G)4 



In one case, the assurers will divide among 

 them 15,0007. ; in the other, they will share 

 60,0007. ; and yet the proportion allotted to 

 them is nominally the same.' Here one office 

 is supposed to have a capital of 200,000/., 

 nnd the other no capital. But when Mr. 

 Babbage comes to state the matter in his 

 table, he drops out the simple quantity of 

 200,0007. from the calculation, as of no 

 value, and charges the interest for the pro- 

 prietors entirely on the profits. But what 

 does he think the office does with this ca- 

 pital? Does he think, <fec. &c. Mr. Eab- 

 bage's account, accurately stated, would, on 

 this supposition (that a capital of 200,0007. 

 might be disposed of at ten per cent, annuity 

 interest), stand as follows : Office with ca- 

 pitalProfit of seven years, 100,000/. ; in- 

 terest on capital, at ten per cent, compound 

 interest, for seven years, less 5 per cent, sim- 

 ple interest to shareholders, 47,6357. 17s. 1 </." 

 This is too absurd ! According to the review- 

 er's statement of Mr. Babbage's meaning, 

 the interest on a capital of 200,0007. at ten 

 percent, is 20,0007.; the interest, at five per 

 cent., to be deducted for shareholders, is 

 10,0007., leaving 10,0007. to accumulate 

 annually, at compound interest, during seven 

 years, which, at ten per cent., amounts to 

 94,8717. 14*. 2d., or precisely double the sum 

 the reviewer allows. So that reasonings, 

 founded on a gross miscalculation, and adapt- 

 ed to mislead the public on a topic which 

 comes home to us individually, are admitted 

 into, a journal professing exclusively to en- 

 lighten the public on every question which 

 concerns them, in contradiction to the legiti- 

 mate demonstrations of a highly-talented 

 uninterested individual, endeavouring tosup- 

 ply a popular view of so important a subject. 

 Is this negligence, design, or incompetence ? 

 But " the most palpable error" is not of the 

 author, but the reviewer : the former sup- 

 posing the gross sum divided by each office 

 septennially to be the same ; the latter going 

 on an opposite supposition. If it be asked, 

 what cceteris paribus can occasion so great 

 a difference in the profits, we will answer the 

 question by supplying at least one item in 

 the account. The Alliance Company give, 

 for example, 2007. per annum a-piece to 

 twenty directors, and 3007. per annum to 

 four vice-presidents; another institution di- 

 vides ten guineas among all the directors who 

 attend at each weekly board ; thus effecting 

 a saving, in the cost of directors alone, of 

 4,6807. As integrity in responsible situations 

 is to be insured only by high salaries (at 

 least there is an axiom to that effect), we 

 cannot doubt the vaunted honour of the former 

 of these establishments, and hope they find 

 that talent and ability may be purchased at 

 the same rate. There is one more topic to 

 which we wish to call the public attention, 

 and, for the benefit of our country readers 

 especially, insert the following extract from 

 Babbage on Life Insurance, page 136: 

 '* A clergyman, in order to provide at his 

 death for a numerous family, succeeded, by 



[JUNE, 



great economy, in saving from hia income suf- 

 ficient to assure his life for 2,0007. Being 

 unacquainted with business, he unfortunately 

 trusted the choice of the office at which he 

 assured to the attorney whom he had been in 

 the habit of employing. The attorney ef- 

 fected the policy at oneof those offices which 

 make no return of any part of the profits, 

 and which, notwithstanding, charge (he same 

 prices as the Equitable. During about twenty 

 years he received a commission of live per 

 cent, from the office, which was puid out of 

 the annual sum with difficulty spared from 

 the scanty income of his employer; and, on 

 the death of the clergyman, his seven sur- 

 viving orphans received from the office the 

 original sum assured, 2,0007., instead of about 

 3,2007., which they might have received from 

 the Equitable, had not the bribe (a little 

 more than 507.) held out by the other office 

 been too great for the integrity of their fa- 

 ther's solicitor. In contemplating with scorn 

 the mercenary agent who betrayed, for so 

 trifling a sum, the confidence reposed in him 

 by his client, whose distressed family were 

 thus deprived of 1,200/., ought not some por- 

 tion of our indignation to be reserved for 

 those who tempted him to this breach of 

 trust?" &c. &c. 



On this becoming exposure of the evils 

 resulting from commission allowed to so- 

 licitors, the reviewer observes, that " it 

 is a little out of place. It is obviously 

 one of those absurd results of competition 

 which must manifest itself as long as human 

 nature remains what it is ; and its removal, 

 though devoutly to be wished, is very little to 

 be expected. . . .Where it is openly acknow- 

 ledged and publicly advertised, and freely 

 acted upon by nearly all the assurance com- 

 panies, there seems little room for just excep- 

 tion. The practice being universally known, 

 its injurious effects are greatly mitigated... . 

 But an attorney, now-a-days, has very little 

 temptation to lead his client astray in this 

 direction, as there are companies, we believe, 

 of every class, which give the same commis- 

 sion of five per cent." (Ed. Rev. xc. p. 500, 

 note}. " The height of competition has in- 

 duced some offices to grant to solicitors bring- 

 ing business to their agents, a handsome ex- 

 tra commission ; so that a great part of their 

 country business is charged with a still fur- 

 ther reduction on the gross premiums." 

 (Ed. Rev. xc. p. 501). As these two pas- 

 sages contradict each other, and as we have 

 already shewn the incompetence of this 

 writer, to his reasonings we shall pay no 

 farther attention : but we would point out 

 the loose morality of the above note to gene- 

 ral reprehension. Life assurance is a subject 

 which has been most studiously mystified by 

 the agents, secretaries, and actuaries of the 

 various companies engaged in it, which, in 

 the mean while, have been accumulating and 

 sharing immense profits (the triumphant re- 

 sult of the abuse of science over vulgar cre- 

 dulity), in which the various subscribers to 

 these institutions were entitled to participate. 



