The Sun.
London, England, 1852-09-29 00:00:00

EVENINer, SEPTEMBER 29 1852.

FRIENDLY SOCIETIES.
I The report of the Select Committee appointee to
inquire into the operation of the laws relating to
Friendly Societies" has been issued. It is as follows :
Your Committee appointed to inquire into the
operation of the laws relating to friendly societies
have examined witnesses thereon, whose evidence
they have agreed to report to the House.
They proceeded first to inquire into the particulars
of those cases of alleged hardship or injustice which
have been brought under the notice of the House
during the present session by petitions from different
parties.
1. The Act of 1850, which is the existing law re-
gulating friendly societies, contains a proviso that it
shall not be lawful for any society established under
this Act to assure the payment of any sum exceeding
1001., nor any annuity exceeding 301. per annum,
nor a sum in sickness exceeding 20s. per week. It
also prohibits nomineeship to others than widowere,
widows, or children of members, and it reduces the
interest payable on future deposits made with the Na-
tional Debt Commissioners to 3/. per annum instead
of 3/. 16s. Oiel.
One operation of these clauses has been to oblige
certain benevolent and useful societies at Dublin,
Cork, and Limerick, and certain other societies esta-
blished nearly a century ago in the north of Ireland
for providing an income for the widows of Presby-
terian ministers, to suspend their transactions, because,
Ist. Those societies grant annuities to an extent
exceeding the limits of this Act.
2d. They grant them to nominees, such as sisters
and brothers, nephews and nieces, cousins, and
strangers in blood.
3d. They are reluctant to reduce their benefits to
suit the lower rate of interest.
Dr. Cooke and Dr. Montgomery appeared before
your Committee, and their evidence shows that their
society is the main dependence of the members of
their ministry, as a provision for their widows, and
that it has existed nearly a century, was recognised
by the Irish Parliament, 36 George III.; was en-
rolled in 1809 under the 49 George III.; and that they
had been formally placed within the Friendly Societies
Act by 2 William IV., c. 37. They complain, bee
sides, that the Act requires tables, a bond from the
treasurer, that a member may not belong to two
societies, that societies should be forced to make re-
turns to the registrar, and that they should not be
allowed to lay out their money in land.
Your Committee see no good reason why the limi-
tation as to the amount of annuity on sickness may
not be withdrawn in the next Bill, if only care be
taken to require that the tables for such annuities,
where the amount of such annuity is certain, be cal-
culated by a competent actuary, and the contributions
be kept distinct.
On the other heads of complaint your Committee
think that the case of these long-established societies
is deserving of a special Act, and that it is not ad-
visable to alter the general law in order to accommo-
date their requirements, however unobjectionable or
praiseworthy they may be.
2. A petition has been presented from 83 assurance
companies, complaining that certain five friendly so-
cieties, established under the 10 Geo. IV., c. 56, be-
fore the year 1840—[Clergy Mutual, Friends Provi-
dent, Provident Clerks, National Benevolent, United
Kingdom Temperancej—claim to have the power to
make their policies, by a clause in the policy, pay-
able to widow or widower, or child of a member, to
any amount, and that such policies are exempt
from legacy and probate duty ; that these so-
cieties have ceased to possess the character for which
Parliament granted privileges ; that they have an
unfair advantage, from being constituted under the
Friendly Societies' Act, which is equivalent to a
charter, being in reality trading life assurance com-
panies; and they ask to have such societies confined
in their transactions to the limits prescribed by the
Act—namely, of 1001., or compelled to be reconsti-
tuted in the same manner as other life companies.
Your Committee examined several witnesses in
support of this view, as well as other witnesses on the
part of the societies against whom the complaint was
laid, and they refer the House to the evidence, which
is of an interesting and curious nature.
It ought also to be borne in mind that the security
and good management of a society depend in no
small degree upon the amount of their transactions
and of their revenue; and it is desirable, therefore, to
induce the poorer classes to insure in societies in
which the richer also insure ; and these five societies
have beyond question conduced in a very material
degree to extend downwards in the scale of society a
knowledge of the principle of mutual assurance and a
disposition to embrace the advantage of it.
The other alternative your Committee incline to
recommend to the attention of Parliament—namely,
to allow the privilege of exemption from stamps and
from probate and legacy duty to the policies of all life
assurance offices, as well as friendly societies, to the
amount of 5001.
This amount is taken because whatever limit may
be fixed upon that will virtually be the limit of the
provision made for their families amongst the great
mass of those parties whose interest is intended to be
advanced by any Legislative measure on this subject.
Your Committee refer to the very explicit evidence
of the chairman of the Board of Inland Revenue and
of Mr. Trevor to show that, in their opinion, the loss
to the public purse would be inconsiderable if put in
comparison with the national benefit which they be-
lieved would be achieved.
If Parliament should adopt this proposal, it will of
course be necessary to guard the privilege from
abuse, by annexing conditions to all societies or as-
surance companies, which may avail themselves of it ;
amongst which the most prominent should be, that a
minute and strict return of the pecuniary condition,
and annual accounts of each should be made, to be
laid before Parliament.
It may also be found that, irrespective of any pe-
cuniary advantage, such a plan may be the means of
checking the formation of delusive and ill-founded
schemes for establishing life assurance companies ; and
this is a subject of so important and critical a nature,
that although your Committee do not feel justified by
the terms of their reference to enter upon it in detail,
they yet think it right to press it upon the notice of
the House.
Your Committee examined Mr. Pratt, the registrar
of Friendly Societies, about the tenure of his office,
and the constitution of it. He states that he is the
sole depository of all the various mass of miscellaneous
matter which in the last twenty years has been
poured in from above 10,000 societies ; and he
suggests that a board should be formed, for the pur-
pose of superintending the management of friendly
societies, and of affording advice and information
when applied to; of furnishing correct rules and
tables at a small expense, for which they would em-
ploy eminent actuaries, or the Institute of Actuaries,
and of requiring societies which are possessed of le-
gislative privileges to act up to the rules on which
they were established.
The last witness who gave evidence before your
Committee was Sir Alexander Spearman, the Comp-
troller-General of the National Debt Office. His
evidence is particularly deserving of the serious at-
tention of the House.
He states that his office has at present no means of
checking or verifying any sums transmitted by any
society to him for investment, beyond a simple decla-
ration, tendered at the same time with the money ;
that the interest payable is higher than that which
the Government receives ; that the risk is great in
case the funds were to go down, that the societies
might draw out their money, and , the difference be-
tween the price when sold and when it is invested,
would be so much loss to the country; that sums
have seldom been drawn out when once invested with
the National Debt Commissioners, and it is open to
surmise that the claims which ought to be met from that
money so invested, have been liquidated from other
means, and so the capital which bears a very high in-
terest has remained untouched, to the prejudice of the
public revenue ; that the total amount of capital be-
longing to Friendly Societies so invested is 2,393,0001.
at an interest, part of 4/.lls. 3d. and part of 3/. 165.,
whereas the average rate of interest realised during
the last 12 years has been only 31. 4s. 9d., and that
the total loss, if the whole were sold out and paid off
at the present price of stocks, would be 127,000/.
That, in the case of the Clergy Mutual Society, if
the accounts with them were closed at present, the
revenue, on the contrary, would have gained a profit
of 5,9001.
Sir A. Spearman agrees with Mr. Tidd Pratt in his
suggestion of a board, so far as to desire that a larger
of
number of persons should have cognizance
management of his office; he thinks thatthe
interest of friendly societies that they should beit isplatehede
under greater control than at present ; and that the
existing state of things as regards the registering
merely of the name and rules, is unsatisfactory in a
public point of view.
In the opinion of your committee the subject of in-
vestments and of interest
payable upon them requires
to be maturely considered, so as on the one side to
protect the revenue, and on the other to keep faith
with parties who have acted under the sanction of
Acts of Parliament. A power is evidently wanted to
obtain a more full investigation of the accounts of all
societies investing through the National Debt Office,
and of requiring that such investments shall be sub-
ject to reduction in proportion to the just demands
which ought to be payable from them.
All these subjects ought to be examined and
settled whenever a Bill shall be brought in for render-
ing permanent the law relating to friendly societies,
which at present has a limited duration.
It does not appear to your Committee that these
five societies have been acting contrary to law. The
Act under which they are enrolled declares in its
preamble that it is expedient to give protection and
encouragement to the formation of friendly so-
cieties, and enacts that any number of persons, with-
out distinguishing any particular class or condition,
may form themselves into a society. To societies so
established that Act gave privileges of interest at 3/.