessed exclusive privileges, namely, the Royal Exchange and London Assurance, their amount of risk on vessels was so limited, that neither would exceed 10,000 l. upon any one ship; and that ship-owners, whose vessels greatly exceeded that value, were obliged to run their own risks.
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There was another point extremely to be desired by merchants, namely, that they should be always assured of the ability of those who subscribed to policies, fully to meet the risk; a point not easily known by the present mode. Merchants were obliged to apply frequently to a number and variety of underwriters at Lloyd's, upon risks of any large amount; and the consequence often was, a considerable loss to the party so insured; insomuch, that at the peace of Amiens, he knew one gentleman insured for 36,000 l. who was forced, through the insolvency of several of the underwriters at Lloyd's, to sit down with a loss of one-third of the whole amount insured. A regular company, composed by persons of known respectability, carrying on their business in one house, and under the management of directors, was the kind of establishment most desirable to commercial men. The subscribers to this petition had already subscribed a sum of five millions, which they could increase to any extent required; so that instead of being confined, like the two present companies, exclusively chartered, to a risk of about three millions, or three parts out of one hundred, constituting the total of the insurances of London in each year, the proposed company might insure to any extent required. The establishment he proposed would not injure the interests of any other, for the increased commerce of this country would afford business enough for all; and the establishment might be made to answer, not only for England, but for every nation of the globe, and thus attract a most lucrative branch of business to this country. He trusted the House would see the importance of the proposition. He would not conclude his speech upon the subject in the usual way, by moving for leave to bring in a bill, because he thought it more decorous to consult in the first instance, the deliberative wisdom of a committee of the House, who should inquire fully into the necessity and expediency of the measure, and report their opinion. The hon. member concluded by moving "That a select committee be appointed to take into consideration the act made in the 6th of George the first, for granting exclusive privileges for marine insurances, to the Royal Exchange and London Assurance companies, and also to consider the best means of effecting marine insurances, and report their opinion to the House."
Mr. Marryatrose, and spoke as follows: Mr. Speaker; For the better elucidation of the motion now before the House, it will be necessary to state, more particularly than has hitherto been done, the nature and object of the petition with which it is connected, and on which it is founded. This petition is signed by a great number of very respectable individuals in this metropolis, describing themselves as merchants and others having assurances to make, who are desirous of forming themselves into a company, with a capital of five millions, for the purpose of effecting assurances; and praying that they may be enabled so to do, either by the repeal of the exclusive privileges granted to the two existing companies, by the Act of the 6th Geo. 1, or by being permitted to make such assurances as a company, notwithstanding the said recited Act. Thus the supporters of this petition are in a situation of some embarrassment as well as awkwardness; for they must first persuade the House that insurance companies, possessing exclusive or particular privileges, are prejudicial to the public interests, in order to induce us to deprive those now existing of their chartered rights; and then, requesting us to forget all they have said on this subject, they must take up the contrary side of the argument, and persuade us that such companies are advantageous to the public interests, in order to induce us to establish their intended new company on the ruins of the old companies. They endeavour, indeed, to draw a distinction between this new company and the present chartered companies, by declaring that they renounce all pretensions to a charter—that they require no monopoly; but the explanation they give of their views and objects, by no means accords with these declarations.—Parties who apply for an incorporation can have but two objects in view; to obtain either exclusive or particular privileges, and to obtain an exemption from responsibility beyond the amount which they engage to invest as a capital in the intended undertaking. The plan of this new company comprises both these objects; for the petitioners pray that they may have the privilege of doing that, which the law as it now stands prohibits them from doing, effecting marine insurances as a company; and they farther pray, that they may be exempted from responsibility beyond the amount of their intended capital. Whether these advan-
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tages are given them by a charter, or by an act of Parliament, the mode indeed may vary, but the effect will be the same; and therefore, there is nothing to distinguish this case, from other cases of applications made by individuals for privileges not enjoyed by the community at large. It is obvious that the grant of any such privileges or immunities to any set of men, is an injury to all those by whom they are not enjoyed; and therefore it is an established principle that they ought never to be granted, but in order to procure some advantage for the public, which cannot be procured by any other means. To use the words of lord Coke, (3rd Inst. 184), "there must be, urgens necessitas, et "evident utilitas." These pleas have been justly admitted in the case of several corporations lately established, not only in this metropolis, but in the out-ports; I mean the Dock Companies. The urgent necessity and evident utility, of giving adequate security to the public revenue and to private property, was so strongly felt, that Parliament thought it advisable to encourage these undertakings, by the exclusive privilege of warehousing certain commodities, at certain rates, for a certain, period; but at the same time, with a due regard to the interests of individuals, they indemnified every description of persons who might be deprived of their accustomed occupations and profits by this new change of system. If we try the merits of the petition now before the House, by the principles here laid down, it is impossible that we can accede to it; for no case has been made out, either of urgent necessity or evident utility. The parties merely propose to do that as a company, for their own emolument, which is already done by individuals; and this, too, without making any provision to compensate those who would be deprived of their present means of subsistence, by the intended innovation.—It has been urged in favour of the present application, that the preamble of the Act of 6th Geo. 1, by which the two Marine Insurance Companies now existing were established, expresses itself in language favourable to chartered and joint stock companies. If, however, we look into the history of that Act, we shall find that the application of these companies for a charter, was in the first instance rejected: but that the civil list being soon afterwards much in arrear, and the proprietors offering 600,000 l to supply this deficiency, the minister of the

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day, anxious to provide means for defraying the too lavish expenditure of the court, without imposing new burdens on the people, exerted all his influence in favour of the measure; and that then this Act was carried through the House. Thus the existing companies owe their establishment to a job; and this surely is no very great recommendation to the pretensions of any new companies of a similar description.—Indeed, although the preamble of this Act justifies the establishment of these two companies, in consequence of the numerous failures which had then recently taken place among the underwriters (a consideration by no means applicable to the present times), yet, in the subsequent clauses, it provides that his Majesty may revoke their charters, if they are found inconvenient of hurtful to the public; enacts, that no other such corporations shall ever be established; and recognizes the general principle, that all joint stock companies "manifestly tend to the common grievance, prejudice, and inconvenience of great numbers of his Majesty's subjects, in their trade or commerce, and their other affairs;"' declares them to be public nuisances; and parties engaged in joint stock companies without the sanction of the legislature, are liable to prosecutions under this very Act.—If we refer to other Parliamentary authorities, we shall find that grants of exclusive or particular privileges, have ever been viewed by our ancestors with great jealousy, and have frequently excited their just reprehension. In the reign of queen Elizabeth, the House of Commons voted such grants to be breaches of the privileges of the people; and the Queen, in consequence, annulled the greater number of them, and subjected the rest to the controul of the laws. When she received the thanks of the House for so doing, she gave them in return her "hearty commendations, for having recalled her from an error, proceeding from her ignorance, not her will, and acknowledged that these things would have turned to her disgrace, had not such harpies and horse leeches," (as the good Queen termed these monopolizers), "been made known and discovered to her, by her faithful Commons." (Rapin, A. D. 1600.) James I, confined his grants of monopoly to foreign trade only; and Mr. Hume tells us, that "by this enormous grievance the trade of England was reduced to a very low ebb,
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"being brought into the hands of a few rapacious engrossers." At length Parliament interfered again, and an Act was passed in the 21st year of that King's reign, by which all monopolies were condemned, as contrary to law and the known liberties of the people: an Act, which sir John Sinclair observes, ought for ever to have put an end to so destructive a grievance. Charles I, among other expedients to raise money, resorted to that of granting exclusive and particular privileges; but as soon as Parliament met, they protested against these grants as one of their greatest grievances, and passed a resolution, that all members having a share in them, directly or indirectly, should be incapable of holding a seat in the House. Many in consequence vacated their seats, and those who did not, were expelled. (Rushworth, 4. page 37. Whitelocke, page 38.) This may be no bad lesson to some gentlemen concerned in the present undertaking; for certainly the principle of exclusion may be much more justly applied to those who obtain particular privileges by grants from the crown, than to those who take contracts by public and open biddings, in the disposal of which the crown has no influence whatever. I shall not trespass on the patience of the House, by citing more parliamentary or historical authorities, nor by giving quotations from writers on political economy, all of whom concur in the injustice and impolicy of establishing companies with exclusive or particular privileges; but conclude my observations upon them with the just and emphatic sentiment of Dr. Adam Smith, who says, that "they are nuisances in every respect."—If I am asked why I, who profess myself inimical to all such companies, object to the appointment of a Select Committee, to consider of the Act of the 6th Geo. I, by which the exclusive privilege of effecting marine insurances, as companies, was granted to the two companies now existing, I answer, because the limited extent of the influence and interest of these companies, renders them much less exceptionable than this intended New Marine Insurance Company, which, we are told by its advocates, comprises 9-10ths of the whole commercial interest of this metropolis; because I am not so inveterate a system-monger as to wish to subvert old established institutions, although I disapprove of the principles on which they were founded, when experience has shewn

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that they are not inconvenient nor hurtful in practice; and because I will not lend myself to the views of those, who, under the specious pretext of redressing existing grievances, would introduce others infinitely more intolerable in their stead; and who are pursuing their own private interests, under the pretence of the public good.—If I am asked why I object to the other part of this motion, the appointment of a Committee to consider of our present means of effecting marine insurances in Great Britain, I answer, because the subject was completely investigated so lately as July, 1806, by the Committee appointed on the Globe Insurance Company's Bill; before whom it was so satisfactorily proved, that our means, both in point of extent and solidity, were completely adequate to every possible occasion, that the parties abandoned their application to Parliament. I am aware that one of the gentlemen who gave the most decided testimony before that Committee, is a subscriber to the petition now before the House, and one of the intended directors of the New Company; but this circumstance does not prove that any change has taken place in his sentiments: it only proves that he has discernment enough to know, that an establishment which may be a very bad thing for the community, may be a very good thing for individuals. I am aware too, that the names of many subscribers to Lloyd's are to be found annexed to this petition; but I know that the greater part of them joined this new company only because they thought it impossible successfully to oppose the powerful interests by which it was supported, and considering the ruin of all individual underwriters as inevitable, were willing to save something out of their own wreck.—In order to put the House in possession of the real merits of this case, it will be necessary to explain the mode in which marine insurances are at present effected in this metropolis. Exclusive of the two chartered companies, there are about 1,500 subscribers to Lloyd's, the greater number of whom daily attend there for the purpose of transacting insurance business. The merchant, when he receives an order to effect insurances from his correspondents abroad, or has occasion to cover property shipped by himself at home, applies to an insurance broker, who transacts the business either with the public companies, or with individual underwriters, according as he finds it most to the ad-
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vantage of his employer. The House will see the extent to which competition is carried by this mode of effecting marine insurances. The merchant is aware that his credit with his foreign correspondents depends upon his executing their orders on the best terms possible. The broker is equally aware that his credit with his employer, the merchant, depends upon the same circumstance. The underwriter is also aware, that unless he writes at the very lowest current premium, the brokers, who are in the habit of shewing him their policies, will transfer their accounts to other underwriters; and from this consideration, he frequently accepts a premium which in his best judgment, he considers as inadequate to the risk, rather than lose his connections. Thus competition is carried to the highest possible pitch; and thus has the reputation of this country for effecting marine insurances on the most reasonable terms been so universally established, that orders from every part of the globe are sent here, the property annually insured in this kingdom amounting to nearly two hundred millions, as is proved by the duty paid for stamps upon policies.*—But, it is contended that greater facility is wanted in effecting insurances, and will be given by the establishment of this new company. A reference to the evidence given before the committee on the Globe Insurance Bill, on this particular point, in July, 1806, completely disproves this assertion;

*Amount of cash received for sea policy stamps, delivered to individuals in the year 1809, from the office

£312,251

3

11

*Amount of cash received for sea policy stamps, delivered to the chartered companies,

12,577

0

0

324,828

3

11

Add for the out-ports and Ireland, estimated at one-fourth of the above,

81,207

1

0

£.406,035

4

11

Four-fifths foreign insurance, or £.324,828 duty, at 5s. per cent. will cover property to amount of

£.129,931,200

0

0

One-fifth Irish and coasting trade, or £.81,207 duty, at 2s. 6d. per cent. will cover property to amount of

64,965,600

0

0

Total amount of property insured in Great Britain in 1809

£.194,896,800

0

0

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and, since that period, the number of underwriters has increased in a far greater proportion than the extent of business. Indeed, it will at once appear evident, that no such facility is wanting, and that our present means of effecting marine insurances are equal to every possible occasion, from the following statement. The number of subscribers to Lloyd's is about 1500; supposing them to write only 300 l. each on a policy, the amount would be 450,000 l.; but many of them are in the habit of writing 1,000 l. 2,000 l. and even 5,000 l. on a single risk. There can, therefore, be no difficulty in insuring with individual underwriters, a much larger sum than ever was embarked in any one bottom, even without the present public offices, much more without the establishment of any new public offices.—It has also been contended, that greater competition would be excited by the establishment of this new company, and thus the general interests of commerce be benefited. This I deny, on irrefragable, evidence—the experience of the past, by which we are best enabled to form a sound judgment of the future. The two public offices already in existence, so far from coming into competition with Lloyd's, in any beneficial way to the general interests of the public, confine themselves to what are called regular risks, in effecting which to any possible extent there is no difficulty whatever; but in what are called cross risks, in those new and perilous modes of carrying on commerce, to which the state of Europe has lately obliged us to resort, the public offices come into no competition with Lloyd's; for they refuse to write them at any premium. During the whole of the last year, they refused to insure vessels trading to or from the Baltic, unless warranted free from capture and seizure in the ports of the enemy, the great risk against which the parties interested wished to be covered: and this branch of commerce, which extended the export of our manufactures and produce to an unprecedented amount, and secured us an abundant supply of naval stores, so indispensably necessary to the support of our maritime greatness, would never have been carried on, (for unless it could have been insured it could not have been carried on,) but for the spirit and enterprise of the underwriters at Lloyd's. Every man there ventured a certain sum upon these risks, such as he could afford to pay in case of loss; and
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thus the whole property was covered, and these invaluable national benefits were obtained. The public companies depend upon their regular business, which enables them to pay a very handsome dividend to their proprietors; and if more of these companies were to be established, and more of the regular business were monopolized, individual underwriters would be discouraged from pursuing their avocations, and competition be lessened instead of being increased. It would be absurd to expect any public office to act on any other system; for it is impossible that the acting director or secretary of a public office, should possess the same knowledge, as to the nature and extent of every new description of risk, the same information as to the means by which the decrees of the enemy may be eluded, as 1,500 underwriters, mostly men of commercial habits, and consequently commercial knowledge, daily collected together for the purpose of communicating and receiving intelligence; whose judgments on these subjects are formed and confirmed by constant habits of individual application and mutual discussion, and who concentrate the scattered rays of information, as it were, into one focus at Lloyd's. On this conviction the public offices, very wisely, refuse to undertake what they do not understand; and wholly decline the only species of competition with Lloyd's, which could in the smallest degree conduce to the public advantage.—Another argument urged in favour of establishing this new company is, that greater security is offered to the public by them, than can be given by individual underwriters. It is not necessary for me to undertake to disprove particular instances that may be brought forward of the insolvency of underwriters, or to contend that they are immaculate as a body, either in property or character; but, this I will assert, that a man who suffers by the insolvency of underwriters at Lloyd's, suffers, generally speaking, strange as it may appear, with his own concurrence. A broker will tell his merchant, that he cannot complete his insurance with good men, unless he will give a higher premium. The answer frequently is, you must not give more, for such a house has effected the same risk at the same premium; therefore, get the best names you can; and thus the merchant frequently sets the advantage to be gained by the reduction of premium, against the risk to be run from the want

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of solidity in the underwriters. No merchant who offers a fair premium, and whose business is transacted by brokers of respectability, is ever under the necessity of taking a doubtful name on his policy; and I maintain, that Lloyd's offers better security to the assured than can be given by any chartered company. I say so, for this plain reason, that every man at Lloyd's is responsible for his engagements to the last shilling of his fortune, while the members of an incorporated company are responsible only for the amount of the capital originally invested; and the capital of the underwriters at Lloyd's infinitely exceeds that of any chartered company whatever. For instance: the capital of this new company is intended to be five millions, of which only one million, I understand, is to be actually advanced. In point of fact, then, the one million so advanced, is the whole extent of the security offered to the public; for though the original subscribers to this undertaking are men of fortune and able to pay the other four millions in case of need, yet they, from various motives, may be induced to sell out, and may sell to men of straw, mere speculators, who would not be able to pay the other four millions. But giving them the whole advantage of this argument, and taking their capital at five millions, that sum bears no proportion to the aggregate capital of the underwriters at Lloyd's; for could name fifty out of the 1,500 subscribers to that house, who could pay down these five millions at any time, without the smallest inconvenience, leaving the capital of the other 1,450 subscribers wholly untouched. Events have occurred within these few years, that would have more than swallowed up the capital of this company, and yet have scarcely occasioned the failure of a single individual at Lloyd's; for every prudent underwriter regularly classes all his risks, and proportions the amount he hazards on those of each particular description to his means of payment in case of loss; a precaution which could not possibly be observed in the vast mass of business that would be undertaken by this new company. The events to which I allude, are the detentions and subsequent condemnation of the Dutch ships, in consequence of the hostilities that took place between this country and Holland, in the year 1794; the capture and condemnation of American vessels by France and Spain, in the year 1797, on the plea of their navi-
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gating without the role d'equipage required by treaty; and the seizure of all the British ships in the ports of Russia, by the emperor Paul, in the year 1799. Had this intended new company been established previous to either of those periods, comprehending within itself, as the proprietors themselves declare it does, 9-10ths of the commercial interest of this metropolis, and of course doing 9-10ths of the business, and sustaining 9-10ths of the losses, it must have been totally ruined. But, the proprietors, sheltered under that limited responsibility which is the great object of their present application to parliament, would still have continued men of opulence: their carriages would still have roiled along the streets, and have splashed with mire the unfortunate individuals, who had been ruined by their insolvency as a company. When these disasters happened, some underwriters certainly failed; but the number was comparatively small: the blasts that would have torn up this company by the roots, scarcely brought down a leaf from the tree at Lloyd's. Whether, therefore, we consider the amount of the capital employed at Lloyd's, or the subdivision of risks attended to by the individual underwriters there, it is obvious that the public security, so far from being augmented, would be diminished, by 9-10ths of the insurance business being transferred to this great and chartered company.—It is also asserted, that much litigation would be prevented, and losses be recovered with greater facility and promptitude from this new company than from the underwriters at Lloyd's, who are accused of being litigious, and even unprincipled, in the defences they set up against just demands. That some individuals have at times availed themselves of points of law, of which underwriters in general have not taken advantage, I admit; but there are very few men whom interest, if not principle, would not prevent from selling their good name for any sum they could possibly gain by evading the payment of a loss. Underwriters, speaking of them collectively, are much more sinned against than sinning; no set of men on earth are so much the dupes of fraud and villany. They have paid, not only for vessels purposely lost, but on cargoes of stones and brick bats, packed up as bale goods; nay, even for vessels which it afterwards appeared never were in existence, though forged invoices, bills of lading, certificates of their having sailed,

411
and every requisite document, were regularly transmitted; and in order to prevent suspicion, one of the most respectable houses in the city was made the innocent instrument of this nefarious transaction. Such impositions practised upon men naturally tend to make them suspicious, and sometimes they certainly are so without just ground; but the question is not as to the positive degree of facility with which losses can be recovered at Lloyd's, but as to the comparative degree of greater facility with which they can be recovered at public offices. It is true that in settling with a public office, the assured has only to settle with a single person, instead of having to settle with the various individuals who have underwritten his policy; but this task is one which requires neither much time nor trouble, for almost all the parties sit under the same roof, and when the first underwriter on a policy has settled the loss, the others generally follow without any investigation of the papers. On the other hand, public offices are necessarily governed by certain fixed rules, and will not settle without regular documents, the production of which is frequently dispensed with at Lloyd's. Public offices will not pay on missing ships till the period is expired when the loss can be recovered by law; the underwriters pay without insisting on this delay, on an undertaking from the assured, that if the vessel should hereafter appear, he will put them in the same situation as if the loss had never been settled. Claims of liberality, which could not be maintained by law and which could not, perhaps, with propriety be admitted by the directors of a public company, acting for others, are frequently admitted at Lloyd's by individuals, each of whom is acting for himself. But, it is said that underwriters frequently go to law in order to put off the payment of losses, and that in such cases an action must be brought against each individual; whereas, if the insurance was effected with a public office, a single action would decide the contest, and thus much money now spent in litigation would be saved. That much money is now unnecessarily spent in litigation the underwriters know to their cost, for it is spent at their expence. The solicitor to the assured commences proceedings against every underwriter; the underwriters apply for a rule to consolidate, which the judge grants on condition of their paying all the charges hitherto in-
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curred, and these fall so heavy, that an underwriter, where a case is doubtful, will frequently rather pay than litigate the demand. The public offices are not influenced by this consideration in the same degree, for they can contest a loss of 100,000 l. at as little expence as an individual underwriter can contest his subscription of 100 l.; and it is not very reasonable to expect that those parties will be least disposed to be litigious who have the strongest temptation to be so, unless we believe the directors of this new intended Marine Insurance Company not to be men of like passions with ourselves.—One of the allegations in the petition of this intended new company is, "that the trade and commerce of these kingdoms have increased so much since the two existing companies were incorporated, that these two companies do not at present insure more than three parts in one hundred of the ships, goods, and merchandize insured in Great Britain." On this it may be observed, that if the trade and commerce of these kingdoms have increased, the number of underwriters has increased in a still greater proportion; for the number of subscribers to Lloyd's in the year 1771 was only 79, and the present number is near 1,500. The small proportion of insurance business effected by the public companies, shews the general preference given by the commercial world to individual underwriters; and is the strongest proof that could possibly be adduced, not only of more moderate rate of premiums at which they transact business, but of the general confidence placed both in their probity and solidity—The petitioners also state, "that several insurance companies have been established in the East and West Indies, and America;" and seem to wish to have it inferred, that these companies have been established for want of more insurance companies in Great Britain. Insurance is a natural appendage to commerce; and the establishment of insurance companies, or of individual underwriters, in every commercial country, may be sufficiently accounted for, by the desire merchants feel to transact their own business, rather than pay a commission for having it transacted by others; and the satisfaction they derive from holding in their own hands the policies of insurance by which their property is secured, instead of confiding the important trust of recovering upon them, in case of loss, to their foreign correspondents. In-

413
dependent of these general considerations, circumstances of a local and peculiar nature, will shew the indispensable necessity of such establishments being formed, in all the countries named by the petitioners. In the East Indies, opportunities of writing to England for insurance occur so seldom, that many voyages, more particularly those from one port to another, or country voyages as they are called, must be insured upon the spot, or not at all. It is also to be considered, that parties resident in India, if they insure there, recover a loss without delay; but if they insure in Great Britain, they cannot recover, and realize their funds, in less than eighteen months or two years; and this circumstance, coupled with the high rate of interest paid for money in India, will account for their preferring to insure there rather than in Europe: nor would the inducement so to do be at all lessened, by the establishment of this, or any other new insurance companies. In the West Indies, vessels going from one island to another, or from any of the islands to America must be insured there unless one of the packets, which sail only once a month, should happen to be on the eve of her departure when the voyage commences; otherwise the issue of it may be known in England before the order for insurance arrives there. With respect to America, it is not to be expected that a country rising so fast into commercial importance, should form none of those establishments by which alone commerce can be secured; and it is also to be remarked, that our law-prohibiting the insurance of enemies' property, not only prevents property really belonging to the enemy, but property liable to be suspected of belonging to the enemy, from being insured here; for as British underwriters cannot pay in case of British capture, parties whose vessels are brought in for adjudication, might, if they insured here, be ruined for want of their funds while the cause was pending, and therefore they insure in countries where there is no bar to their immediate recovery. From these observations, it appears that the extension of the insurance business in America is to be attributed to various causes, but more particularly to this law, which sacrifices commerce to policy; and that the case would not be altered by the establishment of this new company, unless, which I cannot suppose, they mean to insure against British capture, in violation of the law of the land.—The only ad-
414
vantage that I can discern in the establishment of this new company, is an advantage of which the gentlemen concerned have told us nothing, but which I shall now endeavour to develope; the advantage that would accrue to themselves. Their plan is to unite a very great proporportion of the leading mercantile houses in this metropolis into a company, for the purpose of effecting their own marine insurances; and thus to retain, and divide among themselves, the emoluments hitherto made by the insurance brokers and underwriters at Lloyd's. They would retain the profit of the brokers, by effecting their own insurances at their own office; and as proprietors of that office, they would also divide among themselves the profit of the underwriters. They propose, too, acting on a scale hitherto unprecedented in point of extent and magnitude. Thus, by the boldness of their speculations, their profits may be increased to an almost incalculable amount; while their losses cannot possibly exceed the sum they offer to invest as the capital of their undertaking.—Before the House give their sanction to this measure, I trust they will seriously listen to the objections that offer both on public and private grounds, to the carrying it into effect.—The first objection that I shall state, is founded on its interference with the rights of individuals. Every profession, trade, or calling, requires some previous study and qualifications; and all writers on political economy agree in considering the time thus bestowed, and the expence thus incurred, by every individual, as a part of the useful productive capital of the state, as well as the just property of the party, in the enjoyment of the fruits of which he is entitled to legislative protection. I am aware that the occupations of an insurance broker and underwriter are generally considered as requiring but very superficial attainments; but a candid investigation of the subject will prove this idea to be erroneous. An insurance broker can only qualify himself for his business by considerable study and application: he must learn how to fill up policies of every description, with all the various clauses adapted to every possible circumstance; he must be able to make accurate declarations of interest, so as to cover the parties in case of loss, and yet not expose them to the payment of any unnecessary premium in case of arrival; he must know how to make up complex

415
statements of average and partial losses on every species of merchandize, and on the various principles applicable to every different case. He must be informed of the current rates of premiums on every voyage, in order that he may be enabled to transact the business entrusted to him to the best advantage; and he must be well acquainted with the character of the different underwriters, to guide him in the selection of the names he takes upon his policies. The underwriter must possess every species of knowledge requisite for the broker, (except indeed as to the solidity of his brother underwriters;) it being his province to examine all his papers and statements; in addition to which, he must be well versed in geography; must be informed of the safety or danger of every port and road in every part of the world; of the nature of the navigation to and from every country; and of the proper season for undertaking different voyages; he should be acquainted, not only with the state, but the stations of the naval force of his own country, and of the enemy; he should watch the appearances of any change in the relations of all foreign powers, by which his interests may be affected; and in short, constantly devote much time and attention to the pursuit in which he is engaged. Those who commence underwriters without the necessary qualification, or continue underwriters without the necessary caution, generally soon find their error, in their own ruin, and the injury of those with whom they are connected. The gentlemen who have subscribed to this new company, wish to become brokers and underwriters, without loss of time or hindrance of business; to put themselves in possession of their emoluments, without that study and labour, or those qualifications, by which alone they can be fairly acquired. Archimedes told Hiero, who wished to be a great mathematician all at once, that there was no royal road to geometry; and this observation may be justly applied to the acquirement of any other species of knowledge, or to the fruits of that knowledge. But the subscribers to this new company are endeavouring to find out a royal road to the profits of the insurance brokers and underwriters; and this royal road is an act of parliament, enabling the king to grant them a charter of incorporation.—The effect of establishing a company possessing such vast influence within itself, must be that this great leviathan will swallow up
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all the small fry; that it will deprive the insurance brokers and underwriters of those avocations to which they hare devoted their time, in which they have embarked their fortunes, and by which they have maintained themselves and their families. But it is contended, that these consequences will not ensue; that this New Marine Insurance Company will, on the contrary, encourage the insurance trade, by the increased facility and advantage it will afford; and that thus more new business will be brought to Lloyd's than will be taken away. They who so argue, if they believe what they say, must be weak indeed. The principle of this company is not competition, but combination; it even precludes all possibility of competition; for the proprietors tell you, that they possess nine-tenths of the commercial interest of the City of London, and that they wish to form themselves into a company, for the purpose of effecting their own insurances. Who then can wrest them out of their hands? Besides, if this company be incorporated, on what grounds can incorporations be refused to any other set of men? Every out-port will have its Marine Insurance Company; and if the merchants of this metropolis, who are not interested in this establishment, have sufficient business among them to form a second company, a second company will be established here, and thus the whole business of underwriting by individuals will be altogether annihilated.—Great as I consider the evil of this intended establishment to be in itself, I consider it as greater still, when I reflect on the ruin that it will inevitably bring on a numerous class of meritorious individuals, who, I may say, have more than ordinary claims to public consideration. The subscribers to Lloyd's, in promoting their own interests, have at the same time promoted those of their country; they have increased her revenue, and raised her commercial character as well as her prosperity. With a liberality not always found in public bodies, they freely and gratuitously communicate that intelligent e to others, which they daily procure at a heavy expence to themselves. By a standing regulation of the house, access is given to their books in the non-subscribers' room, to every individual whose interest, or whose anxiety for his absent friends, may bring him there. The editors of the public papers constantly resort there also, and all the information the public receive

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respecting shipping concerns comes from Lloyd's. The subscribers to Lloyd's have, at all times, been ready to set an example to their countrymen of public spirit and liberality. Their hands and hearts have ever been open to relieve the distress of those who have suffered, and to reward the valour of those who have distinguished themselves in the cause of their country. More particularly at the commencement of the present war, at a period of great and general public alarm, when every man expected to be obliged to contend for British liberty on British ground, they stood nobly forward; by a well-timed and spirited effort, they infused energy and confidence into the public mind, and gave an impulse to patriotism, which was felt, and most beneficially felt, to the very remotest comer of the British dominions. One unanswerable objection to this new company arises from the illegality of the principle on which it is founded. As the law now stands, if a merchant chooses to underwrite those policies of insurance which he is ordered by his correspondents to effect, he can only do so on the following terms:—if losses happen, he must pay those losses; but if the vessels arrive he cannot recover his premiums. So justly tenacious is the law of the great and salutary rule, that no man shall be at the same time agent and principal; that he shall not have an interest contrary to that of the party for whom he acts. This company is founded on the direct violation of this rule. Every member is to throw his policies into the common stock of the company, in which he is a proprietor, and thus to have an interest diametrically opposite to that of the party for whom he acts. Opposite in a double respect: in the first place, as the higher premium he pays, the greater will be his own profit; and in the next place, as if losses happen, it is his interest not to recover them, because they must come, in part, out of his own pocket. Nothing can be so indefensible, as for men thus to place themselves in a situation, where their interest draws one way, and their duty another. It is what the law positively forbids, and the whole object of this application to Parliament, is to enable the petitioners to do that as a company, which the law prohibits them from doing as individuals.—Let us now examine the consequences of this measure, as it would affect the general interest of commerce and of the public. Instead of 1,500
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individual underwriters, we should probably have five or six insurance companies, each represented and conducted by a secretary or managing director, as he may happen to be denominated. The whole race of insurance brokers too would be at an end; the merchants who now employ them retaining their profits also among themselves by effecting their own insurances at their own office; and instead of that system of fair and open competition which now prevails, we should have a system of close and secret combination. The secretaries of the different offices, by a good understanding with each other, might regulate the premiums as they pleased; and the merchants, the proprietors of these companies, could not be expected to be very active in reducing profits, which they would divide among themselves. The result of these practices would soon be, that foreigners would discover they could effect their insurances cheaper elsewhere, and would no longer send their orders to Great Britain. Thus even the parties themselves, though they might for a while reap the advantage of that high reputation which has been established by others, would not long profit by their own wrong: the revenue would be injured, by the diminution of the present duty on policy stamps; and the public would be injured, by paying a higher price for every commodity imported, in consequence of the advance on premiums; it being art axiom in trade, that all charges fall ultimately upon the consumer.—But, if the prayer of these petitioners be granted, will the mischief end here? On the same principle that a few companies are permitted to engross and monopolize all the insurance business, why may not a few other companies be permitted to monopolize all the other business of this metropolis, and render individual merchants and traders as useless, as these petitioners seek to render individual underwriters and insurance brokers? Why may not the hon. member who brought up this petition, follow it up by another petition, praying for leave to incorporate at company of merchants trading to the West Indies? And why may not another hon. member, who has taken a very active part in supporting this petition, bring up another petition, praying for leave to incorporate a company of merchants trading to the United Stales of America? These gentlemen, with a few of their friends, might set on foot companies trading to every part of the globe, and

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divide the commerce of the whole world among them. Every argument that can be urged in favour of the present plan, might be urged with equal force in favour of these new projects. Instances might be brought forward of the insolvency of some individual merchants, of the dishonesty or ignorance of others; and the advantages that would result both to the character of the nation, and the interests of all those connected with it, by placing the whole foreign trade in the hands of men, possessed of large capital, enjoying an unblemished reputation, and distinguished for high mercantile knowledge, might be urged as unanswerable reasons in favour of this new system. If any poor individual who was not taken under the shadow of the wing of one of these great companies, presumed to complain, he might be told, as the insurance brokers and individual underwriters are now told, that more commerce than ever would be brought to this country by this wonderful improvement, and that it was impossible his interests could suffer by a measure so fraught with public good. Unfortunately for such reasoning, but, happily for us, if we are wise enough to profit by experience, this experiment has already been tried, and the result stands recorded in history: for Mr. Hume tells us, that, during the reign of James I. in consequence of similar incorporations, "the trade of this kingdom was brought into great decay, being put into the hands of a few rapacious engrossers." Let us then guard against the beginning of these evils by discountenancing the present project. It is by the competition of individual exertions, that Great Britain has risen to her present unexampled height of commercial prosperity; and in proportion as that system is exchanged for a system of monopolizing combination, that prosperity will again decline.—Not merely the interest, but, the moral character of the nation, is at stake upon the issue of this measure. The great æra of these incorporated companies was the year 1720, when the spirit of adventure in speculations of this sort inflamed the minds of the people to such a degree, that all sober industry and patient application were despised, and every man was intent upon making his fortune in a moment, by encaging in some of these undertakings. Not merchants alone, but many of the most ancient and noble families in this kingdom, as we read in the history of those times, were totally ruined by this
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epidemical madness. I shall not repeat the history of the South Sea Company, and twenty other companies, which rose like bubbles and like bubbles burst, to the great emolument of the first projectors, and the ruin of the infatuated public, who purchased shares in them at a most enormous advance. More to my purpose is the history of the marine insurance companies, which were established at that very period. I find, in reading the records of those days, that in July, 1720, a very few months after the Loudon Assurance Company received its charter, and before any considerable profits could possibly have been realized, the stock, on which only ten per cent. was paid, rose to 120, and even to 160—sixteen times the capital. That in the month of October in the same year, a hurricane, which destroyed part of the home-ward-bound Jamaica fleet, reduced their stock to sixty per cent.; and that other losses happening soon afterwards, it fell before the end of the year to 15, and even 12 per cent. The historian adds, that for years afterwards nothing more was heard of this Company except in the perpetual complaints of the proprietors, that they were cheated by the directors; and yet, Sir, this Company, like the intended New Marine Insurance Company, was first set on foot, by honourable men, lords and members of parliament. Even our prudent neighbours, the Dutch, were infected by the same mania; and with precisely the same result. A marine insurance company was established in 1720, at Rotterdam, and their actions or shares soon rose to 1,000 percent. The shares of one established at the same time at Gouda, rose in a few months to the almost incredible premium of 3,000 per cent. on the capital advanced; and before the end of the same year, fell again to their original value. Another set up at Delft, experienced the same reverses within the same space of time; and, we read, that the avarice and gambling spirit of the proprietors, in every one of these companies, was ultimately punished by the entire loss of all their capital. The present scheme takes a more daring flight than any of its predecessors; it embraces a larger interest, professes to act on a wider scale, and is therefore more calculated than any plan ever hitherto projected, to dazzle the ignorant, and entrap the unwary.—That I may not be accused of having exaggerated in these statements, I refer those who hear me to

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Postlethwaite's Dictionary of Commerce, under the articles Actions, Bubbles and Companies; and it is not unworthy of remark, that the able author of that work, considers the two latter words as synonimous terms; for under the article 'Bubble.' he says, see 'Companies.'—It is far from my meaning to impute any sinister or unworthy motives to the gentlemen who have engaged in the present undertaking. On the contrary, I know many of them, with whom I have the honour of being acquainted, to be incapable of acting, but with the most laudable intentions. But, I believe they have engaged in it unadvisedly, and without due consideration of the consequences to which it would lead; and against those consequences it is my duty to guard the House. If this scheme is carried into effect, and the shares of the company rise, as I believe they will, to a price far beyond their real value, the present proprietors, as prudent men, will, like their predecessors, avail themselves of the public credulity, and sell out; the concern will fall into the hands of speculative adventurers, lose its present commercial influence, be misconducted, and the bubble will shortly burst, to the ruin of thousands. If this company obtains the sanction of parliament, the rage for these undertakings will be rekindled; other companies will be formed, and the capital of the country will be diverted into new channels, to the injury of all regular trade and solid property. No money will be obtained either on personal or landed security, and all the evils of the memorable year 1720 will be again renewed—Marine insurances are effected in this country on more reasonable terms, and on more solid security, than in any other country upon earth. Neither the necessity nor the utility of this new company has been proved. On the contrary, I flatter myself I have shewn, that it is pregnant, both with private injury and public danger; and, therefore, that the prayer of these petitioners ought not to be granted. I am well aware of the inordinate influence possessed by the members of this intended new company; and, when I reflect, that there is scarcely a commercial member of this House who has not been offered, and that there are very few who have not accepted, shares in this undertaking, I almost tremble for the result, and anticipate the calamitous consequences which an eminent writer
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says will inevitably ensue, "whenever commercial opulence shall became the accomplice of political power, for the purpose of obtaining undue advantages." But, I confide in the wisdom and justice of this House, to avert those consequences. I trust, that a project so exceptionable, will not receive their countenance in any stage whatever; and, therefore, that they will reject the motion of the hon. member for the appointment of this select committee.
Mr. A. Baringthought, that the arguments urged by the hon. gent. against monopolies, strongly applied against the matters complained of in the petition. When his hon. friend had stated that three-fourths of the mercantile body in London were in favour of the petition, it was his opinion that he might, with equal truth, have asserted, that 99 out of every 100 of that body were friends to it. He knew of no house in the city that was not strongly interested in the accomplishment of the object of the petitioners. The only question, then, before the House was, whether the petition should be referred to a select or to an open committee. For his own part, he was inclined to the select Committee. The whole course of precedent in the proceedings of that House lay that way. He was equally disposed to approve of the mode in which it was proposed to compose the Committee, because every disposition had been manifested in the selection of the members to provide with fairness for the interests of all the parties concerned. The case of the Globe Insurance Company would not apply, because that company extended its insurances to fire and lives. The petition before the House complained that the two chartered companies in existence were not able to afford the necessary facility for effecting marine insurances, and therefore prayed that further means should be provided, in any way which to the wisdom of the House might seem meet. If parliament were of opinion that this could be best effected by incorporated companies, as at the passing of the act of George the First, then he would be disposed to say, that the new company should be incorporated; not for the purpose of giving any opinion on the propriety or policy of such exclusive institutions, but with a view to extend the means of effecting marine insurances. His own opinion was decidedly, that the better mode would be to throw the business open generally. If,

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however, it should be thought expedient to establish another company, he conceived that it should be confined altogether to marine insurances. As the other companies extended their assurances to fire and for lives, they must be materially prevented from attending sufficiently to the marine insurance branch. By the existing law, a law enacted for the purpose of giving an exclusive monopoly to the two chartered companies, no two men could join their capital for the purpose of insurance; but the vast accumulation of trade rendered it impossible for these companies to meet the full extent of the exigency. He could not but remark, in this place, the inconsistency into which the hon. gent. had fallen, by representing the capital of the proposed company as too small compared with the capital at Lloyd's to add much to the facilities of insurance, and afterwards arguing against the proposed company on the ground that it would bring ruin upon many of the underwriters at Lloyd's. It had been fairly stated that, generally speaking, an individual cannot stand against a company; but he would ask, whether upon the hon. gent.'s own reasoning that could be the case in he instance adverted to. His impression unquestionably was, that very considerable additional security would be afforded to merchants, if several individuals combined, and only one was to effect the insurance. The complaint of the merchants was, that the names of the underwriters had increased to such an ex tent, as no longer to afford them the same security as before. The great augmentation of trade, therefore, obliged the merchants often to take names on their lists which presented not the same assurance of security. In presenting their petition to the House, the merchants meant to be understood as impressed with a conviction, that, as the reserve had been made in the act, for putting an end to the charters granted by it, the period had arrived for acting upon that reserve. This they wished to have an opportunity to prove by evidence before a Committee They also desired to shew that they wanted some sufficient security in the course of their business in respect to insurances. If the underwriters wanted capital, they were driver to dispute the claims fop fair losses; and this furnished an interior description of lawyers with opportunities of hunting out materials for vexatious litigation. All they wanted was to be allowed to prove
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their case, and upon these grounds he should vote for the appointment of a Select Committee to examine into the matter.
Mr. Adamsaid, that the question before the House was whether the Petition in consideration should be referred to an open committee or to a select one. He was of opinion, that the most judicious mode of proceeding would be to refer it in the first instance to a Select Committee. He was fortified in that opinion by the analogous proceeding in the case of private bills, which were generally referred to the consideration of Select Committees. He thought, too, that a Select Committee was better calculated to consult the interests of the parties concerned, whether the gentlemen at Lloyd's, the two insurance companies, or the public at large. Besides, he reminded gentlemen, that the adoption of the Select Committee, in the first instance, did not necessarily preclude them from subsequent proceedings in the open Committee, and that they might afterwards enter into the most enlarged and public discussion upon the merits of the question. Under these circumstances he expressed a hope that there would be no opposition to going into the Committee.—The gallery was then cleared for a division, when there appeared on the question for going into a Select Committee—Ayes 20—Noes 7. The above numbers not being sufficient to constitute a House, it of course adjourned.