Underwriters of the United States: How Insurance Shaped the American Founding by Hannah Farber

Abstract

Reviewed by: Underwriters of the United States: How Insurance Shaped the American Founding by Hannah Farber Jessica M. Lepler Underwriters of the United States: How Insurance Shaped the American Founding. By Hannah Farber. Published for the Omohundro Institute of Early American History and Culture. Williamsburg, Va., and Chapel Hill: University of North Carolina Press, 2021. 349 pages. Cloth, ebook. If you insure an early American mercantile voyage, make sure to stow some cats on the boat; legend suggests you may need to literally put your "Catts in a bag" (246 n. 9) as evidence that you took the customary feline precaution against rats.1 You will not find this term in your insurance policy, but you will be expected to know it as part of the lex mercatoria—the purportedly universal, unchanging, and unspoken "laws of merchants" (19) that governed trade and maritime risk in the eighteenth and early nineteenth centuries. You, dear reader, will need this tip because, in Hannah Farber's Underwriters of the United States, "you" are a character. This powerful new book about the hidden role of marine insurance in the establishment of the United States begins with a prologue written in the second person that explains how you—in the shape of a fictional, wealthy, white, male, married, Bostonian shipowner of 1800—manage the risk of a round trip to the Caribbean. Sailing the seas during the first half century of U.S. national history meant navigating a world at near-constant war. To insure against wartime spoilation—when a combatant illegally seized neutral ships and cargo—as well as more predictable damage (like that caused by rats), merchants pooled the risk of their community's voyages, gathered information, and signed contracts securing each other's assets. The process could be called "underwriting" (13), a term that also meant supporting an undertaking. The people and companies who underwrote the seafaring risk of American merchants—a group Farber describes as "marine insurers" (13)—are the subject of Farber's study. Despite a few intriguing case studies of famous (or infamous) insurers such as the revolutionary "financier" (14) Robert Morris or the scandal-prone Jacob Barker and his associates, however, this is not really a history of individuals or their companies.2 Farber's book, in her terms, is [End Page 467] about "a practice, not a class" (22), and prioritizes questions of "how" over "why" or "who." The practice that most interests Farber includes the range of techniques insurers used to engage in an unusual kind of "regulatory capture" (22) in which the industry predated the polity. For centuries, insurers acted within, beyond, and around the laws of countries to enforce the lex mercatoria's control over maritime trade. In the Age of Revolutions, when the sovereignty and stability of states were up in the air, the governmental role of insurers became especially apparent because insurers' governance of the seas was often more solid than the laws of the land. Shifting their practices to accommodate changing contexts, insurers employed the tools of their trade "opportunistically" (21) to assist in ushering the new United States into existence and solidifying its sovereignty. Accordingly, Farber describes the development of both the U.S. maritime insurance industry and the nation state as a "process of coformation" (22). Farber couples this big-picture analysis of "state making" (21) with the investigation of the everyday practices that constituted the early American insurance business. For example, she considers how insurers "wielded numerical calculations as weapons" (24). The mere suggestion that insurers' rates were based on complicated mathematics could convince customers and concerned citizens not "to question their decisions" (25). Appearing to be objectively actuarial, insurers could hide profit motives and political interests behind their seemingly mundane practices of quantification. This kind of everyday insurance practice is immediately foregrounded by Farber's second-person prologue. These first eleven pages also establish the purpose of the book for two different sets of readers of early American financial history. For one, the prologue explains the complex maritime insurance industry in a format accessible enough to be assigned to undergraduates. Meanwhile, for those immersed in the field, the book's opening section positions Underwriters of...