252 ESSAY ON PROBABILITIES. 



In the third place, with a merchant "or a banker, the 

 liability to a demand and the demand itself come so 

 nearly upon one another, that real insolvency and bank- 

 ruptcy are never far asunder. When credit cannot be 

 sustained by monthly, and even daily, proofs of substance, 

 it takes its departure altogether : but it is not necessarily 

 so with an insurance office, of whose existence it is the 

 essence to be always receiving consideration for bills 

 which, one with another, have a long time to run. 

 Such an establishment, as will presently more distinctly 

 appear, may be in reality insolvent many years before 

 the symptoms of bankruptcy come on. As no large 

 concern of the kind has hitherto failed, it is difficult to 

 say how they would finally come on : but this much is 

 certain, that an insurance office which could really pay 

 only ten shillings in the pound might, by introducing a 

 better system, or by mere force of circumstances, not 

 only recover its ground, but ultimately become exceed- 

 ingly profitable. But I throw this part of the argument 

 (though it shows a strong principle of vitality inherent 

 in the constitution of such offices) out of the question ; 

 for, surely, no sane and honest person would trifle with 

 important matters so far as to assert that the possibility 

 of temporary insolvency, to be redeemed by the chapter 

 of accidents, or prudence, when it was wanted, should 

 enter into the deliberate calculations on which men 

 should be invited to stake the subsistence of their 

 children. . 



If the last contingency be rejected, that is, if it be 

 held absolutely necessary to calculate on permanent 

 solvency, both real and apparent, then I assert that 

 there is not sufficient ground to gainsay the conclusion, 

 that any insurance office charging only real* premiums 

 (increased for expenses of management) must inevitably 

 have its phases of solvency and insolvency, at the very 

 best. Begin by considering the office as identical in 

 principles with the gaming house, and beat down the 



* By real premiums I mean those which only cover the risks of life. 



