Mercure 1726: 24th February, Charlotte Bonnemay, widow of Louis Barbier, died in Paris aged 96 years old. She alone remained of all the Rentiers who comprised the 13th Class of the first Tontine, and the 14th of the second; at the time of her death she enjoyed an annity of 73,500 livres of income from an subscription of 300 livres in the two classes.
Mercure historique et politique 1762: Mr. Christophle de Beaud, native of Pontarlier, former Chaplain to the nuns of Chaillot and Confessor to the late Queen of England, wife of James II, has just died in his parish of Doux, aged 97 years. He was the last shareholder of his Division in a Tontine; thus in the last two years of his life, he enjoyed 10,400 livres in rentes
Madame Barbier's obituary, with details of her marvellous annuity, was repeated in journals, dictionaries and books of anecdotes, both French and English, throughout the 18th and early 19th centuries. The source of her wealth was a "tontine", a form of life annunity with benefit of survivorship, which was occasionally issued alongside ordinary annuities by the French government.
|19c book illustration - Tonti is the plump bewigged gent on the left|
|Royal Edict creating the tontine of 1744|
French tontines were divided into 14 age classes with different rates of return, and the intial investment was normally set at 300 livres. Payments could be made contingent on the subscriber's own life, or that of a third-party nominee, typically a child. The crucial difference from an ordinary life annuities was that payments did not cease on the death of an individual but were divided between the rest of shareholders, and continued until the death of the last survivor in each class. Hence the huge gain of a few lucky (but aged) individuals.
|Tontine agreement from 1736, with nine ms. signatures|
Savary, Dictionnaire universel de commerce (1762 edition)
|Tontines: list of trustees and payment agents, Almanach royal, 1764|
David Weir compared the outcome of tontines in France with the situation in England, where they were also used in the 18th century, but with notably less success. The terms offered by the French government were much more favourable, and were particularly advantageous in the older age classes, whereas almost all English tontines were taken out on children (p.113) Contemporaries often regarded tontines as a form of lottery but, as David Weir comments, it takes a very long time to "win" the gamble of a tontine. In practice, like individual life annuities, they appealed mainly to pension seekers. The initial investment tarif was set slightly above price of life annuities to reflect the advantageous terms, but both life annuities and tontines paid well over 7% interest.(Weir, p.112-3)
Dr Weir emphasised that the annuities played a political role in cementing the allegiance of the urban bourgeoisie who did not benefit from tax exemptions and privilege. The inviolability of tontine income in particular was emphasised in strongest terms. Nonetheless, in November 1763 a royal edict banned any future government tontines, citing their enormous expense. In 1770 the abbé Terray froze tontine payments and converted them to life annuities, thereby transferring the future benefits of survivorship to the State. The subscribers still enjoyed advantageous terms, since flat-rate 10 percent annities were applied to all tontine classes, but there was a widespread sense of betrayal and fear of default was heightened among other annuity holders. At a crucial juncture royal government alienated an important sector of support, without realising substantial financial gain.
David R. Weir, "Tontines, public finance, and revolution in France and England, 1688-1789
The Journal of Economic History, 1989, 49(1): p. 95-124 [article on JStor]