assume that he would live for thirty-four years and a third, and would make their calculations on that footing. If he did not live so long, the insurers would lose by the transaction; and if he lived longer, they would gain proportionally. But if their business be so extensive as to enable the law of average fully to apply, what they lose by premature deaths will be balanced by the payments received from those whose lives are prolonged beyond the ordinary degree of probability; so that the profits of the society will be wholly independent of chance.

Besides the vast advantage of that security against disastrous contingencies afforded by the practice of life insurance, it has an obvious tendency to strengthen habits of accumulation. An individual who has insured a sum on his life, would forfeit all the advantages of the insurance. did he not continue regularly to make his annual payments. It is not, therefore, optional with him to save a sum from his ordinary expenditure adequate for this purpose. He is compelled, under a heavy penalty, to do so; and having thus been led to contract a habit of saving to a certain exent, it is most probable that the habit will acquire additional strength, and that he will either insure an additional sum or privately accumulate.

England is, perhaps, the only state in which the insurance of lives has never been prohibited. Notwithstanding the sagacity of the Dutch, insurances of this sort were not legalised in Holland till a comparatively recent period. In France they were long deemed illegal; and though now

1 It is said, in article 334 of the "Code de Commerce," that an insurance may be effected upon any thing estimable à prix d'argent. Count Corvetto, in his speech on laying this part of the "Code" before the legislative body, stated, that the above expressions had been introduced in order to make the article harmonise with the 9th and 10th articles of the ordinance of 1681, qui permettent, he says, d'assurer la liberté des hommes, et qui défendent de faire des assurances sur leur vie. La liberté est estimable à prix d'argent; la vie de l'homme ne l'est pas.

It is singular that such an article should be found in the Code de Commerce, more especially as the prohibition in the ordinance of 1681 had been

effected to a certain extent, we are not sure whether they are authorised by any positive law. They were forbidden by the famous ordinance of 1681, (arts. 9 and 10,) because, says its commentator, Valin, "it is an offence against public decency to set a price upon the life of a man, particularly the life of a freeman, which is above all valuation." Probably, however, the fear lest individuals might be tempted to destroy themselves, to enrich their families. at the expense of those with whom they had insured their lives, has had most influence in dictating the attempts to prevent life insurance. It is needless, however, to say, that this apprehension is the most futile imaginable. Attempts are, indeed, frequently made to get insurances effected upon lives by false representations as to the health of the parties; but it is doubtful whether the insurance offices have ever lost any thing from the cause previously alluded to. To prevent the possibility of its occurrence, most English offices stipulate, that death by suicide or in a duel shall cancel the insurance.

virtually repealed by an arrêt of the Council of State, dated the 3d November 1787, in which the advantages of life insurance are ably pointed out. Practically, however, the interpretation of Count Corvetto has been overruled; the legality of life insurance being now admitted, and the business practised to some, though but a small, extent in France.

1 "Forbonnais, Elémens du Commerce," tom. ii. p. 51.

CHAPTER X.

Interference of Government with the Pursuits and Property of Individuals-Cases in, and Objects for which such interference is necessary -Limits within which it should be confined.

THE discussions in which we have been engaged in the previous chapters, sufficiently evince the vast importance of the administration being powerful, and at the same time liberal and intelligent—that is, of its having power to carry its laws and regulations into effect, and wisdom to render them consistent with sound principles. Far more, indeed, of the prosperity of a country depends on the nature of its government than on any thing else. If it be feeble, and unable to enforce obedience to the laws, the insecurity thence arising cannot fail of being most pernicious; while, on the other hand, if its laws, though carried into effect, be founded on erroneous principles, their operation cannot be otherwise than injurious; and though they may not actually arrest, they must, at all events, retard the progress of the society. An idea seems, however, to have been recently gaining ground, that the duty of government in regard to the domestic policy of the country is almost entirely of a negative kind, and that it has merely to maintain the security of property and the freedom of industry. But its duty is by no means so simple and easily defined as those who support this opinion would have us to believe. It is certainly true, that its interference with the pursuits of individuals has been, in very many instances, exerted in a wrong direction, and carried to a ruinous excess. Still, however, it is easy to see that we should fall into a very great error if we supposed that it might be entirely dispensed with. Freedom is not, as some appear to think, the end of government: the advancement of the public prosperity and

happiness is its end; and freedom is valuable in so far only as it contributes to bring it about. In laying it down, for example, that individuals should be permitted, without let or hindrance, to engage in any business or profession they may prefer, the condition that it is not injurious to others. is always understood. No one doubts the propriety of government interfering to suppress what is, or might otherwise become, a public nuisance; nor does any one doubt that it may advantageously interfere to give facilities to commerce by negotiating treaties with foreign powers, and by removing such obstacles as cannot be removed by individuals. But the interference of government cannot be limited to cases of this sort. However disinclined, it is obliged to interfere, in an infinite variety of ways, and for an infinite variety of purposes. It must, to notice only one or two of the classes of objects requiring its interference, decide as to the species of contracts to which it will lend its sanction, and the means to be adopted to enforce their performance; it must decide in regard to the distribution of the property of those who die intestate, and the effect to be given. to the directions in wills and testaments; and it must frequently engage itself, or authorise individuals or associations to engage, in various sorts of undertakings deeply affecting the rights and interests of others, and of society. The furnishing of elementary instruction in the ordinary branches of education for all classes of persons, and the establishment of a compulsory provision for the support of the destitute poor, are generally, also, included, and apparently with the greatest propriety, among the duties incumbent on administration. And, in addition to these duties and obligations, government has to undertake the onerous task of imposing and collecting the taxes required to defray the public expenditure, and of providing for the independence and the security of the nation. It is not easy to exaggerate the difficulty and importance of properly discharging such duties, and the powerful influence which the policy pursued in regard to them must necessarily

exercise over the public wellbeing. But without further insisting on these considerations, it is at all events obvious, when the subjects requiring, or supposed to require, its interference are so very numerous, and when we also take into view the necessity of accommodating the measures of administration to the changes which are perpetually occurring in the internal condition of nations, and in their external relations in respect of others—that it is impracticable to draw any thing like a distinct line of demarcation between what may be called the positive and negative duties of government; or to resolve what Mr Burke has truly termed "one of the finest problems in legislation, namely, to determine what the state ought to take upon itself to direct by the public wisdom, and what it ought to leave, with as little interference as possible, to individual exertion."

It is, indeed, obvious, that no solution of this problem can be applicable at all times, and under all circumstances. But dismissing for the present all reference to the subject of taxation, which we have endeavoured to treat in another work, we may observe generally, that though it may not be possible previously to devise the measures proper to be adopted in particular emergencies, we may, notwithstanding, decide on pretty good grounds in regard to the description of objects which require the interference of government upon ordinary occasions, and give some idea of the extent. to which it should be carried. The discussion of this interesting, though comparatively neglected department of the science, involves many difficult and delicate questions; and to enter fully into their examination would require a lengthened treatise. We shall merely, therefore, endeavour to lay down a few leading principles, touching very briefly upon such topics only as seem most interesting.

The principles already established show, that without security of property, and freedom to engage in every

A "Treatise on the Principles and Practical Influence of Taxation and the Funding System," 8vo, London, 1845.