XVll 
SPECIAL  REPORT  OF  THE  AUDITORS 
ON  LIFE  COMPOSITIONS. 
At  a Meeting  of  the  Council  of  the  Royal  Agricultm-al  Society  held 
on  December  9,  1903,  the  following  resolution,  moved  by  Sir  Walter 
Gii.iiKV,  and  seconded  by  Sir  Nigel  Kingscote,  was  passed  unani- 
mously : — 
‘That,  in  view  of  the  fact  announced  hy  the  Site  Committee  in  their  Ee])ort 
I>resentfd  to  the  Council  on  November  4,  that  the  Society’s  Reserve  Fund  has 
practically  disapiieared  in  meeting  the  losses  of  this  year's  0903)  Show,  the  three 
Auditors  appointed  by  the  Members  to  examine  the  Society’s  Accounts  for  1903,  be 
reel  nested  to  ijrepare  a Special  Report  in  continuation  of  the  three  previous  Reports 
presented  hy  their  pn  decessors  on  March  2, 189],  March  20, 189o,  and  March  19, 1900, 
stating  the  number  of  Life  Members  elected  in  different  years  who  are  upon  the 
Society’s  books  as  at  December  31, 1903,  and  advising  the  Council  as  to  the  method 
in  which  provision  should  be  made  in  the  future  for  the  continuance  of  the  Life 
Members’  privileges.” 
In  connection  with  our  annual  examination  of  the  Society’s  accounts 
for  the  year  1 90.3,  w‘e  have  carefully  considered  the  above  reference  to 
us,  so  far  as  we  have  felt  it  to  be  within  the  scope  of  our  duties  as 
Auditors  to  the  Society  to  go  ; and  we  have  agreed  upon  the  following 
Report: — 
1 . It  may  be  desirable  in  the  first  place  to  give  some  explanation  as 
to  the  original  establishment  of  the  “ Reserve  Fund  ” under  the  advice 
given  by  our  predecessors  as  Auditors  in  their  Report  dated  March  2, 
1891,  printed  on  pp.  xii  and  xiii  of  Volume  52  of  the  Society’s  Journal 
(1891).  Prior  to  1890,  all  receipts  in  the  form  of  Life  Compositions 
were  credited  to  the  income  of  the  year  in  which  they  happened  to  be 
paid.  The  discussions  in  the  Council  in  1889  .and  1890  on  the  inadequacy 
of  the  Life  Composition  of  10/.  then  in  force  led  to  our  predecessors 
being  invited  to  consider  “ the  manner  in  which  the  Life  Compositions 
received  in  future  are  to  be  treated  in  the  Society’s  Accounts,  and  also 
the  contributions  to  the  revenue  of  each  future  year  which  should  be 
made  in  respect  of  the  Life  Compositions  received  in  the  past.” 
2.  On  January  1,  1890,  the  Society  held  30,000/.  Consols.,  which 
had  cost  29,033/.  9.s.  4r/.  It  was  recommended  that  this  29,033/.  9.s.  4(/. 
should’ be  regarded  as  the  “Reserve  Fund,’’  th.at  to  it  should  be  added 
each  year  all  Life  Compositions  received  during  that  year  (with,  of 
course,  the  interest  on  the  investments  represented  by  the  Reserve  Fund), 
and  from  it  should  be  subtracted  each  year  an  amount  which  would 
represent  the  cost  of  providing  the  Life  Members  then  on  the  books 
with  their  privileges. 
3.  These  annual  additions  and  subtractions  have  been  regularly  made, 
and  the  actual  figures  have  been  recorded  in  the  successive  annual  Balance- 
sheets.  It  was,  of  course,  recognised  from  the  first  that  the  amount  of 
this  Reserv'e  Fund,  and  hence  the  invested  capital  which  might  be 
regarded  as  ear-m.arked  for  it,  would  decrease  as  years  went  on,  in  view 
of  the  fact  that  the  contribution  to  the  revenue  from  the  Life  Members 
of  the  past  would  be  greater  than  the  amounts  received  for  new 
Compositions  and  for  interest  on  investments  ; but,  per  contra,  the 
Society’s  obligations  to  its  Life  Members  would  be  running  off  each  year. 
