THE POSITION OF FRIENDLY SOCIETIES.
REGISTRAR MASON'S VIEWS. We continue our report of the addres3 delivered at Wellington last week by Mr Mason, the Registrar of Friendly Sicteties:— It will, I think, be both interesting and instructive to consider what is being done by friendly socioties and other provident organisations outside of New Zealand, and to learn what we cm from their example and experience; but, first of all, I will refer to two matters which possess for us a very direct and immediate iutercst. Man has been variously defined—as a talking animal, as a reasoning animal, as a praying animal—but it is obvious that no single definition, even if it be sufficient to differentiate him from the rest of the animal creation, embraces every sid) of his character. Ido not lmow whether anyone has yet labelled him as a co-operating animal; but, whether tho expression bo original or not, it will suit our purpose to-night to adopt it. Friendly society organisation is one form of co-operation. Oat of wages at the lowest rate it is impossible for men to lay by a sum to meet extraordinary expenditure, especially that entailed by the sickness of the bread-winner, and the only practical means whereby it is possible for this class to combine so as to avert pauperism is that which you have adopted in your various orders. To quote from the report of an English Parliamentary Committee in 1825 :
" Whenever there ia a contingenoy, the cheapest way of providing against it is by uniting with others, so that each man may Bubjeot himself to a Bmall deprivation in order that no man may subject himself to a great loss. He upon whom the contingency does not fall does not get his money back again, nor does he get for it any visible or tangible benefit, but ho obtains security againßt ruin, and consequent peace of mind. He upon whom the contigency does fall gets all that those whom fortune has exempted from it have lost in _ hard money, and is thus enabled to sustain an event that would otherwise overwhelm him." , , Or, as a recent writer has expressed the ■ame idea: — " From the day of entrance the member becomes possessed, in Borne measure, of the advantages of property, not indeed to the extent of setting him free from the necessity of labor, but as enabling him to face life with a light heart." It is true that he may not finally stand in need of such a provision. He may be iuccesfful in bußineßs, and, having acquired a.
competency, may withdraw from hia society, or he may remain in it as an honorary member. This contingency, doubtless, accounts in part for the high rato of secession observable in tlio statistics of this colony's friendly society experience; or he may have been throughout life singularly free from sickness. But, if such has been his favored lot, should he regret the method of his thrift ? Ought he not rather to congratulate himself on his successful career or on his compirativo immunity from sickness, as the | case may bo ? ! Moreover, tho bond of union between numbers of a friendly society is not to be measured merely by the saltish standard of a money value, lucre exists a closer tie of brotherhood among those who have high aims and abundant charity, not limited by the walla of their lodge room, whoso symI pathies are with every effort for the happiness of their f ellowmen. Such are some of the results of friendly society co-operation for its own member?, Let us briefly consider what benefits it confers upon the community at large. The Charitable Aid Society would, I opine, have ample funds at its disposal for unavoidable caseß of distress if every man in the colony were a member of a wellorganised friendly society. Where do the prisoners that fill our gaols come from ? Are they recruited from your ranks ? Think for a moment what the idle and the improvident and the criminal classes cost tho State year by year. Nor is this vast present expenditure for judges and magistrates and police and gaolers and prisons the only burden that has to bo borne by the thrifty and the lawabiding. What ia this compared with the consequences of the transmitted vico which by heredity and evil influence and example is engendered and developed in the children of pauper and vicious parents? I will give you a startling illustration of this inherited and perpetuated career of misery and crime, for which my authority is the * Edinburgh Review ' cf April last. «' Every guardian of the poor is familiar with the caso of hdividuals who are chronic paupers, and of families which have been 'on the rates' for generations. A striking instance comes from New York, in a recent report of tho Children's Aid Society in that city. The descendants of a pauper girl and her Bisters were traced to the number of 709. Of these, 368 were legitimate, 91 were illegitimate, 250 doubtful, 128 were known prostitutes, 18 kept houses of ill fame, 67 were diseased and cared for at the public cost, 172 had received outdoor relief for 734 years in all, 61 had been in alms-houses for 96 years in all, 76 were publicly recorded as criminals."
There is, it must be admitted, an unfortunate lack of information as to the number of the original sisterhood, as to the number of generations over which the observations had extended, and as to the manner in which the observations had been taken; but I think that we may accept the statement in evidenco of the distinction which I wish to emphasise between the conduct of the thrifty and the conduct of the unthrifty in its effect upon the happiness and upon the prosperity of the cntiie community. Once again, the pecuniary relief afforded by friendly societies is not confined to members of their own Order. They have raised considerable Bums for spscific purposes—as, for instance, at tho time of the cotton famine, as it was called, when tho Lancashire weavers were thrown out of work, as a consequence of the American Civil W; r, In England special grants have been made by the Ancient Order of Foresters towards the equipment and maintenance of tho lifeboat service; and of the American Order of Oddfellows it is recorded that when fire demolished the city of Chicago, or yellow fever decimated tho inhabitants of Memphis, or the grasshopper plague made a desert of the States of Kansas and Nebraska, then tho generosity of the Order was displayed by gifts of tens of thousands of dollars.
I think, therefore, tbnt with such a record it is surely not unreasonable to ask that your institutions should be exempt from local as well as general taxation. There is one matter to which I have to refer with mingled feelings of satisfaction and disappointment. It has been urged by all experts and generally admitted that to complete and to materially strengthen the financial position of friendly societies, the establishment of a superannuation fund is necessary, and New Zealand societies have, from time to time, been urged to devote any available surplus to the carrying out of this recommendation. At the instance of the Exocutive of tho Independent Order of Oddfellows a tc'ieme was drafted and submitted to the last biennial meeting of tho society for the formation of such a fund, there being a surplus in the funeral fund which it was proposed to assign as a nucleus of the said superannuation fund. I regret losiy that a majority of the delegates not merely voted against the scheme, but expressed their opposition to the principle. I beg, therefore, to ask your attention to a passage on this subject in the writings of Mr Watson, the actuary to the Manchester Unity in England. " The true mission of friendly societies is only partly fulfilled while superannuation or annuities for aged members remain unproprovided. The sentimental outcry against centralisation will have to be modified. . . .
If a friendly society is formed, individual interests are sunk for a community's good, and centralisation, in a degree, is established. There can be no combination for mutual help without more or IeBS centralisation. The centralisation of such associations as the Independent Order of Oldfellowß, tho Ancient Order of Foresters, and other large affiliated bodies is consolidation, the moulding into a compact integral body of the various branches or parts of which each is composed. The central bodies of the large societies have no power beyond that which the society and the rules give them, and they generally have to be reelected by the representatives of the whole society, year by year." The above was written about eleven ytars ago, and since then the two societies to which Mr Watson refers by Dame have adopted a scheme of superannuation. It has not, however, found favor as yet with members in England, but I hope that New Zealand societies which have a surplus will, before long, come to regard this method of allocating it as the most suitable and effective
Tho address of the Grand Master of the Manchester Unity in 18S2, the year in which the superannuation scheme was introduced into that Order, contains theso words:— " By your acceptance of this additional e'ement of thrift in tho constitution of this society, you will . . . have ttronpthened the lever wherewith the better toe.'evttc the working man to Ih2 level of comparative independence." The objection male to this form rf insuranco is that a large percentage of tho subscribers to tho fund will not live to be recipients of tho benefit. But surely this objection, if it have any validity, is applicable in greater or less degree to the general principle of friendly society co-operatiou, so far at least as relates to tho sickness benefit. I wish most sincerely that candidates for admission into a friendly society would give to thi3 objection its full weight, ao far as unsound societies and branches are concerned, and be deterred from joining such by the consideration that there is very creat probability that, although they may live to need the benefits promised, they will not enjoy their due share as offored and contracted for. Then the unsound societies would soon either cease to be, or would put themselves upon a solvent footing, the sound ones would flourish, and such a state of confidence would be established that their membership would be largely increased, and success be crowned with success yet greater.
The following passage, also on the same subjeot, occurs in a paragraph which I inserted in my recently issued official report, extracted from the Rev. J. F. Wilkinson's paper in the ' Ode fellows' Magazine,' on 'Fifty years of friendly sooioty pro] gress': " The first society that popularises a sound scheme of superannuation, and educates its younger present members and all future initiants to take shares in it, will be the premier friendly society of tho future, will never capitulate to the attacks of want and pauperism, but will provide a shelter to the end against the ills industrial life is heir to." Let us now turn our attention to matters of interest connected with our subject in other countries.
In England a very strong feeling has gradually grown up among the members of tiio affiliated orders that the general application of the term " friead'y accietie3' bo m
to include "collecting" societies, as they are called, is calculated to injure the good name of those institutions whose members are banded together for mutual 6UCcor and support, The collecting society is simply a private venture, atid the contributors to its funds aro, for the most part, the poorest of the poor. The expense of management is necessarily enormous. Tho insurance is chiefly, and in some societies wholly, for a money payment at death, and the lives of children form a very great part of the risk. At a recent conference of tho affiliated orders the following resolution was passed : —"This Conference is of opinion that the time has arrived when the sections in the Friendly Societies Act, 1875, lvivhig reference to the collecting societies should be eliminated therefrom, ard tint they should ba embodied with any other sections these societies may deem necessary as a separate Act for their special guidance and government; also, that the words 'Friendly society' be not inserted :'n any sections of their Act, such appellation being, in our opinion, misleading to the public when associated with the collecting societies." In July, 18S8, a Select Committee of tho House of Commons was appointed to inquire into and report upon the operation of section 30 of tho Friendly Societies Act, 1875, as amended by subsequent Acts, and into the organisation or general condition of societies and companies to which the said section applies, and to suggest what amendment of the law (if any) is required to ensure the better management of such societies and companies, and the more complete protection of tho interests of the members ; and in February last the Committee was reappointed. Tho evidence given beforo the Committee last year dealt with three principal points. More stringent regulations as to children's insurance were urged, in order that no premium might be offered to baby-farmers and others having a pecuniary interest in the death of the assured. The helplessness of the members against the perpetration of fraud or injustice was also suggested as a matter requiring further legislation. And the waste involved in thismethodof thriftwasdweltupon, 40per cent, and up wardb being absorbedas ex pense of management, managers and collectors making a living, and even a handsome income out of these weekly pennies. It is said in reply that, according to the law of supply and demand, if there were no room for such institutions they would cease to exist, and that the contributors belong to a class which either will not or cannot join a mutual society. Tho probable result will be that in England they will continue their work. What I would suggest is that in New Zealand the affiliated orders should occupy the field, so as to render the establishment of of such a wasteful form of thrift unnecessary and impossible. While speaking of the cost of management I wish to show you what New Zealand societies are spending under this head. The average expense of management per member is less than 53 6d in every £ paid as or for benefits. But this ratio diminishes continuously for many years after the establishment of a society. It is therefore more useful to calculate the ratio of the average expense of management per member to the average contribution. This ratio is less than 4s in the £. Again, if to the contributions bo added tho amount received a 8 interest on tho accumulated funds, the ratio of the total expense of management to the total income is a littl-i over three shillings in the pound. The explanation of this economy in management is that so much timo and work is given for the honor of the cause without any pecuniary remuneration. _ And tho economy is all tho moro conspicuous when we consider the small value of the average benefit per member as compared with that in any life insurance oifico, and when we also tako into account that in this colony the coat of travelling and ofother items of necessary expenditure is unavoidably high. In England also, among recent proposed legislation, it is sought to insist upon an actuarial certificate as a condition precedent to registration. I must confess that I do not agree with those who propose to reintroduce this system. I scarcely think that, with English ideas as to the liberty of the subject, it would be possible to legislate so as to prevent persons from establishing societies working nnder scales of contributions and benefits to which no actuary would affix his name, and, as a matter of fact, the " certificate system " has been tried and failed. The law in England from 1819 to 1834, and again from 1846 to 1850, refused registration to societies unless they produced an acturial certificate. The result was that comparatively few were brought within the protection afforded by the Act to registered societies, or within the control exercised by the officer charged with the administration of the Act.
There is one other matter of iaterest for us in the " Home" experience. The friendly society system, originated by working men, is theuce growing into favor with the classes that can afford to pay a higher premium than the rate fixed by working men for themselves, and I think that the example might advantageously be followed in New Zealand. I will not say that there is too much life insurance in the world, but I consider that the amount of it is out of all duo proportion to insurance for sickness and old age. In England an association has been formed among medic.il men on friendly society lines. At Blinburgh hvj been established a sickness Assurance Association, which grants a weekly allowance of Ll and upwards according to the premium paid. I think that it would meet the needs of many if they could join a society in which they would be entitled to sick pay ranging from Ll to L2 a week, together with a medical benefit; also to a deferred annuity varying in amount from L3O to LSO per annum, and commencing at the age of sixty or sixty-five ; also to a payment at death ranging from L2O to LIOO. It may be thought by working men that the premium for such an insurance would be beyond their means; but I take this opportunity to express my belief that such a scheme would prove attractive to many, if established as a mutual society, by men who would be willing, like the members of friendly societies, to give time and services to tho affairs of tho Association,
Let us now turn our attention briefly to what is being done in Germany. An elaborate Bystem of compulsory insurance has been gradually growing up in that country; insurance ogiinst accident, against sickness, and for old age annuities is now in oparation. The scheme does net y3t cover tho entire working population, but in its complete development is intended to do so. It is reported that the scheme is generally acceptable lo the persons assured. Although under State control con6iderable voice in tho management is given to the members, and facilities are afforded to tho representatives of the sssociatirns to suggest and carry out measures for the prevention of accidents, the improvement of sanitation in workshops, and other like matters. Sir Edward Malet, tho British Ambassador at Berlin, in one of his late public despatches, speaks of the scheme as "a social experiment on a vast scale, which, if it succeeds, will form the most enduring title of the late Emperor William and Prince Bismarck to the gratitude of their countrymen." The working out of such a scheme naturally possesses a world-wido interest, and as it appears to be in harmony with the institutions of the German people, it is to be hoped that it will prove practicable and beneficial. But it by no means follows that this example of State Socialism could be successfully initiated by us. I do not think that it is compatible with British freedom. German ideas on social questions may be in advance of ours, or our ideas may belong to a higher plane than theirs, but, whichever it be, the fact remains that the two nations differ so materially in temper and genius that the success of this experiment in Germany would not necessarily prove that its adoption would be equally beneficial to ourselves. It is, without doubt, an attractive idea that for every man, out of his own savings, should be secured a provision against absolute want; and if compulsion were to bo tried at all, it would seem reasonable that those upon whom the experiment should first be made are the men who make no attempt to provide for the future, the men whose improvidence exposes them to the risk, I might say to the certainty, of pauperism; exposes not themselves only, but wife and children also, to the degradation of dependence. Thoso who have denie'd themselves are billed u p'on to sup-
port the thriftless, and the tax weighs with heaviest pressure upon those who have to exercise the greatest self-denial in order to maintain their own independence. It is, without doubt, the greatest possible hardship that the improvident should thus drain the stream of charity, so as to deprive those for whom it should run full and free. But, until for us compulsion is brought within the range of practical politics, I commend to the ambition of friendly societies the effort to strengthen ana complete the edifice of voluntary thrift. In France, friendly societies havo increased rapidly during the past forty yeirs. As compared with our societies, they present several distinctive featuresintheirconstitutlonandmanagement. There are two classes—ono class being admitted to the full privileges conferred upon such institutions, the other being merely recognised as possessing a legal status ; but all have to register and make annual returns to what in England is called the Home Office. Honorary members represent 14 per cent of their number; women and children are enrolled and represent respectively 13 per «ent. and 2 per cent, respectively of the total membership. There are deferred annuities and pension funds in aid of the aged and infirm. For the "approved" societies there is partial exemption from taxation, and in addition the allowance of a liberal rate of Interest upon moneys in the public funds deposited for the purpose of providing annuities, as well a 8 State grants in aid of Buch annuities. Other privileges are conferred upon them—the use of municipal buildings for their meetings, the supply of the necessary books for tho management and accounts, and reduced charges for their members in departmental convalescent institutions. In tho United States of America there has been, as you know, during the present century, vast progress in every direction—a vaat increase of population, a vast increase of settlement, a vast addition to the agriculture, the commerce, the manufactures, and the wealth of the nation. And whereas in this rapid growth many of tho American institutions havo developed new forms, in respect to friendly societies it appears to 1 e recognised that the model of the Affiliated Order, which Englishmen have the credit of inaugurating, is found to bo equally suitable to the citizens of the great Republic. The American Order of Oddfellows, which is, I believe, the largest friendly society in the States, is, in fact, an offshoot of the Manchester Unity, and until the recent disruption, caused by the "color" question, the Foresters thero formed a Subsidiary High Court of the English Order. In conclusion, I repeat my satisfaction at the turn that affairs have lately taken. I hope that it will prove the turn of the tide which, taken at the flood, may lead friendly societies on to fortune. lam told that some have taken great offence at my outspoken language. As I said to you last year, I personally have nothing to gain by calling the attention of societies and the public to these unpleasant truths, but if I had failed to do bo you might justly have charged me with negligence in the discharge of my duty. I have pointed out tho malady. The remedy can bo effected by yourselves, and I say again that I refuse to believe that you will not prove equal to the task of reform which lief before you.
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THE POSITION OF FRIENDLY SOCIETIES., Evening Star, Issue 7959, 15 July 1889
THE POSITION OF FRIENDLY SOCIETIES. Evening Star, Issue 7959, 15 July 1889
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