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the indefatigable exertions of M. Everat, printer in Paris, one of their Comas mittee, is chiefly to be ascribed the general establishment of Friendly So cieties in France. But it is still to be regretted that they have all been founded upon the same erroneous principles as those hitherto established in this country, and that many are therefore already going rapidly to den cay. The errors, however, of Friendly Societies being now pretty well ascertained, it is to be hoped that these institutions will soon be placed upon such a footing as to secure their permanence and utility in every country. ?
As the Funds of Friendly Societies principally arise from a certain sum paid by Members at entry, and an annual contribution so long as they remain in the Society, while the disbursements consist of allowances for sickness or inability to work, and for the funerals of Members, their Wives, or Widows, and, as no Society can be permanent, unless the contributions, with the accruing interest, be equal to meet these allowances, both being taken on an average, the proportion which these should bear to each other became a question which baffled all inquiry, so long as the annual rate of sickness remained unknown. In order to determine this intricate problem, Dr Price was requested, about 1789, by a Committee of the House of Commons, to make computations on the subject ; but these being confessedly founded on suppositions, and given in a work of an abstruse nature, they were not productive of the benefits expected. Several attempts have since been made to obtain the requisite information from Societies themselves ; all of which proved ineffectual, till, upon the motion of CHARLES OLIPHANT, Esq. W. S., the Highland Society, in 1820, offered two premiums of Twenty Guineas each, for the two best Returns from Friendly Societies in Scotland ; and thereafter received communications from 79 of them, situated in 16 different counties, and embracing various periods of from three to seventy years. A most interesting Report * has since been drawn up and published; and from the returns it appears, that the average annual individual sickness of Society Members, above 20 years of age, is as follows: Ages.
Decim. Weeks. Days. Hours. 20 to 30
0.5916 30 40
4 19 40 50
1 63 60 70
5 4 10 Above 70 16.5417
19 This is the average annual sickness of an individual in these several decades, or periods of 10 years, as experienced by Societies on the whole ; but when exhibited for each particular year of age, it is somewhat less in the first, and somewhat more in the concluding, years of the decade. Thus, the average sickness in the 60th year of age, is only 2 weeks 2 days, but in the 70th it is 10 weeks 5 days. The rate of sickness varies also very materially in different Societies, being greatly above this average in some, and below
* Report on Benefit or Friendly Societies, drawn up by a Committee of the Highland Society of Scotland. A. Constable & Co. Edinburgh, and Hurst, Robinson & Co. London. 1824. 6.— This work every person ought to possess who takes any interest or concern in the affairs of FriendJy Societies.
it in others; but such discrepancies have seldom been found, except in cases where the number of members was too small to afford a range for a fair ave. rage. Something, however, must have depended upon the occupations in which the members were engaged, and whether situated in the country or in towns.
To ascertain, too, the rate of Mortality, the computations had to be founded upon the average rate among mankind in general, as stated in the most accurate Tables in use; the Returns being confined to age and sickness only. Mortality Tables, it is well known, are formed from observations made on the proportion between the number of the living and the number of the deaths in the same year of age. Dr Price's Northampton Table was formerly regarded as the best for England; but as it has been usually consi. dered too high, and as the Carlisle and Swedish Tables give the mortality much less, the computations in the Highland Society's Report have been founded on an average of the three. The following is the result of this average, omitting decimal parts.
Between 20 and 30 1 dies out of 95 annually.
Above 90 From the above general views of Sickness and Mortality, it appears, that if 95 men were to enter a Society at 21 years of age, the Sickness experienced by the whole during the following nine years, would be the same in amount as if each had suffered exactly 4 days 3 hours annually ; from 30 to 40,4 days 19 hours; and from 40 to 50, 7 days 4 hours annually; while again, from 50 to above 70, it would rapidly increase till it averaged more than 16 weeks annually to each individual. Now, if the annual contribution to such a Society were 10s., and the weekly sick allowance the same sum, the Report shews, that, after deducting the whole sick allowances paid from the whole contributions received, and adding to the balance the accumulated interest of 4 per cent., with the stock left by the nine deceased members, there would remain, at the end of the ninth year of the Society, or when all the remaining members had entered the 30th year of their age, an indivi. dual stock of L. 2: 6:09. From 30 to 40, the annual sickness averages 16 hours more to each individual ; and, consequently, the yearly balance would be the value of 16 hours' allowances less; but the interest of the former stock, and the sums left by those who had died, would more than cover this increased sickness, making the individual stock amount, at 40 years of age, to the sum of L. 5:19:9}. In this way the fund would go on accumulating till, at 64 years of age, it amounted to L. 15:7:54 to each individual then alive. From the great increase of sickness, however, during the next six years, it being altogether on an average no less than 44 weeks to each individual, the above stock and intervening contributions would all be expended by the end of that time, or when the remaining members had com. pleted their 70th year. This is the farthest age that the Tables in the Re. port are calculated from actual experience of sickness, the returns of societies above that age being too limited to be the basis of any calculation that could be relied on with safety ; but it is estimated from the returns, so far as they go, that the average annual sickness above 70 years of age would be about 164 weeks to each individual. · In like manner it is calculated, that an annual contribution of 39. 4d., from 21 years of age, would be required for an allowance of L. 10 at the death of each member, the contributions being payable till 70, or till death, if that event should happen earlier ; and, like the sickness scheme, the indi vidual stock would also continue to increase till the death of the last member, when it would again all be exhausted. Thus, at the end of the ninth year of the Society, or the beginning of the 30th year of age of the surviving members, there would be a balance to each individual of 148.710;at their 40th year, L. 1:15:91;-at their 60th, L. 4:19:74; and at the 95th year of age, when the last member is supposed to die, L.9: 19:10%, or say L. 10.-If the funeral of a wife of the same age as her husband were to be provided for to the same extent, the contribution would of course require to be doubled.
There are other two Schemes in the Report, one for Annuities to such members as survive 70, when the Sickness Scheme terminates, and another for Widows' Annuities ; but it seems only necessary here to refer to them.
These general observations will perhaps so far tend to illustrate the nature of Friendly Societies, as to shew, that, with the advance of age, there is a great increase of sickness, and that, unless a sufficient capital be always accumulated, in proportion to the number and ages of the members, such Societies cannot fulfil their engagements when their members come to be ad. vanced in life. Let it be particularly remembered, that if a Society's weekly sick allowance were the same sum as the annual contribution, the amount that would be annually required by all the sick members between 50 and 60 years of age, would be the same as if each member in the Society between those ages had received nearly double the amount of his yearly contribution; from 60 to 70 it would be the same as if each had received almost five times the amount ; and above 70 it would be the same as if each of the members of that class had received nearly sixteen times the amount of his annual contribu. tion. This will shew the fallacy of the opinion always hitherto held, that as one member became old another young one would enter, and in this way the allowances to the former would be defrayed by the contributions of the latter. But it will be seen from the above averages, that neither five nor ten members of the classes below 40 years of age, can support one member of each of the classes from 50 to above 70 years of age ; for, as the average annual sickness of the whole members between 20 and 30 years of age is equal to 4 days 3 hours to each, and the average annual sickness of those between 30 and 40 years of age is equal to 4 days 19 hours to each, there can only remain a balance of the yearly contributions of each of the former class equal to 2 days 21 hours' sick money, and a balance of the contributions of each of the latter class equal to 2 days' 5 hours' sick allowance. How, then, can these small balances defray the sick allowances of one week, five weeks, and sixteen weeks, required by each of the members in the three classes above 60 years of age -Neither will it do to take the average age of all the Members of a Society, and hence conclude that the sickness will be the same as if each member were of that age. For example, take one member at 25 years of age, one at 35, one at 45, one at 55, and one at 65, the average age of each of these five members will then be 45, but their average sickness will be much more than if each of them had been in reality 45 years of age. Thus, the average sickness of a member at 25 years of age, is 4 days 3 hours; of one at 35, 4 days 19 hours; of one at 45, 1 week 4 hours ; of one at 55, 1 week 6 days 3 hours; and of one at 65, 5 weeks 4 days 10 hours, being in all 9 weeks 6 days 1 hour; which being divided among these five members, give to each 1 week 2 days 6 hours, while the average sickness to a member at 45 years of age is only 1 week 4 hours, or about one-third less. This will shew how the sickness of a Society may increase, although the average age of the members when taken as a whole, may continue nearly the same for a long series of years. It will thus be seen how Societies who had accumulated little or no capital, have gone so rapidly to ruin whenever they came to have a number of old members, and ceased to obtain young entrants. To ascertain what the accumulation should be, it is only necessary, with the standard age of entry, either to fix the rate of contribution, or the rate of allowance, which the Society wishes to establish, and to ascertain, from the rules in the Report, whether these will be equivalent to each other during the whole of life; the standard rate of sickness being taken, or any other rate which experience may have shewn to be applicable to their own circumstances. It will thus be known what balance of stock each member at every age should have in the Society; and by calculating once every two or three years, by auditors or otherwise, what the total of these balances should amount to, and comparing them with the Society's actual funds in possession, it would always be accurately known how far the stock was keeping pace with the number and ages of the members. If the stock were found to be deficient, then an additional contribution should be instantly levied to bring it to its proper level ; whereas, if it exceeded, the surplus should be kept to meet the increased demands of such of the members as should sur. vive 70, if the Society's sick allowances did not stop at that age. These points being all settled, and particularly the age of entry, it is evident that every entrant above that age, should either,
Ist, Pay an additional sum of equivalent money, equal to the indi
vidual stock that the members at his age have already in the
3d, Receive a lower rate of allowance. Such being the true principles by which it is necessary that permanent So. cieties should be regulated, their errors hitherto must be obvious to every one. The principal of these may be classed as under :
1st, In admitting entrants at various advanced ages for the same or an
inadequate entry-money. 2d, In this entry-money being in general out of all just proportion
for young entrants
** 3d, In granting various high allowances without equivalent contri
butions. 4th, In not accumulating a sufficient fund while the members are,
young, to meet the necessary heavy demands when they become
old. 5th, In trusting to future young entrants for the support and exe
istence of the Society; and, Lastly, In having permanent office-bearers, who generally obtain a
complete ascendancy in the deliberations, and who not unfrequently break up Societies, dispose of their property, and divide
the funds, to serve their own interested purposes. Upon adverting to these defects, but more particularly to the increased rate of sickness above 50 years of age, which no probable increase of young members, without a very large capital, could long support, it will be apparent that such Societies must inevitably go to ruin.
The main object of those institutions being, as already mentioned, the relief of such necessities as arise from sickness, old age, and death, their practical utility as well as permanency has been shewn to depend upon the adequacy of the provision made in health and in youth for these purposes. Without the means, however, of ascertaining what this provision should be, these Societies have been hitherto almost uniformly founded upon the most erroneous principles, but chiefly upon the idea that the aged of one generation would be provided for by the youth of the next. At their commencement entrants have usually been admitted at all ages for the same inadequate sum, to swell the numbers at the outset; and certain inducements and randoin allowances have been held out and adopted, which a few years have shewn were far beyond what their circumstances could afford. As such Societies are at first composed of a majority of the young and healthy, their funds for a while continue to improve; and hence they have been led to believe that they were in a prosperous condition, although in fact they were really insolvent. Prosperity was inferred from the possession of the sum received, and from the capital at first appearing rapidly to accumulate, without attending to the amount that would be afterwards required, when the Society should arrive at maturity. In fact, a rapid accumulation of capital has generally been the means of only rendering a Society the sooner bankrupt; for restrictions have then been laid upon entrants, their number and ages limited, and the entry money raised, upon the erroneous opinion that as the capital increased, so ought also the terms of admission in the same proportion. But the truth is, that as the funds increase, so also do the first members increase in years and infirmities; and though members enter subsequently to a larger capital than their predecessors did, they at the same time enter among a larger class of aged and infirm people, who, from their own payments being now inadequate to defray their allowances, must themselves either require any capital they may have accumulated, or be supported from the surplus contributions of the young members. In farther proof of this fact, it may only be stated, that, during the last 23 years, the members above 40 years of age, in a Society to be afterwards noticed, received the immense number of One thousand nine hundred and seventy-one weeks' full al.