EARLY MARINE UNDERWRITING IN PHILADELPHIA-. THIS first attempt to establish a corporate associa- tion for effecting' marine assurances in Philadelphia merits some notice of the conduct of that business in the earlier years of the city's history. Resort was had by the early shippers to the private underwriters of Great Britain, and early mention of London underwriting for American interests is found in the Penn and Logan Corres- pondence, though "William Penn's scruples as to insuring his property often prevailed. James Logan writes him in 1701: " Notwithstanding thy tenderness about insurance, I hope there is some made."—i. 80. But Penn's tenderness seemed to prevail only when a promising' risk was de- spatched. He writes Logan, 6 September, 1702: "I shall be glad if this dull sailer [Cantico] gets as safely as the Hopewell. I am tender as to insurance, and did nothing in it for the Hopewell."—i. 133. He seems to have been tender, also, as to the credit of the underwriters, doubtless deeming but little dependence would be placed upon a business which might not have the sanction of Heaven. He writes 16 February, 1705, to Logan: " <J. Askew ensured £100 upon thy letter, but the ensurer broke, and the twenty guineas lost. This done upon the former inti- mations. Ensurers fail much."—i. 353. INSURANCE COMPANY OF NORTH AMERICA. 15 In 1721 Mr. John Copson opens an office or ag-ency for the procuring of home insurances from local capitalists, and in the American Weekly Mercury of 25 May, 1721, he adver- tises his plan as follows :— "ASSURANCES from Loffes happening at Sea, y., being found to be very much for the Ease and Benefit of the Merchants and Traders in general; and whereas the Merchants of this City of Philadelphia and other Parts have been obliged to send to London for such AJJurance, which has not only been tedious and troublefome, but even very precarious. For remedying of which. An Office of Publick Infurance on Veflels, Goods and Merchan- dizes, will, on Monday next, be Opened, and Books kept by John Copfon of this city, at his Houfe in the High Street, where all Perfons willing to be Infured may apply : And Care jhall be taken by the faid J. Copfon That the AJ/urers or Vnder Writers be Perfens of undoubted Worth and Repu- tation, and of conjiderable Inter eft in this City and Province." It was within a few years of this announcement that there was published, in 1725, in Philadelphia, by S. Keimer, the first book in America in which reference is made to insurance; it was printed by Benjamin Franklin, and its interest increases from the fact it was the first book printed by him. It was Franklin who was, in 1752, greatly instru- mental in establishing the first insurance company on the continent, The Philadelphia Contributionship for the In- surance of Houses from Loss by Fire. The author of this early work was Francis Rawie, the founder in America of the family of that name, and was entitled Ways and Means for the Inhabitants of Delaware to 'become Sick, and in it he classes insurance as a branch of trade, which, while helpful to the adventurer on risks by sea, would as well be promotive of commerce and agriculture. But Mr. Rawle's paragraph so well expresses the benefits of insurance that 16A HISTORY OF THE he is entitled to the insertion here of his own argument, -which cannot be improved on in the language of to-day, in showing that insurance is, in truth, the foundation of all solid business enterprise :— " Having thus far difcours'd of moft of the Branches of Trade we are capable of, there is yet one great Encouragement, to adventure in the Difcovery and Profecution of new Markets; more safe to the induftrious Adventurer; namely an Infurance- Office in one or more of thefe Colo- nies ; which is the interefting of divers in the Lots or Profit of a Voyage, and is now become so much the Practice of England, that Infurance may be had in divers Cafes as well againft the Hazards at Land, as Cafualties at Sea, which muft be acknowledged not only to be fate, but a great Encouragement to adventure; for it may to happen that a Perfon may fometime adventure his ALL, and then in case of a Lots he may be rendered uncapable of a future Trade, to the Difadvantage of the publick, and (it may be) to the Ruin of himfelf; whereas could he get a part of his Intereft either of Ship or Cargo infured, (tho' in Cafe of fate Arrival he parts with a part of his Profit, yet) in Cafe of lots, he is fecur'd of fuch part as he infureth, which may be fufficient Bottom to begin a new Adventure: How far this may conduce to the Trade of this River, is obvious to any Man of Thought. Now whereas there has been fome Attempts made at Philadelphia^ which dropt and prov'd abortive, (for what Reasons we never could learn) we humbly propofe to the Legiflature that an Office be erected and supported by a Fund arifing out of the Intereft of the Loan-Office. This will be a good and fate Bottom, and cannot be eafily overfet by a few lofles; and we conceive will con- tribute to keep up the Value of our Paper-Credit by promoting of Trade, Navigation and Building of Ships, and in Confequence, of great Advantage to this River : Which we refer to the Confideration of the Merchant." —pp. 62-63. From the date of Mr. Copson's opening an office in 1721, of the operations of which we are without any particulars, and which may have been included by Mr. Rawie among those "attempts made at Philadelphia, which dropt and prov'd abortive;" many years elapse before we have record of another Insurance Office. We find, however, from the
INSURANCE COMPANY OF NORTH AMERICA. 17 MS. journal of the Hon. John Smith, the originator in 1752 of the Philadelphia Contributionship, that local under- writing was resorted to by the merchants in his day. On 13 June, 1746, he writes he '"was busy with the insurers of the sloop, but could not get them to settle till they see whether they shall have her or not." And on 1 December, 1749, "William Callender and I were at the Insurance office in the morning about business"; and we see that he himself begins to underwrite, for on 10 November. 1750, he records he "was at the Insurance office, and began to underwrite." This was the insurance office of Mr. Joseph Saunders, which at this time was located on Eeese Meredith's or Carpenter's Wharf. This is, in fact, the first one of whose operations we know anything, and wliicli was the forerunner of others which became equally well known. Mr. Joseph Saunders was an eminent citizen and prominent member of the Society of Friends, who began issuing his policies, all prefaced by the invocation, "In the Xame of GOD, Amen," at his store on Eeese Meredith's Wharf, above Walnut street {Pennsylvania Gazette, 28 July, 1748). In 1752 we find he " IS remov'd from his late store on Reese Meredith's or Carpenter's Wharf to the Houfe wherein Ifrael Pemberton, the Elder, lately liv'd, in Water-Street, the next door to James Pembertofi's, at the Corner going down to Cheftnut-Street Wharf, where he continues to fell," &c., &c. P/'nn'n Journal, 10 Msu-ph, 1752. Within a few months he advertises : " NOTICE is hereby given. That the INSURANCE OFFICE for Shiping and Houfes is kept by Jofeph Saunders at his Houfe, where Ifrael Pemberton, fen., lately lived, near the gueen's Head in Water- ftreet." Penn'a Journal, 2.3 June, 17.52. 18 A HISTORY OF THE This was the first office of the Philadelphia Contribu- tionship, Joseph Saunders being the first Clerk of that association, which had been organized the previous April, wherein he was succeeded in 1754 by Robert Owen. This is the first Fire Insurance advertisement published in Phila- delphia. In 1756 we find him " Remov'd to the corner of Chefnut and Water-ftreets, the next door but one to where he formerly liv'd." Pennsylvania Gazette, 10 October, 1754. To a later advertisement he adds a postscript: " N. B.—The INSURANCE OFFICE for SHIPPING is Kept by him as ufual." Pennmilvania Gazette, 8 July, 1756. He again moves four years later: "JOSEPH SAUNDERS is removed from his late Dwelling, near Cheftnut-ftreet Wharff, higher up Cheftnut-ftreet, between Front and Second-ftreets, and next Door, but one, to John Reily's,* where he con- tinues to fell fundry Sorts of Goods, and Keeps an Infurance office for Shipping, as ufual, and hopes his Friends who have been pleated to em- ploy him in that Way will ftill continue their Favours." Penizsylvania Gazette, 23 October, 1760. This office was on the south side of Chestnut,! about six
*This gentleman undertook to insure lottery tickets, as was done some years later by the clients of Kidd and Bradford. To an advertisement of St. Paul's Church Lottery there is added:— N. B. John Reily, of this City, Conveyancer, will infure Tickets in this Lottery at a very low Premium." Pennsylvania Gazette, 29 January, 1761. + See the advertisement of 51. Symonds in Pennsylvania Chronicle, 2 May, 1768, of a " Removal to the new shop in Cheftnut street, the fixth door from Second Street, nearly opposite to Mr. Joseph Saunders, merchant." INSURANCE COMPANY OF NORTH AMERICA. 19 or seven doors east of Second street, and -we find him advertising here np to 1768.* The next office we find is that of Thomas Wharton, (< On Carpenter's wharf, where Jofeph Saunders lately kept:" " N. B.—The Infurance Office is there as formerly." Pennsylvania Gazette, 7 May, 1752. This announcement of Mr. Wharton's enterprise led to Mr. Saunders's advertisement of the following June, above quoted, by which he sought to remind his friends that he yet continued his insurances in his new quarters. He had not before this competition arose advertised his insurance * This worthy citizen was born 8 January, 1712-13, at Farnham Heath, in the parish of Farnham Royal, County of Bucks, the third child of Joseph and Susannah Saunders, and brought a certificate from Friends' Meeting in London, 12 February, 1733, to Philadelphia Yearly Meeting. He married Hannah, daughter of John Reeve, of Philadelphia, 8 January, 1741, and died 26 January, 1792. Of his large family of children but seven married, and his descendants find representatives in many of the prominent families of Philadelphia at this day. His son John married Mary Pancoast, and of his daughters, Sarah married William Redwood, Susannah married William Hartshorne, Mary married Thomas Morris, Hannah married Mordecai Lewis, Rachel married Joseph Crookshank, and Lydia married Samuel Coates. The earliest policy from his office now known to exist was issued to John Kidd, and underwritten by John Mifflin, Archibald McCall, Samuel McCall, junior, and Augustus Hicks, in the amount of £450, on Goods from Philadelphia to London, at four per cent., bears date 25 April, 1749 (o.s.), and is endorsed by him, "Regd in Book B, fol. 83," by which we can approximate to the beginnings of his insurances. A policy of his, dated 27 May, 17G1, conforms to tlie new style, and omits the "In the Name of GOD, Amen," which phrase had been omitted by Thomas Wharton in the policies issued by him. They still retain the phrases, however, "Whereof is Mnstpr, under GOD, for this present voyage," &c., &c. It was to Mr. Saunders's office that Colonel Thomas White refers in the following letter to his friend Mr. Thomas Harrison, of Baltimore County, written 24 April, 1755:—"On my coming to Town I went to ye assureance office and ordered yr Policies to be made out, but could get only ye 75£ on ye Brig Philip & James underwrit; they having already fully ventured on ye other vessel; the reason is, that very few will underwrite on a vessel from Maryland. Mr. Meredith has signed for ye above 75£ in Goods at 3t p ct so yt I paid £2. 17. 6." 20 A HISTORY OF THE office; his assuming the Clerkship of the Contributionship at this time doubtless led to the belief he would relinquish his marine insurance. Mr. Wharton's business grew slowly, for a policy of his to Thomas Biche, underwritten by John Baynton, on Goods from Philadelphia to Autigua, at ten per cent., dated 25 October, 1756, is registered in his " Book B, fol. 64." In his advertisements for many years he continues his notice of an Insurance Office. In 1765 he associates with him his son, and the firm is Thomas and Isaac Wharton: " N. B.—An Infurance Office for Shipping is Kept by them." Pennsylvania Gazette, 30 October. 1766. The latter, in 1781, associates with him his kinsman, Samuel Lewis Wharton, and their Register of Policies begins this year. Subsequently we find Isaac "Wharton and David Lewis as Insurance Brokers at 315 south Front street, the latter gentleman afterwards being President of the Phoenix Insurance Company, and his son and grandson were successively Treasurers of The Mutual Assurance Company. In 1819 we find their successors, Thomas and John Wharton, " Insurance Brokers," tenants of The In- surance Company of J^orth America, on the Dock street front of their property. In 1756 Mr. Walter Shee opened an office, and advertises: " NOTICE is hereby given, that WALTER SHEE, in Front ftreet, at the corner of Cheftnut-ftreet, in Philadelphia, hath opened an office for the infurance of fliips, and merchandize. All perfons who want to have infurance made, may apply at faid office, where all risks will be under- wrote." Pennsylvania Gazette, 23 September, 17o0. INSURANCE COMPANY OF NORTH AMERICA. 21 Mr. Shee was the third on the list of tlie first sio-ners of & the Hibernia Fire Company, 20 February, 1752. A policy issued by him on 15 May, 1758, to Thomas Eiche, on Merchandise from St. Christopher's to Philadel- phia, at ten per cent., underwritten by "William Moore, is registered by him in his " Book B, fol. 62," from which we may estimate the growth of his business. In 1760 he in- forms the public: " N. B.—The Infurance Office for Shipping and Merchandize is kept by him as ufual." Pennsylvania Gazette, 6 March, 1700. He subsequently associates with himself his brother, Bertles Shec: " NOW opening at their (lore in Front Street, five doors from the corner of Cheftnut-ftreet. "WALTER AND BERTLES SHEE." " N. B.—The Infurance office for Shipping continued by them as ufual." Pennsylvania Gazette, 26 September, 1765. "At their ftore in Second ftreet, nearly opposite the Golden Fleece Tavern." Pennsylvania Gazette, 7 May, 1767. Following these, next came the office of Kidd and Brad- ford, located at Colonel Bradford's store in the Old London Coffee House, that ancient building at the southwest corner Front and Market streets, which remained intact up to 1883, and was announced by the following advertisement: Philadelphia, 8 April. NOTICE is hereby given that on Monday next an INSURANCE OFFICE for INSURING Shipping, and Merchandize will be opened at 22 A HISTORY OF THE the London Coffee Houfe, where Risks in general will be underwrote, and all Perfons may have their Infurance made with Care and Expedition by JOHN KIDD and WILLIAM BRADFORD. Pennsylvania Journal, Tuesday, 8 April, 1762. Colonel Bradford's paper, the Journal, in its issue of the following week advertised : "The Philadelphia INSURANCE OFFICE is now opened adjoining the London Coffee House, for INSURING Shipping and Merchandize, where Risks in general will be underwrote, &c."* But prior to Kidd and Bradford's office, a 'New York "broker had sought for Philadelphia business, for Mr. Anthony Van Dam advertises his office in the Pennsyl- vania Gazette, 13 September, 1759, as follows: " The New York Insurance Office is opened at the Houfe of the Widow Smith, adjoining the Merchants' Coffee Houfe : where all Rifes are underwrote at moderate Premiums. Constant Attendance will be given from the Hours of Eleven to One in the Forenoon, and from Six to Eight in the Evening, by Anthony Van Dam, Clerk of the Office." Mr. Van Dam was a citizen of New York, eminent in business and social circles, one of the incorporators of the 'New York Chamber of Commerce under its charter of 1770, and its first Secretary, who, espousing the British side in the Revolution, went to England after its close. There were other insurance Offices in New York at the same period, but Mr. Van Dam alone extended his opera- tions to this city. The site of his office is believed to be the modern 93 Wall street.
* Col. Bradford's eminent and useful career is faithfully portrayed in An Old Philadelphian, Colonel William Bradford, The Patriot Printer of 1776, Sketches of his Life, by his descendant John William Wallace, Esquire, Philadelphia, 1884. INSURANCE COMPANY OF NORTH AMERICA. 23 Thus much for the early Brokers and their Insurance Offices. We now note the beginnings of associated under- writing. In the year 1757 certain merchants—namely, Thomas Willing, Attwood Shute, Charles Stedman, Alex- ander Stedman, John Kidd, and William Coxe entered into Articles of Agreement, under date of 8 October, "under the name and style of Thomas Willing and Company," for the purpose of underwriting policies of marine insurance. Their preamble recites, "Whereas the Insurance of Vessels and Merchandize has proved a great Encouragement to Trades, and that by Companies is most secure to the Insured. Therefore to establish a Company for insuring Ships, Vessels, G-oods and Merchandise on reasonable terms," &c., &c. They were not to write more than £600, lawful money of Pennsylvania, nor less than £50, on any one risk, and a regular set of books were to be opened. Thomas Willing was to be the cashier, and the books kept " in the Counting House of the said Thomas Willing, in Front-Street." Each partner had one-sixth interest. New Articles of Agreement were made 20 October, 1758, by the same parties, excepting Mr. Shute, whose place was taken by Robert Morris, the same name and style continuing. No funds were put up by the partners, and the " Company" issued its policies simply upon the united credit of its partners, which assuredly made a strong guarantee of indemnity. This effort evidenced that the practice of individual underwriting was growing here, and indeed, probably, invited it among those of our merchants whose surplus wealth was increasing. How long "Thomas Willing and 24 A HISTORY OF THE Company" continued to underwrite policies cannot now lie ascertained; but as their agreements both of 17.37 and 1758 were but for a twelvemonth each, no renewal may have been had in 1759. On 20 April, 1762, Mr. John Kidd and Colonel John yixon established a like " Company," which at its expira- tion the following- year was renewed for another twelve- month. Kidd and Nixon's subscriptions to policies, which were made by Colonel ^ixon individually, were not to "underwrite more than two hundred pounds lawfull money of Pennsylvania upon any one bottom or risque whatever." Merchants procured their insurances from the individual underwriters, through the instrumentality of the brokers, at whose offices risks were offered and terms arrano-ed, and (_5 / who secured the policy from those of their clients, either individual or associated, who were willing to underwrite the applicant. This class of gentlemen, which had grown in importance, in a few years claimed some compensation over and above that which might accrue upon the adjust- ment of losses, and we see thus early the beginning of the commission question. On 12 February, 1762, we find there was a meeting held of sundry of our local underwriters—namely, Henry Harri- son, Peter Reeve, Amos Strettle, Conyngham and Xesbitt, Scott and McMichael, Samuel Purviance, John Wilcocks, Willing, Morris and Co., Samuel Mifflin, Child and Stiles, Thos. and Wm. Lightfoot, Abram Judah, James and Drinker, Samuel Oldman, John Mifflin, Reed and Pettit, and Aquila Jones to discuss this broker question, and thev agreed : INSURANCE COMPANY OF NORTH AMERICA. 25 " That the several Brokers in whose offices they shall hereafter sub- scribe Policies shall be accountable for all the premiums arising from such subscriptions being allowed thereon by us the underwriters, a commission of one and a quarter percent, for standing the Risquesofsuch premiums, collecting and paying the same in the following manner : " I. That such Brokers shall settle each Underwriter's Account every three Months, and pay the Ballance due thereon exclusive of all pre- miums arising from Policys which have not been Subscribed above one month, and in the Intermediate time between such Settlements shall pay all losses due from us out of the Premiums on Policys which have been underwrote more than one jnonth, or so far as such subscriptions extend." But a more grievous cause of complaint grew up in the lowering of the rates of premiums, for as individual under- writing increased, the number of brokers' offices as well increased, and competition affected the standard of rates;' and in this, history repeats itself in our modern business. On 6 May, 1766, a meeting of nineteen underwriters was ' held, wlio signed an agreement, which thus begins: " The Subscribers hereunto being Convinced by sad Experience that the premiums of Insurance have of late been Inadequate to the risques underwrote in this City, and fearing that the Consequence of their con- tinuing so will be an entire loss of so necessary and usefull a Branch of Business, as most of the present Underwriters are determined to decline the pursuit of it, unless some regulations of the premiums are made and generally agreed to : Wherefore we and each of us promise to and agree with each other : " I. That we will not subscribe our names to any Policy or Policies of Assurance at any less premium or Rates than are specified in the List annexed hereunto signed by the Brokers." " 5. That if any Persons now in the practise of Underwriting in this City do refuse to sign and agree to these articles. We will not subscribe any Policy of Assurance to Cover any Ship, freight, or Goods the Prop- erty of such refusing underwriters, nor any other Policy which the said Refusing Underwriters may have signed." "9. We will subscribe no Policy but what comes from an Office Keeper." 26 A HISTORY OF THE The original MS. of this document, signed by the nine- teen merchants, shows that more than one-half of the subscribers had subsequently erased their names, and so effectually in some instances as to forbid deciphering them now. Thus we may presume but little time elapsed before these gentlemen felt themselves too restricted by the agree- ment, and withdrew from it to join the general competition for insurances. Mr. Kidd, one of the partners of "Thomas Willing and Company" of 1757 and 1758,. subsequently engaged in the Insurance Brokerage, and in 1762 associated himself with . Col. William Bradford, "the patriot printer of 1776," and the firm of Kidd and Bradford, before referred to, main- tained their marine insurance office until 1768 or later Bradford continuing it up to 1776 in his own name. Colonel Bradford left behind him a valuable miscellaneous collection of MSS. relating to politics and business, and it is among these in the Pennsylvania Historical Society that we find many insurance books and papers of his forerunners and of his own office, which the Society has arranged with intelli- gent care; the most interesting of the insurance documents being the Journal of his own underwriting accounts from 1768 to 1774. The business of securing and placing risks among the local underwriters must have steadily grown in importance for among the Insurance Brokers of Philadelphia a few years later we find in addition to the names already men- tioned those of;N'.&J. Frazier, at ^o. 95 south Front street, afterwards yalbro Frazier at 'N0. 161 south Second street; Robert E. Hobart, who had an office at the City Tavern
INSURANCE COMPANY OF NORTH AMERICA. 27 building;* Jacob Shoemaker, afterwards Shoemaker & Berrett, at ~No. 29 north Water street; John Donnaldson; and John Taylor, at Xo. 10 south Front street. Some of these gentlemen had their own policy-forms in print, with their names and office address added thereon, though the contract appears to have been the same in all cases. The modern broker is content with attaching the label of his name and address to the outside of a company's policy; those gentlemen, printing their own policy, could at once place their name and address prominently on the first page.
* Robert Enoch Hbbart, the elder brother of Bishop Hobart, was an active, enterprising man, of a well-cultivated mind and literary taste. At first a mer- chant, then an insurance broker, he became in 1811 a resident of Pottsgrove, Pennsylvania, being allied in marriage to the family on whose estate the town was built, and wlio gave its name; at the time of his death, he had been for two. sessions a member of the State legislature.