The company did not set aside any reserves and paid out its profits promptly. From July, 1793, to January, 1798, the dividends amounted to $591,296.63, an average of over twenty per cent per annum on the capital of $600,000. In January, 1799, a twenty per cent dividend was declared. In July, 1798, July, 1799, and thereafter till July, 1806, inclusive, no dividends at all were paid. Such were the variations in the business done. Yet for the period 1793-1800 as a whole a considerable profit was yielded.

The second company was The Insurance Company of the State of Pennsylvania, with an authorized capital of $500,000 in $400 shares and about the same powers. This was promptly established and has maintained its friendly rivalry with the older company down to the present day. At the present time the Insurance Company of North America has a paid-up capital of four million dollars, net ledger assets of over eighteen millions, and fire and marine risks in force (net) of upwards of a billion dollars each; while the corresponding figures for its rival are one million, four millions, two hundred and sixty-six millions (fire) and thirteen millions (marine).1

In December, 1795, following Pennsylvania's example, Maryland chartered for Baltimore the rival Baltimore and Maryland companies for marine insurance, with capitals of $300,000 and $500,000 respectively.2 Three years later New York followed suit with the New York Insurance Company and the United Insurance Company of the City of New York. All of these seem to have been successfully established; in 1801 the shares of the New York companies were quoted at 128 and 119.3

In 1795 also a body of seven petitioners sought and secured a charter as The Massachusetts Fire Insurance Company, on the plea that they were

"anxious to lend their aid to prevent the Calamities incident to themselves and fellow Citizens from the frequent Fires experienced in this and other populous Towns" and that "Experience has taught that this species of

142d Annual Report of the Ins. Comsr. of Pa. (1914), 54-57, 68-71.

2 Laws (Kilty), Dec. 24, 26, 1795.

3 Laws (ed. 1887), iv, 241-245, 192-195; Pratt, Work of Wall St., 5, citing N. Y. Evening Post, Nov. 16, 1801.

Insurance must be performed by Companies, or corporate Bodies, having large and permanent Funds at immediate command, in order that the business may be carried to so great an Extent as to embrace any object that may offer, and still afford full Security to the Insured, without producing inevitable Ruin to the Insurers, in the greatest Losses that may probably take place."

A capital of $300,000 in $100 shares was authorized, and this the proprietors might increase at their discretion to a maximum of $600,000. Ten dollars per share was to be paid in before any insurance was written. The balance was payable in annual instalments of $10 each; but in case losses, prior to completion of payments, should exceed "the amount of stock on hand," the excess was to be collected by proportionate assessments and an additional assessment of $10 collected forthwith, subject, of course, to the limitation of liability of each proprietor to $100 per share. The charter itself was limited to twelve years. Provisions were inserted requiring investment of the capital of the company, within sixty days of its collection, in stocks of the United States, of Massachusetts, of the United States Bank, or of incorporated banks in Massachusetts.1

The company opened an office at 16 State Street, called in the first instalment in August, and in September published rates and terms and appealed for business "from any of the citizens of Massachusetts, New Hampshire, Rhode Island and Connecticut." In November they offered "to make insurance for any citizens of the United States." The business was not largeabout one thousand policies were written in the first three years; prospective competition with the new mutual company brought rates down about twenty-five per cent, but fewer than two thousand policies were written in the next five years. This experience led the company to secure an amendment to its charter early in 1799, enabling it to write marine policies, as the Massachusetts Fire and Marine Insurance Company.2

Contemporaneously with the entry of the Massachusetts Fire into the marine business, Stephen Higginson and others secured

1 Hardy, Early Insurance Offices, 57-61. Cf. a petition to the town of Boston in 1785 for a fire insurance company refused as not for the "advantage of the Town." 2 Timothy Dwight gives its capital as $400,000 in 1820: Travels, i, 499.

a charter as the Boston Marine Insurance Company. It was to raise $500,000 in $100 shares, which according to law was to be paid in by March, 1800, and promptly began business. The Newburyport and Salem marine insurance companies, on the same model, were chartered in 1799 and 1800 respectively, and began business with capitals of $100,000 and $200,000. In 1800 also the Maine Fire and Marine at Portland, on the principle of the Massachusetts company, was chartered and floated its $100,000 stock.1 The New-Haven Insurance Company, incorporated in October, 1797, successfully prosecuted a marine insurance business with a capital of $50,000.2

In 1799-1800 Rhode Island was struck by an insurance craze. In February, 1799, companies were chartered for Providence and Newport, and a year later others for Providence (the Washington), Warren, and Bristol. The Providence Insurance Company and the Washington Insurance Company amalgamated in 1820 as the Providence-Washington. In this form it has ever since done business. It is now the largest Rhode Island insurance company, with a capital stock of $1,000,000, ledger assets of over $4,000,000, and a normal business nearly as much. It still does both fire and marine insurance, the fire insurance being roughly double its "marine and inland" business. The Newport company's stock ($100,000 in $100 shares) was considerably oversubscribed in March, 1799. A dividend was declared as early as June 18, and the third instalment of twenty per cent was called in October. The par value of shares was soon reduced to $60. The company remained in operation only five years, paying five per cent per annum during that period.* The Warren company operated with a capital of $40,000 till July 1, 1844; during this time it paid losses of about $200,000, and its dividends averaged fourteen per cent per annum.5

1 Hardy, Early Ins. Offices, 77; Columbian Centinel, April 3, July 3, Sept. 4, Nov. 2, 1799. Dwight gives its capital in 1820 as $300,000: Travels, i, 499. 2 Private Laws (ed. 1837), i, 680–682; Dwight, Statistical Account, 78. Report of the Insurance Commissioner of R. I. (1915), i, 9–16; William E. Foster, "Stephen Hopkins, A Rhode Island Statesman," in R. I. Hist. Tracts, xix (Providence, 1889), 117.

• Newport Mercury, March 12, 26, April 2, 23, June 11, 18, Sept. 17, 1799; G. C. Mason, Reminiscences of Newport, 174-177.

'G. M. Fessenden, History of Warren, R. I.

(Providence, 1845), 105.

There were thus incorporated, and possibly all in active operation at the end of the century, eleven mutual fire insurance companies and twenty-two stock companies, most of which did both fire and marine insurance, the latter business predominating. Very naturally they were concentrated chiefly in the populous mercantile towns. Baltimore had four, not counting the one reorganized; Philadelphia four; Boston, Providence, and New York each three, not counting New York's Manhattan Company; Charleston and Richmond each two. The others were scattered chiefly through trading towns of lesser rank: Portland, Portsmouth, Newburyport, Salem, Newport, Warren (R. I.), Bristol (R. I.), Norwich, New Haven, Georgetown, and Alexandria. Most of them were purely local enterprises, but some of the fire companies secured business from outlying towns and country districts, and a few of the larger companies attempted to secure business from distant places.

The joint stock insurance companies came nearer than any others to rivalling the banks in size, measured by the capital employed. The earliest (Baltimore) had a minimum capital of $26,667, and its successor was entitled to have $60,000. Most of the later ones had upwards of $100,000, and the Boston Marine was authorized to raise $820,000. The par value varied greatly, all the way from $6 (in the North America company) to $1000 (Maryland, 1795).1 On the whole they were financially successful, though their dividends varied much more than did those of the banks. None met failure before the end of the eighteenth century, and several have survived the nineteenth as well.

A close relation existed between the insurance companies and the banks, chiefly because premiums were usually paid with notes and because the insurance companies had large funds which they needed to invest or have safely kept. Bank stock

1 Cf. others: Alexandria, $20; New York, $50; Boston, $100; Baltimore, Massachusetts Fire, Maine, $300; United, $500.

2 No company was chartered in this period, as was later the case, to combine the two businesses (e.g., Newark Banking and Insurance Co., 1804), and only the Manhattan Company undertook without specific grant to do these two types of business.

furnished an investment, along with national debt, and the bank vaults were the safest place for temporary surpluses. Massachusetts insurance companies were required to invest their funds in stocks of the United States or Massachusetts or stocks of the Bank of the United States or incorporated banks of the state. Pennsylvania charters were similar, though they allowed wider leeway stock of any corporation chartered by the state was an eligible investment. The relationship was the closer, also, because the merchant class demanded both services and naturally tended to control both types of institutions, and because the leading underwriters were important local financial figures. Here one may find the explanation of the almost simultaneous incorporation of the banks and insurance companies in Bristol and Warren, R. I. The Providence Insurance Company, by 1814, was the largest stockholder (one hundred and fifty shares) in the Providence Bank.

The charters of the insurance corporations were less elaborate than those of the banking and highway companies, and the mutual charters were especially simple. The term of charter was indeed usually limited, after 1790, to nine, ten, eleven, twelve, or twenty years. Trading was ordinarily specifically prohibited, and sometimes banking as well. Directors, varying greatly in number (at least from nine to twenty-four), were usually required to be citizens of the state, and sometimes a majority were required to be chosen from citizens of the town. Usually directors in other insurance companies, and sometimes private insurers, were ineligible to the directorate, and in the New York Mutual any person serving the corporation "in the way of trade." A provision in Maryland charters preventing stockholders in one insurance company from being directors in another was eliminated in 1796.2 Regressive voting, or else one vote per share up to a maximum of ten, thirty, or fifty, was

1 Stokes, Public and Private Finance, 274-276; Mason, Reminiscences of Newport, 174-177. The records of the Massachusetts Bank show that Edward Payne and John Hurd, insurance brokers, were among the large stockholders of the bank in its early days and that the Boston Marine held eight shares of this bank: Directors' Records, 61, and Dividend Book.

2 Md. Laws (Kilty), 1796, c. 63.