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of the well-conducted societies have entirely repudiated the practice. In some counties, as in Lincolnshire, it is almost entirely unknown. Lancashire alone enjoys an unenviable notoriety in this respect. This is what takes place in the Salford Funeral Friendly :
•17,768. Then in fact more than 25 per cent of the money which is paid out, is paid out for liquor; the total amount paid out is 446l. and 1201. is of course more than 25 per cent. ?-It looks like it.
17,769. Does the society pay to the publican any sum for rent of rooms occupied in conducting the business ?-Not a fraction.
• 17,770. This remuneration is derived then solely from the profit upon the liquor consumed in the house ?—That is it.
17,771. If you have to pay 51. for a funeral, do you pay it all in money, or do you pay part of the 5l. by a liquor cheque ?
The witness, Mr. Noden, answers that a shilling in the pound of the funeral benefit is paid in liquor; and the examination goes on
•17,786. Do I correctly understand you to say that the late treasurer bribed the members with a cask of ale in order to get votes at the meeting to retain the meetings at his house?-Yes. And he was successful ?-Yes.'
At Ashton-under-Lyne we read
*17,854. Can you tell me how much is spent in liquor in the course of the year?- In that report it is 1141. ... •17,855. Is that under the item of yearly accommodation ?-Yes.'
The town of Oldham, which contains 230 Friendly Societies, appears to enjoy an especial notoriety in this respect. Two hundred or more of the societies meet at public-houses, and the very large majority of these spend from 1d. to 3d. a member per meeting-night in liquor ; they also, many of them, spend sums out of their funds on the annual dinner. The Rose of Oldham Club has the credit of having invented a new opportunity of drinking on the nights when the degrees and the symbolism of the Order of Odd Fellows are explained. This is called • lecture liquor.' In one club it is stated that 41. is spent in drink at every quarterly meeting ; 31. worth of whisky was served in half-gallons, and drunk in one hour and twenty minutes by 100 members. These facts were elicited at an inquest upon one of their number, who died from the effects of it. We refrain from multiplying such instances, feeling satisfied that such cases are exceptional only.
One very remarkable fact which is disclosed by this investigation is that to an ordinary working-man the desire of effecting an insurance either against sickness or death is not sufficient to
induce him to walk a quarter of a mile down the street to do so ; or if he can be prevailed upon to make this exertion, the subsequent trouble of making a monthly payment is far too great for him. This is the reason of the enormous success attained by the large burial societies, which send their collectors from door to door; and it is a plan which must be in some way imitated by the Post Office, if the various forms of insurance which it offers are ever to become popular among the working-classes.
Another striking fact is that, in spite of the great spread of education, the members themselves appear to be ignorant or careless as to the first principles of management. All authorities agree that the only way to ascertain the real financial position of any society is to submit its affairs at stated intervals to the inspection of a skilled actuary, or person really qualified to form an opinion concerning them. Now it is a common practice on the part of both managers and members to assume that their few hundreds of capital necessarily means surplus capital. The future liabilities are not taken into account at all. An actuary would tell them whether they are in a state of hopeless insolvency, or of insolvency which by prudence and increased contributions might be retrieved. Mr. Neison gives an instance from an actual valuation within his experience of a society which had funds in hand per member of 131., and yet when all prospective liabilities were reckoned up, was declared to be insolvent to the extent of 29401. ; and of another, with funds in hand of 51., which was declared by him to have a real surplus of 21381. It is in fact proved beyond any doubt, that periodical valuation is the only way of ascertaining the real position of a society. Nevertheless, out of the whole number of Friendly Societies, there are perhaps 100 that consult an actuary properly, that is regularly' (Neison, Q. 1092). Many of the largest societies do not. The 550,000 members of the Royal Līver have never had this safeguard. The assets of the Liverpool Protective, with 50,000; the Blackburn Philanthropic, with 130,000, and many others equally large, have never been valued. Even the Foresters, as a whole, have not. So that the importance of this step—the very foundation of soundness and the only test of honest management-does not appear to be appreciated by the members. It cannot be said that the cost would present any serious obstacle, for it would rarely exceed 1s. per member; but in most cases it is simply because the managers are afraid of the result, knowing that it will disclose a state of affairs disheartening to the members, and discouraging to any persons who may be desirous of joining the society. But then it is just what an intending subscriber ought to know before he risks his money. Good societies need not fear such a regulation; they would come out of it with a fresh advertisement of their merits, while bad societies would be exposed. And yet those which do adopt this practice, and publish it to the world, are not at all more appreciated in consequence.
Another point of the most vital importance is that the rates of contribution should be adequate, because upon this the whole welfare of the society must eventually depend. But in many clubs they are framed merely by rule of thumb, without reference to any actuary, and without any real certainty of their being adequate. Even in the Order of Foresters, each court is permitted to exercise its own judgment upon this subject; and the result is, that different rates are adopted in the various courts : that is to say, that although their experience would enable them to imitate the Order of Odd Fellows, and frame rates suitable to all their lodges, and perfectly adequate, they allow some of them to shelter themselves under the reputation which deservedly attaches to the name of Foresters, and yet to use tables which any one of experience could at once pronounce to be unsafe.
Again, it would seem no very difficult task, after having adopted a good set of rules, to require the managers to adhere most strictly to them. But that is just what the members of many of these societies do not do. Take, for instance, the rule that the management expenses shall form a separate fund. This regulation is, for obvious reasons, a most important one; and yet we find that some of the largest societies have allowed it to be neglected for years, without a word of remonstrance. The Royal London Friendly Society, established ten years ago, has never enforced its rule to this effect. Nor have the Royal Oak, the United Assurance, the Integrity Assurance, and many others. Of course the reason for the violation of this rule is generally that the management expenses have been excessive.* But it ought to be easily detected, and, indeed, very often has been. It would be easy to give instances where such abuses exist; where they have been exposed in the Press, in police courts, and at general meetings; where they have been denounced by local reformers or by the Registrar himself, and yet the hundreds of thousands of members sit still and do nothing.
The last instance of defective management to which we would
* Not long ago, in the Leeds district of the Royal Liver Society, the expenses of management were 57 per cent. That is, out of every 1l. scraped up by s working-man for insurance, he only got the real benefit of 88. 5d. În the whole society it is now 37 per cent.; in the Liverpool Protective, 32; in the Scottish Legal, 33}; in the United Reform, 40; in the United Assurance, 46; in the Royal Oak, 50.
call attention is the utter absence in many cases of an independent audit of the accounts. One instance of the manner in which this may be conducted is so instructive, that we are tempted to extract it from the Report before us.
The evidence of Mr. Mingaud, the auditor to the United Assurance Society, discloses a state of things which is of course highly exceptional, but which shows what may possibly be done when the auditor is careless, and the committee are unscrupulous. Mr. Mingaud states that the printer of the society's accounts has in his office a form set up, with the words “ Audited and found correct, Edward Mingaud,” which he sometimes appends to the accounts before Mr. Mingaud himself has examined them. The balance sheet for 1870-1 is printed with this formula attached to it, yet Mr. Mingaud informed us that he had never signed it. That balance sheet was shown to contain a serious error in addition, and an item of 1441. had been added by “somebody” without the knowledge of the auditor, in order to meet that error on the other side of the account.'— Fourth Report, p. 895.
The foregoing picture of the condition of Friendly Societies throughout the country appears to us to point to the conclusion that the time has come for the State to decide upon
its future relations towards them. It cannot stand still in this matter. It must either recede from the position it has taken up, which meets with general condemnation—or it must interfere far more extensively.
Hitherto, as we have already pointed out, certain privileges have been conferred by law upon all societies which send up their rules to the Registrar to be certified, as being 'in conformity with the law. And that is all he is required to say. His certificate conveys no other guarantee whatever. matter of fact, it has been ignorantly interpreted all over the country to mean that the State thereby gives a sort of official sanction to the club, and an assurance that every one will be safe in joining it. This peeps out over and over again in the letters published in some of Mr. Tidd Pratt's Reports.
““ We put our money into the society, a government officer had certified it, and we thought it was all right.” Of course the certificate did not give the slightest assurance that the society was founded upon sound principles, that, for instance, the payments demanded were sufficient to meet the benefits promised. It did not give any assurance as to the solvency or respectability of the parties concerned, or as to the fitness of the rules to give effect to the objects of the society. All those things were matters of importance to the poor man, and far more important than whether there was some rule which might possibly collide or conflict with the Act; but they were left for the person himself to inquire into.'
But as a
Every one will be disposed to agree with Mr. Lowe, from whose evidence the above extract is taken, that the State, so far from giving an advantage to the persons whom it intended to benefit, is misleading them; and that it ought either to go a great deal further, or to do nothing at all. Intending to encourage providence, it has done much to discourage it. With the best intentions in the world, we have given to certain societies privileges which have induced many to confide in them; and we have taken no steps to discover for ourselves whether they are in any respect deserving of that confidence.*
The most complete form of interference with Friendly Societies would be for the State to enter into competition with them by setting up a Friendly Society of its own. And, indeed, the proposal that the Post Office should undertake all forms of insurance in the same manner as it now conducts several branches of it (although without the monopoly which the law secures to it in the case of the carriage of letters and of telegrams), avoids so many of the difficulties of the subject, and is so plausible and attractive, that we cannot be surprised at the space which the consideration of the subject occupies in the Report before us.
It is known, but among the classes for whose benefit it is intended most insufficiently known, that any one by going to the nearest money-order office can insure himself for a sum payable at death, not less than 201., or by undertaking a monthly payment, obtain what is called a deferred annuity, that is, an annuity of so many pounds a year payable at the expiration of any number of years. This form of insurance has never been very popular among the working-classes, probably because few men care to look so far ahead, or know that it can be effected upon Government security. I can safely say,' states one witness, that half the clergy and owners of property are not aware of it, and scarcely any of the labourers know anything about it.' But by this concession, which was made by the Government Annuities Act in 1864, the principle that this is a fit subject for Government interference appears to have been established. As it was explained by Mr. Gladstone himself it amounts simply to this—
that by the interference of the Government you enjoin nothing, and you prohibit nothing, but you offer to such members of the com
* The law, though little enforced, now requires all registered societies to send in quinquennial returns. It will scarcely be believed that after giving these societies the expense and trouble of preparing these returns, they have for the last nineteen years been allowed to lie in the office without any use being mado of them.