( 298 ) 



On the History and Constitution (if Benefit or Fricndlij 

 Societies. By Mr W. Fraseu, Edinburgh. Continued 

 from p. 91. 



J-T was formerly remarked, that, in order to place Friendly 

 Societies upon equitable and permanent principles, it is indispen- 

 sably requisite that all their calculations for contributions and 

 benefits should be founded upon such rates of sickness and 

 mortality as are most likely to occur among their members, and 

 also upon the rate of interest which will most probably be ob- 

 tained for their money. The last of these subjects only now 

 remains to be noticed, the two former having been already fully 

 discussed. 



Rate of Interest 



By the statute 59th Geo. III. c. 128, Friendly Societies in England, whose 

 rates of contribution have been certified by two actuaries to be adequate to 

 -the allowances, and whose rules have been approved of by the Quarter Ses- 

 sions of the Peace, are allowed to pay in their money to the Bank of Eng- 

 land, in sums not under L. 50 at a time, to the account of the Commissioners 

 for the reduction of the National Debt, and to draw interest on all such sums 

 at the rate of threepence per cent, per day, or somewhat more than 4| per 

 cent, per annum. They are likewise authorised to lodge any sum or sums 

 below li. 50 in the Savings Banks, and to receive interest on these at the rate 

 of 4 per cent, per annum. By these privileges, societies in England can al» 

 ways calculate ujion receiving 4 per cent, interest at least, besides the advan- 

 tage of having the whole or any part of their capital always at command, 

 without the risk of loss. 



The above statute, however, only applies to England ; and, consequently, 

 the Friendly Societies of Scotland are obliged to have recourse to other modes 

 of investment. This being the case, the rate of interest to be assumed be- 

 comes with them a question of some difficulty ; and the only guide which can 

 with propriety be taken, seems to be therate of interest hitherto derived from 

 the Public Funds ; for, although societies in Scotland have usually disposed of 

 such portions of their capital as were not immediately required, in house pro- 

 perty and other similar purchases, which produced a higher nominal rate of in- 

 terest than could have been obtained for money on loan ; yet it has generally 

 been found, after deducting occasional losses, and the heavy expences neces- 

 sarily attending such investments, that the ultimate produce has not been so 

 much as if the capital had been lent on heritable securities at a constant rate 

 of 4^ or 6 per cent, interest. 



With the view of obtaining some approximation to the average rate of inte- 

 rest in this country, Mr Babbage examined a period of ninety-two years of 



