ORIGIN AND HISTORY OF LIFE INSURANCE. 485 



to seven, the association should come to an end. Accordingly, in 1870, 

 the requisite number being reached, steps were taken to have the prop- 

 erty (which was then valued at $200,000) divided. 



The advantages the tontines seemed to offer made them very en- 

 ticing. The larger the number of deaths a prospectus would promise, 

 the greater the expected gain to the survivors. No reliable calculation 

 or precise prediction of the mortality was necessary, since they were 

 to be guided by the actual experience only. But the very ease with 

 which thev could be formed tended to make them deteriorate into 

 little better than mere lottery schemes, used by designing men to plun- 

 der the credulous.* 



At present the tontine principle does not enlist our sympathy, being 

 too selfish for our times, but it probably answered a good purpose in 

 its day. Life and property were insecure, the investment of small 

 sums difficult, the usury laws stringent : how natural for men to look 

 to immediate enjoyment, when provision for the future was surrounded 

 by so many uncertainties ! 



Nor is it likely that Tonti was the real originator of the idea. 

 There is reason to assume that similar customs had taken root in 

 Italian cities long before his time. Probably the same conditions 

 and needs of society also led to the practice of purchasing life-annu- 

 ities. It seems to have been a favorite mode of raising money, among 

 the flourishing towns of the Netherlands, since the early part of the 

 sixteenth century. On the payment of a certain sum to the party 

 granting the life-annuity, a fixed annual income could be secured dur- 

 ing lifetime. 



Two other methods of makinsj loans were also known to these old 

 communities, namely, terminable and perpetual annuities. 



Terminable annuities are such as are redeemable after a fixed num- 

 ber of years, and bear interest until maturity. That is the usual mode 

 of investing funds at present. 



Perpetual annuities are those that bear interest for ever, while the 

 principal never becomes payable. Many European governments have 

 funded their debts upon that principle, the most noted being the French 

 rentes and the English consols. 



The people of the Netherlands, that so early displayed commercial 

 and political activity, continued to grow in importance until, by the 

 middle of the seventeenth century, they ranked among the foremost 

 nations of Europe. The freedom they enjoyed fostered material pros- 

 perity and encouraged the arts and sciences. Their statesmen and 

 officials were often men of the hiojhest attainments. 



* These tontine associations must not be confounded with the so-called tontine life- 

 insurance policies issued by some companies at the present day. These latter have simply 

 borrowed the name, while in other respects they are like ordinary life-insurance policies ; 

 only that, instead of having dividends declared annually, they are held back for fixed 

 periods, say ten or fifteen years, and then distributed among the surviving members. 



