H.-7

5

nominal deficiency, the largo additional wealth of the management fund is an adequate guarantee of soundness, and here the number of members (293) is sufficient to meet Mr. Frankland's views. Practically, therefore, it transpires that he indorses the results arrived at by Messrs. Leslie and Black in reference to the condition of the Otago District. Ic will be seen that the valuation brings out a deficiency in- the case of all the lodges but one, the amount of the deficiency ranging from 2s. 5d. per member to £15 15s. 8d. per member, and from ljd. in. the pound to 13s. 3d. in the pound, the average deficiency being 6s. 6d. in the pound. One cause of deficiency is common to all the lodges in the district—-viz., the utter inadequacy of the contributions paid by the members. In tho case of the single lodge which shows a small nominal surplus, the valuers state that ' ; the surplus is not due to adequate contributions, or careful management and profitable investment of the funds, or to an exceptionally favourable sickness experience, but is wholly due to the fortuitous and nob altogether congratulatory circumstance that the number of secessions has been very large." Indeed, it might have been added that so high a secession-rate would, in a lodge of moderate numerical strength, have been a most improbable thing. In the case of one other lodge have favourable conditions availed to counteract the effect of inadequate contributions—■ viz., the Hand and Heart. For though this lodge shows a Sick and Funeral Fund nominally deficient by a small amount, the wealth of its Management Fund must be held to far more than cover this, and, as the numerical strength of the lodge is great, it must be pronounced in a thoroughly sound condition ■—at any rate as regards its existing contracts. The favourable circumstances which have produced this condition are enumerated by the valuers as follows: 1. Careful management; 2. A favourable sickness and mortality experience; 3. A large secession of members. As regards No. 1, a glance at certain of the columns of Table B {see Schedule II. hereto) will show what satisfactory rates of interest were realized during the five years immediately preceding the valuation. The sickness experience of the lodge has been investigated for the same quinquennium with the laborious care which characterizes all the work done in this valuation, ami gives the following results : — Period of Sickness. Expected. Experienced. Weeks. Weeks. First 6 months .. 1,258 577'57 Second 6 months .. 137 104'50 After 12 months .. 238 381'28 Total .. .. ... 1,063-35 The small amount of sickness of short duration is attributed by the valuers mainly " to forbearance on the part of many members in not declaring on the funds when sick." There can be no doubt that this forbearance has prevailed to a large extent in this colony in the past, the Registrar having solicited the opinion of all the lodge secretaries in New Zealand on the subject; but, as the valuers point out, it is not likely to prevail to so great an extent in the future, owing to the altered economic conditions of the colony The secession-rate of the Hand and Heart Lodge has ranged from 6 to 13 per cent, during the quinquennium, and, as might have been expected, the secessions have been mainly among those young in years and in membership. As regards the remaining twenty lodges, besides inadequacy of contributions, the valuers note certain subsidiary causes of insolvency, one or more of which have operated in a greater or less degree in almost all of them. The causes noted are the following:— 1. Excessive sickness experience 4 Lodges. 2. Carelessness in securing profitable investments .. 9 „ 3. Misappropriation of interest earned by benefit funds .. .. 12 „ 4. Misappropriation of benefit funds . ... 11 „ 5. Inefficient management .. .. .. 11 „ Detailed valuation reports have been received by the Registrar respecting most of these lodges. From these it appears, in regard to the main cause of deficiency, that not only is an utterly inadequate contribution chargeable under the rules, but that, in the case of a certain number of lodges, even this contribution has not been charged in full. As regards the subsidiary causes of insolvency, the following facts transpire: («.) The Sickness Experience during 1875-9 was as shown in the following table : —

To IAL. Eiest 6 Months. Second 6 Months. Aftee 12 Months. Name of Lodge. Experienced. Experienced. , , Expeixpected. rien £ ed] Experienced. Expected. Expected. Expected. Expected. Weeks. 855 292 540 353 213 840 175 200 254 310 Weeks, 7G2 147 768 147 165 244 96* 304 183 116 Weeks. 676 Weeks. 415 Weeks. 63 Weeks. 103 Weeks. Ill Weeks. 244 )unedin )alton dbion Vaitahuna Vaipori Slue Spur dexandra loxburgh jake Wakatipu iromwell Lodge. J? 3) 33 3> 33 J) 33 I „ ... 3? 441 163 267 255 1G5 236 41 18 28 50 nil 8 58 32 45 463 nil nil 203 197 21 76 36 32 Totals 1,750 176 237 282 739 3,592 2,932^ 1,268