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⁹ Ibid., 147–53.

¹⁰ The proprietors had discretion to increase the capital to a maximum of $600,000. In 1799, an additional act authorized the company to insure against marine losses (becoming the Massachusetts Fire and Marine Insurance Company), and a further $300,000 was added to the capital stock, of which $180,000 had to be paid in before the company could begin to underwrite marine insurance. Early American Imprints, series 1, no. 49836.

¹¹ Charter of the Middletown Insurance Company, Statute Laws of the State of Connecticut, Book 1 (Hartford, 1808)Google Scholar, title 93, ch. 2.

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¹⁵ In a competitive insurance market, the break-even (competitive) price of insurance would equal the value of losses, discounted to take account of the time lag between premiums being paid in and the settlement of losses. See Kraus, Alan and Ross, Stephen A., “The Determination of Fair Profits for the Property-Liability Insurance Firm,” Journal of Finance 37 (1982): 1015–28CrossRefGoogle Scholar.

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²¹ Samuel W. Fisher to unknown, 10 Nov. 1794, Insurance Co. of Pennsylvania Letterbook, 1794–1804, AM 902; Philadelphia Insurance Co., Minute & Account Book, 16 Sept. 1826; both at the Historical Society of Pennsylvania, Philadelphia, Pa. (hereafter, HSP).

²² Philadelphia Insurance Co., Minute & Account Book, Mar. 1815; Letterbooks of the Insurance Co. of the State of Pennsylvania, passim, HSP.

²³ Knodell, Jane, “The Role of the Private Banks in the U.S. Payments System, 1835–1865,” Financial History Review 17, no. 2 (2010): 239–62CrossRefGoogle Scholar; Sylla, Richard E., “Forgotten Men of Money: Private Bankers in Early U.S. History,” Journal of Economic History 36, no. 1 (1976): 173–88CrossRefGoogle Scholar.

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²⁷ In their petition for incorporation, the founders of the Insurance Company of North America (chartered in 1794) noted that their motivation for associating together was “to establish a greater confidence in the minds of persons who may incline to do business with them, and to enable the assured, in case of disputed losses, to have more convenient recourse to law, as well as to enable the company to prosecute their undertaking with greater ease and effect” (Montgomery, , A History of the Insurance Company of North America, 37Google Scholar).

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³² Samuel Emlen to Robert Vaux, 15, 16 Mar. 1813, Vaux Papers, HSP.

³³ Dr. Henry Pleasants Jr. Collection, Israel Pleasants' Commonplace book, vol. 3, HSP.

³⁴ Like other intermediaries, trusts pooled investors' funds and repackaged them into a portfolio of loans and securities. The trust took some part of the yield on the portfolio, returning the rest to the ultimate investors, the lenders. As specialists with scale advantages, they could provide such services more cheaply and efficiently than most individual trustees could. Smith, James G., The Development of Trust Companies in the United States (New York, 1927)Google Scholar; White, Gerald, A History of the Massachusetts Hospital Life Insurance Company (Cambridge, Mass., 1955)CrossRefGoogle Scholar; Douglass, Elisha, The Coming of Age of American Business: Three Centuries of Enterprise, 1600–1900 (Chapel Hill, 1971), 310–11Google Scholar.

³⁵ Anon., Circular No. 4, 27 Aug. 1851, Office Kentucky Mutual Life Insurance Company, Covington, Ky., John C. Walker Mss., Filson Historical Society, Louisville, Ky. (hereafter, FHS).

³⁶ Historical Statistics of the United States, Colonial Times to 1970 (Washington, D.C., 1975)Google Scholar, series 10, 882. See also Murphy, , Investing in Life, 5, 176–81Google Scholar.

³⁷ Hudnut, , Semi-centennial History of the New-York Life, 22Google Scholar. Murphy, Sharon Ann, “Securing Human Property: Slavery, Life Insurance, and Industrialization in the Upper South,” Journal of the Early Republic 25, no. 4 (2005): 615–52CrossRefGoogle Scholar; Murphy, , Investing in Life, 184–206Google Scholar; Savitt, Todd, “Slave Life Insurance in Virginia and North Carolina,” Journal of Southern History 43, no. 4 (1977): 583–600CrossRefGoogle ScholarPubMed.

³⁸ Slave Policy no. 5152, 16 Mar. 1860, Caroline Myers Papers, Virginia Historical Society, Richmond, Va. (hereafter, VHS).

³⁹ Livestock insurance was considered “invaluable to the farming interest” because it in-demnified farmers for the loss of valuable animals to “the diseases and casualties to which animals are subject.” “American Live Stock Insurance Company,” Trenton, State Gazette (26 July 1850), 3Google Scholar; “Live Stock Insurance Company,” Albany Journal (7 Jan. 1850), 6Google Scholar.

⁴⁰ A few of those were outright frauds. One company in Pennsylvania, for example, never called for the stockholders' capital to be paid in but began selling policies anyway. It failed during the Panic of 1857. “Assets of a Bogus Insurance Company under the Hammer,” Philadelphia Inquirer, 21 Nov. 1860, 1Google Scholar.

⁴¹ H. S. Bodley to William S. Bodley, 19 Dec. 1848, Bodley Family Papers, FHS.

⁴² Company to William Kenyon, 12 Aug., 18 Dec. 1797, Insurance Co. of Pennsylvania Letterbook, 1794–1804, AM 902, HSP.

⁴³ Company to George Simpson, 12 Feb. 1798, Insurance Co. of Pennsylvania Letterbook, 1794–1804, AM 902, HSP.

⁴⁴ Stockwell, Stephen N., Argument of Hon. Chas. Theo. Russell in Behalf of the Boston and New York Central Railroad Co., Remonstrants (Boston, 1854), 32Google Scholar.

⁴⁵ Pearson, Robin, Insuring the Industrial Revolution: Fire Insurance in Great Britain, 1700–1850 (Burlington, Vt., 2004), 331–32Google Scholar; Dix, John, Sketch of the Resources of the City of New York (New York, 1827), 40Google Scholar.

⁴⁶ David Lewis, President of the Phoenix Insurance Co., to unknown, 17 Nov. 1815, Phoenix Fire Insurance Co., Society Coll., HSP.

⁴⁷ Ruwell, Mary, Eighteenth Century Capitalism: The Formation of American Marine Insurance Companies (New York, 1993), 128Google Scholar; Company to Mathias Dishon and Anthony Stocker, 23 Mar. 1804, Letterbook of the Insurance Co. of the State of Pennsylvania, 1804–1807, AM 903, HSP.

Bottomry and respondentia loans were specialized maritime lending contracts with an insurance feature. They were especially lucrative because the lender could openly charge what would otherwise be usurious interest. “The contract of Bottomry,” a contemporary noted in his commonplace book, “is in the nature of a mortgage of a Ship, when the owner of it borrows money to enable him to carry on the Voyage & pledges the keel or bottom of the ship as a security for the repayment.” It was “understood that if the ship be lost, the lender also loses his whole Money but if it return in safety, then he shall receive back his principal, and also the premium or Interest stipulated to be paid, however it may exceed the usual or legal rate of Interest.” “Respondentia,” another contemporary observed, “differs from Bottomry only in this that whereas the latter is upon the Ship, the former is upon the Goods on board & in that case the borrower is personally bound—In other respects the same principles govern in both cases.” Dr. Henry Pleasants Jr. Collection, Israel Pleasants' Commonplace book, vol. 1; Memo, 15 Oct. 1801, Edward Burd Papers, AM 0364, HSP.

⁴⁸ James, , Biography of a Business, 85, 114, 123Google Scholar.

⁴⁹ Dix, John, Sketch of the Resources of the City of New York (New York, 1827), 40Google Scholar.

⁵⁰ United States Insurance Company, Stockholders Meeting Book, 1826, HSP.

⁵¹ F. Carnal to the Phoenix Insurance Co., 21 Mar. 1821, Phoenix Fire Insurance Co., Society Coll.; Insurance Office of North America to the Phoenix Insurance Company, 14 Mar. 1806, Phoenix Fire Insurance Co., Society Coll., HSP.

⁵² Joseph and Thomas Gilpin to the President of the Union Insurance Company, 21 June 1805, Library Company of Philadelphia, Philadelphia, Pa.

⁵³ Abstracts of Corporation Reports, 1834–41 (A1325-77), New York State Archives, Albany, N.Y.

⁵⁴ Fowler, , History of Insurance in Philadelphia for Two Centuries (1683–1882) (Philadelphia, 1888), 140Google Scholar.

⁵⁵ Kamensky, Jane, The Exchange Artist: A Tale of High-Flying Speculation and America's First Banking Collapse (New York, 2008)Google Scholar.

⁵⁶ For a recent overview, see Murphy, , Investing in Life, 67–69Google Scholar. Baranoff, Dalit, “Principals, Agents and Control in the American Fire Insurance Industry, 1799–1872,” Business and Economic History 27, no. 1 (1998): 91–101Google Scholar.

⁵⁷ W. S. Vernon (Aetna, Louisville) to E. G. Ripley, 23 Sept. 1853, William S. Vernon Manuscripts, FHS.

⁵⁸ Newspaper editors and presumably the general public took notice when insurers paid most claims promptly. See, for example, “The Statement,” New Albany [Indiana] Daily Ledger (19 July 1860), 3Google Scholar; “Phoenix Insurance Company,” New Albany [Indiana] Daily Ledger (1 Aug. 1860), 3Google Scholar; “Another Flourishing Insurance Company,” Milwaukee Sentinel (10 Jan. 1860), 2Google Scholar. For further discussion of insurers' decision whether or not to dispute claims, see Murphy, , Investing in Life, 77–79, 87–89, 95–96Google Scholar.

⁵⁹ New Castle Mutual Insurance Company Minute Books, 1828–1962, Hagley Museum and Library, Wilmington, Del.

⁶⁰ The earliest reference in the JSTOR database is Walford, Cornelius, “On the Number of Deaths from Accident, Negligence, Violence and Misadventure in the United Kingdom and Some Other Countries,” Journal of the Statistical Society of London 44, no. 3 (1881): 513, 515CrossRefGoogle Scholar, which used both terms. The Oxford English Dictionary, however, provides an earlier reference to the term moral hazard, in 1875.

⁶¹ Circular no. 8, 16 Jan. 1852, Office Kentucky Mutual Life Insurance Company, Covington, Ky., Manuscripts, John C. Walker, FHS; Murphy, Investing in Life, 27–45, 50–76Google Scholar.

⁶² Where price collusion existed, insurers could agree with each other to set premiums punitively high to extirpate conditions or behaviors they believed to be unnecessary. Where premiums were set competitively, insurers could share some of the expected gains from the new safety technology with policyholders without eliminating all of the arbitrage profit because they understood better than the median policyholder the extent of the savings that new technologies would bring.

⁶³ James W. Henning, “100 Years, So What?” FHS.

⁶⁴ Crothers, A. Glenn, “Agricultural Improvement and Technological Innovation in a Slave Society: The Case of Early National Northern Virginia,” Agricultural History 75, no. 2 (2001): 135–67CrossRefGoogle Scholar.

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⁶⁶ For an excellent example of life insurers' education efforts see Anon., Circular no. 4, 27 Aug. 1851, Office Kentucky Mutual Life Insurance Company, Covington, Ky., John C. Walker Mss., FHS. See also Murphy, , Investing in Life, 125–50, 297–300Google Scholar.

⁶⁷ Archibald Gracie, J. Robinson, and Jon Whellen to Franklin Litchfield, 4 June 1824; Franklin Litchfield to Sr. Felipe Esteves, 2 July 1824, Anderson-Brooke Family Papers, Correspondence, 1793–1825, FHS; Mitchell, C. Bradford, A Premium on Progress: An Outline History of the American Marine Insurance Market, 1820–1970 (New York, 1970)Google Scholar; Wright, Robert E., “Insuring America: Market, Intermediated, and Government Risk Management since 1790,” in Encuentro Internacional Sobre La Historia del Seguro, ed. Caruana, Leonardo (Madrid, 2010), 239–98Google Scholar.

⁶⁸ “Farmers' Insurance Company, of Meridian, Cayuga County,” Albany Journal (3 Dec. 1860), 1Google Scholar.

⁶⁹ Tuckett, , Practical Remarks, 7–10, 32Google Scholar; Murphy, , Investing in Life, 16–46, 152–54, 301–2Google Scholar.

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⁷¹ “Assets of a Bogus Insurance Company under the Hammer,” 1.

⁷² Wright, Robert E., “Rise of the Corporation Nation,” in Founding Choices: American Economic Policy in the 1790s, ed. Irwin, Douglass A. and Sylla, Richard (Chicago, 2011), 217–58Google Scholar; Wright, Robert E. and Sylla, Richard, “Corporate Governance and Stockholder Activism in the United States, 1790–1860,” in Origins of Shareholder Advocacy, ed. Koppell, Jonathan (New York, 2011), 231–51CrossRefGoogle Scholar.

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⁷⁴ For those and other examples, see ibid., 387–418.

⁷⁵ Berks, and Schuylkill Journal (16 May 1818), 2Google Scholar; Peter Randolph Beverely to Robert Beverely, 10 Feb. 1818, Beverely Family Papers, VHS.

⁷⁶ Peter Randolph Beverely to Robert Beverely, 17 Nov. 1818, Beverely Family Papers, VHS.

⁷⁷ Peter Randolph Beverely to Robert Beverely, 30 Mar., 10 Apr. 1819, Beverely Family Papers, VHS.

⁷⁸ Peter Randolph Beverely to Robert Beverely, 31 Aug. 1819, Beverely Family Papers, VHS.

⁷⁹ Peter Randolph Beverely to Robert Beverely, 14, 28, Dec. 1819, Beverely Family Papers, VHS.

⁸⁰ Peter Randolph Beverely to Robert Beverely, 31 Jan. 1820, Beverely Family Papers, VHS.

⁸¹ Ibid.

⁸² Peter Randolph Beverely to Robert Beverely, n.d., Beverely Family Papers, VHS.

⁸³ Peter Randolph Beverely to Robert Beverely, 8 May 1820, 6 Mar. 1824, 8 May 1826, B everely Family Papers, VHS.