October i, 1903] 



NATURE 



535 



and innocent purposes. It is for the individuals themselves 

 to determine whether to adopt the provisions of the statute, 

 which offers them at the same time regulation and privilege, 

 or to remain perfectly unfettered by anything but their own 

 will, and the common or more ancient law against fraud 

 or embezzlement," which common or more ancient law was 

 strengthened in 1868 by the Act known as Russell Gurney's 

 Act. " For your Committee apprehend that although the 

 Act of 1793 appears to begin by rendering lawful the in- 

 stitution of Friendly Societies, there neither was at that 

 time nor is now any law or statute which deprives the 

 King's subjects of the right of associating themselves for 

 mutual support." 



Upon this principle the Legislature has hitherto pro- 

 ceeded. Registration is voluntary. The subscriptions of 

 the members are voluntary. The conditions of membership 

 are such as the rules framed by the members themselves 

 impose. They have full authority to alter those rules from 

 time to time. Those conditions may, if the members so 

 please, imply that the subscriptions are to be small and the 

 benefits large. They may provide for investment of funds 

 on any security they think fit so long as it is not personal 

 security. They may provide for the periodical division of 

 the funds so long as they make it clear that all claims 

 existing at the time of division are first to be met. Up to 

 this point the registered society and the unregistered are 

 hardly distinguishable. What, then, are the obligations 

 consequent upon registry ? There is the making an 

 annual return and the making a quinquennial valuation ; 

 but the action to be taken by the society upon the result 

 of the valuation is wholly in the discretion of the members. 

 The valuer may demonstrate beyond doubt that the society 

 in order to save itself from disaster must increase the sub- 

 scriptions of the members or diminish their benefits ; but 

 neither he nor the Registrar can enforce the recommend- 

 ation. The society has its destinies wholly in its own 

 hands. Then, again, the Act contains certain provisions 

 for the protection of members. Individual members have 

 the right to inspect the books of the society, to receive 

 copies of its balance sheets and valuations, and so forth. 

 A certain number of the members have the right to apply 

 to the Registrar to appoint an inspector into the affairs of 

 the society or to call a special meeting of the members. 

 The inspector can only report — there is no action which the 

 Registrar can take upon his report if the members dis- 

 regard it. The special meeting will in no way differ from 

 an ordinary meeting called by the society itself, except that 

 it may choose its own chairman. The Registrar cannot in 

 any way control its proceedings. Even these things he 

 cannot do of his own motion without being set in action 

 by a competent number of the members. If a society be- 

 comes insolvent, members may in like manner apply to 

 him to wind it up : he may see that a readjustment of con- 

 tributions and benefits would set the society on its legs 

 again, and may suspend his award of dissolution to enable 

 the society to make that readjustment, but he can do no 

 more. If the society refuse to make it, he has no option 

 but at the end of the period of suspension to issue the award. 

 Here again he may have the fullest knowledge that a 

 society is hopelessly insolvent, yet he can do nothing unless 

 a competent number of the members call in his aid. I 

 confess that I think the Legislature might have gone further 

 in this respect and conferred upon the Registrar, or at 

 any rate upon some public authority, the power to deal 

 compulsorily with cases of hopeless insolvency, and if 

 necessary to appoint a receiver, as such cases are not in- 

 frequently complicated with fraud carried on in circum- 

 stances which make it difficult for a competent number of 

 the members to join in an application to the Registrar. 

 However that may be, taking the legislation as it stands, 

 it embodies to the fullest extent the principle laid down 

 by the Committee of 1825. 



The surrender of freedom which a Friendly Society is 

 called upon to make in order to obtain the privileges of 

 registry, which are not inconsiderable, is therefore exceed- 

 ingly small ; yet it is sufficient, as we have seen, to keep 

 out of the registry office a large number of societies. It 

 seems not improbable, looking back on the history of legis- 

 lation on the subject — and the observation is a curious one 

 — that unwillingness to register has been closely connected 

 • ith actuarial considerations. Thus, in the year 1819, an 



t was passed which provided, among other things, that 



NO. 1770, VOL. 68] 



the justices should not confirm any tables or rules connected 

 with calculation until they had been approved by two 

 persons at least known to be professional actuaries or 

 persons skilled in calculation ; but that was repealed in 

 1829. Again, in 1846 an Act was passed which provided, 

 among other things, that every registered society should 

 make a quinquennial valuation ; but that was repealed in 

 1850 before a single quinquennial period had arrived. It 

 was not until a quarter of a century after 1850 that this 

 most salutary provision again found a place in the statute 

 book, and the experience of the last twenty-eight years has 

 shown how valuable it is, and how much it is to be re- 

 gretted that the Act of 1846 was not allowed to remain in 

 force. Again, the Act of 1850 provided for the discrimin- 

 ation of societies into two classes : those which were simply 

 registered and those which were certified. These latter 

 were to obtain the certificate of a qualified actuary that 

 their tables of contribution were sufficient for the benefits 

 they proposed to insure. Very few certified societies were 

 established, and that Act was repealed in 1855. The ex- 

 perience of the Legislature has not been favourable there- 

 fore to endeavours to impose upon Friendly Societies by Act 

 of Parliament conditions of actuarial soundness. 



If, however, the voluntary principle is abandoned, and 

 all societies are to be compelled to register, it is obvious 

 that there must be a recurrence to the policy of imposing 

 such conditions. At present a registered society may be as 

 unsound as it pleases, and so may an unregistered society. 

 Unless registry is to imply something more than that, there 

 can be no reason for any compulsion to register. For what 

 does compulsion mean? It means prosecuting, fining, and 

 sending to prison all persons who associate themselves 

 together for the lawful and innocent purpose of mutual 

 support in sickness and adversity without registration ; and 

 that, obviously, cannot reasonably be done unless abstinence 

 from registration is shown to be a moral offence ; that is 

 to say, unless the conditions of registration are such that, 

 a registered society shall be necessarily a good one, and an 

 unregistered society necessarily a bad one. We must begin, 

 at any rate, by devising model tables and insisting that 

 every society shall adopt them. Are they not ready to 

 hand? Did not my lamented colleague, Mr. Sutton, pre- 

 pare a Blue Book of 1350 pages full of them? That is 

 true ; but it is also true that in the brief introductory re- 

 marks which he addressed to me at the beginning of that 

 report he observed, with great force, that the adoption of 

 sufficient rates of contribution is not enough to secure the 

 .soundness of a society. Those rates are derived from the 

 average experience of all classes of societies — some exer- 

 cising careful supervision over claims for sick pay, others 

 lax in their management — and it is upon care in the manage- 

 ment, rather than upon sufficiency of rates, that the success 

 of a Friendly Society mainly depends. If the members 

 administer the affairs of their society with the same rigorous 

 parsimony and watch over the claims for sick-pay with the 

 same vigilance which a poor and prudent man is compelled 

 to exercise in the administration of his own household 

 affairs, the society will be more than solvent, even though 

 they do not pay as high a contribution as the model tables 

 exact. If they neglect these precautions, there is no model 

 table which will rescue them from ultimate insolvency. In 

 Mr. Sutton's happy phrase, it is the personal equation of 

 the members and of their medical adviser that tells the 

 most on the prosperity or the failure of a society. Your 

 compulsory registration will impose unfair conditions on 

 the well-managed societies, and will do nothing to prevent 

 the inevitable collapse of those which are badly managed. 

 Registration tells for a great deal while it is voluntary and 

 free ; but if you make it compulsory, and add to it con- 

 ditions that you suppose will tend to soundness, you will 

 inevitably do more harm than good. It is, of course, of 

 vital importance that adequate rates of contribution should 

 be charged for the benefits proposed to be ensured ; but if 

 these are imposed by authority, the management of the 

 societies must also be undertaken by the same authority. 

 It is a curious observation, which has been borne out by 

 experience, that in poor societies the claims for sickness 

 are relatively less than in rich ones. M. Bertillon, the 

 eminent French statistician, has shrewdly remarked : " The 

 truth is, that friendly societies, when they grant sick-pay, 

 attach less weight to the text of their rules than to the 

 state of their funds. If the society is rich, it grants relief 



