FRIENDLY' SOCIETIES. These organizations, according to the comprehensive definition of the Friendly Societies Act 1896, which regulates such societies in Great Britain and Ireland, are "societies for the purpose of providing by voluntary subscriptions of the members thereof ,with or without the aid of donations, for the relief or maintenance of the members, their husbands, wives, children, fathers, mothers, brothers or sisters, nephews or nieces, or wards being orphans, during sickness or other infirmity, whether bodily or mental, in old age, or in widowhood, or for the relief or maintenance of the orphan children of members during minority; for insuring money to be paid on the birth of a member's child, or on the death of a member, or for the funeral expenses of the husband, wife, or child of a member, or of the widow of a deceased member, or, as respects persons of the Jewish persuasion, for the payment of a sum of money during the period of confined mourning; for the relief or maintenance of the members when on travel in search of employment or when in distressed circumstances, or in case of shipwreck, or loss or damage of or to boats or nets; for the endowment of members or nominees of members at any age; for the insurance against fire to any amount not exceeding X15 of the tools or implements of the trade or calling of the members" - and are limited in their contracts for assurance of annuities to X52 (previous to the i The word "friend" (O.E. freond, Ger. Freund, Dutch Vriend) is derived from an old Teutonic verb meaning to love. While used generally as the opposite to enemy, it is specially the term which connotes any degree, but particularly a high degree, of personal goodwill, affection or regard, from which the element of sexual love is absent.
Friendly Societies Act 1908 the sum was Aso), and for insurance of a gross sum to boo (previous to the act of 1908 the sum was boo). They may be described in a more popular and condensed form of words as the mutual insurance societies of the poorer classes, by which they seek to aid each other in the emergencies arising from sickness and death and other causes of distress. A phrase in the first act for the encouragement and relief of friendly societies, passed in 1793, designating them "societies of good fellowship," indicates another useful phase of their operations.
The origin of the friendly society is, probably in all countries, the burial club. It has been the policy of every religion, if indeed it is not a common instinct of humanity, to surround the disposal of a dead body with circumstances of pomp and expenditure, often beyond the means of the surviving relatives. The appeal for help to friends and neighbours which necessarily follows is soon organized into a system of mutual aid, that falls in naturally with the religious ceremonies by which honour is done to the dead. Thus in China there are burial societies, termed "long-life loan companies," in almost all the towns and villages. Among the Greeks the 'pavot combined the religious with the provident element (see Charity And Charities). From the Greeks the Romans derived their fraternities of a similar kind. The Teutons in like manner had their gilds. Whether the English friendly society owes its origin in the higher degree to the Roman or the Teutonic influence can hardly be determined. The utility of providing by combination for the ritual expenditure upon burial having been ascertained, the next step - to render mutual assistance in circumstances of distress generally - was an easy one, and we find it taken by the Greek g pavot and by the English gilds. Another modification - that the societies should consist not so much of neighbours as of persons having the same occupation - soon arises; and this is the germ of our trade unions and our city companies in their original constitution. The interest, however, that these inquiries possess is mainly antiquarian. The legal definition of a friendly society quoted above points to an organization more complex than those of the ancient fraternities and gilds, and proceeding upon different principles. It may be that the one has grown out of the other. The common element of a provision for a contingent event by a joint contribution is in both; but the friendly society alone has attempted to define with precision what is the risk against which it intends to provide, and what should be the contributions of the members to meet that risk.
It would be curious to endeavour to trace how, after the suppression of the religious gilds in the 16th century, and the substitution of an organized system of relief by the poor law of Elizabeth for the more voluntary and casual means of relief that previously existed, the modern system of friendly societies grew up. The modern friendly society, particularly in rural districts, clings with fondness to its annual feast and procession to church, its procession of all the brethren on the occasion of the funeral of one of them, and other incidents which are almost obviously survivals of the customs of medieval gilds. The last recorded gild was in existence in 1628, and there are records of friendly societies as early as 1634 and 1639. The connecting links, however, cannot be traced. With the exception of a society in the port of Borrowstounness on the Firth of Forth, no existing friendly society is known to be able to trace back its history beyond a date late in the 17th century, and no records remain of any that might have existed in the latter half of the 16th century or the greater part of the 17th. One founded in 1666 was extant in 1850, but it has since ceased to exist. This is not so surprising as it might appear. Documents which exist in manuscript only are much less likely to have been preserved since the invention of printing than they were before; and such would be the simple rules and records of any society that might have existed during this interval - if, indeed, many of them kept records at all. On the whole, it seems probable thereforethat the friendly society is a lineal descendant of the ancient gild - the idea never having wholly died out, but having been kept up from generation to generation in a succession of small and scattered societies.
At the same time, it seems probable that the friendly society of the present day owes its revival to a great extent to the Protestant refugees of Spitalfields, one of whose societies was founded in 1703, and has continued among descendants of the same families, whose names proclaim their Norman origin. This society has distinguished itself by the intelligence with which it has adapted its machinery to the successive modifications of the law, and it completely reconstructed its rules under the provisions of the Friendly Societies Acts 1875 and 1876.
Another is the society of Lintot, founded in London in 1708, in which the office of secretary was for more than half a century filled by persons of the name of Levesque, one of whom published a translation of its original rules. No one was to be received into the society who was not a member, or the descendant of a member, of the church of Lintot, of recognized probity, a good Protestant, and well-intentioned towards the queen [Anne] and faithful to the government of the country. No one was to be admitted below the age of eighteen, or who had not been received at holy communion and become member of a church. A member should not have a claim to relief during his first year's membership, but if he fell sick within the year a collection should be made for him among the members. The foreign names still borne by a large proportion of the members show that the connexion with descendants of the refugees is maintained.
The example of providence given by these societies was so largely followed that Rose's Act in 1793 recognized the existence of numerous societies, and provided encouragement for them in various ways, as well as relief from taxation to an extent which in those days must have been of great pecuniary value, and exemption from removal under the poor law. The benefits offered by this statute were readily accepted by the societies, and the vast number of societies which speedily became enrolled shows that Rose's Act met with a real public want. In the county of Middlesex alone nearly a thousand societies were enrolled within a very few years after the passing of the act, and the number in some other counties was almost as great. The societies then formed were nearly all of a like kind - small clubs, in which the feature of good fellowship was in the ascendant, and that of provident assurance for sickness and death merely accessory. This is indicated by one provision which occurs in many of the early enrolled rules, viz. that the number of members shall be limited to 61, 81 or tor, as the case may be. The odd 1 which occurs in these numbers probably stands for the president or secretary, or is a contrivance to ensure a clear majority. Several of these old societies are still in existence, and can point to a prosperous career based rather upon good luck than upon scientific calculation. Founded among small tradesmen or persons in the way to thrive, the claims for sickness were only made in cases where the sickness was accompanied by distress, and even the funeral allowance was not always demanded.
The societies generally not being established upon any scientific principle, those which met with this prosperity were the exception to the rule; and accordingly the cry that friendly societies were failing in all quarters was as great in 1819 as in 1869. A writer of that time speaks of the instability of friendly societies as "universal"; and the general conviction that this was so resulted in the passing of the act of 1819. It recites that "the habitual reliance of poor persons upon parochial relief, rather than upon their own industry, tends to the moral deterioration of the people and to the accumulation of heavy burthens upon parishes; and it is desirable, with a view as well to the reduction of the assessment made for the relief of the poor as to the improvement of the habits of the people, that encouragement should be afforded to persons desirous of making provision for themselves or their families out of the fruits of their own industry. By the contributions of the savings of many persons to one common fund the most effectual provision may be made for the casualties affecting all the contributors; and it is therefore desirable to afford further facilities and additional security to persons who may be willing to unite in appropriating small sums from time to time to a common fund for the purposes aforesaid, and it is desirable to protect such persons from the effects of fraud or miscalculation." This preamble went on to recite that the provisions of preceding acts had been found insufficient for these purposes, and great abuses had prevailed in many societies established under their authority. By this statute a friendly society was defined as "an institution, whereby it is intended to provide, by contribution, on the principle of mutual insurance, for the maintenance or assistance of the contributors thereto, their wives or children, in sickness, infancy, advanced age, widowhood or any other natural state or contingency, whereof the occurrence is susceptible of calculation by way of average." It will be seen that this act dealt exclusively with the scientific aspect of the societies, and had nothing to say to the element of good fellowship. Rules and tables were to be submitted by the persons intending to form a society to the justices, who, before confirming them, were to satisfy themselves that the contingencies which the society was to provide against were within the meaning of the act, and that the formation of the society would be useful and beneficial, regard being had to the existence of other societies in the same district. No tables or rules connected with calculation were to be confirmed by the justices until they had been approved by two persons at least, known to be professional actuaries or persons skilled in calculation, as fit and proper, according to the most correct calculation of which the nature of the case would admit. The justices in quarter sessions were also by this act authorized to publish general rules. for the formation and government of friendly societies within their county. The practical effect of this statute in requiring that the societies formed under it should be established on sound principles does not appear to have been as great as might have been expected. The justices frequently accepted as "persons skilled in calculation" local schoolmasters and others who had. no real knowledge of the technical difficulties of the subject, while the restrictions upon registry served only to increase the number of societies established without becoming registered.
In 1829 the law relating to friendly societies was entirely reconstructed by an act of that year, and a barrister was appointed under that act to examine the rules of societies, and ascertain that they were in conformity to law and to the provisions of the act. The barrister so appointed was John Tidd Pratt (1797-1870); and no account of friendly societies would be complete that did not do justice to the remarkable public service rendered by this gentleman. For forty years, though he had by statute really very slight authority over the societies, his name exercised the widest influence, and the numerous reports and publications by which he endeavoured to impress upon the public mind sound principles of management of friendly societies, and to expose those which were managed upon unsound principles, made him a terror to evil-doers. On the other hand, he lent with readiness the aid of his legal knowledge and great mental activity to assisting well-intentioned societies in coming within the provisions of the acts, and thus gave many excellent schemes a legal organization.
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 afid 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 1870to 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 l000 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 60py 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 £6 on the death of a. child under five years of age, or more than £10 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 £3, 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 £4: 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 £9,336,946 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,' 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.
On the actuarial side it is in the highest degree essential to the interests of their members that friendly societies should be financially sound, - in other words, that they should throughout their existence be able to meet the engagements into which they have entered with their members. For this purpose it is necessary that the members' contributions should be so fixed as to prove adequate, with proper management, to provide the benefits promised to the members. These benefits almost entirely depend upon the contingencies of health and life; that is, they take the form of payments to members when sick, of payments to members upon attaining given ages, or of payments upon members' deaths, and frequently a member is 1 These may be briefly summed up thus: - (I) power to hold land and vesting of property in trustees by mere appointment; (2) remedy against misapplication of funds; (3) priority in bankruptcy or on death of officer; (4) transfer of stock by:direction of chief registrar; (5) exemption from stamp duties; (6) membership of minors; (7) certificates of birth and death at reduced cost; (8) investment with National Debt Commissioners; (9) reduction of fines on admission to copyholds; (10) discharge of mortgages by mere receipt; (11) obligation on officers to render accounts; (12) settlement of disputes; (13) insurance of funeral expenses for wives and children without insurable interest; (14) nomination at death; (15) payment without administration; (16) services of public auditors and valuers; (17) registry of documents, of which copies may be put in evidence.
assured for all these benefits, viz. a weekly payment if at any time sick before attaining a certain age, a weekly payment for the remainder of life after attaining that age, and a sum to be paid upon his death. Of course the object of the allowance in sickness is to provide a substitute for the weekly wage lost in consequence of being unable to work, and the object of the weekly payment after attaining a certain age, when the member will probably be too infirm to be able to earn a living by the exercise of his calling or occupation, is to provide him with the necessaries of life, and so enable him to be independent of poor relief. There is every reason to believe that, when a large group of persons of the same age and calling are observed, there will be found to prevail among them, taken one with another, an average number of days' sickness, as well as an average rate of mortality, in passing through each year of life, which can be very nearly predicted from the results furnished by statistics based upon observations previously made upon similarly circumstanced groups. Assuming, therefore, the necessary statistics to be attainable, the computation of suitable rates of contribution to be paid by the members of a society in return for certain allowances during sickness, or upon attaining a certain age, or upon death, can be readily made by an actuarial expert. Accordingly, to furnish these statistics, the act of 1875, in continuation of an enactment which first appeared in a statute passed in 1829, required every registered society to make quinquennial returns of the sickness and mortality experienced by its members. By the year 1880 ten periods of five years had been completed, and at the end of each of them a number of returns had been received. Some of these had been tabulated by actuaries, the latest tabulation being of those for the five years ending 1855. There remained untabulated five complete sets of returns for the five subsequent quinquennial periods. It was resolved that these should be tabulated once for all, and it was considered that they would afford sufficient material for the construction of tables of sickness and mortality that might be adopted for the future as standard tables for friendly societies; and that it would be inexpedient to impose any longer on the societies the burden of making such returns. This requirement of the act was accordingly repealed in 1882. The result of the tabulation appeared in 1896, in a bluebook of 1367 folio pages, containing tables based upon the experience of nearly four and a half million years of life. These tables showed generally, as compared with previous observations, an increased liability to sickness. This inference has been confirmed by the observations of Mr Alfred W. Watson, actuary to the Independent Order of Oddfellows, Manchester Unity Friendly Society, on his investigation of the sickness and mortality experience of that society during the five years 1893-1897, which extended over 800,000 individuals, more than 3,000,000 years of life and 7,000,000 weeks of sickness.
The establishment of the National Conference of Friendly Societies by the orders and a few other societies has been of great service in obtaining improvements in the law, and in enabling the societies strongly to represent to the government and the legislature any grievance entertained by them. A complaint that membership of a shop club was made by certain employers a condition of employment, and that the rules of the club required the members to withdraw from other societies, led to the appointment of a departmental committee, who recommended that such a condition of employment should be made illegal, except in certain cases, and that in every ca g e it should be illegal to make the withdrawal from a society a condition of employment. In 1902 an act was passed based upon this recommendation.
It is an increasing practice among societies of combining together to obtain medical attendance and medicine for their members by the formation of medical associations. In 1895 trade unions were enabled to join in such associations, and it was provided that a contributing society or union should not withdraw from an association except upon three months' notice. The working of these associations has been viewed with dissatisfaction by members of the medical profession, and it has been suggested that a board of conciliation should be formed consisting of representatives of the Conference of Friendly Societies and of an equal number of medical men.
The following figures are derived from returns of registered societies and branches of registered societies to the beginning of 1905: British Empire. - In many of the British colonies legislation on the subject similar to that of the mother-country has been adopted. In those forming the Commonwealth of Australia and in New Zealand the affiliated orders hold the field, there being few, if any, independent friendly societies. The state of Victoria has more than 1000 lodges with more than ioo,000 members and nearly i 2 million pounds funds, averaging nearly 14 per member. Besides the registrar there is a government actuary for friendly societies, by whom the liabilities and accounts of all societies are valued every five years, a method which ensures uniformity in the processes of valuation. The friendly societies in the other Australasian states are not so numerous nor so wealthy, but are in each case under the supervision of vigilant public officials. In New Zealand a friendly society was established at New Plymouth in 1841, the first year of that settlement. The formation of a society at Nelson was resolved upon by the emigrants on shipboard on their passage out, and the first meeting was held among the tall fern near the beach a few days after they landed. The societies have now a registrar, an actuary, a revising barrister and two public valuers. Investigations have been made into their sickness experience, with results which compare favourably with those of the Manchester Unity and the registry office in the mother-country until the higher ages, when greater sickness appears to result from lower mortality. The average funds per member are 19,10s. Nearly four-fifths are invested in the purchase or on mortgage of real estate.
In Cape Colony no society is allowed to register unless it be shown to the satisfaction of the registrar that the contributions which it proposes to charge are adequate to provide for the benefits which it undertakes to grant. The consequence is that little more than one-third of the existing societies are registered. In the Dominion of Canada, province of Ontario, extensive powers of control are given to the registrar, and societies are not admitted to registry without strict proof of their compliance with the conditions of registry imposed by the law. Very full returns of their transactions are required and published, and registry is cancelled when any of the conditions of registry cease to be observed. These conditions apply not only to societies existing in Ontario, but to foreign societies transacting business there.
In several of the West Indian Islands statutes have been passed on the model of British legislation and registrars have been appointed.
In foreign countries the development of friendly societies has proceeded upon different lines. Belgium has a Commission royale permanente des societes de secours mutuel. Under laws passed in 1851 and 1894 societies are divided into two classes, recognized and not recognized. The recognized societies were in 1886 only about half as many as the unrecognized. There were in 1904 nearly 7000 recognized societies with 700,000 members. They enjoy the privileges of incorporation, exemption from stamp duty, gratuitous announcement in the official Moniteur and may have free postage.
Ordinary Friendly Societies (classes 2 to 8, io and 11).
Societies having Branches (class I)
Collecting Friendly Societies (class 9) .
Benevolent Societies (class 12). .. .
Working Men's Clubs (class 12). .. .
Specially Authorized Societies (class 12)
Specially Authorized Loan Societies (class 12)
Medical Societies (see last paragraph) .
Cattle Insurance Societies (class 13)
Shop Clubs (under act of 1902).. .
1 3,97 8 ,79 0
In France under the second empire a scheme was prepared for assisting friendly societies by granting them collective insurances under government security. The societies have the privilege of investing their funds in the Caisse des Depots et Consignations, corresponding to the English National Debt commission. The dual classification of societies in France is into those "authorized" and those "approved." By a law of the 1st of April 1898 a friendly society may be established by merely depositing a copy of its rules and list of officers with the sousprefet. Approved societies are entitled to certain state subventions for assisting in the purchase of old-age pensions and otherwise. A higher council has been established to advise on their working. In Germany a law was passed on the 7th of April 1876 (amended on the 1st of June 1884) which prescribed for registered friendly societies many things which in England are left to the discretion of their founders; and it provided for an amount of official interference in their management that is wholly unknown here. The superintending authority had a right to inspect the books of every society, whether registered or not, and to give formal notice to a society to call in arrears, exclude defaulters, pay benefits or revoke illegal resolutions. A higher authority might, in certain cases, order societies to be dissolved. These provisions related to voluntary societies; but it was competent for communal authorities also to order the formation of a friendly society, and to make a regulation compelling all workmen not already members of a society to join it. Since then the great series of imperial statutes has been passed, commencing in 1883 with that for sickness insurance, followed in 1884 by that for workmen's accident insurance, extended to sickness insurance in 1885, developed in the laws relating to accident and sickness insurance of persons engaged in agricultural and forestry pursuits in 1886, of persons engaged in the building trade and of seamen and others engaged in seafaring pursuits in 1887, and crowned by the law relating to infirmity and old-age insurance in 1889. Mr H. Unger, a distinguished actuary, remarks that the whole German workman's insurance and its executive bodies (sickness funds, trade associations, insurance institutions) are constantly endeavouring to improve the position of the workmen in a social and sanitary aspect, to the benefit of internal peace and the welfare of the German empire.
In Holland it is stated that the number of burial clubs and sickness benefit societies appears to be greater in proportion to the population than in any other country; but that the burial clubs do not rest upon a scientific basis, and have an unfavourable influence upon infant mortality. Half the population are insured in some burial club or other. The sick benefit societies are, as in England, some in a good and some in a bad financial condition; and legislation follows the English system of compulsory publicity, combined with freedom of competition.
In Spain friendly societies have grown out of the religious gilds. They are regulated by an act of 1887. Their actuarial condition appears to be backward, but to show indications of improvement. (E. W. B.) United States. - Under the title of fraternal societies are included in the United States what are known in England as friendly societies, having some basis of mutual help to members, mutual insurance associations and benefit associations of all kinds. There are various classes and a great variety of forms of fraternal associations. It is therefore difficult to give a concrete historical statement of their origin and growth; but, dealing with those having benefit features for the payment of certain amounts in case of sickness, accident or death, it is found that their history in the United States is practically within the last half of the 19th century. The more important of the older organizations are the Improved Order of Red Men, founded in 1771 and reorganized in 1834; Ancient Order of Foresters, 1836; Ancient Order of Hibernians of America, 1836; United Ancient Order of Druids, 1839; Independent Order of Rechabites, 1842; Independent Order of B'nai B'rith, founded in 1843; Order of the United American Mechanics, 1845; Independent Order of Free Sons of Israel, 1849; Junior Order of United American Mechanics, 1853. A very large proportion, probably more than one-half, of the societies which have secret organizations pay benefits in case of sickness, accident, disability, and funeral expenses in case of death. This class of societies grew out of the English friendly societies and have masonic characteristics. The Freemasons and other secret societies, while not all having benefit features in their distinctive organizations, have auxiliary societies with such features. There is also a class of secret societies, based largely on masonic usages, that have for their principal object the payment of benefits in some form. These are the Oddfellows, the Knights of Pythias, the Knights of Honour, the Royal Arcanum and some others. Many trade unions have now adopted benefit features, especially the Typo graphical Union, while many subordinate unions and great publishing houses have mutual relief associations purely of a local character, and some of the more important newspapers have such mutual relief or benefit societies. The New York trade unions, taken as a whole, have paid out large sums of money in benefits where members have been out of work, or are sick, or are on strike or have died. The total paid in one year for all these benefits was over $500,000.
It is impossible to give the membership of all the fraternal associations in the United States; but, including Oddfellows, Freemasons, purely benefit associations and all the class of the larger fraternal organizations, the membership is over 6,000,000. Among the more important, so far as membership is concerned, are the Knights of Pythias, the Oddfellows, the Modern Woodmen of America, the Ancient Order of United Workmen, Improved Order of Red Men, Royal Arcanum, Knights of the Maccabees, Junior Order of United American Mechanics, Foresters of America, Independent Order of Foresters, &c. These and other organizations pay out a vast amount of money every year in the various forms.
Since about the year 1870 a new form of benefit organization has come into existence. This is a life insurance based on the assessment plan, assessments being levied whenever a member dies; Assessor, as more recently, regular assessments being made in meat advance of death, as post-mortem assessments have proved insurance. a fallacious method of securing the means of paying death benefits. There are about 200 mutual benefit insurance companies or associations in the United States conducted on the "lodge system"; that is to say, they have regular meetings for social purposes and for general improvement, and in their work there is found the mysticism, forms and ceremonies which belong to secret societies generally. These elements have proved a very strong force in keeping this class of associations fairly intact. The "work" of the lodges in the initiation of members and their passing through various degrees is attractive to many people, and in small places, remote from the amusements of the city, these lodges constitute a resort where members can give play to their various talents. In most of them the features of the Masonic ritual are prominent. The amount of insurance which a single member can carry in such associations is small. In the Knights of Honour, one of the first of this class, policies ranging from $500 to $2000 are granted. In the Royal Arcanum the maximum is $3000. This form of insurance may be called co-operative, and has many elements which make the organizations practising it stronger than the ordinary assessment insurance companies having no stated meetings of members. These cooperative insurance societies are organized on the federal plan - as the Knights of Honour, for instance - having local assemblies, where the lodge-room element is in force; state organizations, to which the local bodies send delegates, and the national organization, which conducts all the insurance business through its executive officers. The local societies pay a certain given amount towards the support of the state and national offices, and while originally they paid death assessments, as called for, they now pay regular monthly assessments, in order to avoid the weakness of the post-mortem assessment. The difficulty which these organizations have in conducting the insurance business is in keeping the average age of membership at a low point, for with an increase in the average the assessments increase, and many such organizations have had great trouble to convince younger members that their assessments should be increased to make up for the heavy losses among the older members. The experience of these purely insurance associations has not been sufficient yet to demonstrate their absolute soundness or desirability, but they have enabled a large number of persons of limited means to carry insurance at a very low rate. They have not materially interfered with regular level premium insurance enterprises, for they have stimulated the people to understand the benefits of insurance, and have really been an educational force in this direction. A modern method of benefit association is found in the railway relief departments of some of the large railway corporations. These departments are organized upon a different plan from the Railway benefit features of labour organizations and secret societies, relief providing the members not only with payments on account depart- of death, but also with assistance of definite amounts in case of sickness or accident, the railway companies con tributing to the funds, partly from philanthropic and partly from financial motives. The principal railway companies in the United States which have established these relief departments are the Pennsylvania, the Philadelphia & Reading, the Baltimore & Ohio, the Chicago, Burlington & Quincy, and the Plant System. The relief department benefits the employes, the railways, and the public, because it is based upon the sound principle that the "interests and welfare of labour, capital and society are common and harmonious, and can be promoted more by co-operation of effort than by antagonism and strife." The railway employes support one-twentieth of the entire population, and most of their associations maintain organizations to provide their members with relief and insurance. The Brotherhood of Locomotive Engineers, the Order of Railway Conductors of America, the Brotherhood of Locomotive Firemen, the Brotherhood of Railway Trainmen, the Brotherhood of Railway Trackmen, the Switchmen's Union, the Brotherhood of Railway Carmen, and the Order of Railway Telegraphers, all have relief and benefit features. The oldest and largest of these is the International Brotherhood of Locomotive Engineers, founded at Detroit in August 1863. Like other labour organizations of the higher class of workmen, the objects of the brotherhoods of railway employes are partly social and partly educational, but in addition to these great purposes they seek to protect their members through relief and benefit features. Of course the relief departments of the railway companies are competitors of the relief and insurance features of the railway employes orders, but both methods of providing assistance have proved successful and beneficial.
For a history of the various American organizations, see Albert C. Stevens, The Cyclopaedia of Fraternities (New York, 1899); Facts for Fraternalists, published by the Fraternal Monitor, Rochester, N.Y.; for annual statements, "The World Almanac," "Railway Relief Departments," "Brotherhood Relief and Insurance of Railway Employes," "Mutual Relief and Benefit Associations in the Printing Trade," "Benefit Features of American Trade Unions," Bulletins Nos. 8, 17, 19 and 22 of the U.S. Department of Labour. (C. D. W.)
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