Benefit or Friendly Societies. 133 



be ascribed much of the Htigation, and the apparently inconsist- 

 ent decisions, which have so frequently occurred. 



Imperjections in th(f Schemes of Friendly Societies, 



As the funds of Friendly Societies principally arise from a cer- 

 tain sum paid by members at entry, and an annual contribution 

 so long as they remain in the society ; while the disbursements 

 consist of allowances for sickness or inability to work, and for 

 the funerals of members, their wives or widows, it is evident 

 that no society can be permanent, unless the contributions with 

 the accruing interest, be in just proportion to the allowances. 

 But it is much to be regretted that institutions so numerous and 

 useful, should have been so very generally founded on miscalcu- 

 lation, which formed the chief operating cause of their own disso- 

 lution. This is the less surprising, however, when it is recollect- 

 ed, that it is only of late years that the system of Life Assurance 

 has been brought to maturity, even in the higher, and conse- 

 quently better educated, part of the community. Dr Price has 

 shewn that, in his time. Life Assurance schemes went to ruin, in 

 consequence of having been founded on erroneous computations ; 

 and the Scotch Ministers^ Widows' Fund, established about the 

 middle of last century, appears to have been one of the first in- 

 stitutions founded upon just principles. Besides, an accurate 

 knowledge of the rate of' mortality was all that was wanted for 

 properly conducting Life Assurance Schemes, but for those of 

 Friendly Societies, the rate of sickness was also required. Of 

 this latter requisite, however, no accurate information, till late- 

 ly, had ever been obtained, or indeed thought of ; and hence 

 their contributions and allowances were necessarily fixed at ran- 

 dom, and left to be raised or lowered as circumstances might 

 require. 



But to some even of the best informed, this mode of man- 

 agement seemed to be sufficient, and the only one capable of be- 

 ing adopted ; for, in the article on Benefit Societies, in the Sup- 

 plement to the Encyclopaedia Britannica, it is stated, " that it 

 is a great advantage of benefit clubs not to require much in the 

 way of funds. If the calculations are correct, the outgoings 

 within an average period will balance the incomings ; and all 

 that is requisite in the way of fund, is a small sum to meet acci- 



