Tontine, a term derived from the name of Lorenzo Tonti, a Neapolitan, who settled in Paris in Cardinal Mazarin's time, and proposed in 1653 to raise a fund of twenty-five million livres for the relief of the national exchequer by means of a financial association, of which the great prize should ultimately accrue to the longest liver. There were to be shares of 300 livres. The subscribers were to be divided into ten classes according to age; and for each class a fixed sum was annually to be divided equally amongst the members of the class. In this way, while each member should get fair interest from the first on his capital, the profit falling to survivors would increase as years went on, and the last survivor would receive the whole of the interest due to the class he belonged to. Mazarin and Tonti were both Italians, and regarded in Paris with suspicion, and, in spite of the cardinal's support, the scheme fell through. Tonti for a time received a pension, and was an active promoter of companies; but was ultimately committed to the Bastille, whence he for some years corresponded with his friends. There he seems to have died. But in 1689-92 Louis XIV., sorely in need of money, reverted to the plan of the Italian adventurer, and raised a sum of fourteen million livres by a tontine of forty years' duration. The sole survivor was in 1726 drawing an annuity of 73,500 livres on his original share of 300 livres. The tontine is a lottery of annuities—or compound of lottery and annuity—and was frequently had recourse to in France in the 18th century, with government sanction. Generally, in an association on what is called the tontine principle, a payment is made by each member of the association, and with the capital so formed an annuity, payable at the same rate until all the lives forming the association are extinct, is bought from some company or individual. This annuity is divided among the members according to age and premium paid by each; and on the decease of any member the surplus thence arising is divided among the survivors, and on the death of the last member of the association the total annuity reverts to the source from which it has hitherto emanated. There are various kinds of tontines; and the designation of tontine may, with propriety, be applied to any financial scheme by which it is proposed that gain shall accrue to survivorship.
In Britain tontines have been less popular than in France, but both in England and Ireland these were often established. Three Irish tontines in 1773-77 had 3500 members. The last public one in England was in 1789. In Great Britain they were chiefly set on foot not for purposes of public finance, but to enable a number of small capitalists to build hotels and the like, requiring sums beyond what any one of them singly could raise. Such a tontine was founded at Peebles in 1807; 144 members subscribed £25 each, and risked his share not on his own life, but on any life he chose to name—usually a healthy young child. The persons so named had diminished from 144 to 53 by 1864, and to 11 in 1880; in 1887 the shareholders, reduced by death to two, sold their shares for £2130. In 1871 it was proposed to organise a tontine to take over the Alexandra Park and Palace, but the scheme came to nothing. The United States has had its tontines also: the New York Tontine Association, founded in 1790, was wound up in the years 1870-78. See articles in All the Year Round (February 1873) and Chambers's Journal (March 1880).
We occasionally hear of Tontine Clubs where the original members have the advantage that the last 100 survivors of their number become proprietors of the Club. The system is a feature of many American insurance societies (see INSURANCE).