FRATERNAL INSURANCE IN AMERICA 233 



fraternal societies, as a class, do not enpjage in insurance busi- 

 ness, and that they are far removed from the material motives 

 of speculative hisurance companies. The answer to these 

 objections is apparent: Any organization which guarantees 

 the paj^ment of a definite sum of money, under certain circum- 

 stances, dependent upon the contingencies of human life, in 

 return for certain contributions, does an insurance business. 

 We may call the document relating to this arrangement a 

 certificate; the payments made periodically contril^utions, 

 fees, dues, etc.; the final payment, on the occurrence of the 

 specified contingencies, benefits; the whole is nevertheless an 

 insurance contract, pure and simple, and the society issuing 

 such a certificate is doing an insurance business, subject to all 

 the laws and principles applicable to insurance in general. 

 This last proposition, long accepted by a few fraternal societies 

 and ignored or bitterly contested by many others, deserves 

 especial emphasis. 



The dual nature of fraternal societies has proljably been 

 partly responsible for the perpetuation of the fallacy that 

 insurance is one thing and that fraternal insurance is another 

 and a different thing. The fraternal societies falling wdthin 

 the scope of this essay — one half of the total number — are both 

 fraternities and insurance companies, the fraternal element 

 sometimes overshadowing the beneficiary features, or vice 

 versa. It is probable that the cohesive power of numerous 

 societies doing an insurance business would fail, were not the 

 fraternal features so potent. In the preservation and exten- 

 sion of the field w^hich the fraternal element has gained, and 

 in the thorough reformation of defective benefit systems must 

 Ue the future development of the entire fraternal system. 



Evidence to show the existence of defective schemes of 

 fraternal msurance is not far to seek. In a circular issued 

 by one fraternal society the position is maintained that mor- 

 tality experience cannot be reduced to law ! Another attempts 

 to prove that the addition of new memljers w^ill ahvays keep 

 the average age of the entire membership down to a cer- 

 tain level, and that with additional effort the same can per- 

 manently be reduced. How to do this — to follow the argu- 

 ment to its logical conclusion — without ultimately including 



