9

H.—l

generally healthy character of its members during any given period, or through superior management and investment, has realized a profit, it is but equity that they who have earned the surplus should receive a bonus upon their claims as in a regular assurance company. If the reverse be the case, it is equally an act of justice that they should be called upon to pay a small levy to counterbalance any deficiency in the ascertained assets resulting from the excess of their claims over the general average expectation." In contending thus for the necessity of a valuation, I am not supposing that the district officers are either unaware of its importance, or in any manner averse to its taking place. But in the course of the prosecution of my duties as valuer I have become aware that there is a feeling in existence among societies against the necessity or usefulness of valuations. As you will probably take some means of circulating this report among the lodges of your district, I take the opportunity of placing before members, who may be more or less imperfectly informed on the matter, some of the reasons which go to show that it is both necessary and beneficial. It has been urged that the returns required to enable a valuation to be performed are "inquisitorial and vexatious." I suppose by this is meant that information is asked for which the society wishes to keep secret. But, as before remarked, a friendly society offers certain future benefits in exchange for present payments of money. The question, therefore, naturally suggests itself, whether such an institution has any moral or equitable right to keep back from its members, or intending members, such information as will enable them to judge, with some degree of confidence, as to the stability or otherwise of the society. What would be thought of an assurance society which declined to permit any investigation into its affairs? Evidently the public would lose confidence in such an association, and its less reticent rivals would carry off its business. No sound society can possibly suffer by the most searching investigation into its affairs, and the widest possible promulgation of the results. On the contrary, a society constituted on a safe basis, and properly managed, must have everything to gain by such a proceeding. If, on the other hand, a society is in an insecure position, a valuation will point out the causes of such an unsatisfactory state of affairs, and the members may probably bo able to rectify it. If they fail to do this, they cannot complain if would-be members pass such a society by, and make choice of its financially sounder neighbour; and in this case men, who are incapable of judging correctly themselves on such a point, will be saved the disastrous consequences which must flow from uniting themselves to a society which is on a wrong path, and declines to amend its ways. It has been further alleged that valuations are worthless, because the dicta of actuaries are unwarranted by experience, that they are mere "theories," and are contrary to "practice." Now, if there is one branch of inquiry to which this objection is -more utterly inapplicable than any other, it is the one in question, viz., investigations as to the probabilities of human sickness and mortality. For the expectation of the rate at which these events will occur in the future is based —not upon any " theory," but—upon the results of careful, laborious, and extensive observations of the manner in which they have occurred in the past. How utterly groundless such an assertion is, and how valid the doctrine which lies at the basis of the science, viz-., that under given similar circumstances we may expect similar results, may be seen from the subjoined table, which I extract from the latest and, in many respects, the most complete contribution to vital statistics yet published, " The Rates of Mortality and Sickness according to the Experience of the Ancient Order of Foresters Friendly Society, by Francis G. P. Neison, F.S.S., &c": —

Comparative Amount of Sickness in Various Periods of Years, according to the Adjusted Results of Different Inquiries.

From this table it will be seen how wonderfully close is the approximation between the sickness experience of the two largest orders and that of friendly societies generally, on which the Government returns are based; and this although nearly forty years have elapsed between the first and last dates included in the compilation. Whichever of these tables, be taken as the basis of a valuation, it seems to me, then, that the assertion that it was based-on "theory" as opposed to " practice " is & singularly groundless one. It has further been objected that these tables are derived from the experience of an old and thickly-populated country like Great Britain, and that here we may expect better results, as our conditions of life are superior to those of the members of friendly societies in England. Well, it may be so. Reasoning a priori we might reasonably hope that such will prove to be the case. But 2—H. 1.

Amount of Sia Less in each Period, in Weeks. Prom Age Neison: Government Eeturn, 1836-40. Manchi :ster Unity Odd Fellows. A.O.F. 1840-48. 185G-60. 1806-70. 1871-75. 20 to 30 30 „ 40 40 „ 50 50 ,, 60 60 „ 70 8-7 9-9 14-8 27-1 77-3 7-0 9-0 13-7 27-2 61-8 8'2 9-5 14-0 26-1 61-5 7-7 100 14-8 27-2 62-5 8-4 10-6 15-5 27-8 64-0 20 to 70 137-8 I 118-7 119-3 122-2 126-3