The original sum contributed for these annuities was 1.836,276l. They are even now worth more than this sum. The public has already paid above TEN MILLIONS; and by the time they are all extinct, it will have paid above THIRTEEN MILLIONS, on their account. This is great extravagance; but it is nothing to the extravagance constantly practised of borrowing on perpetual annuities, without putting them into a fixed course of redemption.
Note (14).—Tontine by an act of 6 Geo. III. See [page 124].—The intention of this Act was to raise 300,000l. towards paying off navy bills, by offering to subscribers for every 100l. advanced, an annuity of 3l. for their lives, with benefit of survivorship. But the scheme did not succeed, and only 18000l. was subscribed.
Note (15).—Life Annuities. See [page 124].—The annuities on two lives in 1694, were sold at 12l. per ann. during two lives, of any ages, and the annuities on three lives, at 10l. per ann. during three lives, for every 100l. advanced.—This was very extravagant; for, supposing the annuitants in general, about the age of 20 or 30, it was the same, in the case of two lives, with giving above 10 per cent. for money, and in the case of three lives, 9 per cent.—It is, likewise, extremely absurd in these cases to pay no regard to difference of ages. A single life at the age of 60, supposing money improved at 4 per cent. is intitled to 11 per cent. but at the age of 10, scarcely to 6 per cent. Two lives at 60, are entitled, on the same supposition, to 8½ per cent. but at 10, not to 5 per cent.—The original amount of these annuities was 22,700l. nearly. In 1762, that is, in 68 years, they were reduced by deaths no lower than 9,215l.
The other life-annuities mentioned in the preceding account were douceurs granted for loans in 1745, 1746, and 1757. An account of the annuities granted in the last of these years may be seen in [page 101].
The life-annuities in 1745, amounted to 22,500l. and were granted, together with the profits of a lottery, for a loan of two millions at 4 per cent.
The life-annuities in 1746, amounted to 45,000l. and were granted, with the profits of another lottery, for a loan of three millions, at the same interest.—The remarks made in the 3d section of the last part, and particularly in the note, [p. 101], are applicable to these two loans. The value of the life-annuities, and the profits of the lotteries, were made a part of the public debt. And, supposing the life-annuities worth, one with another, only 14 years purchase, and the profits of the two lotteries worth 300,000l. it will follow, that the capital created by these loans, instead of being 5.000,000l. should have been only 3.755,000l.
But there is another remark, which it is proper to mention here. The life-annuities granted in 1757, amounting to 33,750l. were, in January 1775, that is in 18 years, reduced by deaths to 28,732l. or but a little more than a seventh part. But, supposing the annuitants all in the firmest stage of life, or between the age of 10 and 30, they ought, according to some of the best tables of observations, to have been reduced a quarter. These life-annuities have, therefore, fallen in much more slowly than could have been expected; and I have found the same to be true of all the other life-annuities.—The reason, undoubtedly, is, that the tables exhibit the rate of mortality among all sorts and orders of men taken together; whereas, the lives on which annuities are bought, are a selection of the better sort of lives from the general mass, and therefore must be of greater value.—Indeed I am not acquainted with any table of observations which gives the probabilities of the duration of life high enough to be a guide in this case; except that which was formed by Mr. De Parcieux, from the French Tontines.—A calculation, therefore, of the values of lives, agreeably to this table, would be of considerable use.
Note (16).—Unfunded Debt. See [page 124].—I have given the navy debt, as it was in January, 1775.—The civil list debt in 1775, was probably more than the sum at which I have reckoned it. Lord Stair, in his account of the national debt, income, and expenditure, reckons it at 800,000l.