The Sun.
London, England, 1864-03-08 00:00:00

CAPTURE OF VESSELS.

Mr. R. LONG asked the First Lord of the Treasury
whether a ship belonging to the Confederate navy would
have :he same right to search and make prize of an English
vessel carrying contraband of war to a Federal port that a
Federal war vessel would exercise in the case of a British
ship carrying contraband of war to a Confederate port;
and, if not, whether such partiality in favour of one or two
belligerent Powers is .reconcileable with the " &let neu-
trality " professed by her Majesty's Government.
The ATTORNEY-GENERAL said there could be no
doubt whatever that Confederate vessels had the same
right to visit, search, and capture British vessels carrying
contraband of war as Federal men-of-war had ; but it must
always be remembered that neither of them had a right to

make any such capture except for the purpose of taking
the ship for adjudication before a prize court. (Hear.)
GOVERNMENT ANNUITIES BIL .
The SPEAKER reminded the House that the hon.
member for Dudley had a notice on the paper, which was
given on the understanding that a certain ciause of this
bill should not be proceeded with that evening, and the
Chancellor of the Exchequer had replied. The hon. mem-
ber for Cambridge had also addressed the House, and made
a motion for the adjournment. These three members hav-
ing spoken on the main question, he wished to know if it
was the feeling of the House that he should consider they
had already addressed the House, or whether they should
be pat in a position to speak on the bill.
Mr. DISRAELI thought it would be unjust to exclude
them,

The CHANCELLOR of the EXCHEQUER placed
himself in the hands of the house.
Mr. SHERIDAN understood that the hon. baronet the
member for Hertford would move that the bill be referred
to a select committee, and if that were done a great deal of
time would be saved.

After a few words from Sir W. M. FARQUHAR,
Lord PALMERSTON—I think the most convenient
course would be that the house should go into committee
on the bill, and that in the committee my right hon. friend
should make that statement which can be most conveniently
and most regularly made in committee on the clauses of
the bill. My right hon. friend would not press the house
for any decision on that point to-night, but postpone it for
some future day.

Lord JOHN MANNERS, with reference to what had
just fallen from the noble lord, said that if the course he
proposed was pursued his hon. friend's (Sir W. M. Far-
quhar's) wishes would be entirely frustrated, as ho desired
to refer the bill to a select committee.
The CHANCELLOR of the EXCHEQUER—I was
not at all aware that it was intended to make a motion to
refer this bill to a select committee, for I certainly concluded
that if that had been the intention of the hon. gentleman he
would have given notice.

Sir M. FiRQUHAR—I gave notice this evening.
The CHANCELLOR of the EXCHEQUER—WeII, I
am sorry it was not made known before. That being the
case, I presume it will be batter for me to suppose that I
have the permission of the House to make a statement
now. (Heat.) Then I must beg the House to observe
that I am in the peculiar predicament of having to make
a statement, not upon the bill, not upon a particular
clause of the bill, but on the Speaker's leaving the
chair, and that consequently I, being the framer of the
bill, am also of necessity in the position of not being
able to offer any explanation, after I shall have spoken, in
answer to the inquiries of hon. members. With these few
words by way of preface, I will just state to the house the
history of this proposal. The Legislature has thought fit
to appoint a public officer whose business it should b 3 to
register from time to time certain facts with regard to the
condition of friendly societies. It is the duty of that officer
to make annual reports on the subject. In the autumn of
last year that admirable report was presented at a time when
Parliament was not sitting. It recorded a great number
of failures on the part of friendly societies. It recorded
very gross abuses, and it was filled with multitudes of
complaints from persons in all parts of the country with
regard to the position in which they found themselves
under the operation of the rules of many of these
societies. It has often been suggested to me that
the subject of small life assurance, having already
received in principle the sanction of Parliament, was in such
a state, under present circumstances, that it ought to re-
ceive the fresh attention of the Government. I must con-
fess that, upon adverting to the nature of the facts which
had been laid before the country through the medium I have
referred to, and, I am sorry to say, through many other
media—judicial proceedings and otherwise—l came to the
conclusion that it was the duty of the Government to en-
deavour to make the provisions of the law, which now inci-
dentally is rendered inoperative by a peculiar provision not
intended for that purpose—to make the inoperative provi-
sion an operative and real one. I am anxious to call atten-
tion to the circumstances attending the introduction of the
bill. I introduced it at the opening of the session, thinking
it most likely that the leisure of hon. members would
allow them to give it attention ; but more particularly
that I did it in a manner which was unpresuming and
not aggressive. (Hear, hear.) I thought it my duty to
avoid painful discussions with regard to the condition of
many institutions which solicit, and to a certain extent re-
ceive, the public confidence. I did not apply a single word
—or at all events, if I did, it was in very general and few
words that I made allusion to the state of facts as being such
as required the attention of Parliament. If I say this, it is
not to recommend myself, but it is that I may request the
house to observe the difficult position in which I am now
placed. There is no one, so far as I am aware, who has ever
thought that either savings-banks, Post-office savings-
banks, annuities for the people, or assurance for the people,
are matters with which it is abstractedly desirable for the
Government to deal. If it could be said that the operations
of the great laws of supply and demand are generally satis-
factory, and that the defects which occur are incidental
to the principles upon which commerce must be con-
ducted, that in my opinion would be conclusive condemna-
tion not merely of the proposal which I now make but of
the law which was passed two years ago fur Post-office etsv-
ings banks, as an interference with a portion of the banking
business of this country, and of the law you passed before
with respect to the Annuity Laws, and with regard to the
old savings banks. Replying briefly to the alleged hurrying
forward of the bill, the right hon. gentleman said—l wish
to put atii,te, before I discuss the particular provisions, two
point which are of importance in themselves, but which
are purely collateral, and for which duo provision will be
made.llt was asked, when the bill was first printed, Do you
propose to compete with the assurance societies, and avail
yourself of the large circle of legal exemptions from duty,
which will be in the nature of a premium on the business
you are to do, and of course a penalty on the business they
are to do ? My answer is, that we make no such proposal.
We make the proposal that we shall be compelled to do
any business we may do under the precise conditions under
which it is done by independent assurance societies. Ex-
plaining the mode in which the premiums paid for the pur-
chase of annuities under the present bill would be applied,
the right hon. gentleman said that the national debt s..sck
which might he purchased by those premiums would not be
extinguished, but would be hold, and therefore no present
relief would be obtained at the expense of future liability. I
do not deny that the assumption by Government of the
transaction of any business whatever on behalf, not of the
State, but of individuals, is a proposal justly open to ad-
verse presumptions, and one which calls for the careful
and even the jealous scrutiny of the House. (Hear.) It
is a proposal for which cause must be shown in the double
form,—first of all that there is an evil to redress, and
secondly, that the means proposed for its redress or for
its mitigation are means which are in themselves practicable,
and not open to objection. (Hear.) Government interfer-
ence is a matter with respect to which I must confess that
my own prepossessions are as strong at least as those of most
members of this house. The highest form in which it has
been adopted has been that of positive regulations requiring
this thing or that thing to be done in the course of private
commercial arrangements, for the sake of obviating social
moral, or political evils. This is the highest form of Go-
vernment interference. You have an instance of it in some
of the clauses of the Factory Act and in sanitary arrange-
ments. This is a very great interference with the liberty
of private action; but I am bound to say that I believe its
operation has been beneficial. (Hear, hear,) By the Go-
vernment interference now proposed you enjoy nothing and
prohibit nothing ; but you offer to such members of the
community as choose to avail themselves of your proposal
certain facilities for what I may call self-help. nese aro
the precise limits of the plan which I have now to explain
to the house. I do not deny that it requires justifying and
apology, but I do deny that we are to be frightened and
terrified by clamours respecting centralisation. All that is
requisite in such a case, I apprehend, is to show that all
that the Government is proposing to do can be done safely
and done justly. (Hear, hear.) A notion has gone abroad
that this preposition is novel—that Parliament is
about to take upon itself responsibilities where at
the present moment we have no responsibilities at
all. Is that so ? This bill has grown, not out of con-
sideration of the case of assurance societies, but out of
consideration of the case of the friendly societies, and
of the wholesale error, and not error only, for along with
error, deception, fraud, and swindling are perpetrated
upon a helpless portion of the community, who are with-
out defence. Referring to the nature of the friendly
societies, which he said had been represented to him by
deputations as private trade and private enterprise, the
right hon. gentleman denied they were so, and said that
they were virtually and substantially subsidised by the
Government, for all instituted before 1828 received from the
National Debt Office interest at the rate of £4lls, for every
£100; while those instituted up to 1844 received £3 16s. for
every £lOO. That excess of interest, the righthon. gentle-
man contended, could only be looked upon as grants. So,
also, societies ander the Friendly Societies' Act were exempt
from the payment of income tax stamps, and in some cases
probate duty. Under those circumstances he contended
that Parliament was justified in looking into the condition
of these societies, to see whether it was possible to mitigate
the evils which at present appeared to exist. I think, he
continued, we have chosen a very mild manner of interven-
tion, a remedy precisely an alogsus to that which was chosen
with regard to the Post office savings banks. In the Post-
office savings banks what we had to consider was this. The
country was overrun with loan societies offering most attrac'-
tive terms to the people, promising them interest which
cr:eun, ldt anno,ti bthen
epaeicluduinngder any
loss,
sound and honest manage-
We did not attempt to set about the
fool's w ork of prescauri nibnd-.
ing laws by which loan isno c et societiesshoulddisappointment, b
knew
dunder which alone people should bepermitted to lend their
yotvenOrylllodnen, t possibly
that—umthnaeyt wasefeiaa totallypoor impracticable
—that
abuses and dangers into which they run
headforemost and
with their eyes open. But we held that it Was just, expe-
dient, and politic, and discharging in the
highest
sense
the
duty of the Legislature to give to the poor
of small savings, the advantage of a schonl° man, the c caner
which offered
no meretricious attractions, which held out
nothing like a
high rate of interest—on the contrary, it
which offered him that to which he was entitled' low
bs—olbut
and certain security. (Hear.) That is precisely the basis

of the scheme to which I now invite the attention of the
house. Taking it for granted that very serious and ex-
tensive evils exist, the two main questions to which I wish
to ask the attention of the house are, first of all, is the
plan which we propose a safe plan ? and, secondly, does it in-
volve injustice to any one ? As regards safety, I think we
have some claims to confidence. I would not say that if I
urged it on behalf of myself, of any particular party, or of
any particular Government ; but the fact is, that the whole
excellenceof the arrangements under which recent measures
had been framed is due not to us but to the able men con-
nected with the permanent public service of the country—
such men as Sir Alex. Spearman, Mr. Chetwynd, of the
Post-office, and, above all, of that indefatigable and most
able public servant, Mr. Scudamoro. These are men in
whose judgment I feel very great confidence with regard to
the practical question of the safety of these particular ar-
rangements, and in whom I think the house will also be
disposed to confide. The house may fairly feel great jea-
lousy en this subject, but I will say that I am willing, in
any way, to meet every objection—first, by such explana-
tions as are in my power to offer ; and, secondly, to provide
in the bill that no rule which may be adopted for the pur-
pose of giving effect to the provisions of this act shall be
subjected to the scrutiny and approval of the house in the
same manner as the minutes of the Council of Education.
The subject is one which admits of ample and general dis-
cussion. It is quite easy to see in what manner the danger
may arise in the working of a scheme of this kind. It may
arise from fraud with respect to the evidence of lives—
(hear, hear) ; and, secondly, it way arise from personation.
There are parts of the country—which I will not now point
out more particularly—where the inhabitants are such
adepts in the business of personation, that some insurance
offices decline to have anything to do with them. (A laugh.)
But I now wish to call attention to what I think a funda-
mental distinction between the business which it is pro-
posed to undertake, at the option of the people and on the
part of the Government, and the crdinary business of life
assurance companies. Let me ask the particular attention of
the house to the question of the supposed difficulty that we
are to have in dealing with the lives of the labouring classes.
If insurances are not to exceed £lOO, they must be ex-
clusively insurances of the labouring classes. We exclude
children and persons under the age of 16 years altogether,
because the lives of children and persons of 16 years of age
admit of great uncertainty and fraud ; and that is a depart-
ment we do not think it would be wise or safe to undertake.
Practically, the persons who will insure with us aro fathers
of families—the labouring men of the country. Is it a
difficult thing to ascertain the value of the lives of the
labouring men of the country ? It is not. In the first place,
we have the means of obtaining the necessary information.
We have the certificates of medical men who are the medi-
cal officers attached to the guardians ef the poor, and who
are themselves officers of the State. So far as medical means
go, we have all that can be desired. But what I venture to
state, and to state boldly, is that, although the ascertain-
ment of life in the higher classes of society is a matter of
great subtlety and difficulty, requiring the application of the
highest medical skill, and afterwards a jealous scrutiny, yet
the value of lite in the case of labouring men is a matter
comparatively simple. (No, no.) You have these three
things, all of them matters easily ascertainable. The first
is as to age—that is matter of fact and not of opinion ;
second. as to employment—that is also matter of fact and
not of osinion ; and thirdly, as to whether the man is a
sober man or a drunkard. I do not mean to say that in
every case you know the value of the life, but I say that
generally you know the value of the life, and in a manner
perfectly sufficient for safely working your tables. I had
lately an opportunity of discussing the subject with an
eminent member of the medical profession in London,
who was himself the medical consulting officer of two
insurance offices. I asked him whether that was the case,
He said it was, and, speaking merely of certificates sent
from the country, he used these words—ln the case of
industrial insurances "we scarcely look at our medical
papers : " thus distinctly affirming the proposition that
iu the cases of the labouring classes the employment and
general character are palpable and known to all the world,
and are, in the long run, a sufficient and satisfactory test.
We have some experience already, because we have been
working our system of saving banks for some time, ; where
there is certainly some temptation to personation, but not a
single case of the kind has arisen. My belief is that, com-
paring a Government department with the case of an in-
surance office of a large description—l do not speak of
friendly societies, which are local in their character—l say
distinctly, the means enjoyed by the Government officers of
ascertaining the value of life are very superior to those of
insurance offices, because the man who insures with the
Government has every means of having hie identity tested,
The Government have in these ma! ters natural allies in
those persons who are best acquainted with the condition of
the labouring classes throughout the country—the clergy-
man, the Dissenting minister, the magistrate, the poor law
guardians, the registrars, and last, but not least, the em-
ployers of labour. Through these persons it is perfectly easy
for the Government to defend themselves against the risk
of fraud. It appears to me this is not a very difficult matter
as far as regards safety. It has been carefully considered
how far such a system could be worked, and I admit here
we stand in a different position irons that• in which we are
placed under the existing law, where the deferred annuity
required to be purchased is itself looked to as security. But
undoubtedly all the inquiry I can make convince me that
the ascertainment of the value of the lives of labouring men
is, as a general rule, easy and simple, and that, as relates to
fraud by means of personation, it has not been found to pre-
sent any vital difficulty in the way of existing societies,
whereas it would be easier fox us to cope with it. With re-
gard to taking bad lives, let us see what occurs in the case
of existing societies. They have agents all over the country,
and, to induce those agents to draw lives in their nets, they
otrer them 25 per cent. upon all the premiums they obtain,
exclusive of fees. There are societies with hundreds and
thousands of members existing under your auspices,
authorised and subsidised by you, who are drawing lives
into assurance in connection with themselves by giving to
their agents 25 per cent. upon the whole of the premiums,
which is a larger sum than ought to cover twice the ex-
pense of a well-managed insurance society. But what is
the effect of this with respect to fraud an personation ? The
agent goes into a certain district or village, and, with so
large a commission, you cannot expect him to be very scru-
pulous in the selection of good lives. (Hear, hear.) So
much for the safety of these operations. The next question
is, whether this is a measure which can be undertaken
justly with respect to those parties who are now performing
the business of insurance. There are three classes of so-
cieties which it is necessary to take into view. The first is
the case of the principal insurance societies ; the second are
the minor insurance societies, who have but a limited range
of business, or who deal exclusively with industrial pre-
miums ; and the third are friendly societies. The question
is whether this proposal is a just proposal, and whether it
can possibly trench upon the domain of those societies. It
would be invidious to define the offices coming under the
category of insurance societies ; but those acquainted with
mercantile pursuits have no difficulty in distinguishing the
several societies. We know what is their attitude with re-
gard to this proposal—it is one either of neutrality or favour.
They do not desire small business, and they know the busi-
ness of the Government must be small. First of all, be-
cause the sums pointed out in the bill are small; and, se-
condly, because they assume that no Government is likely
ever to think it rational to intesfere with assurance business,
probably so called ; and, thirdly, because, if Government
made the demand, Parliament would not accede to it. But,
further, if both the Government and the Parliament were
to accede to such a proposal, it would not be in the power
of the State to shake the position of many of the
insurance societies which now exist. These societies do
not desire small business, as I can show by reference
to the Post-office. In that department there is
system of insurance among the minor oflioes ; and although
the collection of the premiums, which constitutes the heavi-
est charge in insurance offices was undertaken by the Post-
office, yet there was some difficulty in getting one of the
superior offices to undertake the business. The following
offices declined to undertake it—the Sun, the Atlas, the
National Provident, the Scottish Equitable, the Amicable,
and the Rock. That shows that business of this kind is of
no value to such offices. I will now, without going into
details, state a few facts in connection with some of these
offices; the first point is the date, the second is the premium
income, and the third is the accumulations. The Standard
office, which was founded in 1825, has a premium income of
£247,000, and its
,accumulations amount to £2,133,000, or
nine years' premium income. The University Life Insur-
ance Office, established in 1825, has an income of £44,000 a
year, its capital is £600,000, and its accumulations amount
to £780,000, or 17 years' premium income. The London
and Provincial Law Society, founded in 1844, has an amount
insured equal to a milion and a half; its premium income
is £46,000, and its accumulations 4220,000, or 18 years' in-
come. The Lancashire, founded in 1852, has a premium
income of £23,000, and its accumulations are £856,000, or
about four years' income. The right hon. gentleman, for
the purpose of showing the feeling with which the large
offices regarded the Government measure, read a short
extract from a speech delivered by the chairman of the
Standard Insurance Company, who predicted very fa-
vourable things of the Government measure, which was
calculated to bring insurance within the reach of all. I
come .sow to the consideration of industrial business in
c .nnection with the minor societies. The house will un-
derstand that industrial insurances are distinguished from
insurances in general. Those depeni upon monthly or
weekly premiums, whereas the general insurance offices
depended upon yearly, half-yearly, or quarterly. The in-
dustrial business is carried on upon a very small scale.
I do not doubt that there are excellent societies dealing
with industrial business but they do not make provision for
the wants of the population at large. You may find an in-
surance society in this or that particular district ; but what
I have to look in the face is that there are all over the
country insurance societies inviting persons by means of
agents, whom I cannot call anything but preachers and
denominational ministers, to whom a commission of 25 per
cent. is given, and we may expect that such a reward as this
is calculated to unlock the ici,st tongue, and make these
agents eloquent in praises of the societies to which they be-
long. (Hear, hear.) I do not question that there may be
societies living simply upon industrial business which arc
good and sound. What cause have they to be afraid of
Government competition ? What can we do which will
give us an unfair advantage over them ? In the first place,

we can promise perfect security ; and if this is a benefit I
dou't see why we should withhold it from the people.
(Hear, hear.) I urged upon a deputation, representing the
minor offices, that they had nothing to fear from us, They
said the people generally did not desire the advantage of
insurance ; and that it was necessary to persuade them in-
dividually, go into their houses and reason and convince
them. What will happen will be this, said the deputation,
" Oar agents will go into the cottages and persuade the man
that it is a good thing for him to insure, aced directly they
have persuaded him that it is a good thing, he will turn
round and go and insure with the Government." (Laughter.)
That is paying a high compliment to the Government. We
cannot use such extraordinary means as offering 25 or 15
per cent. to agents, but we can offer security upon favour-
able terms. There is another peculiar facility which the
Government possesses. In this county a considerable pro -
portion of the labouring classes have become migratory in
their habits; but, wherever they go, they will know where
to pay their policy if they assure. That would be much
more difficult in case they assured in any private society.
Undoubtedly this is an advantage possessed by the
Government. (Hear, hear.) I know of no advantages
which the Government do or can possess, except their offer-
ing perfect security, more favourable returns on the drop-
ping of policies, and facilities for the migratory portion of
the population. And now let us look at the disadvantages
of the Government. In the first place, as the Government
cannot employ touting agents, of course we must remain
without the business which such agents attract. Then if
we are to provide liberal terms for those who drop their
polices through inability to pay their premiums for a few
weeks or a few months, we must of course charge for that
in the premiums they have to pay, as it is evident that this
business of the Government must he a self-supporting busi-
ness. (Hear.) Again, the Government will not insure
persons under 16 years old, whereas in many societies more
than one-half of the persons assured aro under that age.
Let those societies who are afraid of illegitimate competi-
bear this in mind. I will take the Government assurance
and compare it with a good private commercial company
doing business on its own private means. Both are depen-
dent on the premiums for meeting the claims upon deaths,
but still they are chiefly dependent upon the judicious in-
vestment of those premiums. Now here we must work in
fetters—within the limits defined by the parliamentary
guarantee. We cannot upon the average invest our pre-
miums so as to yield more than 3 or 31 per cent., whereas
the private companies invest at 4, 41, and sometimes 5 per
cent. Such being the case, nothing can induce the people
to come to the Government except the facility and conveni-
ence they can offer, and the perfect security we can afford.
It would be impossible for the Government to pretend that
we can assure upon terms that would be considered cheap
in the market, therefore no fear of Government competition
need bo entertained in quarters where prudence and
honesty prevails. (Hear, hear.) But, Sir, iu all quer-
ters prudence and honesty do not prevail, and to those
who tell me that this measure is to be considered as
standing in the category of a common commercial business.
I will briefly reply, praying the house in the first place to
consider for a moment the peculiar nature of lire assurance.
It is a business which presents the direct converse of an or-
dinary commercial business. An ordinary commercial busi-
ness begins—if it begins legitimately—with a considerable
investment of capital, and the profits follow at a considerable
distance ; but an assurance company, on the contrary, begins
with receiving :argely, and the liabilities are postponed to a
distant day. I daresay there are not many hon. members
who know to what an extent this is true, and consequently
to what extent the public is dependent upon pure prudence
and high honour and character in the management of these
institutions. When an it stitution of this kind is founded,
so far from having difficulties at the outset, the outset is
the time of its glory and its enjoyment. (A laugh.) The
money comes rolling in, and the claims are at a distance,
almost beyond the horizon. In the first year of the society's
existence the premiums far exceed the death claims ; so in
the second year, and the third, and the fourth, and the fifth,
and the sixth. For how long does this house think the
premiums to be received aro in excess of the claims on
deaths ? For 37 years. (Hear, hear.) lam far from wish-
ing to say that for 37 years the premiums, in all cases, ex-
ceed the expenses ; I)ut when the expenses are kept within
due limits, 37 years is the proportion. The expenses, how-
ever, have in some cases a strange tendency to grow beyond
all bounds, and then it often happens that the promising
hopes of a company are suddenly cut short. The house
may like to know the fugitive character of these institutions.
It appears from a work published by the Guardian Office
that a very large number of assurance companies either fail
or give up business. In nineteen years the number of
companies projected was 596; of these 276 were founded;
and 250 out of these 276 have ceased to exist. (Heel-,
hear.) Then there are twelve amalgamations—l wish I
could read to the house the chapter on amalgamations—
(hear, hear)—and fifty-seven societies were winding, up in
Chancery. This is a subject which has both a comic and a
tragic side, but the tragic side is altogether predominant.
(Hear, hear). With regard to the companies winding-up
in Chancery, I wish to show the house how that matter
stands in the peculiar case of assurance societies. The
policy holder has no remedy when the company is mis-
managed, for this plain and obvious reason—he must wait
till he die before he has a claim. (Laughter,) The posi-
tion of a policy holder, therefore, unless he be a person of
great wealth, is ono of almost utter helplessness. It is
obvious, that, whenever a man hears that the company in
which he is assured has gone into Chancery, he feels
scrupulous about throwing good money after bad, ceases to
pay more premiums, and thereby loses all claim upon what
he has already paid. (Hear, hear.) Then there is another
form of proceeding. I allude to amalgamation, Tnis is a
particular case of what happens on auialgamation : Sup-
pose yourself to be a person of small means insured in a
particular society, and you hear it is going to amalgamate.
What can you do ? How can you know that you will be
able to make a case against the amalgamation or bear the
costs of bringing the company to book ? Practically you
cannot resist the amalgamation. What societies do is this;
they send round gentlemen who suggest to the policy
holders that they had better consent to the scheme. A
company called the Professional ceased business, and trans-
ferred its concerns to an institution called the European.
What did the European do ? It was understood that all the
policies in the Pro:essioual were of a certain value—they
were of a value relative to the sum assured, and the pre-
miums paid up et, the time with interest. There was, how •
ever, a liability on them, and the European society made it
a condition that it should inscribe upon each policy the
amount of the remaining liability. Supposing a policy for
£l,OOO, and the outstanding sum was £6OO, the European,
on amalgamating with the Professional wrote £6OO on the
policy, and charged 4 per cent, on that sum. Then, on
the death taking place, that £6OO, with interest, was deducted
from the £l,OOO. (Hear, hear.) That is an illustration of
what, perhaps, you will say is no better than wholesale rob-
bery. (Hear, hear.) I will now mention the cases of two
societies doing industrial business on a large scale—the
Friend in Need and the British Prudential. The Friend
in Need was born as a friendly society, but the chrysalis
passed into a butterfly, and after a time it came out as an
assurance society. It mew be a society of considerable age.
Now the premium income of the Friend in Need is £22,000,
and its available assets £14,0•.'0. And here I had better
fortify myself with the evidence of an eminent actuary. Mr.
Ingall stated before the committee, in 1833, that if the ac-
counts
existence showed that the assets were equal only to one
year's
actual income, there could be no doubt of the unsafe
of a company which had been fourteen years in
position of that society. (Hear, hear.) And now, air, I
will point out the position of the assured in one particular
respect. It is well known that disputes often arise on a
death occurring as to the liability of the society ; and be it
borne in mind that I am now speaking of societies of a se-
condary chracter. For these disputes arbitration is the
common remedy, and, mind you,
we are now dealing with
the case of institutions which have branches all over the
country, and which you cannot localise in any particular
spot. What will the house think when I tell them that in
the case of the Friend in Need Society the condition of ar-
bitration is that it should be in London ? Think of what
these few words mean. (Hear, hear.) Think of a man
having his little policy of 420 disputed, and being told that
if he wishes for an arbitration he must go to London. It
is nothing else than confiscation, united with concealment.
'The case of another company—the British Prudential—is a
very remarkable one. It is conducted by a Mr. Harben, a
gentleman of great energy, who is stated to have raised the
organised opposition
whether ppositioLi
Harben waited upon
me with a deputation, and
I inquired therto this bill. (Laughter.) Mr.
there would be any objec-
tion to the publication of their accounts. Mr.
Harben replied that they
were exceedingly anxious that
they should be published, He subsequently answered very
cautiously some questions which I put, but said that of
course the information was only for my private use. Of
course I said that I had to private use for it whatever, and
he then said that if al/ other companies were made to pub-
lish full particulars they were willing to do so, but as other
companies did net publish they would rather not do so, as
the facts might be made the subject of unfavourable com •
ment. Therefore I can only refer to the one published
document which I have with regard to the British Pruden.
tial Society—the balance sheet for the year 1861. It shows
on the policy account what might appear at first sight
rather remarkable, a debit of £580,000 and a credit of
£582,000. That is a most singular state of things, because
the policies on which the society has received a very large
sum, and therefore incurred heavy liabilities, are repre-
sented as being in themselves assets of greater value than
the whole liabilities. The debit is the present value of the
whole sum assured, and the credit is actually made into
assets. Put in another way, the premium income was
£52,000, and the assets
£}6ooo, and there was an unpaid
capital besides the assets. The result shown by the balance "
sheet is a balance of P t
000 in favour of the society. That
balance sheet, however, has been examined by actuaries,
who proceeded upon principles net more open to question
then a proposition of Enelid, and instead of a balance of
£ll,OOO for the company, they found a balance of 430,000
against it. According to the balance sheet there are £15,000
capital not pain up which ought to do more than liquidate
this balance, but this stmety does not appear in 1861
to have been in a position at all resembling that of the
societies whose cases I am about to bring under your
notice. I am not going to push this case further than
to say that it is not just that societies in such a con-
dition should come forward and say, " We admit that
the great assurance companies do not do the business

THE SUN, LONDON, TUESDAY EVENING, MARCH 8, 1864

properly; but leave the people to us, and we will do it all
for them in the proper manner." I demur to that. (Hear.)
I may now give the house some particulars of an extinct
society—one of the 57 victims of time and circumstances
which are winding up in the Court of Chancery—l mean
the British Provident. The British Provident Society was
founded in 1851, and carried on business for 11 years. In
only three of these years did it register its accounts as re-
quired by law. These years were from '53 to '56. The
income of the society for those three years was £10,600,
and the expenses were £15,700. (Ironical cheers.) Perhaps
it may be a matter of interest to the house to know that
Mr. Ansel!, one of our most eminent authorities, states of
a number of societies that their expenses during the five
years of their existence were 13 per cent, of the receipts,
However, in the case of the British Provident, the expenses
were rather more than 130 per cent. (Great laughter.)
Of course it was necessary that the society should be
brought to book, It went into Chancery in 1862, and an
action was brought for interpolating words in a deed, and
altering its character, after execution. The deed purported
to be sale to the manager, and the words interpolated made
it a sale to the manager on behalf of the society, and
thereby made the vendor still liable for the outstanding
calls on the policy. The case was referred to a jury in
Chancery, and the jury, having consulted a short time,
were unanimously of opinion that the two interlineations
were made after the execution of the document. With that
verdict the Vice-Chancellor said he saw no reason to be
dissatified. The house will at once appreciate why lam
anxious that it should be understood that I state these
things on the authority of public records, when I state that
the name of the manager of this society was John Sheridan,
and thai; the name of Henry Brinsley Sheridan appeared
in the advertisement for 1856 as auditor, and in 1859 as
trustee of the society. That I believe is the name of the
hon. member for Dudley, but whether he is the gentle-
' man referred to in the advertisement I do not know.
Doubtless he will be able to make the most satisfactory
explanations upon the matter. I come now to the last part
of this painful portion of my business—the composition and
action of certain friendly societies, These friendly societies
are no fewer than 20,000 so far as regards those that are
registered. Besides these there are a large number un-
registered, and these, I am told upon conjecture, will make
up the number to near 30,000. Since the first Friendly
Societies Act was passed, 8,000 or 9,000 of them have failed.
(Hear, hear.) And when I add that the number of these
societies belonged almost exclusively to the labouring
classes, I may leave the house to appreciate the full meaning
of these societies being unable to meet their engagements.
I would now call attention to what are called lapsed policies.
Amongst the labouring classes an elderly man cannot in-
sure ; they insure while they are young. But it is a most
severe description of convenant which you make with him.
You preach to him the duty of prudence; yet you make him
covenant for life, and Oen by the intermission of a single
quarterly payment, after having paid his premium for ten,
twenty, aye thirty years, you deprive him of the benefit of
the policy. (Cheers.) Well, are these fair terms with the
labouring man ? (Renewed cheering) I can only say they
are thought too severe for the higher classes. (Hear.) The
higher classes have generally about one-third of the value
of a policy repaid to them by a sale to the company of the
policy. But no such concession is made in the case of the
industrious classes. And how is it possible for a labouring
man to answer for pas ing every week or every quarter
throughout his life the premiums that may be due from him ?
(Loud cries of " Hear, hear.") How is he to be guaranteed
against vicissitudes? (Cheers.) Suppoie any one of the
10,000 inevitable calamities to which the life of a poor man
is exposed befalls him ; his policy lapses, and he loses every-
thing. It seems to me that that is a very harsh arrangement.
(Hear, hear.) We ought to desire to afford to the
labouring man some fairer prospect of insuring his life,
and consulting the distant exigencies of the future,
without incurring such fearful penalties. (Cheers.) Has
the house the least idea of the number of these lapsed poli-
cies ? To give two instances. The Friend in Need Society,
during five years, issued 86,000 policies, and 48,000 of these
lapsed. Tne Royal Liver last year issued 135,300 policies;
and the number lapsed during the same period was 70,000.
(Hear.) There is a notion that these societies which make
themselves so extraordinarily acceptable to the people are
self-governed bodies. I decline to give the smallest value
to that allegation. It is a perfect mockery to tell these
thousands upon thousands of shareholders scattered all
over England that they might have come up to an office
in London and set everything right. (Hear.) lam ex-
ceedingly desirous not to be understood as making a gene-
ral assault upon friendly societies. Nothing can be more
satisfactory—nothing more congenial to the temper of Eng •
lishmen—than to see the labouring classes associated to-
gether in the true and real spirit of self-government, to
provide for the exigencies of sickness and old age. (Hear.)
But what I am told is, that the rigid law of mathematics
bears hardly on these societ es, and that the smallness of
the number of their members makes it impossible to Equa-
lise their risk. Although their expenses are moderate,
their casualties are heavy, and so they often come to an
untimely end. Still I cherish the belief that there are many
such societies in the happy mean of being able to discharge
their duty, and at the same time to pay their way. (Hear.)
But, as we all know, it is exceedingly difficult to keep these
societies out of harm's way. How much of their funds
are ponsumed in the public-house I (Hear, hear.) What
grievous oppression is practised upon the minority who ob-
ject to have their payments disposed of in that way, and
how much the tyranny of one division of the working classes
over the other is fostered and encouraged through such so-
cieties. (Cheers.) Oa Saturday evening a meeting was held
I at Exeter Hall, to oppose any change in the law, at which coa-
-1 siderable uproar prevailed. Sir, the chairman of that meet-
ing was Mr. George Potter, the far-famed secretary of the
Trades Union. Aud is it not a principle of these trades unions
—which, if they aro voluntary, are in the highest sense legi-
timate—too frequently to coerce the minority? (Cheers.)
Therefore Mr. Potter was in his proper place on Saturday
night, for it is the business of these societies to coerce, often
the minority, and sometimes the majority, through the
medium of an artfully-constructed system. (Cheers.) I
will state the condition of two of these societies. One is the
"Legal Liverpool Friendly Society," which was enrolled in
1884. Its income was £10,130, and the real capital which
it accumulated during the 21 years of its existence, accord-
ing tc its own printed statements, was £3,900. (Laughter,)
The second is the "Royal Liver," which is 14 years old.
Well, its income was £77,000 ; its expense of management
£36,ooo—(much laughter)—and its accumulated assets upon
an income of £77,000 amounted in 14 years to only £39,000.
(Derisive cheers.) And yet the manager of this society
came to me on Saturday to remonstrate against this bill, as
being a very hard interference with private enterprise.
(Much laughter,) But this gentleman had:a rival plan to
recommend to us. He told us the Government should ap-
point actuaries to examine the rules, ice., of all societies.
What I appoint actuaries to examine the rules and accounts
of some 20,000 or 30,000 friendly societies I Why, it could
occur only to a Ministry out of Bedlam to originate such a
proposal. (Loud laughter,) I urged what would be our
position if unfortunately it should turn out that any of these
societies proved insolvent. Well, in that case these gentle-
' men proposed to us to make them solvent. (Great
laughter.) But surely, if it was in our power to do that
with respect to these societies, we ought not to stop
there; but whenever we saw a gentleman in society re-
duced to insolvency, we ought at once to come to his re-
lief, and protect him from the harsh and disagree-
able necessity of having recourse to the Bankruptcy
Cond. (Renewed laughter.) The right hon. gentleman
then proceeded to deal with the suggestion that the bill
should be referred to a select committee; but he re-
jected the responsibility, and deprecated delay in such a
matter. He concluded—l am aware of no mode of pro-
ceeding, compared with that now submitted to the house,
which is not fraught with ten times greater evil, and which
does not likewise involve additional mischief and delay. 1
make my appeal not to one party or to another- I entreat
hon. members, one and all, to take into their view the
serious nature of the mischief, and the consequences in-
volved ; and I am quite sure they will not be prevented by
any sentiments of party or political feeling from giving their
careful consideration to this proposal, and from determining
in their own minds and hearts how the British Legislature
can best acquit itself of this important portion of its obliga-
tions to the great mass of the people of England,
Mr. H. SHERIDAN remarked that the large assurance
offices were not indisposed to grant policies for sums under
£lOO, and declared that the Chancellor of the Exchequer
had suppressed the information which had been put in his
possession on that subject. He (Mr. Sheridan) opposed the
bill, because he believed it would break up and destroy
some 20,000 friendly societies, whilst it would entail an
enormous loss upon the country, which would have to
make up the deficiency that must inevitably result from so
unwise an interference with private enterprise,
Lord STANLEY aoproved of the bill, and therefore
asked the Chancellor of the Exchequer to give the house
time to consider it in detail. The right hon. gentleman
had made statements which, however true they might
be, did nevertheless very seriously inculpate the manage-
ment of a great number of public bodies. He was not
standing there to speak on their behalf, but he thought
they had a right to fair play, and those who had an
answer to give would desire an answer in that house,
and would have no time to give it except when that bill
was under discussion. He sincerely hoped, therefore,
they would not come to a division upon a mere question
of time, and so create out of doors a very false impres-
sion as to the feeling and temper of that house. He
was not inclined to attach much importance to the
vested rights of insurance offices. He thought on the
point the Government had made out a good case, but he did
feel same doubt as to the prospect of this measure being
successful. He did not gather what was the perfect security
the right hon. gentleman intended to take against persona-
tion, and thought there would be same difficulty in tracing
the identity of, for instance, a man named John Smith, a
mechanic, who might have been born in Glasgow, have
removed to Manchester, and died in London, and in whose
'name the insurance money was claimed. Where there was
so large an amount of business it would be quite impossible
to have an effective medical supervision ; and he did not
think that the employment and habits of a man's life were
material things to judge from, He was glad to hear the
right hon. gentleman disclaim any intention of placing any
liability on the Treasury. It did so happen that insurance
companies did break up; and though he hoped no such
thing would happen in the Government insurance office,