We are told by ancient chroniclers that when, about the end of the seventeenth century, coffee was first introduced into England, public houses were started in different points of London for the sale of the new beverage, which had speedily become a favourite with the people.
They were called coffee-houses, and some of them, being situated in the principal thoroughfares of the metropolis, soon became places of resort for merchants, brokers, shippers, and other commercial people, business being transacted therein to such an extent that the journals of the period report advertisements for the public sale of ships or goods to take place at such or at such other coffee-house.
One among them, kept by one Mr. Lloyd, appears to have been in great favour with the business men of the neighbourhood, owing, very likely, to the enterprising character of the proprietor, who, in August, 1696, started one of the earliest commercial newspapers in London, under the name of Lloyd’s News, containing miscellaneous, commercial, and shipping information, both from home and foreign places.
The paper could not fail to turn out greatly acceptable to the public, especially to those connected with the shipping trade, and Lloyd’s Coffee-house soon became the headquarters of maritime insurance business, which was then carried on solely by private underwriters after the ancient system in use with the Italian merchants, who had introduced it into England.
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In 1720 the two most ancient British insurance companies, viz., the London Assurance Corporation and the Royal Exchange Assurance Corporation, both still existing and flourishing, were incorporated with particular privileges by Act of Parliament; an event which it was thought at the time would prove fatal to private insurers; while, on the contrary, it protected them against the competition of the large number of insurance companies which would undoubtedly have sprung up but for the monopoly conferred upon the two privileged corporations.
In February, 1697, owing to having fallen into disgrace with the House of Lords, Mr. Lloyd stopped at once the publication of his journal, when seventy-six numbers only had been issued. It remained dormant for thirty years and in 1726 started anew in an altered and improved form, under the name of Lloyd’s List.
Under Mr. Lloyd’s active management the intelligence department of the new journal soon possessed the most powerful means, as is evinced by the fact that in March, 1740, Mr. Baker, then the master of Lloyd’s Coffee-house and a successor to Mr. Lloyd, was able to announce to the Prime Minister of England the capture of Portobello by Admiral Vernon, whereof the Government had had no news as yet.
Insurance business continued prosperous at Lloyd’s Coffee-house, but a great deal of illicit gambling was also done under the pretence of insurance, most of the underwriting transactions being mere bets on any matter of fact which might in any way interest the public.
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To prevent the discredit of the trade, it was proposed that the underwriters and brokers at Lloyd’s should form an association governed by fixed rules, into which none but persons enjoying a good repute in the profession could be admitted.
The plan was Carried into execution in 1770, when the new institution was formed under the name of Lloyd’s, and, removing from the coffee-house in Lombard Street, .set up on a permanent footing at the Royal (Exchange.
Present Constitution of Lloyd’s.-With a constant progress towards the improvement of its organization and the development of its means, Lloyd’s has continued its brilliant career down to our times, and was lately incorporated by Act of Parliament in 1871.
According to the provisions of the Act of Incorporation, the objects of the Corporation of Lloyd’s are as follows:-
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(1) The carrying on of the business of marine insurance by members of the society.
(2) The protection of the interest of members of the society in respect of shipping and cargoes and freight.
(3) The collection, publication, and diffusion of intelligence and information with respect to shipping.
The Corporation is composed of underwriting and non-underwriting members ; the former carrying on insurance business in their own private interest and with their own capital, strictly abiding, however, by the rules and forms issued by the Committee of Lloyd’s, the ruling body of the Corporation, duly appointed on election by members in general assembly, the latter consisting of brokers and merchants who effect insurances with the indemnity members, either on their own account or for third parties.
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Such forms and rules are frequently adopted by the mass of the ship-trading community wherever British commercial influence has a hold. Thus the Lloyd’s policy now in use, officially adopted by the Corporation in 1779, still the standard form of the contract of private underwriting, and Lloyd’s clauses are often accepted and included in other descriptions of policies, either framed by insurance companies or by other parties, as well as in any kind of transactions relating to shipping. The clause usually inserted in such cases is: practice of Lloyd’s.
Other contributories to the Corporation are also a large number of subscribers for information (among whom are many British and foreign insurai.ee companies), to whom the Lloyd’s Intelligence Department forwards, directly on receipt, all news regarding the arrival and departure of ships, the wrecks, casualties, and other occurrences-any intelligent, in fact, reaching the office in the Royal Exchange, by steam, telegraph, or other expeditious means, from any of the numerous agents which, for this purpose and for the protection of the interest of its members, the Corporation keeps in almost every sea town or port of the globe.