7

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bo judge carefully of the position of the society which they have joined or are intending to join, and thoughtfully to consider the advice and weigh the arguments set forth in support of that advice which is given by experts who have made this matter their special study, and who can have no possible reason for misleading their readers. 35. It seems almost absurd to treat seriously the argument which is constantly repeated that, because a friendly society is yearly accumulating funds, its financial position may be accepted as satisfactory. Of all the societies which have collapsed there was not one which did not during the first years of its existence possess accumulated funds. A society with an inadequate scale of contributions is at its very outset actuarially insolvent; but, even though the payments are utterly insufficient, yet provided that there are enough members to cover the risk of the ordinary fluctuations of sickness and mortality, and that no extraordinary experience is met with, its funds will go on increasing for many years, and only an actuary can determine what the rate of increase should be. Whoever, therefore, is provident enough to invest his savings in order to secure contingent and deferred benefits will, unless he be specially educated to judge as to the position of his society, act wisely in accepting the opinion of an expert. The prudence exercised by the member of a friendly society which is not established on the best principles is better than none, but half measures surely should not satisfy where so much is at stake. While employment is obtainable, and health and strength remain, the lot of the artisan and of the labourer in this colony, if he be single, or if being married he be prudently content with a small family, compares very favourably with that of the working-man at Home; but if sickness overtakes him, and he has made no secure provision for such a contingency, his position, or at least the position of the married man, is worse than it would be in England. 36. Notwithstanding all that has been said, there is happily some ground for congratulations. The progress in the right direction, though slow, may be said to be sure. The adoption of scientific principles of finance by the deliberate and voluntary choice of men educated up to this better knowledge may be regarded as permanent. 37. The criticism of those who find fault with the method of valuation on the ground that the valuers do not anticipate profit arising from secessions has been fully dealt with in the valuation reports. «It may be added that, apart from the actuarial aspect of the question, it is utterly contrary to the spirit of fraternity for a society to make a calculation in cold blood as to the probable gain which will accrue to one section of the members by means of loss, the result perhaps of misfortune, to some of their fellow-members. When the quinquennial valuation is made, then, if there is a surplus available for appropriation, this profit on secessions during the past five years will form a part of such surplus, so that the more prudent and the more fortunate members gain thereby ; but do not let them rejoice in anticipation over the unwisdom or, possibly, over the distress of their neighbours and brothers. 38. It would appear that in some societies the majority of the members are utterly indifferent to the fact that their liabilities are considerably in excess of their assets. In " the days of statistical darkness " that societies should drift ignorantly into insolvency was a misfortune, but that societies in full view of their danger should make no effort to avert it is a crime. If, therefore, tw To consecutive valuations of a society shall have been made and a deficiency shall have resulted on each occasion, and if the Valuer in each of his reports shall have stated that the rates of contribution are inadequate to meet the promised benefits, and the society shall have neglected to take any steps to reduce the deficiency shown, the Registrar considers that it will be his duty to recommend that the Government withdraw the undertaking to defray the expense of any subsequent valuation of such society, due under the Act, until the Valuer's advice shall have been adopted. In providing for the cost of valuation the Legislature has recognized the importance of letting in the light upon friendly-society finance, in the interests not only of the members but also of the community at large, and it certainly is not intended that the Valuer's report should be treated as so much waste paper, or that societies whose liabilities exceed their assets should continue to promise benefits which there is no reasonable expectation that they will be able to pay, without some strong protest being entered against the dishonesty of such a course, as well as against the wilful disregard of the actuarial advice placed gratuitously at their disposal. 39. As the Valuers have pointed out in several of their reports to those societies, whose assets consist partly of land and buildings, the estimated worth of such property the Valuer has no means of verifying. It seems desirable that a certificate by an official property-valuer should be added to the list of the returns to be furnished (whenever requisite) to the actuarial Valuer. For, on the one hand, a surplus is contingent either wholly or in part on the correctness of the stated value of such property, and, on the other hand, the amount of deficiency is understated if too high a value is assigned. It may be added that, in the event of a surplus, even where there is satisfactory proof of the correctness of the value assigned, the Valuer in most cases cannot make the same recommendation as to the disposal of the surplus as he would make if the assets of the society were wholly of a more easily realizable character. 40. The valuations of the following societies were completed during the year 1886 :— A.O.F. —Auckland District, Canterbury United District, Hawke's Bay District, Nelson District, Taranaki District, United Otago District, Court Foresters' Pride. A.O.S. —Sanctuary Star of Canterbury. 1.0.0.1 A— Grand Lodge of New Zealand. I.O.E.—New Zealand Central District. M.U.l.O.O.l?.—Ashley District, Auckland District, Hawke's Bay District, Invercargill District, Lyttelton District, Nelson District, Otago District, Wanganui Lodge. U.A.O.D. —Anchor Lodge, Enterprise Lodge, Lyttelton Hearts of Oak Lodge, Otago Lodge, Star of New Zealand Lodge. 41. Copious extracts from the Valuers' reports are given in Appendix I. Summaries of the results of the valuations are given in two tables (Appendix XII.). Table A shows—