Insurance as an Instrument of War in the 18th Century

In his famous essay on London's Royal Exchange, Joseph Addison marveled at the international concord produced when commercial men freely pursued their economic interests: “Factors in the trading world are what ambassadors are in the politic world; they negotiate affairs, conclude treaties, and maintain a good correspondence between those wealthy societies of men that are divided from one another by seas and oceans, or live on the different extremities of a continent.”1 But men with more than Addison's armchair experience of mercantile affairs had a less irenic view of international trade. Nicholas Magens, a merchant and insurer with a distinguished career and great authority among his fellows, argued that “the great object of a maritime nation should be, to take advantage of any rupture with another trading state, to destroy and distress their [sic] shipping, and commerce, and to cut off all resources for naval armaments.”2 Nowhere in 18th-century economic policy was the clash between the promotion of international trade and the beggaring of commercial rivals so keenly felt as in the British debate over the wisdom of insuring enemy ships in wartime. The controversy and the resulting parliamentary acts of 1746 and 1748 reveal a complicated and vacillating strategy by which the British sought to exploit their dominance of the international marine insurance industry for wartime advantage. The Geneva Papers on Risk and Insurance (2004) 29, 247–257. doi:10.1111/j.1468-0440.2004.00285.x