Part 44

By the act of 1829, in lieu of the discretion as to whether the formation of the proposed society would be useful and beneficial, and the requirement of the actuarial certificate to the tables, it was enacted that the justices were to satisfy themselves that the tables proposed to be used might be adopted with safety to all parties concerned. This provision, of course, became a dead letter and was repealed in 1834. Thenceforth, societies were free to establish themselves upon what conditions and with what rates they chose, provided only they satisfied the barrister that the rules were "calculated to carry into effect the intention of the parties framing them," and were "in conformity to law."

By an act of 1846 the barrister certifying the rules was constituted "Registrar of Friendly Societies," and the rules of all societies were brought together under his custody. An actuarial certificate was to be obtained before any society could be registered "for the purpose of securing any benefit dependent on the laws of sickness and mortality." In 1850 the acts were again repealed and consolidated with amendments. Societies were divided into two classes, "certified" and "registered." The certified societies were such as obtained a certificate to their tables by an actuary possessing a given qualification, who was required to set forth the data of sickness and mortality upon which he proceeded, and the rate of interest assumed in the calculations. All other societies were to be simply registered. Very few societies were constituted of the "certified" class. The distinction of classes was repealed and the acts were again consolidated in 1855. Under this act, which admitted of all possible latitude to the framers of rules of societies, 21,875 societies were registered, a large number of them being lodges or courts of affiliated orders, and the act continued in force till the end of 1875.

The Friendly Societies Act 1875 and the several acts amending it are still, in effect, the law by which these societies are regulated, though in form they have been replaced by two consolidating acts, viz. the Friendly Societies Act 1896 and the Collecting Societies and Industrial Assurance Companies Act 1896. This legislation still bears the permissive and elastic character which marked the more successful of the previous acts, but it provides ampler means to members of ascertaining and remedying defects of management and of restraining fraud. The business of registry is under the control of a chief registrar, who has an assistant registrar in each of the three countries, with an actuary. An appeal to the chief registrar in the case of the refusal of an assistant registrar to register a society or an amendment of rules, and in the case of suspension or cancelling of registry, is interposed before appeal is to be made to the High Court. Registry under a

## particular name may be refused if in the opinion of the registrar the

name is likely to deceive the members or the public as to the nature of the society or as to its identity. It is the duty of the chief registrar, among other things, to require from every society a return in proper form each year of its receipts and expenditure, funds and effects; and also once every five years a valuation of its assets and liabilities. Upon the application of a certain proportion of the members, varying according to the magnitude of the society, the chief registrar may appoint an inspector to examine into its affairs, or may call a general meeting of the members to consider and determine any matter affecting its interests. These are powers which have been used with excellent effect. Cases have occurred in which fraud has been detected and punished by this means that could not probably have been otherwise brought to light. In others a system of mismanagement has been exposed and effectually checked. The power of calling special meetings has enabled societies to remedy defects in their rules, to remove officers guilty of misconduct, &c., where the procedure prescribed by the rules was for some reason or other inapplicable. Upon an application of a like proportion of members the chief registrar may, if he finds that the funds of a society are insufficient to meet the existing claims thereon, or that the rates of contribution are insufficient to cover the benefits assured (upon which he consults his actuary), order the society to be dissolved, and direct how its funds are to be applied. Authority is given to the chief registrar to direct the expense (preliminary, incidental, &c.) of an inspection or special meeting to be defrayed by the members or officers, or former members or officers, of a society, if he does not think they should be defrayed either by the applicants or out of the society's funds. He is also empowered, with the approval of the treasury, to exempt any friendly society from the provisions of the Collecting Societies Act if he considers it to be one to which those provisions ought not to apply. Every society registered after 1895, to which these provisions do apply, is to use the words "Collecting Society" as the last words of its name.

The law as to the membership of infants has been altered three times. The act of 1875 allowed existing societies to continue any rule or practice of admitting children as members that was in force at its passing, and prohibited membership under sixteen years of age in any other case, except the case of a juvenile society composed wholly of members under that age. The treasury made special regulations for the registry of such juvenile societies. In 1887 the maximum age of their members was extended to twenty-one. In 1895 it was enacted that no society should have any members under one year of age, whether authorized by an existing rule or not; and that every society should be entitled to make a rule admitting members at any age over one year, but by the Friendly Societies Act 1908 membership was permitted to minors under the age of one year. The Treasury, upon the enactment of 1895 coming into operation, rescinded its regulations for the registry of juvenile societies; and though it is still the practice to submit for registry societies wholly composed of persons under twenty-one, these societies in no way differ from other societies, except in the circumstances that they are obliged to seek officers and a committee of management from outside, as no member of the committee of any society can be under twenty-one years of age. In order to promote the discontinuance of this anomalous proceeding of creating societies under the Friendly Societies Act, which, by the conditions of their existence, are unable to be self-governing, the act provides an easy method of amalgamating juvenile societies and ordinary societies or branches, or of distributing the members and the funds of a juvenile society among a number of branches. The liability of schoolboys and young working lads to sickness is small, and these societies frequently accumulate funds, which, as their membership is temporary, remain unclaimed and are sometimes misapplied.

The legislation of 1875 and 1876 was the result of the labours of a royal commission of high authority, presided over by Sir Stafford Northcote (afterwards Lord Iddesleigh), which sat from 1870 to 1874, and prosecuted an exhaustive inquiry into the organization and condition of the various classes of friendly societies. Their reports occupy more than a dozen large bluebooks. They divided registered friendly societies into 13 classes.

The first class included the affiliated societies or "orders," such as the Manchester Unity of Oddfellows, the Ancient Order of Foresters, the Rechabites, Druids, &c. These societies have a central body, either situated in some large town, as in the case of the Manchester Unity, or moving from place to place, as in that of the Foresters. Under this central body, the country is (in most cases) parcelled out into districts, and these districts again consist each of a number of independent branches, called "lodges," "courts," "tents," or "divisions," having a separate fund administered by themselves, but contributing also to a fund under the control of the central body. Besides these great orders, there were smaller affiliated bodies, each having more than 1000 members; and the affiliated form of society appears to have great attraction. Indeed, in the colony of Victoria, Australia, all the existing friendly societies are of this class. The orders have their "secrets," but these, it may safely be said, are of a very innocent character, and merely serve the purpose of identifying a member of a distant branch by his knowledge of the "grip," and of the current password, &c. Indeed they are now so far from being "secret societies" that their meetings are attended by reporters and the debates published in the newspapers, and the Order of Foresters has passed a wise resolution expunging from its publications all affectation of mystery.

Most of the lodges existing before 1875 have converted themselves into registered branches. The requirement that for that purpose a vote of three-fourths should be necessary was altered in 1895 to a bare majority vote. The provisions as to settlement of disputes were extended in 1885 to every description of dispute between branches and the central body, and in 1895 it was provided that the forty days after which a member may apply to the court to settle a dispute where the society fails to do so, shall not begin to run until application has been made in succession to all the tribunals created by the order for the purpose. In 1887 it was enacted that no body which had been a registered branch should be registered as a separate society except upon production of a certificate from the order that it had seceded or been expelled; and in 1895 it was further enacted that no such body should, after secession or expulsion, use any name or number implying that it is still a branch of the order. The orders generally, especially the greater ones, have carefully supervised the valuations of their branches, and have urged and, as far as circumstances have rendered it practicable, have enforced upon the branches measures for diminishing the deficiencies which the valuations have disclosed. They have organized plans by which branches disposed to make an effort to help themselves in this matter may be assisted out of a central fund. The second class was made up of "general societies," principally existing in London, of which the commissioners enumerated 8 with nearly 60,000 members, and funds amounting to a quarter of a million.

The third class included the "county societies." These societies have been but feebly supported by those for whose benefit they are instituted, having all exacted high rates of contribution, in order to secure financial soundness.

Class 4, "local town societies," is a very numerous one. Among some of the larger societies may be mentioned the "Chelmsford Provident," the "Brighton and Sussex Mutual," the "Cannon Street, Birmingham," the "Birmingham General Provident." In this group might also be included the interesting societies which are established among the Jewish community. They differ from ordinary friendly societies partly in the nature of the benefits granted upon death, which are intended to compensate for loss of employment during the time of ceremonial seclusion enjoined by the Jewish law, which is called "sitting shiva." They also provide a cab for the mourners and rabbi, and a tombstone for the departed, and the same benefits as an ordinary friendly society during sickness. Some also provide a place of worship. Of these the "Pursuers of Peace" (enrolled in December 1797), the "Bikhur Cholim, or Visitors of the Sick" (April 1798), the "Hozier Holim" (1804), may be mentioned.

Class 5 was "local village and country societies," including the small public-house clubs which abound in the villages and rural districts, a large proportion of which are unregistered.

Class 6 was formed of "particular trade societies."

Class 7 was "dividing societies." These were before 1875 unauthorized by law, though they were very attractive to the members. Their practice is usually to start afresh every January, paying a subscription somewhat in excess of that usually charged by an ordinary friendly society, out of which a sick allowance is granted to any member who may fall sick during the year, and at Christmas the balance not so applied is divided among the members equally, with the exception of a small sum left to begin the new year with. The mischief of the system is that, as there is no accumulation of funds, the society cannot provide for prolonged sickness or old age, and must either break up altogether or exclude its sick and aged members at the very time when they most need its help. This, however, has not impaired the popularity of the societies, and the act of 1875, framed on the sound principle that the protection of the law should not be withheld from any form of association, enables a society to be registered with a rule for dividing its funds, provided only that all existing claims upon the society are to be met before a division takes place.

Class 8, "deposit friendly societies," combine the characteristics of a savings bank with those of a friendly society. They were devised by the Hon. and Rev. S. Best, on the principle that a certain proportion of the sick allowance is to be raised out of a member's separate deposit account, which, if not so used, is retained for his benefit. Their advantages are in the encouragement they offer to saving, and in meeting the selfish objection sometimes raised to friendly societies, that the man who is not sick gets nothing for his money; their disadvantage is in their failing to meet cases of sickness so prolonged as to exhaust the whole of the member's own deposit.

Class 9, "collecting societies," are so called because their contributions are received through a machinery of house-to-house collection. These were the subject of much laborious investigation and close attention on the part of the commissioners. They deal with a lower class of the community, both with respect to means and to intelligence, than that from which the members of ordinary friendly societies are drawn. The large emoluments gained by the officers and collectors, the high percentage of expenditure (often exceeding half the contributions), and the excessive frequency of lapsing of insurances point to mischiefs in their management. "The radical evil of the whole system (the commissioners remark) appears to us to lie in the employment of collectors, otherwise than under the direct supervision and control of the members, a supervision and control which we fear to be absolutely unattainable in burial societies that are not purely local." On the other hand, it must be conceded that these societies extend the benefits of life insurance to a class which the other societies cannot reach, namely, the class that will not take the trouble to attend at an office, but must be induced to effect an insurance by a house-to-house canvasser, and be regularly visited by the collector to ensure their paying the contributions. To many such persons these societies, despite all their errors of constitution and management, have been of great benefit. The great source of these errors lies in a tendency on the part of the managers of the societies to forget that they are simply trustees, and to look upon the concern as their own personal property to be managed for their own benefit. These societies are of two kinds, local and general. For the general societies the act of 1875 made certain stringent provisions. Each member was to be furnished with a copy of the rules for one penny, and a signed policy for the same charge. Forfeiture of benefit for non-payment is not to be enforced without fourteen days' written notice. The transfer of a member from one society to another was not to be made without his written consent and notice to the society affected. No collector is to be a manager, or vote or take part at any meeting. At least one general meeting was to be held every year, of which notice must be given either by advertisement or by letter or post card to each member. The balance-sheet is to be open for inspection seven days before the meeting, and to be certified by a public accountant, not an officer of the society. Disputes could be settled by justices, or county courts, notwithstanding anything in the rules of the society to the contrary. Closely associated with the question of the management of these societies is that of the risk incurred by infant life, through the facilities offered by these societies for making insurances on the death of children. That this is a real risk is certain from the records of the assizes, and from many circumstances of suspicion; but the extent of it cannot be measured, and has probably been exaggerated. It has never been lawful to assure more than L6 on the death of a child under five years of age, or more than L10 on the death of one under ten. Previous to the act of 1875, however, there was no machinery for ascertaining that the law was complied with, or for enforcing it. This is supplied by that act, though still somewhat imperfectly. When the bill went up to the House of Lords, an amendment was made, reducing the limit of assurance on a child under three years of age to L3, but this amendment was unfortunately disagreed with by the House of Commons.

Class 10, annuity societies, prevail in the west of England. These societies are few, and their business is diminishing. Most of them originated at the time when government subsidized friendly societies by allowing them L4: 11: 3% per annum interest. Now annuities may be purchased direct from the National Debt commissioners. These societies are more numerous, however, in Ireland.

Class 11, female societies, are numerous. Many of them resemble affiliated orders at least in name, calling themselves Female Foresters, Odd Sisters, Loyal Orangewomen, Comforting Sisters and so forth. In their rules may be found such a provision as that a member shall be fined who does not "behave as becometh an Orangewoman." Many are unregistered. In the northern counties of England they are sometimes termed "life boxes," doubtless from the old custom of placing the contributions in a box. The trustees, treasurer, and committee are usually females, but very frequently the secretary is a man, paid a small salary.

Under Class 12 the commissioners included the societies for various purposes which were authorized by the secretary of state to be registered under the Friendly Societies Act of 1855, comprising working-men's clubs, and certain specially authorized societies, as well as others that are now defined to be friendly societies. Among these purposes are assisting members in search of employment; assisting members during slack seasons of trade; granting temporary relief to members in distressed circumstances; purchase of coals and other necessaries to be supplied to members; relief or maintenance in case of lameness, blindness, insanity, paralysis, or bodily hurt through accidents; also, the assurance against loss by disease or death of cattle employed in trade or agriculture; relief in case of shipwreck or loss or damage to boats or nets; and societies for social intercourse, mutual helpfulness, mental and moral improvement, rational recreation, &c., called working-men's clubs.

Class 13 was composed of cattle insurance societies.

These are the thirteen classes into which the commissioners divided registered friendly societies. There were 26,034 societies enrolled or certified under the various acts for friendly societies in force between 1793 and 1855; and, as we have seen, 21,875 societies registered under the act of 1855 before the 1st January 1876, when the act of 1875 came into operation. The total therefore of societies to which a legal constitution had been given was 47,909. Of these 26,087 were presumed to be in existence when the registrar called for his annual return, but only 11,282 furnished the return required. These had 3,404,187 members, and L9,336,946 funds. Twenty-two societies returned over 10,000 members each; nine over 30,000. One society (the Royal Liver Friendly Society, Liverpool, the largest of the collecting societies) returned 682,371 members. The next in order was one of the same class, the United Assurance Society, Liverpool, with 159,957 members; but in all societies of this class the membership consists very largely of infants. The average of members in the 11,260 societies with less than 10,000 members each was only 171.

Such were the registered societies; but there remained behind a large body of unregistered societies. With increased knowledge of the advantages of registration,[2] and of the true principles upon which friendly societies should be established, the number of unregistered societies, in comparison with those registered, ought to become much less.