From William Frederick Ast
Richmond, 10th October, 1796.
The Insurance having begun with those that have paid their premiums; I am therefore surprised that you have not yet sent in your declaration for assurance. By applying to your good self1 he will get it made out for you.
A building not insured is no real property, because in a few hours it may be in ashes; you stand therefore at present in the precarious situation, that should you meet with an accident by fire, you might be a considerable loser: for a loss falls heavy upon one; but when it is divided amongst many each person’s share becomes light. If the society was composed only of two, in case of a loss you would have to pay only the half, and would be better than if not insured, and as there are already better than four millions of dollars subscribed, you have of course four millions of chances to your one. We often see that individual houses burn, but the conflagration is never general: therefore all the houses in the State must be destroyed by fire, before you could lose as much as if you was at present to meet with an accident. The institution is on so liberal a footing, that I am astonished to find, that some people, should hesitate a moment to come into it; for if your neighbour’s house was destroyed by fire, I am sure you would lend him your assistance to rebuild it; these are the principles of the institution; they all join to succour such of them as may be so unfortunate to lose their Buildings by fire; their contributions towards a loss are paid out of the interest of the premiums. The premiums average about three per cent. therefore we have to every hundred dollars insured three hundred cents in stock, which is immediately laid out in six per cents stock of the United States, and yields at the present prices near 7 1/2 per cent. interest, of course the premiums of each hundred dollars, insured yield 22 1/2 cents annual interest, supposing that 2 1/2 cents be absorbed by the expenses, then there remain 20 cents annual interest to each hundred dollars insured, which is one fifth per cent. of course there must out of every 500 houses annually one burn to absorb the interest, which is at the rate of 800 houses per annum in the state; and there must out of every thirty three houses one burn before you could be called upon for a second premium—which would be at the rate of twelve thousand houses in the state; and as in the course of 15 years past only about three hundred have burnt, there is no probability, that eight hundred houses should burn annually, nor that twelve thousand should burn in one year: therefore in all human probability these premiums once paid will insure the houses for ever.
As the premiums, which those that insure abroad have to pay annually, average, about one per cent; there being upwards of four millions of dollars subscribed here, therefore there must losses happen annually to the amount of forty thousand dollars and befal only the present subscribers (which is not likely as they are scattered all over the state) before they would have to pay as much as if they were insured abroad—and if all the state was insured abroad it would cost the people annually several millions of dollars, when by my plan we keep the money here to succour our unfortunate fellow-citizens and each person’s contribution will only be a trifle.
You know that all the subscribers (of which you are one) have bound themselves; and the law obliges them to insure their property; therefore if we chuse it we can compel them to come forward: however as people begin now to understand it, we get daily more declarations in, and additional subscribers, so that we need not to force, but only acquaint, the people what they may do for their own good.
There is already a large sum of premiums received, by Mr. JAQUELIN AMBLER, Cashier-General, and laid out in six per cents stock of the United States, and daily more is receiving.
You will please to observe, that the Buildings which stand upwards of 20 feet from others pay only, when built of brick, 1 1/2 per cent. and if of wood 2 1/2 per cent. premium: but when they are contiguous to others, or situate on [Wharves], or hazardous work carried on therein, they pay more. Health and Friendship.
William F. Ast
RC (MHi); consisting of a printed form signed by Ast, with blanks for day in dateline and name in body of text (see note 1 below) completed by him; torn at foot; addressed: “Thomas Jefferson Esqr. Montecello”; stamped; postmarked; endorsed by TJ as received 14 Oct. 1796 and so recorded in SJL.
1. Preceding three words inserted in a blank by Ast, who also canceled “Mr.” printed before the blank.