This section is from the book "Elizabethan Sea Dogs", by Gerhard R. Lomer and Charles W. Jefferys. Also available from Amazon: Elizabethan Sea Dogs.
Marine insurance of the regular kind was, of course, a very different thing. It was already of immemorial age, going back certainly to mediaeval and probably to very ancient times. All forms of insurance on land are mere mushrooms by comparison. Lloyd's had not been heard of. But there were plenty of smart Elizabethan underwriters already practising the general principles which were to be formally adopted two hundred years later, in 1779, at Lloyd's Coffee House. A policy taken out on the Tiger immortalized by Shakespeare would serve as a model still. And what makes it all the more interesting is that the Elizabethan underwriters calculated the Tiger's chances at the very spot where the association known as Lloyd's transacts its business to-day, the Royal Exchange in London. This, in turn, brings Elizabeth herself upon the scene; for when she visited the Exchange, which Sir Thomas Gresham had built to let the merchants do their street work under cover, she immediately grasped its full significance and 'caused it by an Herald and a Trumpet to be proclaimed The Royal Exchange,' the name it bears to-day. An Elizabethan might well be astonished by what he would see at any modern Lloyd's. Yet he would find the same essentials; for the British Lloyd's, like most of its foreign imitators, is not a gigantic insurance company at all, but an association of cautiously elected members who carry on their completely independent private business in daily touch with each other — precisely as Elizabethans did. Lloyd's method differs wholly from ordinary insurance. Instead of insuring vessel and cargo with a single company or man the owner puts his case before Lloyd's, and any member can then write his name underneath for any reasonable part of the risk. The modern 'underwriter,' all the world over, is the direct descendant of the Elizabethan who wrote his name under the conditions of a given risk at sea.
Joint-stock companies were in one sense old when Elizabethan men of business were young. But the Elizabethans developed them enormously. 'Going shares' was doubtless prehistoric. It certainly was ancient, mediaeval, and Elizabethan. But those who formerly went shares generally knew each other and something of the business too. The favorite number of total shares was just sixteen. There were sixteen land-shares in a Celtic household, sixteen shares in Scottish vessels not individually owned, sixteen shares in the theatre by which Shakespeare 'made his pile.' But sixteenths, and even hundredths, were put out of date when speculation on the grander scale began and the area of investment grew. The New River Company, for supplying London with water, had only a few shares then, as it continued to have down to our own day, when they stood at over a thousand times par. The Ulster 'Plantation' in Ireland was more remote and appealed to more investors and on wider grounds — sentimental grounds, both good and bad, included. The Virginia 'Plantation' was still more remote and risky and appealed to an ever-increasing number of the speculating public. Many an investor put money on America in much the same way as a factory hand to-day puts money on a horse he has never seen or has never heard of otherwise than as something out of which a lot of easy money can be made provided luck holds good.
The modern prospectus was also in full career under Elizabeth, who probably had a hand in concocting some of the most important specimens. Lord Bacon wrote one describing the advantages of the Newfoundland fisheries in terms which no promoter of the present day could better. Every type of prospectus was tried on the investing public, some genuine, many doubtful, others as outrageous in their impositions on human credulity as anything produced in our own times. The company-promoter was abroad, in London, on 'Change, and at court. What with royal favor, social prestige, general prosperity, the new national eagerness to find vent for surplus commodities, and, above all, the spirit of speculation fanned into flame by the real and fabled wonders of America, what with all this the investing public could take its choice of 'going the limit' in a hundred different and most alluring ways. England was surprised at her own investing wealth. The East India Company raised eight million dollars with ease from a thousand shareholders and paid a first dividend of 87 1/2 per cent. Spices, pearls, and silks came pouring into London; and English goods found vent increasingly abroad.
Vastly expanding business opportunities of course produced the spirit of the trust — and of very much the same sort of trust that Americans think so ultra-modern now. Monopolies granted by the Crown and the volcanic forces of widespread speculation prevented some of the abuses of the trust. But there were Elizabethan trusts, for all that, though many a promising scheme fell through. The Feltmakers' Hat Trust is a case in point. They proposed buying up all the hats in the market so as to oblige all dealers to depend upon one central warehouse. Of course they issued a prospectus showing how everyone concerned would benefit by this benevolent plan.
Ben Jonson and other playwrights were quick to seize the salient absurdities of such an advertisement. In The Staple of News Jonson proposed a News Trust to collect all the news of the world, corner it, classify it into authentic, apocryphal, barber's gossip, and so forth, and then sell it, for the sole benefit of the consumer, in lengths to suit all purchasers. In The Devil is an Ass he is a little more outspoken.
We'll take in citizens, commoners, and aldermen To bear the charge, and blow them off again Like so many dead flies. . . .
This was exactly what was at that very moment being done in the case of the Alum Trust. All the leading characters of much more modern times were there already; Fitzdottrell, ready to sell his estates in order to become His Grace the Duke of Drown'dland, Gilthead, the London moneylender who 'lives by finding fools,' and My Lady Tailbush, who pulls the social wires at court. And so the game went on, usually with the result explained by Shakespeare's fisherman in Pericles:
 
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