In bringing before the members of the Institute of Actuaries a question so important to the prosperity of Assurance Companies as the investment of the funds, they will be prepared to admit that it is one which could not be fully treated within the limits usually allowed for a paper for discussion at the sessional meetings. All that I could hope for is, to throw out a few hints such as experience or reflection may suggest to me, and trust to elicit, from the practical knowledge and abilities of those present, the materials for a fuller debate of the subject.

The subject which I am about to bring under the notice of the members of the Institute is one as to which a good deal of misapprehension exists. An impression, I believe, very commonly prevails, that combinations of the nature in question are little better than rude and arbitrary arrangements, in which the rights of the several parties concerned are not much regarded, and which are usually carried out by sacrificing more or less the interests of one class to those of another. I propose now to show that such is by no means the case—that these arrangements are susceptible of the nicest and most accurate adjustment—that the advantages derived from them are appreciable with great exactness—and that the rights of all concerned may be most scrupulously maintained. It is true that, the details being somewhat complicated, persons unfamiliar with such subjects are not very well able to satisfy themselves of this; but the fact is so, nevertheless, as we will now endeavour to demonstrate.

The system of fire insurance has been practised in Great Britain, either by private societies, public companies, or corporate bodies, for more than 180 years. In an article on fire insurance in Vol. XII., Part II., of the Encyclopædia Britannica, 8th edition, recently published, Mr. F. G. Smith draws attention to the various attempts which were made to interest the Corporation of the City of London in the subject, and to the proposals which for this purpose were submitted to the Court of Common Council between the years 1669 and 1680, and more especially to one from Mr. Deputy Newbold, which appears to have been the most acceptable. The delay which occurred before the report of the Committee was presented, enabled other private individuals to originate a scheme for fire insurance; and by the advertisements of the day it appears that they offered to insure against damage by fire, brick houses at 6d. in the pound, and timber houses at Is. in the pound—rates which showed the little knowledge which at that time prevailed upon the subject, provided sufficient business could be reckoned upon to obtain an average of the risks. On the 13th October, 1681, the Court of Common Council decided to effect fire insurances on houses within the city and liberties, and engaged a sufficient fund and undoubted security by the Chamber of London, on lands and ground rents, to provide for the fulfilment of their contracts. The war that ensued between those private Societies which had been the first in the field, and the city insurers, gave rise to much amusing pamphleteering and advertisements in the Gazette. In 1681, 1682, and 1683, the journals of the Court of Common Council record the signing of many policies, and refer to the discussions and arguments of their opponents; but the city authorities appear to have been soon weary of the scheme, for, by a resolution of the 13th November, 1682, the Court decided to relinquish the business, to cancel the existing contracts, and to return the money accepted for them.

The tables of the values of annuities on lives, as hitherto constructed, only show the rate of interest which a purchaser may make on the money employed, and replace the capital, provided he can reinvest the surplus income, beyond the interest on the purchase money, at the same rate of interest.

The facts relating to the siege of Sebastopol would seem to show that the enormously increased powers with which instruments of destruction have been endowed by the improvements of modern science tend much more to the advantage of the besiegers than of the besieged, as might indeed have been expected. We have no means of ascertaining the losses of the Russians during the siege, but from their own statements these must have been immense. The official returns of their casualties in the two assaults of the 18th June and the 8th September have been published, and are given below. The additional losses, from the 17th August to the 8th September, are estimated from Prince Gortschakoff's report of the capture; the proportion of the missing, already mentioned, being added to the killed and wounded.