144 Mr W. Fraser 07i the History and Constitution of' 



tutes ' The Gross Fund or Stock of the Society.' Again, if we attend to the 

 nature of the contract, it will appear evident that the value of each member's 

 interest in the fund is measured by the benefit for which he is assured, modified 

 by the different circumstances under which the benefit becomes payable ; and 

 it is easy to see, that the aggregate amount of the values of the individual 

 interest of the members,— supposing there should be no deviation from the as- 

 sumed law (of sickness or) mortality, or rate of interest upon which the rates 

 of contribution have been calculated, — will be always equivalent to the amount 

 of the gross fund. The benefit assured to each individual is that according 

 to which his contributions are made, and which he or his heirs or nominees 

 will be entitled to claim as a debt upon the funds, whenever the event ar- 

 rives upon which it becomes payable, or, in other words, it is his share of 

 the stock which, upon his death or other contingency, is withdrawn from the 

 concern. 



" After the society has existed for any time, the share of stock held by 

 each member, considered in relation to the mode of its being contributed, 

 may be contemplated as consisting of two parts, \iz. first. His share of the fund 

 in hand (col. 14.), arising from his former contributions, which is equal to the 

 present value of his benefit, mimes the present value of his future contribu- 

 tions ; and, secondly, The value of his future contributions (col. 15.) The sum 

 of these two is evidently equal to the present value of his benefit assured 

 (col. IG.) If it be said that, in estimating the value of the member's interests, 

 his future contributions ought not to be taken into account, the answer is, 

 that they are as effectually secured as any obligation in favour of the society, 

 because the non-payment voids the policy ; and, therefore, as well in respect 

 to the individual as to the society, it is the same thing whether the stock con- 

 sists of money paid down, and vested in securities granted by strangers, or in 

 the obligations of the members. In short, the benefit assured, modified by 

 the circumstances under which it is payable, may, to use a mercantile phrase, 

 be considered as the amount due to the member upon his ' account in company,^ 

 and his future contributions as the amount of what is due by him upon his 

 ' account-current.^ 



" Thus it follows, that the interest of every member in the gross fund or 

 stock of the society, at any time, is equivalent to the present valtie of his benefit 

 assured, or, in other words, it may be expressed by saying, that it is ' the benefit 

 assured payable in the event or under the circumstances contained in the policy*." 



If, therefore, a Friendly Society has proper tables, shewing the amount 

 of capital which it should be possessed of for each member at every age, ade- 

 quate with their future contributions to defray their future allowances, and 

 if a proper record be kept of the number and ages of those insured for each 

 benefit, it will be easy for such a society to ascertain the real amount of capital 

 which it should at any time be possessed of. For example, let it be supposed 

 that a society has existed for some length of time— that the calculations for 

 the Sickness and Funeral Schemes have proceeded upon the same data as those 

 of the Tables at p. 136. and 140, — that new members of various ages had been 

 from time to time admitted, upon paying a fine or entry -money equal to the 



• Pamphlet entitled " Explanation of the Principles of distributing the Surplus Fund of the 

 Scottish Life Assurance Society, suggested in the Report of the Committee. By Mr Patrick Cock- 

 burn. January 1822."— The italics are in the origlnaL 



