Benefit or Friendly Societies. 143 



ly ascertained ; next, the receipts and the debts due to the company compared 

 with the expenditure and the debts due by the company ; and then the pro- 

 fit or loss on the various transactions periodically ascertained. No person in 

 business could obtain a proper knowledge of his affairs from merely knowing 

 the money and goods he had at any time on hand, together with the debts 

 that might be due to him, without also taking into account the stock with 

 which he commenced, and the debts which he was still to be called upon to 

 pay. Such, however, has been the method hitherto adopted by Friendly So- 

 cieties — the receipt and expenditure of the past being merely compared with 

 each other, and the balance in hand ascertained, but without any regard to 

 the probable income and demands of the future. Hence it was impossible 

 that societies could at any time know the real state of their affairs, with re- 

 gard to the probable amount of the claims which were to come against them, 

 or when they had too much or too little capital to meet them. 



In order that Friendly Societies may be able to ascertain these particu- 

 lars, it is necessary that the relations in which a society and its members 

 stand to each other should be rightly understood, and that both should be ful- 

 ly aware of the interest which every individual has, or ought to have, at any 

 time in the capital. For money received, societies undertake to pay sums af- 

 terwards to a greater amount ; and therefore a society must always be debtor 

 to the members, and they of course creditors, till the time and events arrive 

 when the benefits become payable, and the members cease to have any farther 

 interest in the society, or particular department to which they belonged. A 

 Friendly Society consequently differs from every other company in this im- 

 portant respect, that it never can lose by bad debts of the members, the stock 

 in hand being always of necessity more than the amount of any contributions 

 which are ever allowed by the regulations to run in arrear. A society, how- 

 ever, may fall behind in its capital from other circumstances, such as more 

 sickness and mortality occurring, and a lower rate of interest for money be- 

 ing obtained, than were originally calculated on ; and hence it is necessary 

 that proper books be kept, and periodical investigations made, to ascertain 

 whether or not the stock be keeping up to the requisite amount. 



In endeavouring to exhibit the nature of such an investigation, we shall 

 merely take the Sickness Scheme as an example, in the first place, and again 

 have recourse to the Table at p. 1.36; and we find that this Table cannot be 

 better explained for the purpose in view, than by a statement, although writ- 

 ten for a different purpose, by Mr Patrick Cockbum, accountant in Edin- 

 burgh. To his statement we shall merely add the columns of our table to 

 which his remarks are applicable. 



" It only remains to inquire what is the stock of the society., and what is tfie 

 vnterest of each member in that stock at any given time. Now the stock of 

 the society, at any given time, consists of two parts : First., Of the funds 

 which have accumulated from the past contributions (col. 13.), after paying 

 the claims which have emerged ; and, 2(%, Of the obligations of the mem- 

 bers for their future contrbutions (col. 15. multiplied by the number of mem- 

 bers in coL 3.) The former of these may be called ' The Fund in hand,' and the 

 latter ' The Fund in expectation.' The fund in hand, added to the present 

 value of the funds in expectation, calculated according to the tables, constK 



