An excellent mathematician of the present day, in writing of this work, says, " Dr. Price's object was not so much to insert what was new, as to illustrate, by some striking examples, a few of the leading problems, with a view to oppose the pernicious schemes that disgraced the age in which he lived.-But those schemes having long since vanished, his observations may now be considered rather as a beacon to posterity." The imperfections of the Northampton tables have been fully shown in the last edition of Dr. Price's work, (vol. i. p. 183.) published by Mr. Morgan; in which, on a comparison of the mortality exhibited by the Northampton table with the actual mortality among the members of the Equitable Life Office, during a period of forty-two years, on a general average of deaths, only two out of every three presented by that table appear to have taken place, and at the early periods of life, only one out of two. In 1808, the Commissioners for the reduction of the National Debt were empowered to grant Life Annuities, and these rates were founded on the expectations of life exhibited by the Northampton tables. In 1828, the Finance Committee report, that "having in the course of their inquiries discovered that the conditions under which the Commissioners of the Sinking Fund are required by the Act for enabling the Commissioners for the reduction of the National Debt to grant Life Annuities are extremely disadvantageous to the public, they feel it to be their duty to call the immediate attention of the House to the expediency of repealing that Act." Thus it appears that by the Northampton tables great loss has been sustained by the public, on sale of Life Annuities, and most exorbitant profits have been obtained by the Insurance Offices on purchase of Life Annuities; I say purchase, because every life premium paid on an insurance is an annuity to the office of the amount of that premium during the existence of the party on whose life the insurance is granted, in consideration of the supposed value to be paid at his death. That the loss by sale of annuities has fallen on the public at large, is a fortunate circumstance for the individuals who purchased; as your Lordship has deeply lamented your inability to afford relief to those who had trusted for payment of such annuities to less stable security than the Go vernment revenues. In proportion to the good fortune of many who purchased annuities from the Government on faith of the Northampton table, has been the improvidence of those who brought life insurances from public offices which adopted the same estimates of mortality; estimates which, if the annuities sold had been equal in extent to the annuities received, must, by involving the offices in inevitable ruin, have produced the disastrous consequences which your Lordship has so feelingly deplored in the cases to which I shall presently refer. It is manifest from Mr. Morgan's own statement, in his edition of Dr. Price's work, that if at a particular age only one death took place where two deaths were represented by the table of mortality, from which the premiums were deduced, the parties insuring at that age would have paid double the price which the true risk required. Now, although this shameful excess may not be sufficiently apparent, when the premium is paid annually, it becomes perfectly obvious, if we suppose the insurance to be paid for by one sum, instead of by an annual premium. Mr. Bailey, in his excellent work, exposes this imposition in its true light: + "A person aged 20 is desirous of assuring his own life for 5000l. The sum demanded for this purpose, by all the assurance companies, (in 1813) is 21407. 2s. But the true value of such sum, as deduced from the Sweden observations, is no more than 14221. 10s. if we take the rate of interest at 4 per cent; and no more than 11281. 10s. if we take the rate of interest at 5 per cent: or, when deduced from the observations of M. De Parcieux, it is no more than 1358/. 2s. taking interest at 4 per cent; and no more than 1078/. 16s. taking interest at 5 person, therefore, of this age, who insures the above sum at any of those offices which make no return of any part of the premium, may be considered as throwing away between 7007, and 1000" per cent. A In computing the value of 50007., payable at the death of a man aged 20, by a table deduced from the most correct modern of servations, and agreeing most accur tely in result with the actal mortality among the members of the Equitable Sey dain, a period of forty-two years, it is found to be emy 12764 78. taking interest at 4 per cent; and only 9957. 19. taking interest at 5 per cent: being in the former case little more than half, and in the latter case considerably less than half the price charged by the antiquated assurance companies. Such is the difference, in a single instance, between the values of life interests calculated according to the Northampton table of mortality, and those deduced from correct modern observations. And hence it may be inferred how prejudicial a reliance on calculations founded on the Northampton table must be, in cases in which the value of property depending on life contingencies is involved. But, my Lord, there is another branch of this inquiry which extends to persons who have always excited the warmest sympathy, and have always received the most generous protection from the government of the country-I mean the members of benefit societies: select committees of the House of Commons have fre quently directed their anxious attention to this subject, and as recently as June last, have declared that of several scientific gentlemen then examined, (among whom was the actuary of the life office of which I am the founder,) no one, except a country clergyman, and Mr. Morgan himself, recommended the Northampton tables as a safe basis of a deferred annuity. That these committees have only tardily adopted a course which your Lordship suggested as far back as 1808, will be seen from your Lordship's judgments, which by your kind permission I was allowed to record in an appendix to my work, in 1823. In the case of Pearce v. Piper, (in the course of which Buckley v. Cater before Lord Thurlow was mentioned,) the bill stated articles of agreement, dated 25th June, 1798, for the establishment of a society under the title, "The Amicable Society of Master Bakers," for raising an annuity fund, containing provisions for the payment of annual subscriptions, &c.; and that every subscriber, who should have been a member seven years, and should have attained the age of sixty years, should be entitled to a clear annuity of 60%. for life, and the widow of every such annuitant to an annuity of 30%., or, in certain cases, 601. for her life, if she continued a widow in giving judgment, your Lordship said, "The parties who formed this society proposed to establish, certainly, a very useful institution, to the success of which every one must wish fairly to contribute; and regret the failure, if there is in the original constitution some error fatal to its existence, arising from the desire of different individuals to have, towards the close of life, that degree of ease and comfort which a proper application of the fruit of the labors of their more early years might produce. If they cannot agree on some plan, I must refer it to the Master to make similar inquiries to those directed by Lord Thurlow, taking the assistance of a calculator; and to inform me, if this society cannot longer exist, what will be an equitable distribution of the funds subscribed. But that course is not to be taken, unless the Court shall be unable to do more justice, by securing to those who have and may become entitled to annuities the enjoyment of them." In Davis v. Fisk, also, your Lordship observed, "The hardship or injustice of the case may be urged; but many gentlemen of the bar must remember the cases of the unfortunate annuitants— widows who had subscribed small sums during a certain portion of their lives, to receive annuities after they had reached a particular age. The one case was before my Lord Thurlow, and the other before myself. That learned lord felt most acutely his inability to afford relief, by reason of the situation of the parties; and, however much he might have lamented his want of power, I am sure I suffered as much on my own account." Your Lordship is perfectly aware, that in almost every trade and profession, a different rate of mortality will be found to prevail; and I assert with perfect confidence, that materials may be obtained, from which to deduce the correct values in every case. A census of the population of the whole kingdom once in five years, carefully setting forth ages and occupations, and the bills of mortality in which the ages and trades were also distinguished, would be data enough; and these would not cost a tythe of the amount lost by the Government annually by sale of annuities, deduced from imperfect materials. The probable deterioration of the expectation of life by chronic diseases, may likewise be reduced within very narrow limits; I speak advisedly, when I say that authentic records of the treatment and duration of such maladies, in a great many thousand cases, and spreading over a long series of years, may be obtained, and reduced into a tabular form. Shall we then, in a matter of great national importance, reject our better information to act on mere approximations made before the proper data for accurate deductions could be obtained? Shall we in this one case travel backwards half a century? I humbly venture to assert that this should not be, and to hope that it will not be. Lunacy (as mania is generally called) has frequently come under your Lordship's judicial notice; and has always received your most anxious and benevolent attention. Is any prognosis of this distressing and increasing malady to be formed from observations founded on the bills of mortality, fifty years ago, at the town of Northampton? Shall we measure the probable existence of a person so afflicted, by the insufficient materials afforded by the deaths among the inhabitants of a small inland town? Is it right, in the present improved state of medical science, to estimate the chance of life in such a case by the treatment adopted more than half a century ago, when narcotic drugs and oblivious antidotes were thought the most proper, because the most stupifying, remedies? As well might we seek to drown madness in intoxication, and await the feast of reason from the orgies of Bacchus. Your Lordship's opinions, which now appear with the force of predictions, have been fully confirmed; and although their fulfilment has been shown at a time when you have thrown off the forms of state and the labors of office, those opinions are still revered, your suggestions would still be thankfully adopted,—and your voice is still potential. I am, my Lord, Asylum Life Office, 70, Cornhill, London. March 21, 1828. |
