this group might also be included the interesting societies which are established among the Jewish community. They differ from ordinary friendly societies partly in the nature of the benefits granted upon death, which are intended to compensate for loss of employment during the time of ceremonial seclusion enjoined by the Jewish law, which is called “sitting shiva.” They also provide a cab for the mourners and rabbi, and a tombstone for the departed, and the same benefits as an ordinary friendly society during sickness. Some also provide a place of worship. Of these the “Pursuers of Peace” (enrolled in December 1797), the “Bikhur Cholim, or Visitors of the Sick” (April 1798), the “Hozier Holim” (1804), may be mentioned.
Class 5 was “local village and country societies,” including the small public-house clubs which abound in the villages and rural districts, a large proportion of which are unregistered.
Class 6 was formed of “particular trade societies.”
Class 7 was “dividing societies.” These were before 1875 unauthorized by law, though they were very attractive to the members. Their practice is usually to start afresh every January, paying a subscription somewhat in excess of that usually charged by an ordinary friendly society, out of which a sick allowance is granted to any member who may fall sick during the year, and at Christmas the balance not so applied is divided among the members equally, with the exception of a small sum left to begin the new year with. The mischief of the system is that, as there is no accumulation of funds, the society cannot provide for prolonged sickness or old age, and must either break up altogether or exclude its sick and aged members at the very time when they most need its help. This, however, has not impaired the popularity of the societies, and the act of 1875, framed on the sound principle that the protection of the law should not be withheld from any form of association, enables a society to be registered with a rule for dividing its funds, provided only that all existing claims upon the society are to be met before a division takes place.
Class 8, “deposit friendly societies,” combine the characteristics of a savings bank with those of a friendly society. They were devised by the Hon. and Rev. S. Best, on the principle that a certain proportion of the sick allowance is to be raised out of a member’s separate deposit account, which, if not so used, is retained for his benefit. Their advantages are in the encouragement they offer to saving, and in meeting the selfish objection sometimes raised to friendly societies, that the man who is not sick gets nothing for his money; their disadvantage is in their failing to meet cases of sickness so prolonged as to exhaust the whole of the member’s own deposit.
Class 9, “collecting societies,” are so called because their contributions are received through a machinery of house-to-house collection. These were the subject of much laborious investigation and close attention on the part of the commissioners. They deal with a lower class of the community, both with respect to means and to intelligence, than that from which the members of ordinary friendly societies are drawn. The large emoluments gained by the officers and collectors, the high percentage of expenditure (often exceeding half the contributions), and the excessive frequency of lapsing of insurances point to mischiefs in their management. “The radical evil of the whole system (the commissioners remark) appears to us to lie in the employment of collectors, otherwise than under the direct supervision and control of the members, a supervision and control which we fear to be absolutely unattainable in burial societies that are not purely local.” On the other hand, it must be conceded that these societies extend the benefits of life insurance to a class which the other societies cannot reach, namely, the class that will not take the trouble to attend at an office, but must be induced to effect an insurance by a house-to-house canvasser, and be regularly visited by the collector to ensure their paying the contributions. To many such persons these societies, despite all their errors of constitution and management, have been of great benefit. The great source of these errors lies in a tendency on the part of the managers of the societies to forget that they are simply trustees, and to look upon the concern as their own personal property to be managed for their own benefit. These societies are of two kinds, local and general. For the general societies the act of 1875 made certain stringent provisions. Each member was to be furnished with a copy of the rules for one penny, and a signed policy for the same charge. Forfeiture of benefit for non-payment is not to be enforced without fourteen days’ written notice. The transfer of a member from one society to another was not to be made without his written consent and notice to the society affected. No collector is to be a manager, or vote or take part at any meeting. At least one general meeting was to be held every year, of which notice must be given either by advertisement or by letter or post card to each member. The balance-sheet is to be open for inspection seven days before the meeting, and to be certified by a public accountant, not an officer of the society. Disputes could be settled by justices, or county courts, notwithstanding anything in the rules of the society to the contrary. Closely associated with the question of the management of these societies is that of the risk incurred by infant life, through the facilities offered by these societies for making insurances on the death of children. That this is a real risk is certain from the records of the assizes, and from many circumstances of suspicion; but the extent of it cannot be measured, and has probably been exaggerated. It has never been lawful to assure more than £6 on the death of a child under five years of age, or more than £10 on the death of one under ten. Previous to the act of 1875, however, there was no machinery for ascertaining that the law was complied with, or for enforcing it. This is supplied by that act, though still somewhat imperfectly. When the bill went up to the House of Lords, an amendment was made, reducing the limit of assurance on a child under three years of age to £3, but this amendment was unfortunately disagreed with by the House of Commons.
Class 10, annuity societies, prevail in the west of England. These societies are few, and their business is diminishing. Most of them originated at the time when government subsidized friendly societies by allowing them £4: 11: 3% per annum interest. Now annuities may be purchased direct from the National Debt commissioners. These societies are more numerous, however, in Ireland.
Class 11, female societies, are numerous. Many of them resemble affiliated orders at least in name, calling themselves Female Foresters, Odd Sisters, Loyal Orangewomen, Comforting Sisters and so forth. In their rules may be found such a provision as that a member shall be fined who does not “behave as becometh an Orangewoman.” Many are unregistered. In the northern counties of England they are sometimes termed “life boxes,” doubtless from the old custom of placing the contributions in a box. The trustees, treasurer, and committee are usually females, but very frequently the secretary is a man, paid a small salary.
Under Class 12 the commissioners included the societies for various purposes which were authorized by the secretary of state to be registered under the Friendly Societies Act of 1855, comprising working-men’s clubs, and certain specially authorized societies, as well as others that are now defined to be friendly societies. Among these purposes are assisting members in search of employment; assisting members during slack seasons of trade; granting temporary relief to members in distressed circumstances; purchase of coals and other necessaries to be supplied to members; relief or maintenance in case of lameness, blindness, insanity, paralysis, or bodily hurt through accidents; also, the assurance against loss by disease or death of cattle employed in trade or agriculture; relief in case of shipwreck or loss or damage to boats or nets; and societies for social intercourse, mutual helpfulness, mental and moral improvement, rational recreation, &c., called working-men’s clubs.
Class 13 was composed of cattle insurance societies.
These are the thirteen classes into which the commissioners divided registered friendly societies. There were 26,034 societies enrolled or certified under the various acts for friendly societies in force between 1793 and 1855; and, as we have seen, 21,875 societies registered under the act of 1855 before the 1st January 1876, when the act of 1875 came into operation. The total therefore of societies to which a legal constitution had been given was 47,909. Of these 26,087 were presumed to be in existence when the registrar called for his annual return, but only 11,282 furnished the return required. These had 3,404,187 members, and £9,336,946 funds. Twenty-two societies returned over 10,000 members each; nine over 30,000. One society (the Royal Liver Friendly Society, Liverpool, the largest of the collecting societies) returned 682,371 members. The next in order was one of the same class, the United Assurance Society, Liverpool, with 159,957 members; but in all societies of this class the membership consists very largely of infants. The average of members in the 11,260 societies with less than 10,000 members each was only 171.
Such were the registered societies; but there remained behind a large body of unregistered societies. With increased knowledge of the advantages of registration,[1] and of the true principles upon which friendly societies should be established, the number of unregistered societies, in comparison with those registered, ought to become much less.
On the actuarial side it is in the highest degree essential to the interests of their members that friendly societies should be financially sound,—in other words, that they should throughout their existence be able to meet the engagements into which they have entered with their members. For this purpose it is necessary that the members’ contributions should be so fixed as to prove adequate, with proper management, to provide the benefits promised to the members. These benefits almost entirely depend upon the contingencies of health and life; that is, they take the form of payments to members when sick, of payments to members upon attaining given ages, or of payments upon members’ deaths, and frequently a member is
- ↑ These may be briefly summed up thus:—(1) power to hold land and vesting of property in trustees by mere appointment; (2) remedy against misapplication of funds; (3) priority in bankruptcy or on death of officer; (4) transfer of stock by direction of chief registrar; (5) exemption from stamp duties; (6) membership of minors; (7) certificates of birth and death at reduced cost; (8) investment with National Debt Commissioners; (9) reduction of fines on admission to copyholds; (10) discharge of mortgages by mere receipt; (11) obligation on officers to render accounts; (12) settlement of disputes; (13) insurance of funeral expenses for wives and children without insurable interest; (14) nomination at death; (15) payment without administration; (16) services of public auditors and valuers; (17) registry of documents, of which copies may be put in evidence.
