INTERIOR OF LLOYD’S.
It may be asked, as Lloyd’s will now have nothing to do with such a rotten tub, How does the owner get anyone to insure it? It is generally done by mutual insurance clubs formed among these very owners, though not exclusively. Plimsoll says: “It almost seems as if there was a race who should lose his ships first on the formation of a new club, so great are the sums the members are called upon to pay as premium;” and such clubs are constantly failing.
To be classed A 1 in anything is good, and, as applied to a ship at Lloyd’s, means, as we all know, that the vessel is first-class in every particular. But what is Lloyd’s? Many readers would find it difficult to give a clear answer to this query. The secretary of that institution told M. Esquiros, when that distinguished writer was visiting England, that he received many business letters addressed to “Mr. Lloyd,” and we all know there was long, in fact, a celebrated Lloyd’s Coffee-house in the City, where the merchants interested in maritime matters used to congregate. A poem, “The Wealthy Shopkeeper, or Charitable Christian,” published in 1700, alludes to the establishment, and the writer adds, as an addendum, that the London merchant at that time never missed “resorting [pg 126]to Lloyd’s to read his letters and attend sales.” Later, Steele and Addison both spoke of it in the same light. “The veritable, personal Lloyd,” says Esquiros, “as we see, has made a great deal more noise in the world after his death than he ever did during his lifetime.” The name of the coffee-house keeper has become inseparably connected with the greatest maritime institution of the world.
The original Lloyd was a wonderfully good example of a pushing London citizen. Little was, speaking in these later days, known of Edward of that ilk till Mr. Frederick Martin unearthed, in the vaults of the Royal Exchange, a long-forgotten series of its archives. Then he found “huge stores of manuscript papers and immense leather-cased folios, partly singed in the great fire which, in 1838, destroyed the Royal Exchange above them.” Now we know that Lloyd, early in the reign of Charles II., kept a coffee-house in Tower Street, and contrived to make it the gathering point for the underwriters, who had been previously scattered all over the city. This house was near the Custom House, the Navy Office, and the Trinity House, as well as to the Thames “below bridge,” and the position was obviously a good one for the purpose. Having surrounded himself with a growing connection in Tower Ward, Lloyd found himself in a position to approach the haunts of the leading merchants and bankers, and we find him in 1693 securely established at the corner of Lombard Street and Abchurch Lane, near the spot where the Lombard Street post-office now stands. Here he held periodical auction sales “by the candle,” and started a weekly paper devoted to maritime affairs, the first of its kind: indeed it was, saving the London Gazette, the only London newspaper yet in existence. But he now met a severe blow, for, as we learn from Macaulay, “the judges were unanimously of opinion that this liberty (of printing) did not extend to gazettes,” and that, by English law, no man not authorised by the Crown had the right to publish political news. The said political news in this case consisted of mere headings and brief paragraphs, as, “Yesterday the Lords passed the Bill to restrain the wearing of all wrought silks from India,” or that they had received a “petition from the Quakers.” Lloyd had to succumb and stop the publication, but his sales of ships and cargoes increased, so that in fifteen or twenty years Lloyd’s had become the recognised London centre of maritime business, including marine insurance. From this comparatively small beginning has sprung the all-powerful organisation whose agents are to be found in every part of the habitable globe.
“When,” says a writer already quoted, “I landed, about three years back, upon one of the group of rocks lost in the bosom of the waves, and which are called the Scilly Islands, there was only one thing which brought London to my mind, and that was the name ‘Lloyd’s’, in letters of brass, on the door of one of the least poor-looking houses. I might have gone much further afield, into some of the still wilder islands of the Old or New World, and there, even at the very ends of the earth—provided only that there was a town or port of some sort—I should have found an agent of this English society. The definition of Lloyd’s which was given by a City merchant can now be better understood by us. ‘It is,’ said he, ‘a spider planted in the centre of a web which covers the whole sea, and the shipwrecked vessels are the dead flies.’ ”[38]
“The loose connection existing between the underwriters of London,” says the leading authority on the subject,[39] “as frequenters of the same coffee-house, where they carried on their business transactions, formed itself into a final ‘system of membership’ by transmigration to the Royal Exchange in 1774. The author and leading spirit in this all-important movement, which had far-reaching consequences for the commerce, not only of England, but for that of the whole world, was Mr. John Julius Angerstein, a native of St. Petersburg, but of German extraction, descended from an old and highly respected family of merchants.” The writer goes on to show how young Angerstein, from junior clerk, had risen to be a successful merchant and underwriter. He became one of the most honoured of those who assembled at Lloyd’s Coffee-house, as he was a most sagacious and far-seeing man, of unimpeachable integrity, and when the movement for obtaining a suitable home for the underwriters was mooted he was its greatest supporter. He became virtually the leader in the whole matter, and seventy-nine underwriters agreed to pay one hundred pounds each to start it fairly. Thus was the “New Lloyd’s,” as it was then called, first organised. It is not, nor ever has been, an insurance company, but rather a fraternity of merchants, shipowners, bankers, and capitalists subscribing for a place where they could meet and transact business. It is a maritime exchange. But each man is guided by his own intelligence, and must measure the extent of business which he undertakes by the standard of his personal capital.
“The English merchant especially,” says Esquiros, in his charming work, “having so many bonds of union with the ocean, can hardly expect to always have tranquil sleep. Let the south-west squalls be ever so little let loose, the ruin of his house and family is hoarsely muttered through his dreams. Oh, if he could only see from afar the good ship in which he has risked the better part of his fortune! In the morning he rushes to Lloyd’s, the fountain-head of all marine news. Nothing, either in his face or conduct, shows the least emotion—he has the art of veiling his features with a mask of indifference; but what a tempest of anxiety rages under this outward calm! He asks himself a thousand questions: What does the telegraph say? What ships have touched at distant ports? What are the names of those which have reached England? To all these questions and many more he finds answers affixed to the walls of the vestibule. There the lists and advices give exactly the maritime bulletin of the day. But the critical moment has yet to come; this man, whose whole fortune perhaps is on the sea, has not at present consulted the ‘Loss Book,’ or, as it is also called, the ‘Black Book.’ ”
This gloom-inspiring volume is placed by itself on a high desk, and each can refer to it in turn. It is, of course, written by hand, and contains every day the wreck record, briefly told. Laconic as is the formal record—the name of the ship, destination, nature of cargo, coast on which shipwrecked, and so forth—there have been as many as twelve pages blackened with the sad summary of the losses announced by telegraph during one day. “In each of these announcements—frigid and taciturn as fate itself—the mind may conjure up many a sad drama. How many human lives are there [pg 128]sacrificed? This is often the fact of which the ‘Black Book’ takes but little notice; the matter with which it has exclusively to deal is the property insured against the perfidy of the sea. Who was the insurer? and who has lost? These are the great questions. It is also remarkable, after a storm, to see with what anxious and fidgety hands some of the insurance speculators turn over the pages of this sibylline book.” And no wonder: for the underwriter[40] is a speculator who is taking long odds against a terrible gambler—the ocean.
The Underwriters’ Room at Lloyd’s to-day is a splendid hall, with Scagliola columns and richly decorated ceiling, and mahogany tables placed at intervals all round the room. “What an animated, yet demure, hubbub is here!” says the French writer before quoted. “One might fancy that the sea, with the thoughts of which every brain is occupied here, had imparted some of its agitation and uproar to the business world. The current of news, transactions taking place, and chat going on, runs from one end of the hall to the other with a kind of deep murmuring roar.” Those going to and fro are of two very distinct classes—the insurers of ships and the insurance brokers. The latter have become very necessary, the reason being as follows:—The merchant who wishes to insure a ship, or a certain kind of merchandise that he is about to export, may by no means always meet the underwriter who is prepared to take that particular risk. While he is trying to insure his ship she may have already started—may even be at the bottom of the sea. In the latter case a delay might be fatal, for the news once arrived that his ship had been wrecked, he could not, of course, effect any insurance. He therefore goes to a broker who knows the habits of the place, and probably the very underwriter whose means or known predilections for certain forms of investment will make him desirous of taking the risk.