5

H.—l

21. That portion of the sickness curve which represents the rates at the higher ages can be expected to assume a regular form only when statistics of long-established societies having a large membership are available for tabulation. In New Zealand, owing to the paucity of observations, the recorded sickness at the higher ages is insufficient for the construction of a sickness table for the whole of life. But, so far as it goes, the evidence indicates that at the higher ages there is a more rapid rate of increase per member at risk than the expectation based on English experience. In conjunction with this, the death-rate of members of New Zealand friendly societies is conspicuously light. The favourable sickness of members under age fifty affords, therefore, no reasonable ground for the assumption that a society whose sickness is light when most of the members are young will continue to experience the same good fortune throughout their lives. With the certainty of a greater number, of members surviving at all ages, and with the probability of a comparatively heavy sickness-rate at the higher ages, every society, instead of being satisfied with solvency, should seek to possess a reserve for possible contingencies. 22. There is another reason why there should be a margin for safety in friendly society finance. The rate of interest still continues to fall, and, should the earning power of a society's accumulated capital be less than that on which the estimated value of the prospective assets is based, such difference will have to be met either by a reduction of benefit or by an increase of contribution. 23. The sickness of the Otago District, M.U.1.0.0.F., for the years 1890-94 is reported by the valuer as being 4,818 weeks, or nearly 48 per cent, above the expectation. The society has been valued four times, and this is the first quinquennium in which the total sickness has exceeded the expectation. As the valuer remarks, the increase in the sickness-rate, which was 571 days per member per annum during the quinquennium 1875-79, and 11-20 days during the quinquennium 1890-94, is manifestly due to permanent causes. 24. In September, 1895, the Eegistrar addressed to the Honourable the Colonial Treasurer a memorandum on " Friendly Society Financial Eeform," which was presented to both Houses of the General Assembly by leave. To the memorandum was appended an extract from the report of the English Eoyal Commission on the Aged Poor, relating to the question of compulsory registration of friendly societies and enforcement of the adoption of certified tables of contributions, together with recent expressions of opinion on both sides of the controversy by English experts and friendlysociety leaders. 25. For the purpose of enabling certain societies to acquire a legal status an Act was passed in 1895 entitled " The Unclassified Societies Eegistration Act, 1895." In consequence of the passing of this measure there exists no longer any need to include the class of specially-authorised societies among those which may be registered under the Friendly Societies Act, and section 7 (5) and section 8 thereof were therefore repealed. 26. According to the last report of the New Zealand Friendly Societies' Mutual Fidelity Guarantee Association, the societies insured in the association reaped for the second time the benefit of their co-operation, free policies for the year being issued to subscribers. 27. So many references from the Controller of the General Post Office re change of trustees involved unnecessary correspondence, owing to the neglect of secretaries to notify the Eegistrar of the change, that an instruction was recently issued to local Postmasters to inquire of the secretary when filling-in the savings-bank form whether the change entered therein had been registered. It would obviate delay and inconvenience if, instead of waiting until money is urgently needed, due notice of each change of trustees were sent to this office immediately after appointment. 28. Some misunderstanding of the law appears still to exist as to the necessity of making provision for the dissolution of branches in cases where branches are registered under rules of their own. The New Zealand Act of 1882 being framed on the lines of the English Act of 1875 the English practice is in point. In Eule XV. of the model rules for branches, printed as an appendix to Mr. Pratt's valuable work on the " Law of Friendly Societies," express provision is made for the dissolution of a branch. This rule provides for the consent of the central body and of five-sixths in value of the members, including honorary members, if any. As a general principle the consent of the central body should not be withheld except on reasonable grounds. A rule therefore containing such conditions as would virtually deprive the members of a branch of their right to dissolve cannot be registered. Neither may conditions precedent to dissolution or secession of branches be introduced into the rules which would be more stringent than the provisions of the Act. In 1893 application was made by the Otago District, M.U.1.0.0.F., for the registration of the Dunback Lodge as a branch. Accompanying the application were submitted, in the usual manner, two copies of lodge rules. In reference to Eule No. 59, headed " Secession and Dissolution," it was pointed out that the rule, so far as it referred to dissolution, was not in accordance with section 16 of " The Friendly Societies Act, 1882." The society contended that this section did not apply to the branches of the Otago District, but subsequently submitted a rule re dissolution. This rule, however, provided for the consent to dissolution not only of five-sixths of the members in value, but also of three-fourths in number. The society was therefore informed that the condition as to consent by three-fourths in number was not in accordance with the Act. This condition having been deleted from the rule in accordance with the requirement made, the rules were registered in the ordinary course. 29. It may also be advantageous here to refer to a point in connection with rules relating to the disposal of a surplus. After a portion of a surplus has been allocated and credited in account to a member, it is in accordance with a recognised principle of equity that such allotted share may not be alienated for any breach of the society's rules or for non-payment of contributions. So long as a sum remains to the credit of the member sufficient to meet his contribution as it falls due from time to time his membership must not be allowed to lapse. Should he be expelled from the society for a breach of its rules, for which the penalty of expulsion is provided, he yet may not be deprived of any accrued right which he possesses in the funds of the society. Eule therefore must not be drawn in violation of this principle.