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 John Bright. 
 
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 English National Education. 
 
 By H. HOLMAN, M.A., formerly Professor of Education in 
 the University College of Wales, Aberystwyth. 
 
 Provident Societies and Industrial "Welfare. 
 
 By E. W. BRABROOK, C.B., Chief Registrar of Friendly So- 
 cieties. 
 
 Forthcoming volumes 
 
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 By G. LAURENCE GOMME. 
 
 Charles Kingsley and the Christian Social 
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 LONDON: BLACKIE & SON, LIMITED, 50 OLD BAILEY, E.C. 
 GLASGOW, AND DUBLIN.
 
 Sbe Victorian Era Series 
 
 Provident Societies and Industrial 
 Welfare
 
 Provident Societies 
 
 and 
 
 Industrial Welfare 
 
 By 
 
 E. W. BRABROOK, c.B. 
 
 Chief Registrar of Friendly Societies 
 
 LONDON 
 BLACKIE & SON, LIMITED, 50 OLD BAILEY, E.G. 
 
 GLASGOW AND DUBLIN 
 J898
 
 Preface 
 
 The general object and scope of this work are 
 fully explained in Chapter I. The large share which 
 Provident Societies have had in the promotion of 
 Industrial Welfare during the Victorian Era is 
 worthy of even ampler record. Those who desire 
 to pursue the subject in further detail may find 
 means of doing so in the Guide Book of the 
 Friendly Societies' Registry Office, the Annual 
 Reports since 1855 of the Registrar, and since 
 1875 of the Chief Registrar of Friendly Societies, 
 the Parliamentary Returns of Building Societies, 
 and the Labour Gazette and other publications of 
 the Board of Trade relating to Trade-Unions.
 
 Contents 
 
 CHAPTER I 
 Introductory ....- p 
 
 CHAPTER II 
 Trade-Unions ** 
 
 CHAPTER III 
 Friendly Societies ------- 41 
 
 CHAPTER IV 
 Varieties of Friendly Society - - - - 56 
 
 CHAPTER V 
 Burial Societies -------- 74 
 
 CHAPTER VI 
 
 Financial Position of Friendly Societies - - -84 
 
 CHAPTER VII 
 Other Societies under the Friendly Societies Act - 97 
 
 CHAPTER VIII 
 Old-age Pensions ------- 112 
 
 CHAPTER IX 
 Workmen's Compensation - too 
 
 CHAPTER X 
 Co-operative Societies - - *3 3
 
 viii Contents 
 
 Pag, 
 CHAPTER XI 
 
 Building Societies - ^47 
 
 CHAPTER XII 
 Savings-banks - J&5 
 
 CHAPTER XIII 
 Post-office Savings-banks ------ if 8 
 
 CHAPTER XIV 
 Other Provident Societies ------ igz 
 
 CHAPTER XV 
 Industrial Welfare 206 
 
 INDEX - - 221
 
 Provident Societies and 
 Industrial Welfare. 
 
 Chapter I. 
 Introductory. 
 
 It is the good fortune of the writer to have been 
 associated for nearly thirty years with a public depart- 
 ment that exists for the benefit of the industrial popula- 
 tion. There is no act it does that is not the conferring 
 of a privilege. The bodies with which it has to deal 
 claim its services at their own option. Any one of 
 them might dispense with those services if it cared to 
 do so. As the subject of the present volume is almost 
 wholly limited to the institutions which hold a relation 
 of one kind or another to the Registry of Friendly 
 Societies, it may be worth while to state at the outset, 
 in general terms, what are the history and principal 
 functions of that department. Its existence in its 
 present form belongs wholly to the Victorian Era. 
 
 From 1828 to 1846 a number of important duties had 
 been devolved by statute upon a barrister appointed by 
 the Commissioners for the Reduction of the National 
 Debt. An act of 1828 gave him the examination and 
 certifying of the rules of savings-banks. These had 
 formerly been submitted for the approval of the justices
 
 io Provident Societies and 
 
 at Quarter Sessions. An act of 1829 gave him the 
 examination and certifying 1 of the rules of Friendly 
 Societies. These functions were purely legal; but as it 
 was very desirable in the interests of Friendly Societies 
 that correct information as to the rates of sickness and 
 mortality should be obtained, it was provided that every 
 society should, after its rules had been certified, send to 
 the barrister every five years a return of its experience, 
 and that he should lay an abstract of the returns before 
 Parliament. The .first- such abstract was made in 1835. 
 The legislature .attached so much importance to these 
 functions of the barrister in question, and was so 
 desirous to facilitate his labours, that it was enacted 
 in 1834 that letters to and from him should be free of 
 postage. As that was before the days of Rowland Hill, 
 it was an important concession to those who had to 
 correspond with the barrister, and a great assistance to 
 him in the execution of his duties. 
 
 In 1835 an act was passed for the regulation of Loan 
 Societies, and the examination and certifying of the 
 rules of these societies was confided to the same 
 barrister. Again, in 1836 an act was passed for the 
 encouragement and protection of Benefit Building 
 Societies, and the same functions were allotted to him 
 in respect of the rules of these societies. Shortly after 
 the accession of Her Majesty, an act was passed, 
 exempting societies for purposes of literature, science, 
 and the fine arts exclusively, from the payment of local 
 rates. This privilege was not to be obtained by any 
 such society until its rules had been submitted to the 
 same barrister, and he had given a certificate that the 
 society was one entitled to the benefit of the act. 
 
 This curious accumulation upon one man, in succes- 
 sive sessions of Parliament, of a variety of duties, seems
 
 Industrial 'Welfare. n 
 
 to indicate that at that period there was much activity 
 in the formation of societies having various praiseworthy 
 objects, and that the person who happened to have been 
 appointed the barrister for certifying" savings-banks was 
 a man possessing special qualifications to deal with 
 work of the kind. It is not far from the truth to say 
 that the legislature had been learning from experience 
 that the best service it could render to such societies 
 was to pass their rules under the eye of a person skilled 
 in the art of expressing in clear and simple language 
 the legal conditions upon which the members of associ- 
 ations were to be allowed to combine for beneficial 
 purposes. It may equally justly be inferred that the 
 creation of these several offices, and the appointment of 
 Mr. John Tidd Pratt to fill them, were coincidences 
 tending greatly to the public advantage. 
 
 In addition to all these functions, he was the standing 
 counsel to the Commissioners for the Reduction of the 
 National Debt, a body consisting of high officers of 
 state and magnates of finance, which had originally 
 been created to supervise the operations of the sinking 
 fund, by which Mr. Pitt fondly hoped the national debt 
 would be greatly reduced and in time extinguished. 
 The Savings-bank Act of 1817, which required the 
 deposits of savings-banks to be paid into a savings- 
 bank fund opened at the Banks of England and Ireland, 
 created a new sphere of duty for the commissioners, 
 who were thereby intrusted with some control over 
 savings-banks and with the investment of the deposits, 
 and these new duties have since more fully engaged 
 them than those from which they derive their name. 
 
 Mr. Pratt's functions in regard to savings-banks- 
 extended over all three parts of the United Kingdom. 
 In regard to Loan Societies, Scotland and Ireland were
 
 12 Provident Societies and 
 
 excluded from the operation of the act; in regard to 
 the other classes of societies that have been mentioned, 
 there was a separate advocate appointed by the Lord 
 Advocate for Scotland, and a separate barrister ap- 
 pointed by the Attorney-General for Ireland. The 
 number of such societies formed in Scotland and Ireland 
 was, however, small in comparison with those formed 
 in England, and the gentlemen who held the appoint- 
 ments in these countries have not attached their names 
 to the history of provident movements to anything like 
 the extent which their English colleague was able to do 
 by the variety of his functions and his interesting 
 personality. 
 
 For a society to be " certified by Tidd Pratt" was for 
 a long time a kind of hall-mark of respectability in the 
 eye of many people in various parts of the country, and 
 the name of Tidd Pratt was held up as a terror to 
 managers suspected of evil designs, who were told 
 "Tidd Pratt will never allow you to do this", or "if 
 you do this, you will have Tidd Pratt upon you ". The 
 gentleman who acquired this wide-spread influence was 
 short and thin, walked somewhat lame, had an animated 
 manner and brilliant eyes, and impressed all with whom 
 he came in contact with a sense of ability and savotr 
 faire. He had strong convictions and was earnest in 
 the expression of them, and brought a wide range of 
 knowledge and experience to the performance of his 
 duties. 
 
 Many a well-meaning person who came with the 
 outline of a scheme which he desired to carry into effect 
 under one or other of the many acts which Mr. Pratt 
 administered, or who was anxious to introduce reforms 
 into some existing society, but did not know how to set 
 about it, found a valuable and unexpected ally in the
 
 Industrial Welfare. 13 
 
 barrister, who in a few words would direct him in the 
 right path to accomplish what he wished. While in 
 this respect he was something more than the dry and 
 cold official, in other ways he was a man of wide 
 sympathies. He was one of the founders of the Reform 
 Club, a trustee of the Soane Museum, a fellow of the 
 Society of Antiquaries and of the Royal Society of 
 Literature, an honorary fellow of the Institute of 
 Actuaries, a director of an important insurance com- 
 pany, and active in many other pursuits. He was 
 author of a history of Savings-banks, a treatise on the 
 law of Friendly Societies, a work on the Highways 
 Acts, which is still the foundation of the standard work 
 on that subject, and a considerable number of other 
 books, mainly relating to branches of the law which 
 were more or less closely connected with his functions 
 in certifying rules. 
 
 He would not have been the man he was, however, if 
 he had succeeded in pleasing everybody. There was 
 one class of Friendly Society, the members of which 
 always looked upon him as out of sympathy with their 
 operations, and, in consequence, charged him with a 
 degree of active obstruction to them, which probably 
 did not exist in his intention so fully as they thought 
 it did, and certainly was not manifested to that extent. 
 The societies referred to are the affiliated orders which, 
 as we shall see later on in this volume, have been grow- 
 ing in strength and influence of late years very consider- 
 ably. They were ignored by the legislature until 1850, 
 and, when recognized, it was in so unsatisfactory a 
 manner that they awarded to the executive officer of the 
 law a large share of the blame that belonged to the 
 legislature itself. It is quite possible that, as he had for 
 twenty-two years been the administrator of a law which
 
 14 Provident Societies and 
 
 ignored these societies, his sympathies were more in 
 touch with societies of another class, and he may have 
 held some notions which are now heterodox as to the 
 possible dangers of large affiliated organizations, but in 
 the business of certifying" rules he could only do what 
 the statute told him. 
 
 Such was the barrister who, at the time of the acces- 
 sion of Queen Victoria, had already been for nine years 
 engaged in the interesting and useful functions which 
 we have enumerated, and whose zeal and ability in the 
 performance of them had led to their successive exten- 
 sion to one and another sort of institution connected 
 more or less closely with the industrial classes. At that 
 time, however, whenever he certified rules for a society, 
 he retained no transcript of them (except in certain 
 cases where three copies were sent to him), but returned 
 the original to the society, and sent the duplicate for 
 registry to some public authority, in most cases the 
 Clerk of the Peace, so that inconvenience arose when 
 he had to perform any subsequent act in respect of the 
 same society, as, for example, receiving quinquennial 
 returns he could not tell what societies ought to send 
 them to him. 
 
 In 1846 the legislature remedied this inconvenience 
 by an enactment creating the barrister the head of a 
 department, under the style of Registrar of Friendly 
 Societies, and requiring the several Clerks of the Peace 
 to take off their rolls the various sets of rules that he 
 had sent to them, and to return them to him, to be kept 
 and registered by him. In addition to the documents 
 which he had himself sent to them, the Clerks of the 
 Peace were required to send him all the transcripts of 
 rules which had come into their custody between 1793 
 and 1838, when rules of societies were laid before the
 
 Industrial Welfare. 15 
 
 Justices in Quarter Sessions to be examined and allowed 
 by them, and were afterwards enrolled among the records 
 of the Court. These were directed to be taken off the 
 file and transmitted to the Registrar. 
 
 The result was that a vast mass of documents, most 
 of them parchment enrolments, very unwieldy in shape 
 and size, was sent to him from all parts of the country, 
 and had to be registered and catalogued by him. The 
 total number of documents appears to have amounted 
 to about 30,000 20,000 rules of societies and 10,000 
 amendments of rules so great, even at that early date, 
 had been the progress of Friendly Societies. It should 
 be observed that this Act of 1846 transferred to Mr. 
 Pratt, as Registrar of Friendly Societies, only those 
 functions which had formerly been performed by him 
 under the Friendly Societies Acts. He still remained 
 the barrister (not the registrar) for the purpose of 
 Savings Banks, Loan Societies, Benefit Building So- 
 cieties, and Scientific and Literary Societies. The 
 records of these societies remained with the National 
 Debt Commissioners or the Clerks of the Peace, as the 
 case required. 
 
 In regard to Friendly Societies, the act conferred upon 
 him somewhat extensive powers. He was authorized to 
 transfer the property of a society from an incapable or 
 absent trustee, and thus to save it the expense and 
 worry of proceedings in Equity; to settle disputes, and 
 for that purpose to require the production of documents 
 and to administer oaths. He thus became a judicial 
 officer with powers sufficient to enable him to do justice 
 at a minimum of cost to the parties. In addition to the 
 quinquennial returns already mentioned, every society 
 was to send to him a report of its assets and liabilities. 
 This provision, however, never came into operation, for
 
 16 Provident Societies and 
 
 before the first quinquennial period had expired, the 
 Act of 1846 was repealed, and a consolidating act 
 passed, in which this provision was not re-enacted. 
 Later on, in the chapter relating to Friendly Societies, 
 we shall have occasion to show how much this is to be 
 regretted. 
 
 The specialization of his work still continued. In 
 1852 a new class of societies, the Industrial and Provi- 
 dent, usually known as Co-operative Societies, called 
 for legislative encouragement and regulation, and these 
 were confided to the Registrar of Friendly Societies. 
 Some of them had already been registered by him under 
 the Friendly Societies Acts as societies for the frugal 
 investment of savings. Successive acts varied the pro- 
 visions of the several statutes that have been mentioned, 
 mostly in the direction of increasing the responsibility of 
 the registrar or barrister, and adding new functions to 
 those already exercised by him ; but it is hardly neces- 
 sary here to mention them, as we shall have to deal 
 with them in detail under the heads of the several 
 classes of societies to which they relate. 
 
 It should, however, be stated that the Friendly 
 Societies Act of 1855 required the registrar to make an 
 annual report to parliament, and from that date to the 
 present a yearly blue-book has been issued. Mr. Pratt 
 availed himself of the opportunity of this annual report 
 to draw public attention to the mischievous operation of 
 the collecting burial societies and the expensiveness of 
 their management. He also took occasion, whenever 
 the necessity arose, to inform the public, through the 
 Times newspaper, of any facts that came to his know- 
 ledge relating to schemes tending to deceive or defraud 
 the unwary, and was successful in prosecuting some 
 such schemes. In one amusing case, an insurance 
 
 (M610)
 
 Industrial Welfare. 17 
 
 society was started by domestic servants, who issued an 
 attractive prospectus, in which they were described as 
 "esquires". 
 
 It will be gathered from all that has been said that 
 this excellent public servant fulfilled the duties confided 
 to him with great zeal and efficiency. Early in 1869 his 
 health began to fail, and the writer, who had then 
 recently been called to the bar, was appointed to assist 
 him. Mr. Pratt died in January, 1870, having completed 
 forty-one years' public service. At the time of his death, 
 the Right Hon. Robert Lowe was Chancellor of the 
 Exchequer, and in that capacity would have had the 
 right to fill up the vacant office; but he formed the 
 opinion that it was not desirable to continue the Registry 
 of Friendly Societies, and introduced a bill into parlia- 
 ment to transfer its functions to other departments. He 
 advocated this course on the ground that the certificate 
 of the registrar had been misunderstood. 
 
 It was found, however, necessary that the office 
 should be filled up, at least temporarily, and the Assis- 
 tant Solicitor to the Treasury, now Sir Augustus 
 Stephenson, was requested to perform the necessary 
 duties in the interval before the abolition of the Depart- 
 ment. Meanwhile, some of the societies concerned 
 made representations to the government, which induced 
 them to think that further inquiry would be desirable 
 before the bill was proceeded with. Accordingly, a 
 Royal Commission was appointed, of which Sir Stafford 
 Northcote (afterwards Earl of Iddesleigh) was chairman. 
 Of the other members of the Commission, Sir Michael 
 Hicks-Beach, Sir Sydney Waterlow, and Mr. C. S. 
 Roundell, M.P., are now the only survivors. Mr. J. M. 
 Ludlow was the secretary to the Commission. Other 
 members were Mr. J. Bonham Carter, M.P., Mr. E. M. 
 
 ( M 510 ) 3
 
 i8 Provident Societies and 
 
 Richards, M.P., Mr. F. T. Bircham, solicitor, and Mr. 
 W. P. Pattison, actuary all since deceased. 
 
 They were directed " to inquire into the existing" state 
 of the law relating- to Friendly Societies, and to inquire 
 into and report upon the operation of the acts relating 
 to Friendly Societies and Benefit Building- Societies, 
 and the organization or general condition of societies 
 established under such acts respectively, and upon the 
 office and duties of the Registrar of Friendly Societies, 
 with power to suggest improvements in the law". They 
 entered upon this comprehensive inquiry in 1870, and 
 did not complete it until 1874. In 1871 they obtained 
 power to appoint Assistant-Commissioners, and these 
 gentlemen the Hon. E. Lyulph Stanley, Sir George 
 Young, Mr. E. Lynch Daniell, and Mr. G. Culley 
 visited various parts of the country, and presented re- 
 ports on the condition of the Friendly Societies in the 
 districts allotted to them, comprising a great body of 
 valuable information. 
 
 The fourth and final report of the Royal Commission 
 was a document filling 216 folio pages and containing 
 931 numbered paragraphs. It summed up their chief 
 recommendations under 46 heads, some of which were 
 adopted by the legislature. Among these were, that 
 the registration of Friendly Societies should continue, 
 the second report having recommended that Building 
 Societies should be registered. Meanwhile, the legis- 
 lature itself had continued the previous practice of in- 
 trusting new duties to the registrar. In 1871 Trade- 
 unions were legalized, and the functions of registering 
 their rules, receiving annual returns from them, and 
 publishing an abstract of such returns, were imposed 
 upon the registrar. An amending act in 1876 materi- 
 ally increased his powers with regard to those bodies.
 
 Industrial Welfare. 19 
 
 In 1874 the enrolment of Benefit Building Societies, 
 which had commenced in 1836, was abolished, and the 
 Clerks of the Peace were directed to send the rules 
 and other documents in their custody to the registrar; 
 future Building 1 Societies were to be incorporated by his 
 certificate and the rules registered by him, and many 
 new functions were imposed upon him in respect to such 
 societies. 
 
 In 1875 an act was passed, by which some of the 
 recommendations of the Royal Commission were carried 
 into effect. A central office was created, consisting of 
 a Chief Registrar, and one or more Assistant Registrars 
 in London, with Assistant Registrars in Scotland and 
 Ireland, and a complete actuarial staff. Previously the 
 registrars in the three parts of the United Kingdom had 
 been independent. The functions of the registrar of 
 Friendly Societies and of the barrister to certify the rules 
 of Savings-banks were consolidated, and the law was 
 amended in many other respects. A few more clauses 
 would have made the consolidation more effectual, and 
 removed some anomalies that still exist, but opposition 
 to them was raised, and the legislature could not be 
 prevailed upon to adopt them. 
 
 Early in 1875 Mr. Stephenson, Assistant Solicitor to 
 the Treasury, became the Solicitor to the Treasury, and 
 resigned the office of registrar. Mr. John Malcolm 
 Ludlow, Secretary to the Royal Commission, which had 
 then completed its labours, was appointed registrar and 
 barrister to certify, and later in the year, when the Act 
 of 1875 was passed, became the first chief registrar. 
 The Commissioners, in their report, had recorded their 
 "very strong sense of the important services rendered, 
 not so much to themselves as to the public, by Mr. 
 Ludlow, who had throughout their proceedings taken
 
 20 Provident Societies and 
 
 by far the largest share of the labour of the Commission, 
 and but for whose devotion to the work they would have 
 felt themselves unable to deal in a comprehensive manner 
 with the numerous and complicated questions involved. 
 Mr. Ludlow's great knowledge of, and interest in, the 
 subject had made his assistance unusually valuable, and 
 if the report should be found to contain a more complete 
 account of the great system of Friendly Societies, and 
 of the questions involved in their management and 
 regulation, and their various relations to the community, 
 than had yet been given to the public, it would be to 
 the exertions of Mr. Ludlow, more than of any other 
 individual, that this result would be due." 
 
 Mr. Ludlow had, however, many years before, estab- 
 lished a high claim on the gratitude and confidence of 
 the industrial community. By his labours with F. D. 
 Maurice and others in the cause of popular education, 
 and with E. V. Neale, Charles Kingsley, Thomas Hughes, 
 and others in the cause of industrial co-operation, 
 and by the enlightened support and sympathy he had 
 given to the cause of Trade-unions, he had marked him- 
 self out as the fittest man for the exercise of functions 
 for which a deep knowledge of the sentiments of the 
 working-classes, and a cordial desire to help them, are 
 qualifications of primary importance. It was under 
 these inspirations that Mr. Ludlow fulfilled his duties 
 until 1891, when he retired from office, leaving to his 
 successor an easy task in the maintenance of the good 
 feeling that he had established between the registry 
 office and the various classes of societies with which it 
 has to deal. 
 
 Since his retirement from the office of chief registrar, 
 Mr. Ludlow has continued to serve the public as a mem- 
 ber of the Inspection Committee of Trustee Savings-
 
 Industrial Welfare. ai 
 
 banks, a body which has done much to prevent the re- 
 currence of those frauds and irregularities in savings- 
 bank management which have in past times greatly 
 injured the cause of thrift. 
 
 The legislature has continued to find new functions 
 for the activity of the Registry Office, and hardly a year 
 has passed of late in which some enactment has not 
 been made extending its powers or imposing upon it 
 new responsibilities and new duties, to be exercised 
 either in a judicial, executive, or discretionary manner. 
 Among these may be mentioned the extended authority 
 over Building Societies, conferred by the Act of 1894, 
 under which the registrar is enabled to direct inquiry 
 into their management and inspection of their books, to 
 cancel their registry and compulsorily to wind them up, 
 if occasion should arise and the conditions precedent 
 stated in the act had been fulfilled. 
 
 Still more noteworthy is the authority given to the 
 registrar under the Workman's Compensation Act 
 1897 to certify schemes entered into by employers and 
 workmen for contracting out of the provisions of that 
 act, in which a very wide discretion is left to the registrar 
 in granting certificates, and extensive powers of investi- 
 gation and of cancelling certificates, are contained. 
 
 One other observation may be made as to the registry 
 of Friendly Societies. While it is a Government depart- 
 ment, it is not the depositary of any state secrets. On 
 the contrary, it is enjoined by statute to publish and 
 circulate, or otherwise make known, such information 
 useful to the members of, or to persons interested in, 
 societies registered, or capable of being registered, as 
 the chief registrar may think fit. The present publica- 
 tion is not, of course, one made under the authority of 
 the act, but the writer hopes that it may serve the same
 
 22 Provident Societies and 
 
 excellent purpose, and has been induced to prepare it by 
 the feeling that the unofficial comments of an indepen- 
 dent but friendly observer may possibly be useful and 
 interesting, not only to those members and other persons 
 whose advantage the act has in contemplation, but to 
 those of the public generally, to whom information as 
 to the great extent and the beneficial operation of 
 Provident Societies and their bearing on industrial wel- 
 fare has not before been offered. 
 
 Chapter II. 
 Trade-Unions. 
 
 If we seek to place ourselves in the position of a 
 member of the industrial population, at the outset of life, 
 well-disposed and well-informed, anxious to do the best 
 he can for his own interests in the present and in the 
 future, we shall probably find, if he belongs to a trade 
 which is organized, that he will think it worth while to 
 join the organization of his trade by becoming a member 
 of a Trade-union. It is possible that the trade may be 
 so completely organized that he will have no option in 
 the matter, and will not be permitted to work at it while 
 he remains outside the Union; that is to say, that the 
 Union will be in a position to exercise an influence 
 powerful enough to prevent its members from working 
 with him, and his employers from continuing him in 
 their employment. 
 
 Even if that be not so, it is probable that he would 
 arrive at the conviction that it is better for him and for 
 all his comrades that he should join them in an organi-
 
 Industrial Welfare. 23 
 
 zation which is intended to enable them to meet the 
 employer on equal terms, and to use the powerful 
 influence of combination to secure for the general body 
 of workmen that which they think is for their benefit. 
 
 The question arises, however, Is a Trade-union a 
 provident society? If not, we have no concern with it 
 here. In a discussion on the subject before the Royal 
 Statistical Society in April, 1895, Mr. A. H. Bailey, a 
 distinguished actuary, said Trade-unions were not pro- 
 vident institutions. In this we cannot but think he 
 took too narrow a view of what constitutes a provident 
 institution. If a society which enables you to devote 
 a portion of your wages towards providing for the 
 future is a provident institution, a combination which 
 has the object of seeing that you get sufficient wages 
 to pay your contributions to that society must also be 
 provident. Apart from this, Trade-unions do, to a large 
 extent, make provision against sickness, accident, and 
 old age. 
 
 Trade-unions are institutions of great antiquity. The 
 trade guilds of the middle ages were trade-unions. 
 They are now represented in London by the wealthy 
 city companies, and their objects and operations have 
 changed with the change of the times, but many of 
 them still bear in their charters and by-laws traces of 
 the trade regulation which formed a great part of their 
 original object. 
 
 The ordinances of the fraternity of Glovers of London, 
 dated 1354, provided that no apprentice should be made 
 a freeman at the end of his term without the consent of 
 the Master and Wardens, and that no man of the craft 
 should teach or inform a foreigner or stranger upon pain 
 of 6s. &/., and generally that no man of the craft should 
 disobey any rules lawfully made by the good advice of
 
 24 Provident Societies and 
 
 the Master and Wardens and other brethren of the 
 craft. 
 
 The Blacksmiths of London made ordinances in 1434, 
 that if any stranger came to London to have service in 
 the craft, he shall be received in the craft to serve two 
 weeks, and after that to make his covenant for three 
 years, and to have for his salary 40$. a year, and shall 
 do nothing- pertaining to the craft without the counsel 
 of the Warden; and that no servant of the craft shall 
 sustain or succour a new man that cometh new to town 
 to have service but in the form aforesaid. 
 
 The Shearmen or Cloth-workers in 1452 ordained that 
 no man take an apprentice into the craft but he be free 
 born and clean of body and of limbs, and not disfigured 
 in any manner : and that if any man of the craft, or his 
 apprentice, shear any cloth but it is truly wet he shall 
 pay an arbitrary fine: and if any man take any chaffer 
 of any Lombard or stranger, or receive any foreign 
 man without license of the Wardens, he shall pay a 
 fine. 
 
 These various rules were certified by the Commissary 
 of the Bishop of London, with the view of making them 
 binding upon the members, who could be sued in the 
 Bishop's Court for breach of faith if they did not fulfil 
 their undertaking to obey them. This ingenious method 
 of using the ecclesiastical courts to enforce civil obliga- 
 tions was not looked upon with favour by the civil 
 courts, and indeed had been prohibited in 1164, and 
 again in 1220 and 1481. The judges were always hos- 
 tile to agreements in restraint of trade. A case is in 
 the law books for 1414, in which an action was brought 
 against one John, a dyer, on a bond which he had given, 
 undertaking not to use his craft of dyer for the space of 
 half a year. Justice Hull said, the bond is void, for the
 
 Industrial Welfare. 25 
 
 condition of it is against the Common Law: and per 
 Dieu, if the plaintiff were here, he should go to prison 
 until he had paid a fine to the king. 
 
 It is possible that there are other instances where 
 Judges on the bench have been moved by righteous 
 indignation beyond the verge of profanity; but it is 
 doubtful whether there is another case in which the 
 official reporter has felt bound to publish the fact. He 
 usually takes the place of that recording angel whose 
 compassionate tear expunged the oath into which Uncle 
 Toby was surprised. Was there a reminiscence of this 
 old case in the mind of Charles Dickens when he described 
 the judge whose temper bordered on the irritable? 
 
 The legislature also sought, from very early times, 
 to repress combinations of workmen. The long succes- 
 sion of acts for this purpose begins in 1304. In 1424 
 it was enacted that masons shall not confederate them- 
 selves in chapters and assemblies. Other acts having a 
 similar object may be counted by the score. Side by 
 side with them from the time of the plague of 1347 
 proceeded another series of acts, having the futile pur- 
 pose of regulating wages by statute, instead of leaving 
 them to be fixed by the operation of natural economic 
 laws. 
 
 The trade guilds of London in due course obtained a 
 legal constitution and exceptional privileges by Royal 
 Charter. Each in respect of a particular trade acquired 
 a control over the persons who should be allowed to 
 practise it, and the manner in which it should be carried 
 on; exercising that control partly for the benefit of the 
 public, by seeing that the work put out came up to a 
 certain standard of excellence, but mainly for that of the 
 traders, by excluding the competition of foreigners, i.e. 
 persons from other towns.
 
 26 Provident Societies and 
 
 The modern Trade-union differs from these ancient 
 combinations in many respects. Whether it is a union 
 of employers or workmen, it is now mainly for the 
 objects of regulating the relations of the one party with 
 the other, and of imposing restrictions upon the conduct 
 of the trade or business. The Trade-unions of workmen 
 are the more common, but Trade-unions of employers 
 are not unknown, and there are also Trade-unions 
 which are, in effect, combinations against the con- 
 sumer. 
 
 The old Combination Acts were repealed in 1824, and 
 the act repealing them was itself repealed by an Act of 
 1825, which recited that combinations interfering with 
 the free employment of capital and labour are injurious 
 to trade and commerce, dangerous to the tranquillity of 
 the country, and especially prejudicial to the interests 
 of all who are concerned in them : and that it was 
 expedient to make further provision, as well for the 
 security and personal freedom of individual workmen 
 in the disposal of their skill and labour, as for the 
 security of the property and persons of masters and 
 employers. It did not prohibit meetings of workmen 
 for the sole purpose of consulting upon and determining 
 the rate of wages to be required by the persons meeting, 
 on the hours for which they will work: nor agreements 
 entered into by workmen as to the same matters: nor 
 meetings of masters for the sole purpose of consulting 
 upon and determining the rate of wages to be paid by 
 the persons meeting, or the hours of work to be re- 
 quired from those they employ: nor agreements entered 
 into by masters as to the same matters. 
 
 By the Friendly Societies Act of 1855 provision was 
 made that a society for any of the purposes of a 
 Friendly Society, or for any purpose which was not
 
 Industrial Welfare. 27 
 
 illegal, might deposit its rules with the registrar, 
 without fully registering them, and should thereupon 
 have power to settle its own disputes, and to take pro- 
 ceedings against an officer, member, or person guilty of 
 fraud or imposition, but should have no other privileges 
 of the Act. This provision was resorted to by many 
 Trade-unions, who relied on the declaration of the Act 
 of 1825, that their purposes were not illegal, and desired 
 to obtain protection for their funds: but the effect of it 
 was much impaired by a series of legal decisions, which 
 established that combinations in restraint of trade were 
 illegal, and therefore that Trade-unions were not en- 
 titled to its benefits. 
 
 The earliest case arose in 1856, in respect of a com- 
 bination of eighteen master cotton-spinners, who bound 
 themselves under a penalty of 500 to act in com- 
 pliance with the majority, in respect to carrying on or 
 ceasing to carry on their works. The court held that a 
 contract to carry on trade, not freely, as they ought to 
 do, but in conformity to the will of others, was contrary 
 to the public policy. A later case, in 1867, enlightened 
 the Trade-unions of workmen as to the danger in which 
 they were placed by the application of this doctrine. 
 The president of the Bradford branch of the United 
 Boiler-makers and Iron Ship-builders preferred a com- 
 plaint against one of the officers, that he had unlawfully 
 withheld money belonging to the society, and sought 
 the remedy given by the Act of 1855. 
 
 The charge was proved; but the Justices dismissed 
 the complaint on the ground that the society was for 
 a purpose which was illegal. The Court of Queen's 
 Bench confirmed the decision of the Justices, and held 
 that where members agree not to work except on cer- 
 tain conditions, and the purpose of the Union is to
 
 28 Provident Societies and 
 
 support its members so out of employment in a manner 
 consistent with the interests and wishes of the body, 
 that was an illegal contract which could not be, and 
 ought not to be, enforced. 
 
 Again, in 1869, the Amalgamated Society of Carpen- 
 ters and Joiners sought to punish a fraudulent officer, 
 but found themselves unable to do so, on the ground 
 that the society had applied its funds to the support of 
 workmen on strike, and to prevent men from seeking 
 work in districts where a strike existed. 
 
 The result of these judgments was to place the funds 
 of the Trade-unions at the mercy of their officials, and 
 to give a distinct stimulus to fraud and dishonesty. 
 The judges made themselves the accomplices and the 
 protectors of the petty embezzler, and placed in his 
 hands the disposal of those savings which represented 
 so much heroic self-sacrifice on the part of the members. 
 Fortunately, the legislature could be appealed to: and 
 a short Act was passed in 1869 (drawn by Mr. J. M. 
 Ludlow), providing that rules for determining the con- 
 ditions on which members will or will not consent to 
 employ or be employed, shall not, by reason only that 
 such rules may operate in restraint of trade, be deemed, 
 for the purpose of the punishment of frauds and imposi- 
 tions, to be rules for a purpose which is illegal. 
 
 At last, in 1871, the Trade-union Act was passed, 
 which swept away all the antiquated theories of restraint 
 of trade, and public policy, and the rest, and enacted 
 that the purposes of any Trade-union shall not, by 
 reason merely that they are in restraint of trade, be 
 deemed to be unlawful, so as to render any member of 
 such Trade-union liable to criminal prosecution for con- 
 spiracy or otherwise, or to be unlawful, so as to render 
 void or voidable any agreement or trust. The least
 
 Industrial Welfare. 29 
 
 that can be said in favour of this statute is that it was 
 a great discouragement to the rogues whom the legal 
 decisions had encouraged. It was more; it was a full 
 acknowledgment by the legislature of the right of 
 working-men to combine together for their own benefit 
 in their own way, and a substitution of lawful and 
 ordered methods for methods of conflict with law. 
 
 By this Act, as amended in 1876, a Trade-union was 
 defined to be any combination, whether temporary or 
 permanent, for regulating the relations between work- 
 men and masters, or between workmen and workmen, 
 or between masters and masters, or for imposing re- 
 strictive conditions on the conduct of any trade or 
 business, whether such combination would or would 
 not before the passing of the Act have been deemed to 
 have been an unlawful combination by reason of some 
 one or more of its purposes being in restraint of trade. 
 This Act authorized Trade-unions to be registered, and 
 provided for registered Trade-unions a remedy against 
 misapplication of funds and other privileges which were 
 not extended to unregistered Trade-unions; but it was 
 some years before several of the more important Trade- 
 unions availed themselves of the advantages of registry. 
 The proportion of unregistered Trade-unions is now 
 comparatively small. Mr. and Mrs. Sidney Webb in 
 their valuable history of Trade-unionism give a table 
 which shows the membership of 28 unions, which had 
 343,890 members in 1890, as having risen to that number 
 from 142,530 in 1870. In 1873, however, there were 
 already 130 Trade-unions registered, and 93 of these 
 had 256,179 members. There are now 565 registered 
 Trade-unions in England and Wales. 
 
 The statistics of these Trade-unions (or rather of the 
 523 which on the 3151 December, 1896, were of more
 
 3O Provident Societies and 
 
 than a full year's standing) throw some light on their 
 method of working. At that day they had 1,036,351 
 members. Even from this figure something should be 
 deducted for such Trade-unions as consist of employers 
 only, and something also for cases where a branch of a 
 Trade-union is separately registered, and its members 
 are therefore counted twice over. These deductions are 
 not very important, for the average number of members 
 in an employers' trade-union is comparatively small, and 
 the number of unregistered Trade-unions would largely 
 exceed any that are counted twice. On the other hand, 
 as the whole number of male adult workmen in the 
 United Kingdom has been estimated by Sir Robert 
 Giffen at 7,300,000, it is clear that the Trade-unions, 
 registered and unregistered, comprise only a fractional 
 part of the whole number of workmen. 
 
 The total income of these Trade-unions for the year 
 1896 was ^1,693,150, or an average of i, izs. 8d. for 
 every member, equivalent to a contribution of ^Y^d. per 
 week. Of this, in the year, they only expended 
 ;i, 258,440, increasing their funds by ^"434,710; so 
 that at the end of the year those funds amounted to 
 ^2,138,296, or an average of 2, is. %d. for each 
 member. This is equivalent to a little more than 
 fifteen months' income. Comparatively few of the 
 Unions are of any magnitude. Out of the whole 523 
 there are only 22 which have more than 20,000 members, 
 or more than 20,000 income, or more than ,20,000 
 funds. Not one of these 22 had as much as four years' 
 income accumulated; eight of them had less than one 
 year's income in hand. This is a point of which we 
 shall presently see the importance. 
 
 The Trade-union which was, at the date in question, 
 by far the largest and most important of all was the
 
 Industrial Welfare. 31 
 
 Amalgamated Society of Engineers, a society which was 
 established in 1851. It did not take advantage of the 
 permission to register given by the Act of 1871 until 
 1884. As it was engaged during 1897 in a long and 
 exhausting struggle with the employers in the engineer- 
 ing trade, it will be interesting to trace by its proceed- 
 ings during 1896 to what extent it had become prepared 
 for such a struggle. During the year 1896 the Amalga- 
 mated Society of Engineers increased its members 
 from 79,134 to 87,313, its income from 296,960 to 
 347,867, and its funds from 206,116 to 305,882. 
 Its income was therefore nearly 4 per member, or one 
 shilling and sixpence per member per week, and it 
 saved out of that income enough to increase its funds 
 by 99,766, though the funds even then were less than 
 one year's income. In 1897 the great lock-out took 
 place; the members raised in contributions 441,940; 
 the public subscribed .77,765; other Trade-unions lent 
 22,900; and the Union was able not only to keep up 
 its payments for death, accident, sickness, and super- 
 annuation, amounting to 126,694, but to grant trade 
 benefits amounting to 527,010. At the end of the 
 year it had in its general fund 93,255, and in its super- 
 annuation fund (which had been kept intact) 63,597. 
 The number of members had increased to 91,444. 
 
 The oldest existing registered Trade-union is the 
 London Society of Compositors, which was established 
 in 1785. It had at the end of 1896 10,558 members, 
 32,008 income, and 44,645 funds, having increased 
 its funds during the year by 12,211. It appears from 
 Johnson's Typographia that in the year 1785 a regular 
 scale of compositors' wages was for the first time 
 printed, and was agreed to by a general meeting of the 
 master printers. There had been, however, almost
 
 32 Provident Societies and 
 
 from the introduction of printing, a system of internal 
 regulation in a printing-office, called the "chapel". 
 When a printer had a complaint to make against a 
 comrade, he would tell it to the president or "father" 
 of the chapel, who would call a chapel at the imposing- 
 stone, and determine the matter in dispute, and amerce 
 the plaintiff or defendant, according as the charge was 
 proved or rebutted. 
 
 The Manchester Society of Braziers and Sheet-metal 
 Workers dates back to the year 1802, but was not re- 
 gistered until 1890. It is a comparatively small union, 
 having only 523 members, an income of ^1781, and 
 ^"1419 funds, having increased its funds during the 
 year from 838. This tends to show that great fluctua- 
 tions in the funds of a Trade-union do not affect its con- 
 tinued existence. 
 
 Another old Trade-union is the Friendly Society of 
 Ironfounders of England, Ireland, and Wales, established 
 in 1809. It has 16,278 members, ^61,085 income, and 
 ^46,341 funds, having shared the general forward 
 movement of the year by an increase of ^"20,088 in its 
 funds. This society has an interesting history, and has 
 taken a creditable part in movements for the benefit of 
 the workmen belonging to it. 
 
 That workmen should have achieved such results as 
 these in the face of the bitter persecution that was 
 directed against combinations of working-men in the 
 early part of this century, and of the cruel punishment 
 inflicted upon some of their members for an imaginary 
 offence despite also their own mistakes and the real 
 crimes which were committed by some trade organiza- 
 tions in Sheffield and elsewhere is evidence of the 
 vitality of workmen's trade combinations, and of their 
 necessity in the circumstances of modern life.
 
 Industrial Welfare. 33 
 
 The registered Trade-unions in Scotland and Ireland 
 should not be passed over. In Scotland, 36 unions had 
 62,634 members, and an income of ^80,505. Their 
 funds on 3ist December, 1896, amounted to ^95,586, 
 having increased in the year from 77,232. Only one 
 society, the Associated Ironmoulders of Scotland (akin 
 to the Ironfounders in England) ranks with the 22 
 largest English unions. In Ireland also 36 unions made 
 returns, but their operations are very small, and the 
 whole of them put together would not rank with the 22 
 large unions in England. They had an aggregate of 
 7522 members, ^14,504 income, and ^14,139 funds, 
 an increase during the year from ;i 1,903. The oldest 
 is the Belfast Brassfounders, established in 1840, having 
 177 members and ^458 funds. 
 
 In the year 1872 a Trade-union was established 
 among the agricultural labourers, a class which had 
 been reduced to a miserable condition of poverty. A 
 previous Union of Agricultural Labourers in Dorsetshire 
 in 1834 had been suppressed by the infliction on six of 
 its members of the ferocious sentence of seven years' 
 transportation. Mr. Joseph Arch, the founder of the 
 new union, had not the same fate to fear, but he did 
 experience bitter and unscrupulous opposition. The 
 Union succeeded in bettering the condition of the agri- 
 cultural labourer, and contributed to obtain for him the 
 parliamentary franchise; after a stormy experience of 
 twenty years it completed its circle of usefulness and 
 ceased to exist. 
 
 In order that a Trade-union may be registered, it has 
 to adopt rules providing for the following matters : 
 
 i. The name of the Trade-union, which must not be 
 the same as that of any existing registered Trade- 
 
 ( M 610 ) C
 
 34 Provident Societies and 
 
 union, nor so nearly resemble such name as to be 
 likely to deceive the members or the public. It 
 has been held also that rules under the name of 
 an existing unregistered Trade-union cannot be 
 registered unless it is shown that the applicants 
 for registry are authorized on its behalf. 
 
 2. The place of meeting for its business, which may 
 
 or may not be the same as its registered office. 
 When the registered office is changed, notice is to 
 be given to the Registrar. 
 
 3. The whole of the objects for which it is to be 
 
 established. 
 
 4. The purposes for which the funds thereof shall be 
 
 applicable. If any of such purposes shall be un- 
 lawful, the registration is void, and may be can- 
 celled. 
 
 5. The conditions under which any member may be- 
 
 come entitled to any benefits assured. 
 
 6. The fines and forfeitures to be imposed on any 
 
 member. These must be definite. 
 
 7. The manner of making, altering, amending, and 
 
 rescinding rules. 
 
 8. The appointment and removal of 
 
 (a) A general committee of management, 
 
 (b) A trustee or trustees, 
 
 (c) Treasurer, 
 
 (d) Other officers. 
 
 9. The investment of the funds. 
 
 10. An annual or periodical audit of accounts. 
 
 11. The inspection of the books and names of the mem- 
 
 bers by every person having an interest in the 
 funds. 
 
 12. The manner of dissolving the Trade-union.
 
 Industrial "Welfare. 35 
 
 If the Rules contain these provisions, and do not dis- 
 close an unlawful purpose, they are to be registered. 
 It is not necessary for the Registrar to inquire what 
 other provisions the rules contain. 
 
 The primary and paramount object of a Trade-union 
 is its trade object : if it be a workmen's union, the so 
 using* their funds that they can, in case of need, resist 
 any attempt of the employers to lower the scale of 
 wages, or to render the conditions of labour more 
 severe, or enforce any attempt of the workmen to raise 
 the scale of wages, or to render the conditions of labour 
 more lenient; if it be an employers' union, the converse. 
 Workmen's unions, especially those of the older type, 
 combine with this object, very greatly to the advantage 
 of the members, other purposes, akin to those of a 
 friendly society, such as relief in sickness, pensions in 
 old age, allowances when out of work, assistance to- 
 wards emigration, and provision for funeral expenses at 
 death. 
 
 In ordinary times, when no trade conflict exists, the 
 expenditure on these purposes largely exceeds the 
 expenditure on trade purposes. For example, in the 
 year 1890, when the total expenditure of 259 trade- 
 unions, registered and unregistered, as recorded by 
 Mr. Burnett, the able Chief Labour Correspondent of 
 the Board of Trade, was ^862,000 (the number of 
 members being 871,000), only ^107,000 was spent in 
 dispute benefits. Of the remainder ^173,000 was 
 for sick pay and medical attendance, ^145,000 for 
 out-of-work benefits, ^87,000 for superannuation, 
 ^60,000 for funerals, and ^26,000 for accident and 
 other benefits. Sick pay, superannuation and funeral 
 allowance are benefits which can only be secured 
 (as we shall see when we discuss Friendly Societies)
 
 36 Provident Societies and 
 
 by the accumulation of considerable funds to meet 
 the future accruing- liabilities, and those funds should 
 be earmarked for each benefit and set aside, so 
 that as the age of the members increases, and the 
 liability to sickness becomes more urgent, and old age 
 draws nearer, and deaths are more numerous, the funds 
 may be ready to meet the growing claims. This is the 
 moral every actuary is constantly preaching. 
 
 The members of Trade-unions, knowing what they 
 want, disregard the teaching of the actuary. They do 
 not accumulate large funds, and do not earmark those 
 funds for a special purpose, with an exception to be 
 mentioned hereafter. There is not a single large Trade- 
 union, as we have seen, which has as much as four 
 years' income in hand, and the average of all the unions 
 is fifteen months' income only. The common practice 
 is to levy each year as much as is required to meet the 
 outgoings of the year, and only to keep in hand a little 
 over one year's income, except when the probability of 
 a conflict is in the air, and it becomes necessary to 
 increase the contributions of the members and accumu- 
 late a reserve to support them when the conflict comes. 
 It is always to be remembered that the paramount pur- 
 pose of the Trade-union is the trade purpose. 
 
 The actuaries would point out, very justly, that to 
 raise the sick pay, and superannuation allowances, and 
 funeral money, which all increase as the age of the 
 member increases, and in the case of superannuation 
 allowances are deferred for many years, by an equal 
 levy on all members alike, is a practice which is unjust 
 to the younger men and unduly favourable to the older 
 men. If younger men were practically free to join or 
 not to join the union, and if they understood their own 
 interests, they would not join a body in which funds for
 
 Industrial Welfare. 37 
 
 those benefits were raised by levy; and in that event the 
 old men would be left to themselves, and the levy would 
 year by year have to be greater, till at last it would be 
 more than they could pay. It is because they know 
 that the trade purposes are those to which, in case of 
 need, all the others must give way, that it becomes the 
 interest of the younger men to support the union. 
 
 It is essential, therefore, that a Trade-union supported 
 by levy should have the means of practically ensuring 
 that as young men entered the trade they should have 
 no option of refusing to join the union and to contribute 
 to its funds a levy of the same amount as that paid by 
 the older men, who would nevertheless derive a much 
 larger share of the benefit of the levy. It is also essen- 
 tial, especially having regard to the long-deferred benefit 
 of superannuation allowance, that a Trade-union which 
 relies upon levies should be connected with a progressive 
 industry that is to say, that its members should in- 
 crease from time to time, and not remain stationary or 
 diminish, if it is to meet the growing burden of the 
 allowances. 
 
 Of the younger men who join a union, about half will 
 live to be of the pension age. By the system of levy, 
 the present members have to pay the pensions of those 
 who were young forty or fifty years ago. If there are 
 now 5000 members, and there were only 500 then, the 
 burden might not be intolerable, because it would be 
 measured by the claims of the survivors of the 500. If, 
 however, we look forward another forty or fifty years, 
 and the Trade-union should not increase its members 
 beyond its present number of 5000, or, worse still, should 
 diminish them, the burden would probably become in- 
 tolerable, because it would be measured by the claims 
 of the survivors of the 5000, a large proportion of whom
 
 38 Provident Societies and 
 
 are now comparatively young. This consideration has 
 impressed itself upon the minds of some of the more 
 thoughtful among the members of Trade-unions, who 
 have commenced to set aside a special fund to meet 
 superannuation allowance. As yet, however, this special 
 fund has not been sufficiently long in operation to form 
 an adequate provision, and it is only to be noted as a 
 step in the right direction. The special fund of the 
 Engineers, for example, which was not touched during 
 the recent strike, does not yet amount to one year's 
 pension. 
 
 One advantage that has always been held to attach 
 to the system of an equal undivided levy for all benefits 
 is that it tends to caution in entering upon industrial 
 warfare, and therefore to the prevention of strikes for 
 any cause short of necessity, the members knowing that 
 the cost of the strike must diminish the funds applicable 
 for other benefits. The result has been that these Trade- 
 unions have been in many cases organizations by which 
 the claims of the workmen have been secured by friendly 
 negotiations with the employers, who have found it ad- 
 vantageous to deal with an organized body representing 
 the workmen, and consisting of the best informed and 
 most reasonable among their number, disposed rather 
 to avoid than to incur hostile proceedings. 
 
 The success which attended the strike of the dock 
 workers, organized by the Dock Workers' Union in 
 1889, led to the creation of a large number of Trade- 
 unions on a different principle, mainly among unskilled 
 labourers. The new unionism, as it was called, dispar- 
 aged the system of insurance for provident purposes, 
 and adopted instead the purely militant trade organiza- 
 tion. Of 500 Trade-unions registered between 1888 and 
 1895, 200 have already ceased to exist. This and other
 
 Industrial Welfare. 39 
 
 circumstances lead to the opinion that the combined 
 form of trade-union is the more advantageous to the 
 members, notwithstanding the unscientific and uncertain 
 conditions under which its benefits are offered. 
 
 It is but justice to the Trade-unions to add, that their 
 members have made great sacrifices in order to keep 
 faith with those to whom superannuation and other 
 allowances have been promised. The statute strangely 
 provides that nothing it contains shall enable any court 
 to entertain any legal proceeding instituted with the 
 object of directly enforcing or recovering damages for 
 the breach of any agreement for the application of the 
 funds of a Trade-union to provide benefits to members. 
 It is creditable to the Trade-unions that, being thus left 
 to be a law to themselves, and the members deprived of 
 legal remedy if the Trade-union refuses to grant the 
 benefits it has agreed to provide, there should be few, 
 if any, complaints of unjust treatment raised against 
 them. 
 
 In a separate report made by the Duke of Devonshire 
 and other members of the Royal Commission on Labour, 
 this matter was considered, and a recommendation was 
 made that an option should be given to Trade-unions of 
 obtaining incorporation, and thus becoming bodies ca- 
 pable of suing and being sued, and that in respect of such 
 incorporated Trade-unions the section in question should 
 not apply. The recommendation has not been acted 
 upon, and was not received by the Trade-unions with 
 favour. They have a strong sentiment against having 
 recourse to courts ot law, and in favour of their own 
 method of settling their disputes; and it is not perhaps 
 surprising that that sentiment should still exist, though 
 many years have elapsed since the decisions of which 
 they complained.
 
 40 Provident Societies and 
 
 Those years have witnessed a large extension in the 
 influence and power of Trade-unions. They have gained 
 a considerable representation in Parliament, and the 
 views of their members are consulted by both the great 
 political parties. Although the Trade-unions do not com- 
 prise more than one-fourth, or perhaps even one-fifth, 
 of the working-men of the country, they are taken as 
 expressing the general views of the whole body. They 
 have been fortunate in the personal character of some 
 of their representatives. Mr. George Howell, the author 
 of Conflicts of Capital and Labour, Trade-unionism Neia 
 and Old, a Handy Book of the Labour Laws, and other 
 works, during a long parliamentary career acquired the 
 esteem of all parties, and succeeded in passing many 
 measures for the benefit of the working-classes. Others, 
 such as Mr. Macdonald, Mr. Broadhurst, Mr. Cremer, 
 may be mentioned in the same connection. The unions 
 have not only directly obtained benefits for their mem- 
 bers, but they have acted indirectly as educational insti- 
 tutions, and have opened a career of public service to 
 many among their number who have shown themselves 
 capable of attaining distinction. 
 
 The generous manner in which the various trades 
 contribute to the support of each other in times of stress 
 is a further indication of the excellent moral influence 
 exerted by those "combinations of workmen" which 
 the legislature used to brand as criminal.
 
 Industrial Welfare. 41 
 
 Chapter III. 
 Friendly Societies. 
 
 The theoretical young workman, whose existence we 
 conjectured at the beginning of the last chapter, may 
 belong to a trade which is not organized, or he may not 
 think it worth while to join the union which is connected 
 with his trade, or he may recognize the fact that, from 
 its peculiar constitution, a Trade-union is not the best 
 form of provision for provident purposes other than 
 trade purposes. In any of these cases he will find in 
 the Friendly Society a provision which he wants and 
 cannot afford to neglect. We shall accordingly now 
 proceed to consider what a Friendly Society is, and to 
 look into the methods adopted by the various classes of 
 friendly societies, and the nature of the benefits which 
 they confer on the persons who join them. 
 
 The legal definition of a Friendly Society is a society 
 for the purpose of providing by voluntary subscriptions 
 of the members thereof, with or without the aid of 
 donations, for 
 
 (a) The relief or maintenance of the members, their 
 husbands, wives, children, fathers, mothers, brothers 
 or sisters, nephews or nieces, or wards being orphans, 
 during sickness or other infirmity, whether bodily or 
 mental, in old age (which means any age after 50) or in 
 widowhood, or for the relief or maintenance of the or- 
 phan children of members during minority: or 
 
 (b) Insuring money to be paid on the death of a 
 member's child or on the death of a member, or for the 
 funeral expenses of the husband, wife, or child of a 
 member, or of the widow of a deceased member, or, as
 
 42 Provident Societies and 
 
 regards persons of the Jewish persuasion, for the pay- 
 ment of a sum of money during the period of confined 
 mourning: or 
 
 (c) The relief or maintenance of the members when 
 on travel in search of employment, or when in distressed 
 circumstances, or in case of shipwreck or loss or damage 
 of or to boats or nets : or 
 
 (d) The endowment of members or nominees of mem- 
 bers at any age : or 
 
 (e) The assurance against loss by fire, to any amount 
 not exceeding ^15, of the tools or implements of the 
 trade or calling of the members. 
 
 Few societies combine the whole of these objects: 
 the majority insuring only sick pay and a sum at death. 
 
 In order that the privileges conceded to societies 
 registered under the Friendly Societies Act may not be 
 abused by their extension to persons of ample means, it 
 is provided that no gross sum shall be insured exceeding 
 200 and no annuity exceeding $o, and in regard to 
 the privilege of exemption from income-tax, that it shall 
 not apply to a society that assures annuities exceeding 
 
 30- 
 
 Friendly Societies can claim an even greater antiquity 
 than Trade-unions. In their earliest form they were 
 burial societies. It is a very common weakness of 
 human nature to surround the disposal of a dead body 
 with circumstances of pomp and expenditure which 
 exceed anything the deceased enjoyed when living, and 
 tax heavily the means of the survivors. When religion 
 began to be organized, its policy was to avail itself of 
 this instinctive tendency of mankind, and to encourage 
 rather than to discourage the desire to bestow costly 
 observances upon the deceased. The idea of a spirit, 
 separable from the body, and capable of being benefited
 
 Industrial Welfare. 43 
 
 by these attentions, arose, and a professional caste for 
 conducting the ceremonies was set apart. 
 
 Examples of this sentiment are to be found in the 
 ancient interments, in which objects supposed to be use- 
 ful to the deceased in his future state, the coin he was 
 to pay to Charon, food and personal ornaments, favourite 
 horses and other animals, were buried with him leading- 
 even to the fanaticism of his favourite wives destroying 
 themselves that he might still enjoy the society that 
 gave him pleasure in life. This tendency of mankind 
 to give up precious things for the benefit of the departed, 
 modified by religious systems into the purchase of 
 masses, and degenerating into various forms of osten- 
 tation and pretence, led to the survivors impoverishing 
 themselves, and to their making appeals for help to their 
 neighbours and comrades, especially where they came 
 together in social meetings. 
 
 It was not a long or difficult step to reduce this casual 
 help to an organized tariff, and to raise the funds pay- 
 able for funeral expenses by an equal levy on all the 
 members of the social gathering; and the next step, of 
 establishing a permanent chaplain who should pray for 
 the souls of all the deceased members, almost naturally 
 followed. It appears that in China there have been for 
 many centuries burial clubs, termed long-life loan com- 
 panies, and that they exist in almost all the towns and 
 villages. There are also traces of similar clubs in 
 Greek and Roman epigraphy, and the Teutonic gild is 
 familiar to all of us. As there is here no question of 
 intercommunication, we see in this class of society a 
 sort of spontaneous growth. 
 
 The rules of a Roman burial club of the time of 
 Hadrian, founded at Lanuvium, and dedicated to Anti- 
 nous and Diana, have come down to our own times.
 
 44 Provident Societies and 
 
 The members met once a month, and frequently dined 
 together. They excluded a member from benefit who 
 did not keep up his subscription; but when a member 
 died who was not in arrear, they followed his body in a 
 walking- procession and paid the expenses of the funeral. 
 If it took place at too great a distance for their personal 
 attendance, they refunded the expenses to the person 
 who had charitably defrayed them. Nothing- was to be 
 done, however, in regard to the funeral of a member 
 who committed suicide a curious exception when it is 
 remembered that to commit suicide is to seek death 
 Romano more. Opprobrious or contumelious speech to 
 the master was punishable by a fine, and it was his duty 
 upon certain appointed days to perform solemn offices 
 in white vestments. Whether our own mediaeval guilds 
 (to the trade-unionist aspect of which we have already 
 referred in Chapter II.) were the lineal descendants of 
 these or of the Teutonic gilds does not much matter. 
 At least one Roman club, the college of the smiths, is 
 known to have existed during- the Roman occupation 
 of this country; and the late Mr. Coote has shown con- 
 clusively how much that was Roman survived that 
 occupation. 
 
 The late Mr. Cornelius Walford compiled from the 
 rules of the mediaeval guilds the following list of their 
 provident objects : 
 
 1. Relief in poverty. 
 
 2. Relief in sickness. 
 
 3. Relief in old age. 
 
 4. Relief on loss of sight. 
 
 5. Relief on loss of limb. 
 
 6. Relief on loss of cattle. 
 
 7. Relief on fall of a house
 
 Industrial Welfare. 45 
 
 8. Relief on making pilgrimages. 
 
 9. Relief in case of loss by fire. 
 
 10. Relief in case of loss by floods. 
 
 1 1. Relief in case of loss by robbery. 
 
 12. Relief in case of loss by shipwreck. 
 
 13. Relief in case of imprisonment. 
 
 14. Relief for defence at law. 
 
 15. Relief of the deaf and dumb. 
 
 16. Relief of the afflicted with leprosy. 
 
 17. Dowries on marriage of females, or on their 
 
 entering a house of religion. 
 
 18. Aid in temporary pecuniary difficulties. 
 
 19. Aid to obtain work. 
 
 20. Repair of roads and bridges. 
 
 The list is even more comprehensive than that in the 
 Friendly Societies Act 1896, which we have quoted 
 already, and seems to include every possible ill that 
 man is heir to; especially when it is remembered that 
 these provident purposes were largely supplemented by 
 works of charity. 
 
 The evidence of any direct connection between the 
 guilds of the middle ages and the modern Friendly 
 Society is scanty, if indeed there can be said to be any 
 such evidence at all. The oldest existing societies, 
 founded in 1687, 1703, and 1708, are those which were 
 founded among the Huguenot refugee workmen in 
 Spitalficlds, and the modern London Friendly Society is 
 one of the boons those admirable men conferred upon 
 this country in return for its hospitality. Friendly 
 Societies first appeared upon the statute-book in the 
 year 1793, when an Act was passed for their encourage- 
 ment and relief. The preamble of that Act affirmed 
 that the protection and encouragement of such societies
 
 46 Provident Societies and 
 
 would be likely to be attended with very beneficial effects 
 by promoting the happiness of individuals and at the 
 same time diminishing- the public burdens. 
 
 The public burden which the framer of the statute 
 had in mind was no doubt that of poor-law relief: and 
 one of the privileges the statute extended to members 
 of Friendly Societies was that of exemption from re- 
 moval under the poor-law until they became actually 
 chargeable to the parish. Having regard to the vicious 
 principles upon which poor-law relief was then adminis- 
 tered, there is something to be said for the view that 
 Friendly Societies greatly diminished the burden upon 
 the public. The same argument is still used, but it is 
 submitted that it has ceased to have the same weight. 
 Since the great reform of the poor-law that took place 
 in 1834, it has been applied with more or less strictness 
 to its proper purpose of the relief of destitution. That 
 reform has undoubtedly led to the formation of Friendly 
 Societies, but it is another thing to say that the societies 
 have saved so much in poor-rates. That would be to 
 imply that their members, if they had not belonged to 
 such societies, would have been destitute. Whether 
 they would have been so or not, no one can tell. We 
 think it is a libel upon them to say that they would. If 
 they had not invested their savings in Friendly Societies, 
 they would presumably have invested them elsewhere. 
 A Friendly Society creates no wealth. It only husbands 
 and distributes it. 
 
 The Friendly Society has done so much for its 
 members, and contributed so largely to industrial 
 welfare by increasing their self-respect and independ- 
 ence, it has been so powerful an instrument of foresight 
 and economy, and has led so many men to positions of 
 influence and of dignity, that it has strong and genuine
 
 Industrial Welfare. 47 
 
 claims upon the community, whose interests it has 
 largely promoted. It is precisely for that reason that 
 we do not wish to see urged on its behalf a claim that 
 cannot be substantiated, and that from our point of 
 view implies a disparagement of the member of a 
 Friendly Society that he does not deserve, for there is 
 no evidence whatever that the class of men from whom 
 the members of Friendly Societies are drawn is the class 
 of men who would otherwise be paupers. Such evidence 
 as there is is all to the contrary. The late Mr. Hal Ian 
 Stead, secretary of the Ancient Order of Foresters, 
 stated in his testimony before the Royal Commission on 
 the Aged Poor that out of the half-million of members 
 who constituted that society, he could not find that there 
 were as many as a hundred persons in receipt of relief 
 under the poor-law. This is the more remarkable that 
 the society itself does not insure (in the generality of 
 cases) relief in old age as such, but only grants a sick 
 allowance to an aged member when he is suffering from 
 some defined disease which disables him from work, and 
 even then the allowance, after short terms of full- and 
 half-pay, is reduced to quarter-pay of 2s. 6d, or 3$. a 
 week. As the society does not directly insure him 
 against pauperism in old age, we have to seek in some 
 other direction for an explanation of the reason for his 
 not becoming a pauper, and we find it in the moral 
 character of the man himself. The considerations 
 which induce him to belong to a Friendly Society are 
 the same considerations which keep him independent of 
 public aid in his old age. 
 
 The existing law of Friendly Societies is consolidated 
 in the Friendly Societies Act 1896, and the Collecting 
 Societies and Industrial Assurance Companies Act 
 1896. By registry under the Friendly Societies Act a
 
 48 Provident Societies and 
 
 society becomes entitled to certain privileges. The 
 condition of registry is the adopting rules which contain 
 provisions for the following matters : 
 
 1. The name of the society, which must not be a name 
 
 identical with that of any existing registered 
 society, or so nearly resemble any such name as 
 to deceive, nor must it be any name likely to 
 deceive the members or the public as to the nature 
 or identity of the society. 
 
 2. The place of office. Any change in the society's 
 
 office must be notified to the registrar within four- 
 teen days, so that the public may at all times know 
 where a society is to be found. 
 
 3. The whole of the objects for which the society is to 
 
 be established, which must be some of those speci- 
 fied in the act as above set forth. 
 
 4. The purposes for which the funds thereof shall be 
 
 applicable, which must be such as are requisite for 
 carrying out those objects. 
 
 5. The terms of admission of members. 
 
 6. The conditions under which any member may become 
 
 entitled to any benefit assured, so that there may 
 be no doubt as to a member's right to benefit. 
 
 7. The fines and forfeitures to be imposed on any 
 
 member, which must be definite and not arbitrary. 
 
 8. The consequences of non-payment of any subscrip- 
 
 tion or fine. As the subscriptions are voluntary, 
 the consequences of non-payment can only be the 
 loss of benefit or exclusion from the society. 
 
 9. The mode of holding meetings. 
 
 10. The right of voting, which may be restricted to 
 
 certain classes of the members. 
 
 1 1. The manner of making, altering, or rescinding rules.
 
 Industrial Welfare. 49 
 
 ia. The appointment and removal of a committee of 
 management, to whom may be assigned any name, 
 such as "directors", the society thinks fit. 
 
 13. The appointment and removal of a treasurer and 
 
 other officers. The treasurer must be an individual, 
 not a corporation. 
 
 14. The appointment and removal of trustees. The 
 
 committee, treasurer, and trustees must all be over 
 2 1 years of age. 
 
 15. When the society is one having branches, provision 
 
 is to be made also for 
 
 (a) The composition of the central body; 
 
 (b) The conditions under which a branch may 
 
 secede from the society. 
 
 The central fund of the society, and the separate 
 fund of each branch, should also be defined in the 
 rules. 
 
 1 6. The investment of the funds. A society may invest 
 
 its funds on any security expressly directed by its 
 rules, but not on any security not so directed, 
 except by way of a deposit in a savings-bank or 
 with the Commissioners for the Reduction of the 
 National Debt. The rules may not direct any 
 investment upon personal security, except by way 
 of a loan on the society's own policies, or a loan 
 from a separate loan fund. 
 
 17. The keeping of the accounts. 
 
 18. Audit once a year at least. This may be conducted 
 
 either by two persons appointed by the society or by 
 one of the public auditors appointed by the Treasury, 
 if the society prefer to employ him. It is not com- 
 pulsory to do so. 
 
 19. Annual returns to the registrar of the receipts. 
 
 (M610) D
 
 50 Provident Societies and 
 
 funds, effects, expenditure, and number of members 
 of the society. These are to be made by the ist 
 June in each year. 
 
 20. The inspection of the books of the society by every 
 
 person having an interest in its funds. This is to 
 be permitted at all reasonable hours at the regis- 
 tered office of the society or at any place where the 
 books are kept. Where the society grants loans 
 to members, the loan account of a member is not 
 to be inspected by another member without his 
 consent. 
 
 21. The manner in which disputes shall be settled. As 
 
 to this the society is perfectly free to adopt any 
 manner of settlement it thinks fit, except that the 
 committee of management, being necessary parties 
 to the dispute, cannot be judges in their own 
 cause. 
 
 22. Where the society divides its funds, it must make 
 
 provision for meeting all claims existing upon the 
 society at the time of division before the division 
 takes place. 
 
 23. Keeping separate accounts of all money received or 
 
 paid on account of every particular fund or benefit 
 assured for which a separate table of contributions 
 payable is adopted. 
 
 24. Keeping a separate account of the expenses of 
 
 management and of all contributions on account 
 thereof. 
 
 25. A valuation once in every five years of the assets 
 
 and liabilities of the society, including the estimated 
 risks and contributions. 
 
 26. The voluntary dissolution of the society by the 
 
 consent of five-sixths in value of its members (a 
 certain increase of voting value being given to the
 
 Industrial Welfare. 51 
 
 older members) and of all those entitled to the 
 actual receipt of benefit at the time. 
 27. The right of a specified proportion of the members 
 to apply to the Chief Registrar for an investigation 
 of the affairs of the society or for winding it up. 
 
 It results necessarily that the rules of each society 
 form a comprehensive code, in which the members are 
 fully informed of the conditions of their contract with 
 each other, and of the remedies which the law provides 
 to secure its due fulfilment, and to enable the individual 
 member to obtain his rights, to watch over the pro- 
 ceedings of the managing body of the society, and to 
 check mismanagement or fraud. The registry office 
 has prepared model rules, which are printed on sheets of 
 foolscap, on one side only; so that the persons intend- 
 ing to form a Friendly Society need only add to the 
 model rules the details of their own particular plan, and 
 send the rules thus framed to the registrar for revision. 
 Otherwise, it is possible they might feel some alarm at 
 the long list of matters they are required to provide for. 
 
 There are some points which it is interesting to note 
 in respect of this code of requirements. The first is, 
 that although the society is required to state what are 
 the conditions under which its benefits are to be insured, 
 no conditions are imposed upon it: its members are 
 perfectly free to insert in the rules any conditions they 
 may think fit. They may promise themselves large 
 benefits for small contributions, if they care to do so. 
 They are not under any compulsion to adopt graduated 
 rates of contribution, or to consult an actuary as to what 
 rates they can charge with safety for sick pay or funeral 
 allowance: they may provide for a periodical distribu- 
 tion of their funds, provided only that they meet such
 
 52 Provident Societies and 
 
 claims as are actually incumbent upon them at the time 
 of the distribution: they are left entirely to their own 
 discretion as to the soundness of the conditions on 
 which they grant insurances. 
 
 The legislature leaves the societies equally free to 
 manage their affairs in their own way. The registrar 
 has no authority to interfere unless the members them- 
 selves call upon him to do so. Even then, he has no 
 power to impose upon the society his own views as to 
 any reforms that may appear to him necessary. The 
 society works out its own salvation. It is true that 
 every society has once in every five years to employ a 
 valuer to value its assets and liabilities. It may employ 
 as such valuer any person who is willing to undertake 
 the work, and when the valuation is made, it is under 
 no obligation to take any action upon it, or to adopt 
 any advice the valuer may give. It may go on its own 
 way to the bitter end. 
 
 From first to last, therefore, the essential principle of 
 the Friendly Societies Act is the voluntary principle. 
 The act compels no society to be registered ; it compels 
 no registered society to adopt any fixed scale of contri- 
 butions and benefits ; it compels no society to carry on 
 its business in any particular way; it compels no society 
 to adopt reforms, however apparent may be the necessity. 
 What the act does provide, however, is that the members 
 of a society shall have ample means of knowing what 
 are the contracts into which they are entering, how their 
 managers are carrying on the business, what is the fin- 
 ancial condition of the concern, and of themselves origin- 
 ating and carrying into effect the reforms which the 
 periodical valuations from time to time show to be 
 necessary. 
 
 Though under the act registry is optional, yet as
 
 Industrial Welfare. 53 
 
 organization and management are voluntary, and the 
 act attaches a number of privileges to registry, which, 
 in the aggregate, are valuable, it would seem surprising 
 that any society should reject these privileges : neverthe- 
 less, it is the fact that for one reason or another a vast 
 number of societies occupying probably as large a field 
 as that occupied by the registered societies remain 
 unregistered. The advantages which a registered society 
 has over an unregistered society are the following: 
 
 1. It can legally hold land and other kinds of property 
 
 in the names of the trustees. 
 
 2. When the property is copyhold land, it may require 
 
 that three trustees should be admitted on payment 
 of the same fines and fees as a single tenant. 
 
 3. Where the property is stock in the funds, it may be 
 
 transferred from a deceased or absent trustee by 
 order of the Chief Registrar, without other legal 
 proceedings. 
 
 4. All other property, including land that is not copy- 
 
 hold, passes from one trustee to another without 
 conveyance or assignment. 
 
 5. Its trustees can carry on all legal proceedings on its 
 
 behalf. 
 
 6. They can invest its money with the National Debt 
 
 Commissioners at a fixed rate of interest, and thus 
 be independent of the rise and fall of stock. 
 
 7. They can invest its money without restriction of 
 
 amount in a Savings-bank or Post-office Savings- 
 bank. 
 
 8. They can discharge a mortgage on which money of 
 
 the society has been invested by merely endorsing 
 a receipt upon it, without a reconveyance. 
 
 9. They can take proceedings against an officer for mis-
 
 54 Provident Societies and 
 
 application of funds, although such misapplication 
 does not amount to larceny or embezzlement. 
 
 10. Where they do not take such proceedings, the Regis- 
 
 trar, or the Committee of Management, may take 
 them, or may authorize a member to do so. 
 
 11. The trustees are entitled to claim property of the 
 
 society from the representatives of a deceased or 
 bankrupt member in preference to all other credi- 
 tors, and even to claim priority over an execution 
 creditor. 
 
 12. They, or the committee, or a general meeting, can 
 
 call upon officers to render an account and to deliver 
 up property in their possession. 
 
 13. Documents of the society are exempt from stamp-duty. 
 
 14. Certificates of birth or death of members, or persons 
 
 insured, can be obtained at a reduced fee. 
 
 15. Members may be admitted at any age exceeding one 
 
 year, and when over sixteen by themselves, or under 
 sixteen by their parents and guardians, may execute 
 instruments and give discharges. 
 
 1 6. Members may insure the funeral expenses of their 
 
 wives and children without risk of forfeiture for 
 want of insurable interest. 
 
 17. Members above sixteen years of age may dispose of 
 
 sums not exceeding 100, payable at their death, 
 by a written nomination. 
 
 18. The trustees, where a member dies intestate and 
 
 has made no nomination, may pay to the person 
 who appears to them to be legally entitled, and 
 such payment is a good discharge to the society. 
 
 19. They may pay on the death of a person of illegiti- 
 
 mate birth as if he had been legitimate. 
 
 20. They can settle disputes in any manner the rules 
 
 provide, and thus avoid the cost of litigation.
 
 Industrial Welfare. 55 
 
 21. Societies are entitled to the services of public 
 
 auditors and public valuers at moderate fixed 
 charges. 
 
 22. Societies (if they grant no annuities exceeding ^30) 
 
 are free of income-tax either under Schedule C or 
 Schedule D. 
 
 23. Their rules, removals, appointments of trustees, 
 
 returns, and valuations, are placed on record at a 
 public office, where they can be inspected. 
 
 24. Copies and extracts of all registered documents 
 
 attested by the registrar are receivable in evidence 
 in courts of justice. 
 
 Some of these privileges such as the exemption from 
 stamp-duty and from income-tax, and the profit rates of 
 interest on investments with the National Debt Com- 
 missioners are actual endowments by the State ; others 
 enable the society to do inexpensively that which other 
 citizens can only do at heavy cost; and others are of 
 great value for the protection of the funds and the due 
 carrying into effect the objects of the society. 
 
 According to the latest complete return of regis- 
 tered societies published, 22,313 Friendly Societies and 
 branches in England and Wales had 3,861,519 mem- 
 bers and ^21,410,563 funds. In Scotland, 1325 societies 
 and branches had 283,512 members and ^1,218,090 
 funds. In Ireland, 360 societies and branches had 
 58,570 members and ^66,386 funds. The total for the 
 United Kingdom was 23,998 societies and branches, 
 having 4,203,601 members and ^22,695,039 funds. 
 
 In addition, there were Collecting Burial Societies, 
 which are registered under "The Friendly Societies 
 Act", but are subject to special regulations under "The 
 Collecting Societies Act 1896", and whose members
 
 56 Provident Societies and 
 
 include a large number of children. Of these, 35 in 
 England and Wales had 3,318,942 members and 
 ^2,289,858 funds; and eight in Scotland had 556,273 
 members and ^423,356 funds. The total for the United 
 Kingdom (there being none in Ireland) was 43 societies 
 with 3,875,215 members and ^2,713,214 funds. The 
 difference between the two classes of societies is marked 
 by the fact that in the ordinary Friendly Society the funds 
 are ^5, 8.y. per member ; in the Collecting Burial Society 
 only 14^. per member. 
 
 The total for the United Kingdom of the two classes 
 of societies together was 24,041 societies and branches, 
 having 8,078,816 members and ^25,408,253 funds. 
 
 Chapter IV. 
 Varieties of Friendly Society. 
 
 Our hypothetical young man will find himself called 
 upon to select the particular society he will join. One 
 consequence of the absolute freedom and voluntariness, 
 which has been shown to be the leading characteristic 
 of the law relating to Friendly Societies, is that each 
 society has been at liberty to organize itself in any 
 manner which has appeared to the members to be most 
 suitable to their circumstances. We have accordingly 
 a great variety of societies. The Royal Commission on 
 Friendly Societies enumerated as many as seventeen 
 classes. It would be outside the scope of this work to 
 express a preference for one class over another, or to 
 recommend one class at the cost of the others, but we 
 may proceed to describe the various methods of manage-
 
 Industrial Welfare. 57 
 
 ment, so as to give the reader the means of exercising 
 a judgment of his own. 
 
 The oldest and most simple form the one that shows 
 most traces of continuity with the ancient guilds is the 
 village club. Meeting for the most part at the village 
 inn having its box for donations by way of casual relief, 
 and its box with three locks for the securities, docu- 
 ments, and uninvested cash, its solemn procession to 
 church on the anniversary day often a day selected 
 from some association with local history it is largely a 
 relic of the olden time. Its organization is usually very 
 simple. It too often has a uniform contribution for all 
 ages at entry, to assure sick pay during life and burial 
 money at death. Its funds keep on increasing while its 
 members are young till it gets a tidy little sum, which it 
 probably invests on a mortgage of a bit of property. 
 When its members grow old, the claims for sick pay 
 increase, and the funds begin to diminish, till at last 
 they diminish so rapidly that the old men share out 
 what there is and close the society. The young men 
 have long since learned that there is no advantage to 
 them in joining the society merely for the purpose of 
 paying sick pay to the older men, but they have not 
 learned much more wisdom: they start another club 
 for themselves on the same principle, think all is going 
 well as long as the funds continue to increase, and then 
 in their turn grow old ; and so the vicious succession is 
 kept up, each club in its turn lasting out its one gener- 
 ation of members. 
 
 Some village clubs have seen the mischief of these old 
 methods, have adopted graduated scales of contribution 
 and other sound principles, and have met with propor- 
 tionate success. The circumstance that such clubs can 
 rarely have a large average of members is against them,
 
 58 Provident Societies and 
 
 but there is great compensation in the consideration 
 that the members generally will be well acquainted with 
 each other. Early in the century the Rev. J. T. Becher, 
 prebendary of Southwell, devised a plan for village 
 societies, and several were founded on his system. They 
 were a great improvement on the old-fashioned clubs, 
 but have now for the most part terminated. One of the 
 latest survivors is the Stewponey Becher Club, in a 
 locality that Mr. Baring Gould has lately made famous. 
 
 As the Orders of Oddfellows, Shepherds, Druids, 
 Foresters, and the like, grew in popularity, the type of 
 the village club was transformed into the type of the 
 lodge, and in the early days of those orders their lodges 
 or other divisions presented the same features of dis- 
 regard of science in equal contributions for all ages and 
 otherwise that we have seen in the village club, and 
 were exposed to the same consequences. In speaking 
 of the early days of those Orders, we are not alluding 
 to their claims of misty antiquity, as having been first 
 established among the Roman soldiers in the time of 
 the Emperor Nero and the like, but rather to the time 
 when they began to be active in the various towns and 
 villages of the country, and to establish themselves as 
 bodies with definite friendly-society benefits. 
 
 With Mr. Frome Wilkinson, we believe that the oldest 
 of the Orders did not originate earlier than the first half 
 of the eighteenth century, and that they had much to do 
 with the revival of Freemasonry during that period. He 
 quotes the Order of Free Gardeners in Scotland, estab- 
 lished in 1715, as the earliest that can now be traced. 
 Like Freemasonry, they were at first mainly convivial, 
 incidentally charitable, and not provident. The late 
 editor of the Oddfellows' Magazine holds that while the 
 Masonic Order maintained intact the traditions of the
 
 Industrial "Welfare. 59 
 
 Masons' craft guild, the Oddfellows comprised a collec- 
 tion from all the others, which were not strong' enough 
 in themselves to carry on a distinctive club. Thus they 
 were not mercers, nor dyers, nor smiths, nor girdlers, 
 nor drapers, but an omnium gatherum, and hence "Odd- 
 fellows". The similarity of ritual and ceremonial is thus 
 fully accounted for. 
 
 If the Oddfellows had followed the same course as the 
 Freemasons, and secured as members "noblemen and 
 gentlemen of the first rank", they would probably have 
 become the same harmless, semi-convivial, semi-bene- 
 volent body that the Freemasons, in this country at 
 least, now are. It is fortunate for them that they re- 
 mained a society of "good-fellowship", consisting of 
 members of the same rank of life, and asking for no 
 patronage. The way was thus left open for their 
 evolution into a great Friendly Society. They began 
 with convivial objects, and with a casual method of 
 relief to distressed brothers. They found that, to pre- 
 vent abuse, and to save the self-respect of such members 
 as might fall into distress, it would be better to raise 
 the fund by a fixed contribution, and to give the member 
 a definite claim to benefit. 
 
 The allowance during sickness, however, continued 
 to bear, in the familiar expression " sick gift", testimony 
 to the original voluntary nature of the relief, as Mr. 
 MofFrey points out, just as the word "donation" is 
 generally used by Trade-unions to denote the sums 
 allowed to members on strike. To Trade-unions the 
 term is the more applicable, as there is no legal right to 
 sue for the benefits ; but to the assurance of sick pay 
 by friendly societies it is not now applicable at all. A 
 further development of the system arose when it was 
 found that the provision of burial money by the lodge
 
 60 Provident Societies and 
 
 would sometimes, when several deaths had occurred, 
 involve a very heavy payment, while at other times 
 years might pass without any payment whatever. The 
 plan of equalizing such payments by combining- the 
 lodges, as far as burial money was concerned, into 
 "districts" at once put an end to this fluctuation, and 
 prepared the way for complete organization of the orders. 
 The society so organized is popularly, if not quite 
 accurately, called an "affiliated Order". Its designa- 
 tion under the statute is "a society having branches". 
 Such societies were not admitted to registry until 1850, 
 and the Act of 1855, which admitted their branches to 
 registry, did so under the perplexing condition that each 
 branch was to be registered as a separate society. 
 
 The Act of 1875, introduced and carried through by 
 Sir Stafford Northcote, Chancellor of the Exchequer, 
 afterwards Earl of Iddesleigh, for the first time gave 
 full recognition to the constitution which such societies 
 had worked out for themselves, and by so doing greatly 
 strengthened the bond between the central body of a 
 society and its local branches, and furthered the judicious 
 measures by which several of the Orders have been 
 enabled materially to improve the condition of their 
 branches. Sir Stafford Northcote, in his capacity of 
 chairman of the Royal Commission on Friendly Societies, 
 had thoroughly acquainted himself with, and learned to 
 appreciate, the work of the Orders, and the statute bears 
 the impress of the sound sense and considerateness that 
 were marked features of his character. 
 
 In every Society having branches, it is necessary that 
 there should be : 
 
 i. A central body, of such composition as the rules of 
 the Society direct.
 
 Industrial Welfare. 61 
 
 2. A fund under the control of the central body, to which 
 
 each branch is bound to contribute. 
 
 3. A fund administered by each branch, or by a com- 
 
 mittee or officers appointed by the branch. 
 
 4. A declaration in the rules, of what control the central 
 
 body shall have over each branch. 
 
 5. Provision enabling the branch to secede from the 
 
 Society. 
 
 A branch cannot alter its rules, or obtain an official 
 inspection, or apply to the Chief Registrar to call a 
 special meeting, or for an award of dissolution, or 
 dissolve itself, without the consent of the central 
 body. 
 
 In the constitution which the legislature has thus 
 impressed upon these Societies, there is a mixture ot 
 centralization with local independence that is very valu- 
 able. The administration of the local fund which is in 
 general the fund for sickness is expressly reserved to 
 the branch, which in other respects is under the control 
 of the central body, subject to the rules. 
 
 The supreme government of each order is vested in 
 an annual or other periodical general meeting, composed 
 of delegates elected by the several branches. This meet- 
 ing, in a large Order, extends over several days, occupied 
 in the discussion of matters affecting the welfare of the 
 Society at large, and of proposals for the amendment of 
 its general rules. In the interval between the general 
 meetings, the functions of the central body are usually 
 discharged by the President and Committee of Manage- 
 ment, under whatever title. Two great Orders distance 
 all the others in importance and number of members 
 the Independent Order of Oddfellows Manchester Unity, 
 which has 787, 962 members, and the Ancient Order of
 
 62 Provident Societies and 
 
 Foresters, which has 731,542. In stating the method 
 of conducting" business, it will be convenient to keep 
 these two Orders in mind, as among Orders generally 
 there is considerable difference in nomenclature and in 
 matters of detail. Some, for example, have no "districts", 
 but only "lodges". We shall use the great Orders as 
 the general model. 
 
 Every year a new President is elected, called by the 
 Oddfellows the Grand Master, and by the Foresters the 
 High Court Ranger. The branches, which by the Odd- 
 fellows are termed Lodges, by the Foresters are termed 
 Courts. To be the chief of one of these great organiza- 
 tions for a year, freely elected by the votes of all his 
 brethren the delegates, who number several hundreds 
 of individuals, and represent hundreds of thousands of 
 members, is a conspicuous honour. 
 
 The President opens the proceedings with an address, 
 in which he recapitulates the matters of importance to 
 the Order which have occurred during his year of office, 
 and refers to such other points of interest to Friendly 
 Societies as he thinks advisable. The Committee of 
 Management, termed by the Oddfellows the Board of 
 Directors, by the Foresters the Executive Council, then 
 present a formal report, which is discussed clause by 
 clause, and its recommendations either adopted, or 
 modified, or rejected. 
 
 After all the matters before the meeting have been 
 disposed of, the President and Committee for the next 
 year are elected, and the retiring President inducts his 
 successor into office. During his year of office the new 
 President devotes as much of his time as he can spare to 
 visiting branches in various parts of the country, and 
 encouraging them by his addresses to persevere in sound 
 management, to extend their membership, to carry out
 
 Industrial Welfare. 63 
 
 any necessary reform, and generally to promote the 
 interests of the Order. 
 
 The records published by the two great Orders do 
 not enable us to go back to the commencement of the 
 Victorian Era, when the recent enactment of the Poor- 
 law compelled men to think of self-help; but, so far as 
 they go, they indicate marvellous progress, and it is fair 
 to infer that that progress was in operation in the 
 previous years. Thus, on ist Jan. 1852, the Manchester 
 Unity had 3219 lodges and 225,194 members. On ist 
 Jan. 1898 it had 4698 lodges and 787,962 members, 
 being an average increase of 32 lodges and 12,234 
 members per annum. On ist Jan. 1865 the amount of 
 funds of the lodges was ^1,796,349; on ist Jan. 1871 
 it was ^2,835,262; on ist Jan. 1898 it was ^8,302, 390, 
 an average increase of ^173,152 per annum in the first 
 period, and ^202,486 in the second. The Foresters' 
 published records go back to ist Jan. 1845, when they 
 had 1456 courts and 65,909 members; by ist Jan. 1852 
 the courts were 1605 and the members 89,875, so that 
 in these respects it had then half the strength of the 
 Manchester Unity; on ist Jan. 1898 the courts were 
 4899 and their members 731,442, being an average 
 increase since 1852 of 72 courts and 13,860 members 
 per annum, and raising the Order nearly to a level with 
 the Oddfellows. The amount of the court funds was 
 not ascertained before December, 1870, when it was 
 ^1,274,935. In the twenty-seven years since that date, 
 the court funds have increased to ^5, 119,842, an aver- 
 age of ^142,404 per annum. One secret of this remark- 
 able growth is to be found in the fact that in December, 
 1870, the number of courts having graduated scales of 
 contributions was only 1 144 out of 3931, or 29 per cent; 
 now the whole of the courts have adopted the system.
 
 64 Provident Societies and 
 
 The practical enforcement of this important reform 
 began in 1872, when the number of courts having gradu- 
 ated scales of contribution increased in a single year 
 from 1345 to 2890, or from 34 per cent to 71 per cent of 
 the courts then in existence, a striking instance of the 
 power for good inherent in the annual general meeting 
 of delegates. 
 
 A curious point in the history of the Orders previously 
 to the passing of the Act of 1875 is the liability to 
 secession. The hold the central body had on the various 
 branches was so weak that whenever a decision was 
 come to on a matter on which a considerable minority 
 of the branches felt strongly, they would break away 
 and form a new order. This tendency has now been 
 checked by the requirement of the Act, that the con- 
 ditions of secession shall be expressly provided for in the 
 rules of each branch. The Manchester Unity itself was 
 a secession from a previous order of Oddfellows ; other 
 orders of Oddfellows have been derived by secession 
 from the Manchester Unity; the Ancient Foresters 
 originated in a secession from a previous body called 
 the Royal Foresters, and has now practically outlived 
 the body from which it seceded. In some cases secession 
 has taken place in opposition to some wise action of the 
 delegates; in others the better branches have been the 
 seceders. 
 
 It is an evidence of the smooth working of the Act of 
 1875 that, while it has enabled the central bodies of 
 societies to exert their legitimate influence and enforce 
 upon the branches necessary reforms, some of which 
 must have been very unpopular with members of the 
 branches principally affected by them, it has entirely 
 checked the tendency to secession, which now only takes 
 place in isolated cases, either of branches which think
 
 Industrial Welfare. 65 
 
 themselves strong enough to run alone, or of others 
 which are too far gone to reform. 
 
 The requirement that there shall be a fund under the 
 control of the central body to which each branch shall 
 contribute is usually fulfilled by the creation of a fund 
 for the relief of branches in distress. By means of such 
 a fund it has been possible to assist a lodge which had 
 been unfortunate, either as the result of miscalculation 
 or of unfavourable experience of sickness, to right itself, 
 or, if that could not be done, to provide for such of its 
 members as are claimants upon the funds. This ar- 
 rangement is sometimes spoken of as being so essential 
 a part of the bond of union between the branches as to 
 amount to a federal guarantee of the benefits of each 
 branch, but it is not so. Each branch is financially 
 independent, and must provide for its own liabilities. 
 The relief from the central fund is discretionary, and is, 
 in general, only granted when the lodge has complied 
 with the provisions of the general rules. It does not 
 either in form or effect amount to an assumption by the 
 central body of the whole liabilities of the lodge. 
 
 The early village club has developed in another direc- 
 tion into the county society. Many village clubs had 
 obtained the patronage of the gentry and clergy as 
 honorary members. In some cases, these honorary 
 members had taken an active share in the management. 
 Their doing so led to the discovery of weak points in 
 the system, and of the instability arising from the small 
 number of members. The suggestion arose that the 
 county gentry might, by acting together as a central 
 body, and by acting locally as local managers, ensure 
 the establishment of the clubs on sound principles; and 
 by centralizing the risks, might get rid of the liability 
 to fluctuation which necessarily imperils the security of 
 
 (M610) B
 
 66 Provident Societies and 
 
 a small local society, however careful its calculation of 
 contributions and benefits may have been. Eminent 
 actuaries were accordingly called in, and elaborate 
 tables of contribution provided to meet the requirements 
 of the members. An honorary fund was raised to meet 
 preliminary expenses and to add to the society's stability, 
 and great care was taken in the investment of the funds. 
 The lines of the institution, combining local manage- 
 ment with complete centralization of the funds, were laid 
 down with thoroughness and precision. 
 
 Many of the societies so formed have realized the 
 expectations of their founders, and have been success- 
 fully and soundly managed; but few of them have 
 become so popular as their carefully-planned system, 
 and the advantages they offer, would have led one to 
 expect. Not one has obtained as members more than a 
 small fraction of the industrial population in its dis- 
 trict. 
 
 For this several reasons might be assigned. The 
 rates fixed by the actuaries in the interests of soundness 
 have been higher than the villagers could easily afford. 
 The share in the management taken by the honorary 
 members has been more than they care to concede. 
 They have the pardonable weakness of preferring to do 
 things in their own way to having things done for them 
 by other people even in a better way. The element of 
 conviviality and good fellowship is sometimes wanting. 
 
 In large towns, the type of village society expanded 
 into a town society, on a large scale, having an office 
 for the transaction of its business, instead of meeting at 
 an inn or school-room. These societies approximated to 
 the county societies in regard to scales of rates and 
 otherwise; but the element of patronage, if present in 
 them at all, was not so to the like extent.
 
 Industrial Welfare. 67 
 
 The next step is the formation of a general society in 
 London or some other large city, which practically 
 becomes an insurance office. The element of personal 
 knowledge by the members of each other is almost wholly 
 absent, and hence a great safeguard against fraud is 
 wanting in these societies that the smaller societies 
 possess. 
 
 Some of these large general societies have grown out 
 of small beginnings and still retain the peculiar features 
 which led to their gradually becoming attractive to 
 an increasing numbers of members. For example, the 
 largest of the class, the Hearts of Oak Friendly Society, 
 has a system of uniform contributions to cover a great 
 variety of benefits. The contribution is not absolutely 
 fixed, but varies by levy, according to the claims made 
 upon the society during the previous quarter. It aver- 
 ages ioy. or los. 6d. per quarter, and covers sick benefits, 
 burial money, allowance on birth of child, assurance of 
 tools against fire, and other allowances, some of them 
 on a liberal scale. It does not provide medical attend- 
 ance, and hence has arisen a practice of forming sub- 
 sidiary medical clubs in certain localities. Another 
 outgrowth of the large society has been the formation 
 of clubs for the purpose of organizing the election of 
 delegates, arising from the circumstance that the mem- 
 bers, being generally unknown to each other, are unable 
 to judge of the merits of the candidates. 
 
 The National Deposit Friendly Society, which grew 
 out of a local society at Albury, under the patronage 
 of the Duke of Northumberland, and was by the energy 
 of the late Canon Portal extended first over a county 
 and then over a considerable part of the country, espe- 
 cially in the southern districts, has become a society of 
 this class, established in London, and the special features
 
 68 Provident Societies and 
 
 of this and other Deposit Friendly Societies may now be 
 mentioned. 
 
 They are based on a system which combines the 
 features of a Friendly Society with those of a Savings- 
 bank, and was invented by the late Hon. and Rev. 
 Samuel Best, who established a society in the village of 
 Abbotts' Ann, Hampshire, where he was rector. Their 
 legal constitution was provided for under the Act of 
 1875 (now s. 42 of the Act of 1896) as societies which 
 provide for accumulating at interest, for the use of any 
 member, any surplus of his contributions to the funds of 
 the society or branch which may remain after providing 
 for any assurance in respect of which they are paid, and 
 which provide for the withdrawal of the accumulations. 
 Before 1875 these societies had been legalized by an 
 authority of the Secretary of State. 
 
 Out of each member's payment, which he is encour- 
 aged to make as large as he can, a certain sum is taken 
 towards the benefit funds of the society, the remainder 
 being credited to him as his own bank or deposit. When 
 he falls ill, a certain proportion of the sick pay fixed 
 when he became a member, upon a scale varying with 
 his age and other circumstances, is taken out of the 
 benefit fund, the remainder he can draw from his own 
 account. When his own account is exhausted, the 
 allowance from the benefit fund also ceases, subject to a 
 provision for a limited allowance of grace pay out of a 
 special fund. When the member arrives at old age, his 
 bank is converted into a pension, which will of course be 
 the larger the more he has saved and the less he has 
 claimed by sickness. The element of insurance in the 
 contract is so small that there is no fear of insolvency, 
 and no necessity for valuation; on the other hand, a 
 member who suffers from prolonged sickness may find
 
 Industrial Welfare. 69 
 
 the relief of the society fail him through the exhaustion 
 of his own bank at a time when he most wants it. 
 
 Akin to these societies in some respects, though widely 
 different in others, are the Dividing Societies, which 
 exist in great numbers, under a variety of names, as 
 Slate Clubs, Tontines, Birmingham Benefit Societies, &c. 
 These also were legalized in 1875 by a provision that no 
 society should be disentitled to registry by reason of a 
 rule for or practice of dividing any part of its funds, if 
 the rules of the society contain distinct provision for 
 meeting all claims upon the society existing at the time 
 of division before any such division takes place. 
 
 Previously to 1875 such societies existed in great 
 numbers, as they do now, but they either remained 
 unregistered, or omitted all mention of the practice of 
 dividing from their rules, or steered a middle course by 
 stating that the division should be subject to the pro- 
 visions of the Friendly Societies Acts. 
 
 When societies of a particular form are established in 
 great number in many parts of the country, without 
 regarding whether the form is the one prescribed or 
 encouraged by law, it is to be inferred that there is 
 something in that form of society which especially meets 
 the wishes and conduces to the interests of its members, 
 and the wise legislator will inquire whether his own 
 views are not too narrow, and whether there may not be 
 something in the form of society which deserves the 
 encouragement of the law. 
 
 It seems a common mistake on the part of legislators 
 that it is within their province to find out for the people 
 that which is for their good and that which is not, to 
 encourage them to follow the former, and to devise 
 brave punishments for those who will persist in follow- 
 ing the latter. This is an absolute error: the province
 
 70 Provident Societies and 
 
 of the legislature is to find out what contracts people 
 desire to enter into, and, when they have entered into 
 them, to see that they fulfil them; not to tell them what 
 contracts they ought to enter into, and what contracts 
 they ought not to enter into. The administrators of the 
 law may not be going beyond their province in offering 
 such advice and guidance as experience may have shown 
 to be useful ; but, in general, people are the best judges 
 of their own affairs, and know their own interests better 
 than the wisest statesman who ever made a blunder 
 and no statesman ever did anything who did not do 
 that. Hence the circumstance that Dividing Societies 
 are popular leads to the conclusion that it is not without 
 reason that they are so. They possess the advantage, 
 that, as a member gets back his surplus payments at 
 the end of the year, he is willing to pay more than the 
 member of a society which looks forward only to the 
 dim and distant future. They have also the advantage, 
 that they frankly provide only for such sickness and 
 death as may occur in the course of the current year. 
 There is no affectation of providing for old age, either 
 directly or indirectly. If the members feel it their duty 
 to provide for old age, they know they must go else- 
 where to do so. There is no pretence that they thought 
 their Slate Club would do it for them. Statesmen have 
 moved on several occasions for returns of the number 
 of paupers in workhouses who have been members of 
 Friendly Societies. Such returns have always been 
 misleading, because they have included those who have 
 been members of Dividing Friendly Societies. On the 
 other hand, these societies have obvious disadvantages. 
 So long as it continues a law of nature that the liability 
 to sickness and death increases with age, so long a club 
 that wipes off the slate each year the transactions of the
 
 Industrial "Welfare. 71 
 
 year will find the increase of age of its members a dis- 
 advantage. The younger men will refuse to join when 
 they find that the club contains an undue proportion 
 of older men. The older men will find the burden too 
 heavy if there are no younger ones to share it with 
 them. Pleasant, therefore, as the annual dividend may 
 be, and attractive as the working of a "Tontine" may 
 be during its earlier years, it is not to be looked upon 
 as a permanent provision, and the wise workman will 
 not waste his dividend, but will so apply it as to form 
 a provision for the time when the Slate Club ceases to 
 be available. 
 
 Another class of Friendly Society has grown up in an 
 interesting manner. For many years village clubs and 
 lodges have had excellent relations with the local doctor. 
 For a small payment by each man, whether well or ill, 
 the doctor has undertaken to attend the members when 
 they are ill, to watch over the interests of the society, 
 and to examine candidates for membership on admission. 
 In the larger towns a modification of this arrangement 
 became possible. By all the clubs combining their 
 medical funds together, a considerable staff of medical 
 men could be retained, and the members of each club 
 could be allowed their choice among them. Everyone 
 knows how largely the personality of the doctor affects 
 his patients, to whom he seeks to be a friend as well as 
 a medical adviser, and accordingly how everything that 
 tends to give freedom of choice between doctor and 
 patient is an advantage. A third development has 
 taken place. The combination of the medical funds of 
 the various clubs into one has in many places raised a 
 fund sufficient to retain the whole services of one or 
 more qualified medical men, and to establish a dispen- 
 sary house, where the medical officers reside. The
 
 72 Provident Societies and 
 
 relation of the medical men so appointed to the societies 
 which employ them becomes entirely different from that 
 of the old-fashioned club doctor, and hence some friction 
 has arisen between friendly societies and the medical 
 profession. It is alleged that persons make use of these 
 medical aid associations who are in receipt of an income 
 which ought to enable them to consult their own doctor 
 and pay him his proper fees, and that thus the desire of 
 the medical profession to co-operate with Friendly So- 
 cieties and accept low fees has been abused. It is also 
 alleged that some of the medical aid associations canvass 
 for members, and thus involve their medical officers in 
 unprofessional practices. It is moreover alleged that 
 the salaries paid to the medical officers are so low as to 
 amount to "sweating". 
 
 Where the medical associations are merely a combina- 
 tion of existing Friendly Societies and branches for the 
 purpose of obtaining medical aid, we think they are but 
 little open to these complaints. It is true that members 
 of such societies, being thrifty, careful men, often get 
 on in life, and yet desire to retain their membership and 
 their interest in the societies, but such men are not likely 
 to take advantage of the benefits of the medical asso- 
 ciation, though they have to contribute to its funds; and 
 the circumstance that to qualify for membership of the 
 medical association, a man must be already a member 
 of a friendly society, in which his interest is much 
 greater, disposes of the risk of canvassing; while in 
 regard to mere underpayment, the societies are generally 
 willing to meet their medical officers fairly. The asso- 
 ciations which are most open to these complaints are 
 those which admit the public generally to their benefits, 
 and thus become essentially trading concerns. These 
 are in general established under other acts than the
 
 Industrial Welfare. 73 
 
 Friendly Societies Act, to the benefits of which they can 
 hardly be said to be entitled. As this distinction becomes 
 more clear, it is to be hoped that the excellent relations 
 between Friendly Societies and the medical profession 
 will be re-established. The prosperity of a Friendly 
 Society so largely depends upon having- as its medical 
 adviser one who will safeguard its funds by his vigilance 
 over claims for sick pay, and will use his professional 
 skill to restore the health of the members as quickly as 
 may be, that anything which raises a cloud between the 
 societies and the medical men is greatly to be regretted. 
 The Act of 1875 provided that no person should be a 
 member of a society under the age of 16 years, except 
 in a society consisting wholly of persons above the age 
 of 3 years and under the age of 16. The Act of 1887 
 allowed the societies so constituted to extend the maxi- 
 mum age to 21. As, however, no person can be a 
 trustee, treasurer, or member of the committee of 
 management of any society who is under the age of 
 21 years, the juvenile societies created under these 
 enactments present the anomaly of being societies which 
 are incapable of being self-managed, and are thus a 
 wholly exceptional class, as the guiding principle of the 
 act is the self-management of societies. This has had 
 one curious consequence that as sickness and death 
 are relatively infrequent between the ages of 3 and 21, 
 these separate juvenile societies have sometimes accumu- 
 lated considerable funds, which, as the members cease 
 to belong to them at a given age, remain unclaimed. It 
 would appear from legal decisions, that such unclaimed 
 funds are bona vacantia and belong to the Crown. The 
 Act of 1895 put an end to all the anomalies incident to 
 juvenile societies by enacting that every society may 
 have members at any age exceeding one year. In order
 
 74 Provident Societies and 
 
 to facilitate the termination of the separate existence of 
 juvenile societies, and to ensure the just application of 
 their funds, the same act provided a simple machinery 
 for the amalgamation of a juvenile society with an 
 ordinary society or branch, or for the distribution of the 
 members among- several branches. It is to be hoped 
 that by this means an end may speedily be put to these 
 utterly anomalous bodies : but the conservatism of the 
 working-man is so great that as yet there is a strong 
 disinclination to adopt the simple method of the act for 
 doing so. 
 
 Chapter V. 
 Burial Societies. 
 
 The groups of societies which have been discussed in 
 the last chapter have been those which have for their 
 principal object the assurance of sick pay, to which 
 funeral allowance, relief in distress, and other benefits 
 are secondary. There is a large class of societies which 
 assure no sick pay but only burial money, and as the 
 more important of these are regulated by a special 
 statute, it will be convenient to consider them in a 
 separate chapter. We have already referred in Chapter 
 III. to the origin of this form of society. 
 
 The Burial Societies of all classes are to be distin- 
 guished from other societies by the smallness of the 
 interest of each member, by the circumstance that a 
 large proportion of the members are young children, and 
 that, in comparison with the members of other societies, 
 the members are not so well off in a financial point of 
 view, nor so well educated. For all these reasons, the
 
 Industrial Welfare. 75 
 
 member of a burial society does not count for so much 
 as the member of an ordinary friendly society. 
 
 A number of the Burial Societies are local. The towns 
 of Preston, Macclesfield, Blackburn, and Chorley have 
 many societies of this class, and in Manchester, Salford, 
 and other large places in Lancashire and the north they 
 are also frequent. They usually employ collectors, but 
 the collectors only work within the limits of the town, 
 and in some cases the collectors are themselves mem- 
 bers. The expenses of management are not unduly 
 heavy, and the societies fulfil a requirement that is felt 
 very strongly by those who join them. It is not to be 
 doubted that the provision of burial money is an object 
 that is very important to those whose income is too 
 small to meet the expenses caused by death in a family, 
 and that their sentiments are greatly concerned in being 
 able to render the last offices of respect to the dead, and 
 being saved the humiliation and indignity of having to 
 leave to the parish the duty of burying the remains of 
 those to whom they were attached in life. 
 
 The existence of this sentiment has resulted also in 
 the formation of societies, counting their "members" 
 by the million, extending their operations over the whole 
 of the United Kingdom, and employing an army of col- 
 lectors, under the command of well-paid officers. These 
 societies are known as "collecting societies", and all 
 such as have been registered since ist Jan. 1896 are 
 required to adopt "Collecting Society" as the last words 
 of the registered name. The provisions of the Friendly 
 Societies Act apply to such of the societies as are regis- 
 tered under it; and those of the "Collecting Societies 
 and Industrial Insurance Companies Act 1896" apply 
 to all collecting societies, whether registered or unregis- 
 tered, and to all industrial insurance companies which
 
 76 Provident Societies and 
 
 receive contributions by means of collectors on a similar 
 system. The requirements of this act are that every 
 member or person insured is to have a copy of the rules 
 and a printed and signed policy, at a cost not exceeding 
 one penny for each; that before the society can take 
 advantage of any forfeiture for non-payment of contri- 
 butions, it must give fourteen days' notice to the member 
 and allow him the opportunity of paying the amount ; 
 that a member is not to be handed over from one society 
 to another without his written consent ; that notice is to 
 be given to the members of general meetings and of any 
 proposed amendment of rules; that the balance-sheets 
 are to be open for inspection during seven days before 
 the annual meeting is held, and are to be certified by a 
 professional accountant, as well as by the auditors ; that 
 disputes may be settled by the County Court or the 
 magistrate for the place where the member or claimant 
 lives; that collectors are not to hold office on the com- 
 mittee of management, or vote, or take part in the pro- 
 ceedings of meetings; and that all these provisions of 
 the Act are to be set forth in the rules of the Societies. 
 The members are thus in possession of information as to 
 their rights in respect of management, and are protected, 
 if they choose to avail themselves of the protection, 
 against some of the practices which were alleged to have 
 been carried on by these societies before the Act of 
 1875 was passed. 
 
 It will be seen that in the nature of things the indi- 
 vidual member must be of small account in the manage- 
 ment of such a society. It becomes in fact an insurance 
 company, without any capital or body of shareholders. 
 In two of the largest of these societies a remedy for 
 this has been sought to be provided by the establishment 
 of a system of delegates, elected at local meetings held
 
 Industrial Welfare. 77 
 
 in every place where there are a sufficient number of 
 members to claim representation. So far this system 
 appears to have worked fairly well. One main objection 
 to this class of society lies in the expense incurred. Out 
 of the small contributions paid by members, nearly half 
 is absorbed in expenses of management. The labour of 
 collecting small contributions from house to house is no 
 doubt very great, and the collectors have to get through 
 a large amount of work in order to earn a living wage : 
 at the same time, the circumstance that a collector's 
 " book" is a saleable commodity, for which a consider- 
 able sum can be obtained, seems to indicate that the 
 collectors are not underpaid. It is a rather curious 
 incident of this class of business that the " good-will " of 
 it, as represented by the " book", is treated as the pro- 
 perty of the collector, and not of the society. In the 
 rules of some societies, an attempt is made to control 
 these transactions of sale and purchase, but it is gener- 
 ally recognized that the sale is for the benefit of the col- 
 lector. Hence arises that paramount influence of the 
 collector in the affairs of the society which the legis- 
 lature has endeavoured to check. In a large society, 
 the management fund leaves a margin also for liberal 
 remuneration to the chief officers. A society into which 
 the Hon. E. Lyulph Stanley held an inspection some 
 years ago, had two general secretaries, who each received 
 between ^5000 and j6ooo a-year salary. The existence 
 of rich prizes like this led to continual conflicts in the 
 meetings between the body in possession, who naturally 
 desired to retain their emoluments, and expectant bodies 
 outside, who equally naturally wished to enjoy a share 
 in them. This, and the circumstance that the emolu- 
 ments increased with the business done, led to grave 
 mischiefs in the management, of which Mr. Stanley
 
 78 Provident Societies and 
 
 records some remarkable instances. The meetings were 
 often scenes of disturbance, and many illegalities and 
 irregularities took place. 
 
 The result of Mr. Stanley's investigation was that 
 the two managing secretaries resigned their position, 
 which may be taken as an indication that there was 
 good ground for setting the investigation on foot. 
 Various reforms were made in the procedure of the 
 society, and Mr. Stanley himself consented to become 
 a trustee of it, and has thus been able to watch over the 
 manner in which these reforms have been carried into 
 effect. 
 
 These reforms, however, only to a moderate degree 
 affect the great difficulty of dealing with societies of this 
 class, arising from the unavoidably high expense of 
 management. The question has often been asked Can 
 no other machinery be devised by which the benefits of 
 burial assurance can be obtained for the great body of 
 the industrial population at a less expense? Cannot 
 the Post-office, or some other Government department, 
 undertake to do the work at a less cost? We think 
 that the answer must necessarily be in the negative, so 
 long as the insurers insist upon their contributions being 
 collected from them at their own homes. In the majority 
 of cases it is the mother who transacts the business with 
 the collector, and saves up and pays to him the few 
 pence which insure her own and her husband and child- 
 ren's funeral money. She will not go to the Post-office 
 to pay it, and the Post-office, if it is to do the same 
 business which is now done by the collecting society, 
 must go to her. That possibly might be done without 
 great additional cost if she were a person having a large 
 correspondence, but she is of a class the postman rarely 
 visits, and a special collecting postman would have to
 
 Industrial Welfare. 79 
 
 be put on for her. More than this the collector who 
 receives the money, and thus makes a saleable "book", 
 earns the value of his book by the arts of persuasion 
 which he uses upon these poor mothers to induce them 
 to effect the insurances; and the special postman, if he 
 is to be a success, would have to learn to use the same 
 arts of persuasion, and would thus become as much 
 unlike the ordinary government officer as could be. 
 
 The Collecting Societies Act extends also to Industrial 
 Assurance Companies. These differ from the Collecting 
 Societies in having a more or less numerous body of 
 shareholders among whom the profits of the business 
 are divided. The largest of them is the Prudential 
 Assurance Company, which can boast of having upon 
 its books about one-third of the whole population of the 
 country. It has in existence 13 million policies, and its 
 accumulated funds amount to ^30, 438,000. It need 
 hardly be said that its shareholders are very fortunate 
 persons. 
 
 There are two points in respect of this group of soci- 
 eties and companies which are worthy of consideration : 
 the first is, that there seems reason to believe that many 
 persons are insured repeatedly in one and another office, 
 and frequently the persons effecting, or hoping to profit 
 by the insurance are persons who have no real insurable 
 interest in the life. The legal consequence of this is 
 that such policies are void; but as the forfeiture would 
 be in favour of the society or company, this does not 
 operate to prevent the contract being entered upon, and 
 the society or company rarely avails itself of the defence, 
 on account of the unpopularity and loss of business that 
 would follow. It is greatly to be feared, therefore, that 
 illegal insurances are frequently effected. 
 
 The second is, that a considerable portion of the profit
 
 8o Provident Societies and 
 
 made by these societies and companies arises from the 
 lapsing of policies. That was the case in earlier times 
 with all assurance companies; but the ordinary policy- 
 holder now knows his rights, and rarely suffers a valu- 
 able policy to lapse. In industrial assurance companies 
 the policy-holders are still in the early stage, and policies 
 are frequently allowed to lapse after they ought to have 
 acquired a surrender value. 
 
 In the Collecting Society, father, mother, and all 
 children above one year of age count as separate mem- 
 bers. The great extension of this practice of the insur- 
 ance of children has led to grave apprehensions as to its 
 effect on infant mortality. In a few cases, convictions 
 for child-murder have been obtained, and it has been 
 shown that the burial money has been an inducement 
 to the crime. The same thing might be said of ordinary 
 insurance. We think it would be a libel on the great 
 body of the population who are members of burial soci- 
 eties to say that they are so sordid and so false to 
 parental instinct as to wilfully kill their children for the 
 purpose of enjoying the small sum of burial money for 
 which they have been insured. If such a horrid practice 
 prevailed, it would be in the interests of the societies 
 themselves to stop it. There is no evidence that it does 
 prevail. The members of burial societies are so poor 
 that a small sum appears large to them, and the burial 
 money comes as a consolation when a child is lost. The 
 lines of Clough have been quoted in this connection : 
 
 " Thou shalt not kill, but needst not strive 
 Officiously to keep alive ". 
 
 Whether a tendency to neglect may not be sometimes 
 unconsciously fostered by the existence of the burial 
 money contract may be questioned.
 
 Industrial "Welfare. 81 
 
 The legislature has endeavoured to meet this by some 
 stringent provisions as to payments on the death of 
 children under ten : 
 
 1. The money is not to be paid to anybody but the 
 
 parent, or the personal representative of the parent 
 who survived. It is to be feared that some societies 
 interpret the term "personal representative" with 
 laxity, and it is certain that insurances are some- 
 times effected by persons other than the parent. 
 
 2. The sum to be assured or paid on the death of a child 
 
 under five years of age is not to exceed 6. This 
 seems a larger sum than necessary, and the House 
 of Lords in 1875 amended it to ^3 ; but this amend- 
 ment was disagreed with by the House of Commons 
 when the bill returned to that house. 
 
 3. On the death of a child between five and ten, 10 
 
 may be insured. 
 
 4. Where the child is insured in more than one office, 
 
 the total insurances must not exceed these limits. 
 
 5. No payment is to be made except upon produc- 
 
 tion of a special certificate from the registrar of 
 deaths. 
 
 6. The registrar is to state in the certificate the name 
 
 of the society to which it is to be produced, and the 
 amount of the claim said to be due from it. 
 
 7. Where he grants more than one certificate, he shall 
 
 number them consecutively, and the total amount 
 of claim for which he issues them is not to exceed 
 the limits. 
 
 8. He is not to issue a certificate unless the cause of 
 
 death is medically certified, or other satisfactory 
 evidence of the cause is furnished. 
 
 9. The society is to inquire what sums have been paid 
 
 (M610) f
 
 82 Provident Societies and 
 
 by other societies when the certificate does not pur- 
 port to be the first. 
 
 Cases have arisen which show that these provisions 
 require strengthening-. It should be observed that they 
 apply to all Friendly Societies, whether registered or 
 unregistered, and to Industrial Assurance Companies 
 and Trade -unions. Industrial Assurance Companies 
 and registered Friendly Societies are exempted from the 
 provisions of the Life Assurance Act 1774, which render 
 void all insurances where the person insuring has no 
 interest in the life insured. 
 
 Deplorable instances of fraud have occurred in Col- 
 lecting Societies, in some of which the perpetrators have 
 been prosecuted to conviction. In the absence of fraud, 
 there ought not to be much risk of these societies be- 
 coming insolvent, inasmuch as their premiums are ample 
 to cover the benefits insured. If the rates charged are 
 compared with those of an ordinary insurance company, 
 it will be seen that, even after allowance is made for the 
 heavy expenditure of the Collecting Society, there is a 
 considerable margin left in the premium for profit. 
 
 It has accordingly been suggested that where a society 
 of this class shows a balance deficient, there should be 
 vested in some authority the power compulsorily to wind 
 it up, inasmuch as the existence of the deficiency is in 
 itself proof of mismanagement, and affords strong pre- 
 sumption of fraud. Nothing in the statutes, however, 
 deals with these societies on any footing other than that 
 of voluntary action, and the registrar has no more autho- 
 rity to institute proceedings of a compulsory character 
 against societies of this class than against societies ot 
 any other class. In each case, he must be moved to 
 action by the members themselves. It is true that while
 
 Industrial Welfare. 83 
 
 in a society of less than a thousand members, it requires 
 one-fifth of the whole number to set him in motion, in 
 a society of loco or more, 100; and in a society of more 
 than 10,000 members, 500 can do so. Except through 
 the medium of the collectors, 500 signatures cannot 
 easily be obtained, and therefore such applications are 
 frequently set on foot by dissatisfied collectors, and 
 become only incidents in the chronic struggle between 
 those who are in the management to keep there, and 
 those who are out of it to get in. It is rarely that the 
 registrar is called upon to act by the spontaneous im- 
 pulse of the members themselves. For the reasons that 
 have been already given, they have not sufficient interest 
 in the society to be moved to such action, and they have 
 not the means of combination. Yet, in many cases, 
 these powers of the registrar have been usefully exer- 
 cised as in the case of the inspection of the Royal Liver 
 Society, conducted by Mr. Lyulph Stanley; the special 
 meetings of the Royal Liver, the Scottish Legal, and 
 the Liverpool United, or Royal Oak, in each of which 
 a change in the system of management had become 
 necessary, and precautions were taken to ensure order 
 at the meetings, and to secure that the sense of the 
 members was taken. In other cases, as that of the 
 Independent Mutual Brethren, where the insolvency of 
 the concern was evident, an application by members for 
 an award of dissolution enabled a complete investigation 
 to be made into the frauds which had led to the disaster.
 
 84 Provident Societies and 
 
 Chapter VI. 
 Financial Position of Friendly Societies. 
 
 For the person who desires to join a Friendly Society 
 it is not sufficient that he should understand the pecu- 
 liarities of its constitution. It is much more important 
 that he should know something about its financial con- 
 dition. The man who joins an insolvent society is aptly 
 described by the sarcastic words of the prophet Haggai, 
 " He that earneth wages, earneth wages to put it into a 
 bag with holes ". 
 
 The first point to be considered is the nature of the 
 contract of insurance against sickness. Sickness, in the 
 language of Friendly Societies, does not denote merely 
 a pathological condition. It means inability to work, 
 produced by disease or infirmity. In some cases it 
 extends to both bodily and mental disorder, and to 
 infirmity produced by lameness, blindness, insanity, &c. 
 In other cases it is limited to inability to work produced 
 by acute bodily disease. 
 
 It follows that sickness which does not cause inability 
 to work does not constitute a claim on a Friendly 
 Society. The occupation of the member thus becomes 
 a material element; inasmuch as men of one occupation 
 may continue able to work at it during an illness that 
 would disable men of another occupation. There is 
 also the moral consideration, that a man of firm mind 
 and industrious temperament will continue at work, 
 when a man of weak, flabby, and lazy disposition would 
 lie up for the same disorder. 
 
 It is clear from this that no model tables derived from 
 the experience of other societies will of themselves
 
 Industrial Welfare. 85 
 
 ensure the solvency of a society; and this is one of the 
 many reasons why the legislature has wisely refrained 
 from prescribing 1 model tables, or from accepting any 
 responsibility for the terms of the contracts that mem- 
 bers of Friendly Societies enter into. Any other policy 
 would be a distinct encouragement to the lazy as against 
 the industrious, and to laxity of administration as 
 against care. It could not be carried out with safety 
 unless the State took upon itself the whole management 
 of the societies, and reduced them to a Government 
 department. 
 
 It is nevertheless essential that a society should 
 charge sufficient and equitable rates of premium for the 
 benefits that it assures: for though they cannot of them- 
 selves secure success, independently of careful adminis- 
 tration, good management of itself would be of no avail 
 if the rates of contribution were insufficient or inequitable. 
 
 Those who were interested in Friendly Societies saw 
 from a very early stage in their working that the only 
 way to ascertain what were the proper contributions to 
 be charged for sick pay would be to tabulate the ex- 
 perience of the societies themselves, and to do so on a 
 scale so large that the errors of one society in paying 
 too much might be corrected by those of another society 
 in paying too little. The first important attempt of this 
 kind was made by the Highland Society in 1824. By 
 offering prizes for the best returns, it obtained informa- 
 tion from seventy societies in Scotland, and its observa- 
 tions included more than 100,000 individuals. 
 
 In 1835 Mr. Ansell published the results of a similar 
 collection of information made by the Society for the 
 Diffusion of Useful Knowledge. 
 
 Meanwhile the Act of Parliament had been passed 
 which required every Friendly Society once in every
 
 86 Provident Societies and 
 
 five years to make a return, in a prescribed form, of the 
 sickness and mortality it had experienced. The returns 
 thus collected for the five years 1836-40 were intrusted 
 to Mr. F. G. P. Neison the elder, who published the 
 abstracts in a work called Vital Statistics. He dis- 
 tinguished them into rural, town, and city districts : the 
 rural districts having- greatly the advantage of the others 
 in respect both of sickness and mortality. 
 
 In 1850 the Corresponding Secretary of the Manches- 
 ter Unity of Oddfellows, Mr. Henry Ratcliffe, published 
 a Return of the Sickness and Mortality experienced by 
 the Lodges of that Order. This also was distinguished 
 into rural, town, and city districts. He issued a second 
 series of tables in 1862, and a third series in 1872. This 
 latter included 1,321,000 years of life, and was adopted 
 by the Treasury in the regulations made for the guid- 
 ance of Public Valuers as the standard table to be used 
 by them pending the preparation of tables from the 
 quinquennial returns from 1856 to 1880. 
 
 The quinquennial returns to 1850 were abstracted in 
 1854 by Mr. A. G. Finlaison, the actuary to the Com- 
 missioners for the Reduction of the National Debt, who 
 prepared a series of tables from them, in which he 
 excluded cases of chronic and prolonged sickness, so 
 that the tables were not available for societies which 
 granted allowances during such sickness, and thus 
 Ratcliffe's tables were preferred. The subdivision 
 adopted was into light labour and heavy labour. 
 
 In 1896 the largest series of observations yet made 
 was published in a blue book of 1367 folio pages. It is 
 based on the quinquennial returns from 1856 to 1880, 
 and was prepared by Mr. W. Sutton, the Actuary to the 
 Registry of Friendly Societies. The tables are based 
 upon the experience of 4,480,809 years of life.
 
 Industrial Welfare. 87 
 
 They are divided into five groups, the result of the 
 returns for males from 1856 to 1860, 1861 to 1870, 1876 
 to 1880 being given separately, and also those for 
 females, and for males in Wales, representing the 
 mining districts. With regard to the group of males, 
 1876 to 1880, representing 1,662,562 years of life, a 
 subdivision is effected into five smaller groups, accord- 
 ing to the population of the places where the registered 
 offices of the societies are respectively situate, so that 
 those in places having a population under 2000, between 
 2000 and 7000, between 25,000 and 100,000, and above 
 100,000 can be distinguished. In order that societies 
 may have the means of ascertaining the value of every 
 variety of liability which they are in the habit of under- 
 taking, separate values are given for every four weeks 
 of sickness during the first year of sickness, for each 
 half of the second year, and for three years and up- 
 wards. From these the value of every combination of 
 full pay, half pay, and reduced pay can be ascertained. 
 
 It may be stated generally that, as compared with 
 previous observations, these tables give an increased 
 liability to sickness. Whether this arises from the fact 
 that sickness claims are actually increasing in Friendly 
 Societies, or that previous observation consisted mainly 
 of societies which had had a favourable experience, or 
 from some other cause, it is not easy to determine. 
 
 The tables indicate, among other things, the extreme 
 importance of the rate of interest. The liabilities for 
 sick pay of a society consisting of members of 30 years 
 of age which could invest its funds at 4 per cent would 
 be, in present money, ^43, 14^. io</. for every i a 
 week sick pay insured: those of a society which could 
 only obtain 2j^ per cent on its investments would be, in 
 present money, ^,65, i is. , or almost half as much again.
 
 88 Provident Societies and 
 
 The several collections of observations to which we 
 have referred differ in many minor points, but they all 
 agree in one that the liability to sickness, in the 
 Friendly-Society sense of the word, increases with age, 
 slowly at first, between the ages of 20 and 40, after- 
 wards more rapidly, and that as men reach the more 
 advanced ages the increase becomes so great that it is 
 practically not to be distinguished from a pension. In 
 other words, that an age comes when man is not able 
 to work any longer, and that age is approached by a 
 gradual increase of the length of time during which 
 man, on the average, is unable to work. 
 
 Now, if we remember that the primary object of a 
 Friendly Society is to provide for such inability to work 
 through sickness as may occur to any man in the best 
 years of his working life, and that it is only a secondary 
 object to provide for that inability to work which must 
 come to every man sooner or later after those best years 
 are over, we shall see that there is a great practical 
 advantage in keeping those two ideas separate. 
 
 There are many ways of providing for old age; but 
 there is no other way of providing for the casual sick- 
 ness which for the time dries up all the sources of 
 income, and adds its own burdens of expenditure, than 
 that offered by the Friendly Society. If the assurance 
 against sickness is limited to the years of working life, 
 the amount of funds required to be accumulated by the 
 society for future years will not be so large as if the 
 assurance is continued during old age. Some accumu- 
 lation will be necessary; because the liability to sickness 
 during the years from 40 to 65 is much greater than the 
 liability to sickness during the years from 20 to 40, and 
 the contribution must be so fixed as to be sufficient for 
 both.
 
 Industrial Welfare. 89 
 
 The contribution, therefore, which every member pays 
 to the sick fund of his Friendly Society may be divided 
 into two parts the one, that which corresponds to the 
 actual sickness which he and other members of the same 
 age experience on the average during the current year; 
 the other, that which is to be accumulated so as to 
 provide for the sickness of future years. As time goes 
 on, the first part of the contribution becomes larger and 
 larger, till it leaves nothing for the second part, and 
 then the member has to draw upon his accumulation. 
 Assuming, for the sake of illustration, that a society 
 consisted wholly of persons of the same age, and that 
 sick pay and contributions both ceased at the age of 
 65, then the amount accumulated at the end of the 
 sixty-fourth year of age of the members, and their con- 
 tributions during the sixty-fifth year, would (if the 
 society had worked out according to the tables on 
 which its contributions were calculated) exactly equal 
 the sickness experienced during that year, and at the 
 end of the year the last week's sick pay would be paid 
 to the last member sick out of the contributions of the 
 last members not sick, and the sick fund would come to 
 an end. If, however, the sick pay and contributions 
 were not to cease at 65, but to continue throughout 
 the whole of life, then at the end of the members' sixty- 
 fifth year of age it would be necessary for the society to 
 have still in hand a large sum, representing the probable 
 excess of the sick claims over the contributions during 
 the whole remainder of the lives of the members; and 
 thus it is easily to be seen that to insure sick pay during 
 the whole of life would require a much larger contribu- 
 tion and a much longer continuance of accumulation 
 than to assure sick pay for a limited time only. 
 
 The supposition that all the members are of the same
 
 QO Provident Societies and 
 
 age has only been used for simplicity of illustration. It 
 does not occur in practice. Where the members are of 
 different ages the calculation of the amount of accumu- 
 lation that the society ought to have, becomes a matter 
 of some difficulty, and the method of effecting it is called 
 a valuation. As the law requires such a valuation to be 
 made once at least in every five years, it is called the 
 Quinquennial Valuation. This is a process which can 
 only be performed by a professional actuary, or by 
 someone who has mastered at least enough of the 
 elements of the actuarial profession to know the meaning 
 of the algebraical formula involved. 
 
 As the returns of sickness and mortality experience 
 contain a number of auxiliary tables by which these 
 calculations may be made, a general comprehension of 
 the principles of valuation is not difficult of attainment ; 
 and it would be very desirable that it should form one of 
 the subjects taught at every public elementary school. 
 As the scholars will be the members of Friendly Societies 
 of the future, nothing could be more useful to them than 
 to be well drilled in the mathematical basis upon which 
 the soundness of those societies rests, and nothing 
 would do more to check the spread of societies formed 
 on the unsound methods of equal rates and periodical 
 division than the dissemination among the young of a 
 real knowledge of the true conditions of sickness assur- 
 ance. 
 
 In the absence of this knowledge, the members of a 
 society, when its funds increase from year to year, some- 
 times look upon the increase as in itself conclusive 
 evidence that the society is prosperous ; but that is not 
 so : the society may be increasing its liabilities to a much 
 greater extent than the increase of its funds, and the 
 test of a valuation may show that it is actually going
 
 Industrial "Welfare. 91 
 
 downhill. So rooted is the idea that the increase of 
 funds must mean prosperity that we have known cases 
 where the members of a society have refused to act upon 
 the report of the valuer, believing that the adverse 
 result which it showed must have been due to a mistake 
 on his part. It would be a most effectual cure for 
 delusions of this kind if the young were taught some- 
 thing of the science of Friendly Society calculations. 
 
 There is an error on the other hand that should also 
 be guarded against. The aspect of a valuation is to- 
 wards the future, not the past. When a valuer declares 
 that such a society has a deficiency of so many thousand 
 pounds, that is not the same thing as saying that some- 
 body has embezzled so many thousand pounds of the 
 society's cash, or that its bank has broken, or its invest- 
 ments been depreciated to the same extent. It does not 
 mean more than this: that if the society continues to 
 carry out its existing contracts without modification, 
 and does not take any measures to improve its position, 
 a deficiency will ultimately accrue, of which the present 
 value is so many thousand pounds. 
 
 Assuming that the society took the heroic course of 
 raising the money, which is rarely practicable, the result 
 would be, that if the valuer's estimates should turn out 
 to be confirmed by the actual future experience of the 
 society, and if the society admitted no new members, the 
 last member would receive the last pound, and the 
 society would work itself out. The same result would 
 be obtained by diminishing the future benefits to the 
 extent to which the deficiency represents the present 
 value of such benefits for example, if the valuer found 
 the present value of the future benefits to be ^20,000 
 and the deficiency to be 5000, the reduction of the 
 future benefit by an average of one -fourth would
 
 92 Provident Societies and 
 
 wipe out the deficiency. It could in like manner be 
 obtained by increasing the future contributions, or by a 
 combination of both methods. The practical skill and 
 competence of the valuer are greatly tested by the 
 measures he recommends the society to adopt for effect- 
 ing the necessary adjustment. 
 
 Some interesting examples may be given of how a 
 valuation deficiency may be met. A society in Warwick- 
 shire had a deficiency of ^4396. In the course of the 
 next five years it increased its funds from ^10,880 to 
 ^"13,361, and so reduced its benefits that their present 
 value was diminished from ^26,024 to ^20,922, or 
 nearly 20 per cent (4^. in the pound). The result was 
 that the next valuation showed a surplus of ^2045. A 
 society in Middlesex was in the apparently hopeless 
 condition that its funds were ^3720 only, and its valua- 
 tion deficiency was ^5023. This society took such 
 vigorous steps for increasing its funds and extending its 
 business, upon properly calculated rates of premium, 
 that in five years it had raised its capital to ^10,297, 
 and though it had increased the value of its estimated 
 future liabilities from ^40,282 to ^77,333, the valuation 
 brought out a surplus of ^413. A third society, in 
 Surrey, was in a position which even the most heroic 
 measures would hardly have seemed sufficient to re- 
 trieve. Its funds were only ^3471, yet its estimated 
 valuation deficiency was ; 18,131. There could be 
 nothing in such a case short of a drastic dealing with 
 the promised benefits, the value of which was reduced 
 in the next valuation from ^22,770 to ^9874, or more 
 than 56 per cent (us. in the ]. The funds were also 
 increased to ^4912, and the valuation showed a surplus 
 
 of ;378- 
 
 These examples may serve to show that the condition
 
 Industrial "Welfare. 93 
 
 of valuation "deficiency" is rarely a hopeless condition. 
 We wrote the following' words in 1881, and nothing that 
 has since occurred has shown them to be incorrect: 
 " A word of caution may be added against forming- too 
 hasty conclusions adverse to Friendly Societies if it 
 should turn out that the valuations in many cases show 
 an estimated deficiency in the funds to meet the liabili- 
 ties. It would be strange if it were otherwise when for 
 the first time scientific tests are applied to contracts 
 that have been in operation without a scientific basis for 
 a long series of years. It must be borne in mind, how- 
 ever, that nothing is more elastic than the contract 
 made by a Friendly Society with its members; no error 
 more easy of remedy, if found out in time, than one ex- 
 isting in the original terms of such a contract. Hence 
 the words ' insolvency', 'rottenness ', and the like, which 
 we sometimes hear freely used as describing the general 
 condition of Friendly Societies are utterly out of place. 
 Of Friendly Societies in general it may be said that as 
 there are no associations the benefits of which are more 
 important to their members, so there are none that are 
 managed with greater rectitude, and few with equal 
 success." 
 
 The recent experience of one of the smaller Orders, 
 but yet an important one, having as many as icoo 
 branches, is another case in point. Its valuation to 
 3ist December, 1891, showed that on the aggregate of 
 all the branches their assets were only 155. id. in the , 
 of their estimated liabilities. 
 
 A valuation to 3ist December, 1896, showed that in 
 the aggregate of all the branches their assets were ids. 
 id. in the of their estimated liabilities. If it is re- 
 membered that a deficiency must increase from year to 
 year unless steps are taken to diminish it, it will be seen
 
 94 Provident Societies and 
 
 that most resolute efforts must have been made during 
 the five years to secure this result, which is the more 
 remarkable that the Order has undergone during that 
 time a very unfavourable experience of sickness. The 
 valuers calculate that, taking all things into considera- 
 tion, the measures adopted were equivalent to an addi- 
 tion of a quarter of a million to the resources of the 
 Order. It has still much to do to attain complete 
 actuarial solvency, for a deficiency of 3$. nd. in the 
 is a serious one, but the results here mentioned should 
 encourage the Order to pursue the course of reform it 
 has so successfully commenced. 
 
 The elasticity and recuperative power which we have 
 referred to as characteristic of Friendly Societies applies 
 mainly to that branch of their business which deals with 
 assurance against sickness. The assurance of burial 
 money in a Friendly Society differs in no way from life 
 assurance as practised by a company, and the principles 
 of valuation of life policies have been so fully investi- 
 gated by professional actuaries, and are so familiar to all 
 who take a practical interest in the subject, that it is not 
 necessary to discuss them here. Those who desire to 
 study the question will find all they require in the second 
 volume of the Institute of Actuaries Text Book. The 
 assurance of old-age pensions, however, stands on a 
 different footing from that of sick pay, and this lends 
 great force to the argument that a society insuring old- 
 age pensions should place all its contributions for that 
 purpose in a separate fund, and jealously guard every 
 penny of them from even a temporary use for any of the 
 other purposes of the society. 
 
 The assurance of sick pay involves the system of 
 brotherly visitation by the members valuable, on the 
 one hand, as establishing kindly relations between
 
 Industrial Welfare. 95 
 
 them, and on the other, as a powerful check upon 
 malingering- and develops the element of good-fellow- 
 ship, which is one of the best features of Friendly 
 Societies. The assurance of a deferred pension involves 
 merely the receipt of the contribution, and the careful 
 accumulation of it at compound interest until the time 
 arrives when the pension begins to be payable. 
 
 The assurance of sick pay allows of considerable 
 fluctuations a year or a few years of heavy experience 
 of sickness will naturally be followed by a similar 
 number of years of light experience of sickness, and the 
 one will counteract the other. The assurance of a 
 pension requires the steady accumulation of the money 
 at compound interest, and offers no means of recovering 
 an amount once lost by bad investment or otherwise. 
 Every pound lost when a man is 20 results in a loss of 
 four pounds when he is 65. 
 
 While the assurance of sick pay is best done by the 
 small lodge, where all the members know each other, 
 the assurance of pension would be most safely and con- 
 veniently effected through the central body of the whole 
 Order, who would have a large average of lives over 
 which to spread the risk and large funds to invest, so as 
 to prevent the loss that arises from money lying idle. 
 In every respect, therefore, the two kinds of assurance 
 are in strong contrast with each other. 
 
 A similar observation applies to assurance of endow- 
 ments at a fixed age. These depend wholly on the 
 accumulation of the contributions, and therefore should 
 not in any way be mixed up with funds of a more 
 fluctuating character, such as sick pay. There does 
 not seem much necessity for the transaction of endow- 
 ment business by Friendly Societies, now that the Post 
 Office has made the accumulation of savings so easy :
 
 g6 Provident Societies and 
 
 but every society which grants endowment policies 
 should keep a separate fund for the purpose. 
 
 It has been observed as a curious fact that when a 
 society or branch has large funds, there is a tendency 
 to an increase in claims for sick pay, the members 
 perhaps fancying that the society is well able to meet 
 those claims, and having generally large and liberal 
 views ; while a society that is poor, is often spared by 
 its members, who also keep a sharper look-out on 
 claims. Thus what Mr. Sutton has called the " personal 
 equation" in allusion to a well-known problem in 
 mathematics, where the effect of the difference of quick- 
 ness of observation in different people on the result of 
 the observations is sought to be ascertained has a 
 great deal to do with the assurance of sick pay. In 
 respect of the assurance of fixed annuities and of endow- 
 ments, it is almost entirely absent. For this reason, 
 also, it becomes essential that these assurances should 
 be kept apart. 
 
 It follows from what has been said, that without a 
 periodical valuation a society has no means whatever 
 of knowing whether it is solvent or insolvent ; whether, 
 as years go on, its members will find themselves de- 
 prived of its benefits when those benefits are most 
 needed; or whether it is now giving to its members an 
 unfair share of its funds. The mere continuous increase 
 of funds affords no guide whatever to the society's real 
 financial condition. More than fifty years ago the 
 legislature was sufficiently well informed to see that 
 this must be so; and the Act of 1846 required every 
 society to make a return of its assets and liabilities once 
 in every five years. Strangely enough, in 1850 that 
 provision was repealed, before a single term of five 
 years had been completed, so that in this respect the
 
 Industrial Welfare. 97 
 
 Act of 1846 was entirely a dead letter. Even in 1855, 
 when the Act was passed which worked so well for 
 twenty years, the lesson which the legislature had 
 learned in 1846 was wholly forgotten; and no provision 
 for periodical valuation was made until 1875. It is 
 clear from the experience that has been gained under 
 the Act of 1875, that if the requirement of a quinquen- 
 nial valuation contained in the Act of 1846 had not been 
 repealed, but had been enforced during the thirty years' 
 interval, the financial condition of Friendly Societies 
 would at this day have been very different from that 
 revealed by the recent valuations. 
 
 Chapter VII. 
 Other Societies under the Friendly Societies Act. 
 
 Several classes of societies, which are not Friendly 
 Societies proper, are admitted to the benefit of the 
 Friendly Societies Act. It will be convenient to con- 
 sider them here, although they do not follow in the 
 order of succession which has been indicated in the 
 commencement of previous chapters. 
 
 Cattle Insurance Societies provide for insurance to 
 any amount against the loss of neat cattle, sheep, lambs, 
 swine, horses, and other animals by death from disease 
 or otherwise. Shortly after the passing of the Act of 
 '855, the Secretary of State had given authority for the 
 extension of its provisions to societies for assuring the 
 members against loss by disease or death of cattle 
 employed in trade or agriculture, but that was subject 
 to the limitation that no member should contract for a 
 
 ( M 610 ) O
 
 98 Provident Societies and 
 
 sum payable on any contingency exceeding 200. By 
 an Act passed in 1866, at a time when the rinderpest 
 had been making great ravages, this limitation was 
 repealed so far as relates to such societies ; and it was 
 provided that contributions to these societies should be 
 recoverable as a debt. These two distinctions are main- 
 tained in the existing law. In other respects, the same 
 provisions relate to Cattle Insurance Societies as to 
 friendly societies, except that no quinquennial valuation 
 is required from them. The extension to "other ani- 
 mals " is due to the Act of 1896. Few of these societies 
 avail themselves of the permission to insure more than 
 200. The majority of them are small pig clubs and 
 cow clubs, mainly established in and about the county 
 of Lincoln, and doubtless very valuable to their members. 
 Benevolent Societies are societies for any benevolent 
 or charitable purpose. All the charitable societies of 
 the United Kingdom are capable of being registered 
 under the Friendly Societies Act, and it would be 
 well for many of them if they were so registered. 
 The great abuses that arise in charities for want of a 
 proper audit of accounts might then be remedied. The 
 subscribers would have access to the accounts, and 
 would be able to see to the honest application of their 
 benefactions in a much more thorough way than they 
 can do in the absence of such registry. The simple 
 definition of a Benevolent Society is a society to which 
 the members subscribe not for their own benefit but 
 for the benefit of others. A society from which the 
 members themselves or their families are to derive 
 benefit cannot be registered as a Benevolent Society. 
 Like other registered societies, a Benevolent Society 
 may hold land, but not more than an acre in extent. 
 The privilege of nomination for sums payable at death
 
 Industrial Welfare. 99 
 
 does not apply to the society, nor can it have a rule for 
 dividing its funds. 
 
 Working-men's Clubs. These are societies for pur- 
 poses of social intercourse, mutual helpfulness, mental 
 and moral improvement, and rational recreation. 452 
 such clubs, registered in England and Wales, made 
 returns many of them very imperfect ones for the 
 year ending 3ist December, 1895. The number of 
 members was 116,370, an average of 257 to each. The 
 revenue of the clubs for the year was ^325,821, an 
 average of 721, or about ^3 per member. 120 of 
 them owed upon mortgage ^90,230, or an average of 
 700 each. 371 of them had accumulated profits 
 amounting to .107,938, or ^290 each; 50 had made 
 losses amounting to 3886, or ^78 each. The largest 
 club appears to be one at Huddersfield, with 7140 
 members. The largest revenue returned is that of the 
 Borough of Leicester Club, 5051. This Club has 1631 
 members, and its accumulated profits are ^3170. The 
 largest mortgage indebtedness is that borne by the 
 Bryanston Club, London, ;6o6i. This club has 390 
 members, 2150 revenue, and i 18 profit. The largest 
 profit appears to have been accumulated by a club at 
 Wisbech, with 1 136 members and 1818 revenue, which 
 returns its profits at $9 1 ' The losses are small in 
 comparison, the largest being ^448, which is returned 
 by the Walworth Radical Club, having 310 members 
 and 1581 revenue. Of the 452 clubs, 74 are in York- 
 shire and 68 in Middlesex, these two counties between 
 them having about one-third of the whole number. If 
 Lancashire is thrown in with Yorkshire these two great 
 northern counties have 132; and if Surrey be added to 
 Middlesex, the two metropolitan counties have 110; or, 
 together, considerably more than half the whole number
 
 ioo Provident Societies and 
 
 of registered clubs. An interesting- group of 7 clubs 
 exists at Swindon, in Wiltshire, mainly among the per- 
 sons employed by the Great Western Railway. These 
 clubs have together 4882 members and a revenue of 
 ;i6,8o8. Four of them have mortgages on their club 
 premises amounting to ^4435. About one-fifth of the 
 clubs indicate by their name that they are in connection 
 with a political party, usually the Liberal or Radical, but 
 the promotion of political objects is not a purpose for 
 which a working-man's club is allowed to be established 
 under the Friendly Societies Act. Eleven of the clubs 
 are brass and other bands, the practice of such bands 
 being undoubtedly a form of rational recreation. Their 
 registry enables them to protect their property in the 
 instruments and music, some of which are costly, ac- 
 quired by them for the use of their members. Several 
 clubs represent combinations of the members of the 
 various Friendly Societies in a district, and afford, beside 
 the other advantages of a club, a convenient place of 
 meeting for such societies and their branches. 
 
 The Working-man's Club, at any rate as it was origin- 
 ally devised, and is now in the majority of cases actually 
 carried on, deserves all the protection and encourage- 
 ment that the Friendly Societies Act can give it, though 
 it differs from the ordinary Friendly Society in not 
 insuring any actual money benefits. The powers and 
 facilities of the Act were first extended to clubs on the 
 27th January, 1864, by authority of the Secretary of 
 State, and among the purposes stated in that authority 
 was that of affording facilities for the meetings of 
 Friendly Societies legally established. It was thus one 
 of the original ideas of their promoters that there should 
 be a link between them and Friendly Societies. The 
 principal originator of these clubs, and founder of the
 
 Industrial Welfare. 101 
 
 Working-men's Club and Institute Union, a body which 
 promotes their establishment and assists them with 
 advice and model rules, and also by the settlement of 
 disputes, and makes provision for intercommunication 
 between them, was the lato Rev. Henry Solly, and to 
 him and Mr. Hodgson. Piatt, . genjkman of well-known 
 benevolence, the clubs are milch indebted.- In their 
 primitive form, they no doubt had more of the in- 
 stitute than the club element, but their founders very 
 soon learned that a Working-man's Club, to be success- 
 ful, must give its members relatively to their means 
 the same comforts and amenities that form the attrac- 
 tion of a West End Club to its members. It was seen 
 that the providing of games and even of alcoholic 
 refreshments would not necessarily encourage gambling 
 or drunkenness. In this matter, however, precautions 
 had to be taken. The Inland Revenue authorities had 
 to be satisfied as to the genuineness of the club, and as 
 to its advantages being limited to those who were actual 
 members. This was done by the adoption of a rule, 
 stringently prohibiting any payment for an excisable 
 commodity being made by any visitor to the club, a rule 
 which many clubs enforce by fine and expulsion against 
 a member who introduces a visitor and allows him to 
 pay for anything. Upon an undertaking being given 
 that this rule shall be adopted and rigorously enforced, 
 the Working-men's Club is put in the same position as 
 any other club, its members providing themselves as a 
 body with the supplies that they dispense at a price to 
 themselves as individuals. 
 
 Thus understood, as a means of providing for work- 
 ing-men the pleasures of social intercourse and some of 
 the comforts of life by means of combination, Working- 
 men's Clubs may fairly be included among Provident 
 
 LIBRARY 
 UNIVERSITY OF CALIFORNIA
 
 io2 Provident Societies and 
 
 Societies; but it will be easily seen that the absolute 
 freedom from restraint enjoyed by a club member, his 
 right when once within the walls of his club to treat it 
 as a home and to be supplied wi.thr what he wants from 
 its stores at any hour or on any day, may lead to abuse. 
 When clubs are. found to .be crowded at the hours when 
 public-houses 'are shut, and comparatively empty at 
 other times, they certainly have a mischievous tendency. 
 It has been observed, moreover, that when the hours 
 of opening- of public-houses have been restricted in a 
 locality, as at the time of the passing of the Welsh 
 Sunday-closing Act, a crop of clubs has sprung up. 
 In cases like these, a so-called Working-men's Club 
 becomes a mere expedient for evading the licensing 
 acts. It has been so regarded by the magistrates in 
 many places, and convictions have been obtained 
 against the managers. Where that occurs in a club 
 which has been registered, it involves the cancelling of 
 the registry, upon the ground that the club exists for an 
 unlawful purpose; but in general it occurs in clubs that 
 have not been registered. The registrar is called upon 
 to exercise some vigilance in registering clubs, to see 
 that the conditions of membership are genuine, and that 
 its management is confided to a responsible committee, 
 as otherwise he would be registering to-day a body 
 the registry of which he would have to cancel to- 
 morrow; but in the absence of local knowledge he 
 cannot decline to register a club which adopts rules 
 that on the face of them are satisfactory, though they 
 may conceal an intention of illegality, and will be 
 actually disregarded in practice. Upon this ground, 
 that it is impossible for a registrar in London to obtain 
 the knowledge of what goes on in the country that 
 would be requisite to enable him to exercise any effectual
 
 Industrial Welfare. 103 
 
 control over clubs, we have recommended to the Royal 
 Commission on the Liquor Laws that some other 
 measures of obtaining that control should be devised. 
 The matter is now under the consideration of that body, 
 and their report will no doubt throw much light on a 
 difficult question. It ought to be added, that whenever 
 the registry office has felt called upon to make local 
 inquiries, it has received the readiest assistance from 
 the authorities connected with local government and 
 from the police. Upon the whole, the returns show 
 that so far as regards registered Working-men's Clubs, 
 the probabilities are in favour of good management and 
 against abuse. 
 
 A variety of miscellaneous societies have been author- 
 ized by the Lords of the Treasury to be registered as 
 for purposes to which, in their lordships' opinion, the 
 provisions of the Friendly Societies Act, or some of them, 
 ought to be extended, and these are called Specially 
 Authorized Societies. The first and most popular spe- 
 cially authorized purpose is ' to create funds by monthly 
 or other subscriptions to be lent out or invested for the 
 members of the society or for their benefit, pursuant to 
 the Friendly Societies Act '. Under this authority a 
 large number of Loan Societies or Money Clubs have 
 been registered. An act is still in force, dating as far 
 back as 1840 (which repealed one passed in 1835), for 
 the establishment of Loan Societies in England and 
 Wales, as to which we shall have something to say in a 
 later chapter; but this act is limited to loans under ^15, 
 and does not extend to Scotland or Ireland. In Ireland a 
 number of Loan Societies had been registered under the 
 Friendly Societies Act, and in England Money Clubs 
 had been formed in many places under various titles, 
 but not registered under any act. Without interfering,
 
 104 Provident Societies and 
 
 therefore, with the operation of the act of 1840, this 
 special authority has given a legal constitution to 
 societies which would otherwise have had none. The 
 limitations which affect these societies are those speci- 
 fied in section 46 of the Act of 1896: that a member 
 shall not be capable of holding any interest in the funds 
 exceeding 200, that no loan is to be made to a 
 member exceeding $o, and that the society shall not 
 hold on deposit from members more than two-thirds of 
 the total sums owing by members who have borrowed. 
 The society may in each case fix a lower limit by its rules. 
 The membership of persons under twenty-one years of 
 age is not allowed in these societies, and they are not 
 entitled to exemption from stamp duty and some other 
 privileges. On the other hand, their contributions are 
 made recoverable as a debt, and the right of nomination 
 for payment of sums at death is extended to the 
 members. The Loan Societies Act strictly limits the 
 rate of interest that may be charged to a member, and 
 forbids the imposition of fines or forfeitures upon him; 
 but a specially authorized Loan Society is not under 
 any restriction in either respect, except the general 
 restriction that all fines must be reasonable. In some 
 of these societies the advances are sold to the members 
 for the highest price that any member will offer, by a 
 kind of auction; in others, the repayments are of fixed 
 amount. In some, a yearly division of the whole fund 
 takes place ; in others, a yearly division of profit only. 
 
 Some societies of this class have branches. An 
 interesting group of these societies is denominated 
 "Self-help Societies", and combines with the loan- 
 society purpose that of relieving members in distressed 
 circumstances. Another group is that of Agricultural 
 Credit Societies, established with a view of introducing
 
 Industrial Welfare. 105 
 
 into this country a modification of the Raiffeisen 
 system of credit banks, which has been very successful 
 in Italy and other parts of the continent of Europe. In 
 regard to these, it has been found that the provision of 
 the Friendly Societies Act, by which deposits can be 
 received only from members, has hampered their opera- 
 tions, and the Rt. Hon. Mr. Plunkett, who has rendered 
 great service to Ireland by the establishment of Co- 
 operative Dairies, as well as of Agricultural Credit 
 Societies, has obtained in 1898 an Act to confer upon 
 these latter the power of borrowing and receiving 
 deposits from any person, whether members or not, 
 including corporate and other public bodies. The Con- 
 gested Districts Board is willing to assist such societies 
 in the parts of Ireland over which its operations extend. 
 In order that the bill may not alter the constitution 
 of other societies registered under the same special 
 authority, it is expressly limited to such societies as 
 prohibit their members from making any profit or 
 receiving any dividend, and reserve to the managing 
 body of the society the right of seeing that every loan 
 to a member is applied by the member to a purpose of 
 which the society approves. These are the particular 
 features of the Agricultural Credit Bank, by which all 
 the members undertake to be jointly responsible for any 
 advance made, in the event of the borrower failing to 
 repay it, and in return enforce on the borrower the 
 application of the advance to some agricultural im- 
 provement by which it will repay itself. In both these 
 respects it is clearly to be distinguished from the 
 ordinary Money Club. 
 
 Societies for assisting members out of employment 
 are also specially authorized. They differ from Trade- 
 unions in not desiring to impose any restrictive con-
 
 io6 Provident Societies and 
 
 ditions on the conduct of any trade or business, but 
 merely to relieve their members while unable to obtain 
 employment. Several such societies have been estab- 
 lished in large towns for the benefit of clerks and 
 warehousemen. They usually combine with the spe- 
 cially authorized purpose the objects of an ordinary 
 Friendly Society, but they do not even in that case 
 obtain the special privileges of Friendly Societies. 
 
 The protecting and defending members of any trade 
 or calling against frivolous, vexatious, or malicious 
 prosecutions, and in cases of robbery or other crimes 
 affording them legal or other assistance for the detection 
 and prosecution of the offenders, is another object for 
 which a specially authorized society may be registered. 
 Such societies have been established in connection with 
 the occupation of driver of a public conveyance, and 
 other like callings. 
 
 Promoting agriculture and horticulture, by obtaining 
 small estates and distributing them in allotments among 
 the members, and by offering prizes and otherwise, is 
 also a purpose to which the Treasury has extended the 
 powers and facilities of the Act. The simplification of 
 title to land resulting from the provisions vesting it in 
 the trustees of the society for the time being without 
 conveyance renders the Act especially favourable to 
 small provident ventures of this kind. 
 
 Promoting thrift among the labouring classes by 
 affording them the opportunity of depositing their 
 savings and receiving interest on the same is another 
 specially authorized object. Under this authority penny 
 banks may obtain a legal constitution. The York- 
 shire Penny Bank is registered as a company limited 
 by guarantee ; but many smaller penny banks in various 
 parts of the country would find the provisions of the
 
 Industrial Welfare. 107 
 
 Friendly Societies Act more suitable to their pur- 
 poses. 
 
 Another special authority is for guaranteeing the 
 performance of their duties by officers of Friendly 
 Societies and branches. Societies for this purpose have 
 been established in connection with some of the large 
 orders with excellent results. Not only are they able 
 to provide the officers of societies with the requisite 
 security on much easier terms than they could get it 
 from an ordinary guarantee company not connected 
 with Friendly Societies, and to relieve them from the 
 invidious position of obtaining the suretyship of personal 
 friends, and their friends from the responsibility, and 
 the societies from the uncertainty of private suretyship; 
 but by means of judicious provisions in the policies 
 they may secure a better audit of the accounts, and may 
 exercise supervision over the financial arrangements of 
 the branches. 
 
 A special authority has been granted for playing the 
 game of quoits. In this a liberal interpretation has been 
 placed upon the Act, for while the game in question has 
 doubtless much to recommend it, the pursuit of it is not 
 analogous to the operations of a Friendly Society. It 
 was probably looked upon as akin to a Working-man's 
 Club. 
 
 The promotion of literature, science, and the fine arts 
 has also been specially authorized, and might certainly 
 have included the promotion of a knowledge of music, 
 though that is made the subject of a separate special 
 authority. Under this some excellent societies have 
 been able to obtain a legal organization suitable to their 
 wishes, without the expense of registration under the 
 provision of the Companies Act 1867, which enables the 
 word " Limited" to be omitted.
 
 io8 Provident Societies and 
 
 The desire on the part of many branches of Friendly 
 Societies to avoid the loss of interest, which often arises 
 from the difficulty of obtaining investment for small 
 sums, by combining" together for the purpose of invest- 
 ment, led to the granting of a special authority for the 
 receipt of the funds of Friendly Societies and branches, 
 and the investment of the same for their benefit. The 
 usefulness of this special authority has now been spent, 
 for the Friendly Societies Act 1895 enabled the object 
 desired to be attained without a separate organization, 
 by simply enacting that one branch might invest its 
 money by the trustees of another branch, of which it 
 formed part. A previous similar enactment was con- 
 tained in the Act of 1887, but had been found difficult to 
 work on account of the requirement of the consent of 
 the committee or members of the branch whose funds 
 were invested, for each investment. It is now provided 
 that the consent required shall be that only of the com- 
 mittee or members of the branch by which the invest- 
 ment is made. It is presumed, therefore, that this 
 special authority will now fall into disuse and not be 
 renewed. The existing societies registered under it will 
 probably continue their operations, as they have doubt- 
 less invested their funds on mortgages and in other ways 
 which it will not be necessary or desirable to call in or 
 realize; but the superior simplicity and safety of the 
 proceeding under the Act will no doubt lead to its being 
 generally adopted, and the specially authorized invest- 
 ment societies being allowed to die out. 
 
 An interesting special authority is that granted for 
 enabling persons of the Jewish religion to provide for 
 the due celebration of the Passover, and for the expenses 
 incurred at Passover. That ancient and thrifty race 
 attaches so great a value to the historic observances
 
 Industrial Welfare. 109 
 
 enjoined by its religion, that among the very poorest of 
 its members the expense of a due celebration of the 
 Passover is contemplated long beforehand, and small 
 sums are set aside, week after week, to accumulate until 
 the time arrives for the sacred festival. In other respects 
 religion and thrift are kept in close connection among 
 the Jewish people. We have seen that the purposes of 
 an ordinary Friendly Society may include for their benefit 
 the observance of "shiva", when the mourner is com- 
 pelled to abstain from labour for a given time. The 
 societies formed for this purpose usually provide also for 
 conveyances to carry the mourners to the funeral of a 
 member, and for the erection of a tombstone over his 
 remains. It is an object of interest in a Jewish cemetery 
 to observe the number of memorials of the humbler 
 .nembers of the community, bearing the name of the 
 Friendly Society to which they belonged and by which 
 the tombstones were erected. Many of these societies 
 have synagogues of their own, and provide by joint 
 contribution for all the observances of religion, but these 
 are not referred to in the registered rules. 
 
 The encouragement and promotion of the riding of 
 bicycles and similar machines may also be the purpose 
 of a registered society. 
 
 The promotion of education is an object for which 
 several societies have been formed. Perhaps one of the 
 most curious is a society for the education of political 
 agents in a knowledge of the law relating to corrupt 
 practices. 
 
 The promotion of the science and art of cookery will 
 be admitted to be a purpose deserving of every encourage- 
 ment. 
 
 An authority was granted for providing the members 
 with legal and other assistance when claiming compcn-
 
 no Provident Societies and 
 
 sation under the Employers' Liability Act, but it was 
 pointed out to the societies applying to be registered 
 thereunder, that it was to their own legal advisers that 
 they must look to avoid the perils of champerty and 
 maintenance. The Employers' Liability Acts have been 
 in some degree superseded by the Workmen's Com- 
 pensation Act 1897, which we propose to consider in a 
 future chapter. 
 
 The mutual protection and promotion of the interests 
 of Friendly Societies is a purpose for which another 
 special authority has been obtained. In many parts 
 of the country Friendly Societies combine with great 
 advantage for the discussion of matters that affect their 
 common interests, and for the solution of difficulties that 
 occur in their working, and such combinations enable 
 them to take common action. 
 
 Finally, the promotion of the pursuit of angling has 
 been specially authorized. In connection with the gentle 
 craft the contemplative man's recreation fishing rights 
 are frequently acquired, and the inexpensive and effec- 
 tual machinery of the Friendly Societies Act is very 
 useful in simplifying the method of dealing with these 
 rights. 
 
 The expression, " Specially Authorized Society", is in 
 some respects an unfortunate one, as it might be taken 
 to imply some particular excellence in the purpose of 
 the society which had induced the Lords of the Treasury 
 to extend to it their special approval. This is curiously 
 the reverse of the fact; for Specially Authorized Societies 
 (with rare exceptions) are refused all the special privi- 
 leges of a Friendly Society, including the fiscal privilege 
 of exemption from stamp duty. Rather, therefore, than 
 having a claim to special preference, they are placed at 
 a disadvantage. The registry of rules in no case implies
 
 Industrial Welfare. in 
 
 any approval of anything 1 they contain ; but in the case 
 of a Specially Authorized Society it implies a distinct 
 stamp of inferiority to the other classes of societies which 
 are admitted to the full benefits of the Act. 
 
 The latest published returns as to the societies other 
 than Working-men's Clubs, referred to in this chapter, 
 show a capital of ^535,301, belonging to 51,068 mem- 
 bers in 258 societies. 
 
 The reader will probably be surprised to find how 
 multifarious a collection of societies may be brought 
 within the margin of the Friendly Societies Act, and 
 how large a space of man's life may be spent in associa- 
 tion under it. In the social intercourse which is to be 
 promoted by the Working-men's Club, in the game of 
 quoits, in the popular and wholesome exercise of bicycle 
 riding, in the contemplative pursuit of angling, in the 
 development of literary, scientific, or artistic tastes, 
 especially in regard to the sublime art of music; in the 
 organization of charity, the promotion of thrift, the 
 relief of the embarrassed by way of loan, the assistance 
 of the unemployed, the promotion of agriculture and 
 horticulture, the promotion of education, especially in 
 that most necessary and specifically human art which is 
 based upon the science of cookery; in association with 
 the religious beliefs of the Hebrew community, as well 
 as in all the ramifications of provident insurance, the 
 Friendly Societies Act is a code of encouragement and 
 a charter of protection.
 
 ii2 Provident Societies and 
 
 Chapter VIII. 
 Old-age Pensions. 
 
 We have dwelt upon Friendly Societies mainly in 
 relation to their primary object of assuring sick pay 
 during- working life, and have incidentally pointed out 
 the distinctions of various kinds between that assurance 
 and the assurance of old - age pensions or deferred 
 annuities. The question of provision for old age is 
 one, however, that cannot escape the attention of the 
 thoughtful young man in whose position we have sought 
 to place ourselves. He knows that the time must arrive, 
 if he lives, when the cause of inability to work will 
 be, not a casual distemper or accidental injury, but the 
 fact that working days are over. Even in those societies 
 which continue the allowance of sick pay for the whole 
 of life a plan open to the objections pointed out in 
 chapter VI. the condition of the allowance is that there 
 shall be some actual sickness, and, however liberally 
 that condition may be interpreted, mere inability to 
 work through old age is not within the terms of the 
 contract. Those terms have been construed by many 
 societies with undue liberality, greatly to the damage 
 and loss of their younger members. Even in those 
 cases where slight evidence of sickness is accepted as 
 sufficient to enable a member to claim sick pay in old 
 age, the allowance granted, which used frequently to 
 be called superannuation, is but small, being usually 
 the quarter pay, viz. 25, 6d. or 35. a week. It is not 
 surprising that this disposition towards a liberal con- 
 struction of the contract should exist, where the member 
 has no other source of maintenance, and would other-
 
 Industrial Welfare. 113 
 
 wise be compelled to seek relief from the poor-law 
 authorities. A society is naturally unwilling to see its 
 members in old age sink into the condition of paupers, 
 especially where the workhouse test is enforced, and 
 the small allowance which it grants is in general just 
 enough to prevent that calamity. All the evidence seems 
 to show that, though Friendly Societies rarely make 
 direct provision for old age, very few of their members 
 become inmates of a workhouse. It would be so even 
 if the parliamentary returns of paupers who have been 
 members of Friendly Societies were to be trusted; but 
 those returns are in no way to be depended upon, the infor- 
 mation they give being neither accurate nor sufficient. 
 
 The societies which have thus, by over-generous 
 treatment, protected such of their members against 
 pauperism as would otherwise have fallen into that 
 condition, have done so at the risk of their own 
 stability; and as accurate views are more and more 
 prevailing on the actuarial conditions of financial suc- 
 cess in Friendly Societies, it is becoming more and more 
 obvious that the reform of limiting sick pay to a given 
 age will have to be adopted. It was indeed suggested 
 by the Royal Commission on the Aged Poor that the 
 Friendly Societies Act should be altered so that after a 
 certain date members who join a society should be 
 enabled to insure for sick pay up to 65, and for an 
 annuity after that age, but not for sick pay throughout 
 life. The Commissioners hoped that this would have 
 the double effect of securing a regular provision for the 
 old age of Friendly Society members, and averting the 
 danger to the financial stability of the societies caused 
 by the present system of continuous sick pay in old age. 
 It would, as it seems to us, be a complete departure 
 from the present system of freedom of contract in 
 
 (M610) II
 
 H4 Provident Societies and 
 
 Friendly Societies, and is to be deprecated upon that 
 ground, if for no other. If the limitation is to extend to 
 registered societies alone, it will encourage the forma- 
 tion of unregistered societies. If it is to extend to both, 
 it cannot be made effectual except by the pernicious 
 system of declaring- a contract unenforceable in the 
 interest only of the rogues who desire to break it. At 
 present the societies appear to be waiting for each other 
 before effecting the reform voluntarily, as the present 
 system is still too attractive to the members for a society 
 rejecting it to meet the competition of those which would 
 still maintain it. When any society or societies shall 
 have adopted a rule limiting sick pay to the age of 65, 
 the problem how to provide for the old age of the 
 members will become a pressing one. The actuarial 
 solution is easy: create a separate pension fund for 
 deferred annuities, commencing at the age of 65, and 
 continuing during the remainder of life ; let each member 
 pay into that fund the requisite premium, according to 
 a table of contributions for deferred annuities, and then 
 invest and reinvest until by compound interest the 
 annuities have been made secure. 
 
 We have already said that the purchasing a deferred 
 annuity is only one of the many ways of providing for 
 old age. It is undoubtedly an effectual method, but it 
 has never been, and is not likely to become, a popular 
 method. For this there are several reasons. It is 
 costly. Unless begun early in life, the premium neces- 
 sary to secure a deferred annuity is a heavy tax on 
 wages. It involves the sinking of present money to 
 secure an advantage in the remote future. No man 
 likes to place his savings beyond his control. Its 
 benefits may be small in comparison with the amount 
 paid for them. The member may not live till he is 65,
 
 Industrial Welfare. 115 
 
 or may live only a short time after. It may absorb 
 savings that would be better applied towards provision 
 for the member's wife and children in the event of his 
 early death. 
 
 The objection arising from the uncertainty of life is 
 sometimes proposed to be met by making the premiums 
 returnable in the event of death before attaining the age 
 when the annuity commences, but that can only be done 
 by increasing the amount of the premiums, and thus 
 rendering the transaction more costly. It becomes by 
 this means a mere deposit of savings, and might be 
 carried out with equal or greater advantage by paying 
 the premiums into the Post Office Savings-bank, or 
 otherwise investing them, until the time arrives when 
 the member desires to cease work, and then buying an 
 immediate annuity with the accumulated amount. This 
 plan has the more attraction, that it can be made avail- 
 able if the benefit of it is required before attaining the 
 age of 65; and also that if the member finds himself still 
 able to work at that age, he need not withdraw his 
 accumulations until he wants them, when the provision 
 made by way of pension will be materially increased. 
 The plan of accumulating surplus contributions at 
 interest, and converting them into an immediate annuity 
 when the time arrives, instead of at once applying them 
 to the purchase of a deferred annuity, is that adopted by 
 the societies founded on the model advocated by the late 
 Mr. Holloway, M.P., in his " Forster Prize Essay". 
 
 The Aged Poor Commissioners reported that there is 
 undoubtedly a wide-spread dislike of the purchase of 
 deferred annuities, owing largely to a conviction that 
 other forms of thrift are of more value, such as expendi- 
 ture on the advancement of children, or the application 
 of savings to investment, or in business, so as to yield a
 
 n6 Provident Societies and 
 
 permanent return without forfeiture of capital. It is by 
 some of these means, rather than by direct insurance, 
 that members of Friendly Societies have hitherto made 
 provision for old age. If, however, the insurance of 
 sick pay after 65 years of age should be discontinued, 
 a source which has been in fact to a large extent 
 a provision for old age would be dried up, and the 
 necessity of a more general provision by way of deferred 
 annuity would have to be considered. The question 
 would then arise Have the members of Friendly So- 
 cieties generally the means of making this provision? 
 Hitherto they have paid inadequate contributions for a 
 partial provision; where will they find the funds for 
 paying adequate contributions for a complete provision? 
 It is alleged by some that the members now pay out of 
 their wages as much as they can afford, and that to call 
 upon them to pay a larger sum towards the future would 
 involve them in present distress. It is alleged by others 
 that it is not so; the extra contribution need not be so 
 large as supposed, and might be brought well within 
 their means. According to the rates charged by the 
 Manchester Unity of Oddfellows, at the age of 21 a 
 weekly contribution of 4^^. during life would provide 
 los. sick pay for the first twenty-six weeks of sickness, 
 and 5.9. afterwards during the whole of life, and funeral 
 benefits ; while it would require a weekly contribution of 
 67/%d., payable till 65, to assure sick pay up to that age, 
 55. per week fixed pension after that age, and funeral 
 benefits the difference being 2%d. per week. 
 
 It would thus appear that by an additional contribu- 
 tion of los. lod. per annum beyond the igs. which he 
 now pays, a member of the Manchester Unity at the age 
 of 21 could secure, not merely a fixed pension of ^13 a 
 year, but also the cessation of the payment of igs. at the
 
 Industrial "Welfare. 117 
 
 age of 65, equivalent to a pension of ^13, 191. a year. 
 Suppose him to be earning" 2os. a week wages, that is 
 equivalent to increasing his contribution from one week's 
 income per annum to one and a half week's income per 
 annum. There is assuredly nothing in this which places 
 it beyond the range of possibility. We take it for 
 granted that no prudent young man, who applied one 
 week's income per year to pay his friendly society con- 
 tribution, would fail to set aside in some other form 
 of saving at least another week's income per year. 
 Would he not be doing well to apply half that amount 
 to an absolute provision for old age? 
 
 Whence, then, has arisen the cry for state-aided 
 pensions? What young man of 21, having the option 
 presented to him of applying another half-week's pay 
 to this particular object, would say: "This is the last 
 straw that breaks my back ; I really cannot afford more 
 than a quarter of a week's pay ; I must ask the govern- 
 ment to provide me with the other quarter out of the 
 taxes, or the local authorities to provide it out of the 
 rates"? Would he not feel that such an appeal was 
 wholly inconsistent with independence and self-reliance? 
 If the young man of 21 would not say so, why should an 
 older man say so? If he did not in his time purchase a 
 deferred annuity, did he not keep in his pocket the half- 
 week's pay that it would have cost, and invest it in some 
 other equally profitable way? If not, is he not respon- 
 sible for his own neglect of having done so? What is 
 the foundation of the claim that has been urged on 
 the community at large? Has his income been so small 
 that he could not save one and a half week's of it in 
 the year? Is not this in itself an acknowledgment of 
 improvidence? If it was too small, why did he not take 
 steps to increase it?
 
 n8 Provident Societies and 
 
 The suggestion usually made by the advocates of 
 State-aided Pensions has been that the member should 
 provide himself with half-a-crown a week and the State 
 give another half-crown to make up a total income of 
 5-y. a week. According to the rates of the Manchester 
 Unity the weekly contribution at the age of 21 payable 
 till 65 to assure sick pay up to that age, 2$. 6d. per 
 week fixed pension after that age, and funeral benefits, 
 would be 5^^., which, as compared with the 4^5^. pay- 
 able during life for sickness and funeral benefits only, 
 gives a difference of ^ths of a penny per week. Thus 
 an additional contribution of 35. lod. beyond the igs. 
 now paid would suffice to secure a fixed pension of ^6, 
 ioy. a year and the cessation of the payment of igs., 
 equivalent to a pension of ^"7, gs. a year. A little more 
 than one day's wages per annum would thus be all that 
 he is called upon to contribute, the State providing the 
 extra 7$. per annum. The man who saves one day's 
 wages is to be rewarded by an equivalent of two days' 
 wages from the State, while the man who saves three 
 days' wages is to get nothing. It is not easy to discern 
 any sound principle upon which such an arrangement 
 could be defended. 
 
 Others have suggested that every member of a 
 Friendly Society should, when he reaches the age of 
 65, be granted a free pension of 55. a week by the State. 
 This, at the age of 21, would, according to the Man- 
 chester Unity tables, reduce the necessary weekly con- 
 tribution for sickness and funeral benefits from q^d. 
 payable during the whole of life to sfysd. payable until 
 65, or from igs. per annum to 15.9. gd., less than five days' 
 pay of a man earning 205, per week, and would be 
 equivalent to a State gift to each man of 14^. per annum, 
 or more than four days' pay. The employer may be
 
 Industrial Welfare. 119 
 
 trusted to find this out and reduce the wages accord- 
 ingly, so that in the long run the gift will be a gift to 
 him and not to the workman, and the State will be 
 endowing out of the general taxation the employer of 
 looo workmen with the handsome sum of ^700 a 
 year. 
 
 Whatever a man's income may be, there seems to be 
 nothing unreasonable in the suggestion that, if he must 
 spend fifty weeks' pay in meeting present necessities, he 
 should at least put aside the other two weeks' pay to 
 provide for future needs. If men framed their standard 
 of living on that principle, they would be able to obtain 
 from their employers wages sufficient to carry it into 
 effect. In all ranks of life there are persons who live up 
 to and even beyond their means, and these persons 
 deserve no sympathy. The man who lives within his 
 means, even to the extent of one-twenty-sixth part, will 
 find that he need ask for none. Certainly the members 
 of Friendly Societies deserve credit for their economy 
 and providence; and equally certainly, the industrial 
 population generally deserve well of the State whom 
 they serve with the strength of their manhood; but it 
 would be a poor acknowledgment of those services to 
 grant them State pensions, which would only tend to 
 lower their wages, and put money in the pockets of their 
 employers. 
 
 We wrote in 1890 " that there is no other way of pro- 
 viding for old age than by thrift, self-denial, and fore- 
 thought in youth"; and the anxious and prolonged con- 
 sideration we have lately been required to give to the 
 subject, with the most urgent wish to find a favourable 
 solution for its difficulties, has strongly enforced the 
 same lesson. We have not been called upon to con- 
 sider the proposal that everyone should have a pension.
 
 120 Provident Societies and 
 
 As it could only be carried into effect by a system of 
 enormous taxation, against which the pension in the 
 case of the wealthy would be a small set-off, it would 
 be nothing- but a redistribution of wealth, diminishing 
 the incomes of the wealthy to provide incomes for the 
 poor a system which might be defensible upon some 
 grounds, but certainly not upon any which have relation 
 to providence, and is therefore quite outside the scope of 
 this work. 
 
 Chapter IX. 
 Workmen's Compensation. 
 
 The Workmen's Compensation Act 1897 introduced 
 a new principle into English jurisprudence. Under the 
 Common Law and under the Employers' Liability Act 
 1880, an employer like every other person had been 
 made liable for the consequences of his own acts, and of 
 the acts of those other persons which, upon the principle 
 gut facit per alium facit per se, were imputed to him. 
 If I employ the hand of another to do my work, I do 
 the work myself. This principle is somewhat extended 
 by the maxim respondeat superior. If my servant in the 
 course of his service injures a third party, it is I, the 
 superior, who must answer for that injury. But how if 
 the person injured is another servant? Here the law 
 interposed a doctrine of "common employment", and 
 excogitated an implied condition in the contract of 
 service that the servant intended to take upon himself 
 the risk that he might be injured by a fellow-servant. 
 The judicature has always felt especial fondness for its 
 own children, and as it is quite certain that this supposed
 
 Industrial "Welfare. 121 
 
 tacit contract never entered the mind of any employer, 
 or of any servant, the judicature has all the rights of 
 paternity in this case. The consequences of this fiction 
 of the law were so intolerable that they were modified, 
 though not entirely removed, by the Act of 1880. 
 Another qualification of employers' liability arose where 
 there had been "contributory negligence" on the part 
 of the person injured. It is my duty so to conduct my 
 business, and to see that my servants so conduct my 
 business, that they do not injure anyone, in obedience 
 to the precept Sic utere tuo ut alienum turn laedas\ but 
 it is equally the duty of other people so to act that they 
 do not needlessly expose themselves to be injured by me 
 or my servants in the lawful conduct of my business, 
 and if they fail in that duty they take the consequences 
 upon themselves. Vigilantibus, non dormicntibus, Jura 
 subveniunt. The law will not look after the interests 
 of those who do not look after their own. The net 
 result of all this is, that if a servant, without neglect 
 or default of his own, is injured by the act or default of 
 his master, or within the limits covered by the Em- 
 ployers' Liability Act 1880, of another servant of his 
 master, the master is liable. 
 
 This is still the law : absolutely, as far as regards all 
 occupations to which the Workmen's Compensation 
 Act 1897 docs not apply; and it is not repealed as far 
 as regards the occupations to which that Act does apply, 
 but may be put in force at the option of the workman if 
 he prefer it to the remedy which the Act gives him. 
 That remedy is, however, complete. The new Act in- 
 troduces the principle of insurance a principle well- 
 known in Germany and other continental countries, but 
 not heretofore applied to the relations of employer and 
 workman in this country. With the exception that the
 
 122 Provident Societies and 
 
 employer is not to be liable where the injury arises from 
 the serious and wilful misconduct of the workman 
 injured, an employer in the industries to which the Act 
 applies is now liable to compensate his workman for 
 any personal injury by accident arising out of and in the 
 course of the employment, whether such injury is or is 
 not caused by any act or default of the employer, or of 
 any servant of his, or of the injured workman himself. 
 The doctrines of common employment and contributory 
 negligence are thus swept out of the way, and it becomes 
 unnecessary to inquire whether anything the employer 
 did or left undone has been the cause of the injury. The 
 employer is required to insure his workmen against 
 accidents of whatever kind occurring out of and in the 
 course of the employment, from any cause other than 
 the serious and wilful misconduct of the injured work- 
 man himself. 
 
 The insurance so provided differs from ordinary life 
 insurance in being a contract of indemnity. The ordi- 
 nary contract of life insurance may be of any amount, for 
 which the insurer is willing to pay the corresponding 
 premium; if a company insures my life for ^10,000, and 
 I die, it is not open to them to question whether the 
 person entitled to receive the money has suffered any 
 such loss by my death as to require that amount of com- 
 pensation : the contract is an express contract, and not 
 (like fire insurance or marine insurance) a contract of 
 indemnity. The old doctrine upon which this distinction 
 is founded is that no limit of value can be put upon the 
 life of a man. In the first schedule to the Workmen's 
 Compensation Act 1897 careful provision is made to 
 proportion the compensation to the loss sustained. If 
 death results from the injury, and the deceased leaves a 
 husband, wife, parent, grandparent, step-parent, child,
 
 Industrial Welfare. 123 
 
 grandchild, or stepchild wholly dependent upon his earn- 
 ings, a sum not less than ^150 nor more than ^300, 
 and between those limits equal to his earnings during 
 the last three years of his working life, is to be distri- 
 buted among such dependants. If he leaves none wholly 
 dependent upon him, but some partially dependent, the 
 ^150 may be reduced by agreement or arbitration, to 
 a sum proportionate to the pecuniary loss they have 
 suffered. If he leaves no dependants at all, 10 only 
 is to be allowed, to cover the expenses of medical attend- 
 ance and burial. If total or partial incapacity for work 
 results from the injury, the workman is to receive a sum 
 measured by the loss of his earnings, not exceeding half 
 his weekly earnings, and not exceeding one pound per 
 week in any case. There is, however, the material 
 qualification that the allowance is not to commence until 
 after the second week of the incapacity. 
 
 The Act applies only to employment on, or in, or about 
 a railway, factory, mine, quarry, or engineering work, 
 and to employment on, in, or about any building which 
 exceeds 30 feet in height, and is either being constructed 
 or repaired by means of a scaffolding, or being demol- 
 ished, and on which machinery driven by steam, water, 
 or other mechanical power is being used for the con- 
 struction, repair, or demolition thereof. Although many 
 important industries are thus excluded from its opera- 
 tions, those which are included comprise a very large 
 portion of the working population, some of whom are 
 especially exposed to risk of accident. If the Act should 
 be found by experience to work well, it will probably 
 not be difficult to induce the legislature to extend its 
 operations over other industries. 
 
 It is evident that this statute materially increases the 
 obligations of employers. The knowledge that work-
 
 124 Provident Societies and 
 
 men have a legal claim to compensation may tend to 
 increase the number of accidents. The assurance com- 
 panies are asking- high rates for insuring employers 
 against their risks under the Act, or rather for reinsuring 
 them. It would become necessary for all insurers who 
 are not possessed of sufficiently large capital to equalize 
 their risks, either to reinsure their risks with some com- 
 pany, or to join with other employers in a mutual scheme 
 of insurance. There will thus arise provident associa- 
 tions of employers. 
 
 The Act permits a more satisfactory proceeding. 
 Where employers and workmen are willing to join in 
 a scheme for their mutual benefit, and such scheme can 
 be shown to be, on the whole, not less favourable to the 
 workmen than the Act would be, the employer may 
 contract with any of his workmen that the provisions 
 of the scheme are to be substituted for the provisions 
 of the Act. Where such schemes depend upon a joint 
 contribution of the masters and the men, it has to be 
 shown that the contribution of the master is as great 
 as the payment he would have to make under the Act, 
 and that the benefits the workman is to derive from the 
 master's contributions are equivalent to those he would 
 derive under the Act. For example, where the same 
 benefits as those of the Act are granted, and in addition 
 the first two weeks' inability to labour is provided for, 
 it must be shown that the contribution of the master 
 covers the former, and that of the workmen does not 
 exceed the latter. It is competent, however, for masters 
 and workmen to agree that other benefits shall be sub- 
 stituted for those of the Act, as, for example, a general 
 system of life assurance for the assurance against death 
 by accident, a general system of sick pay for the pro- 
 vision against disablement by accident, or a system of
 
 Industrial "Welfare. 125 
 
 pensions or of medical relief for the benefits of the Act 
 generally. In such case, it has to be shown that the 
 benefits provided out of the employers' contribution are 
 equivalent to those of the Act, and that the workmen's 
 contribution is not more than is necessary to provide 
 the other benefits. 
 
 Under the provisions of the statute it will be com- 
 petent for the employers and workmen to continue (at 
 any rate, with some modification) schemes that have 
 been in beneficial operation for many years. It is not 
 to be supposed that the relations between employers and 
 employed are relations of chronic hostility. They have 
 their diverging interests, as all persons who have deal- 
 ings together must necessarily have, but they have a 
 common interest, which is often stronger than the ten- 
 dencies to divergence. Where these common interests 
 lead them to join in arrangements by which the workmen 
 and employers contribute together to a provident fund, 
 the results have been excellent in the establishment of 
 mutual confidence and good feeling between them. This 
 has been shown to a marked extent by unanimous appli- 
 cations on the part of the workmen in certain industries 
 for certificates to schemes in which the benefits provided 
 have been shown upon inquiry not to be equal to those 
 of the Act, and the contribution of the employers not to 
 be equal to that of the workmen. They have felt that 
 the indirect advantages of maintaining the existing ami- 
 cable relations and avoiding litigation were so great that 
 they would have been glad to continue the existing pro- 
 visions and waive the advantages they might derive 
 from the Act. This is obviously not practicable, and 
 when the necessity of increasing their contributions to 
 the joint fund has been pointed out to the employers, 
 it has been cheerfully accepted a circumstance which
 
 126 Provident Societies and 
 
 leads to the hope and confident expectation that the 
 provision for contracting out may tend greatly to pro- 
 mote industrial peace and welfare. 
 
 The conditions under which contracting out of the 
 Act is permitted are the following : 
 
 i. The Registrar must take steps to ascertain the views 
 of the employer and workmen. This is a condition 
 precedent, and no certificate can be granted to a 
 scheme until it has been fulfilled. For this purpose, 
 the Registrar requires that formal application for a 
 certificate should be made by the employer and by 
 some of the workmen on behalf of as many as agree 
 in the application, setting forth the nature of the 
 scheme, and the views (a) of the employer, (d) of 
 the workmen, as to its operation. Where the work- 
 men who join in the application are not the whole 
 body of the workmen in the employment, he requests 
 that copies of the scheme may be printed, and hung 
 up in every workshop, and appoints a time within 
 which the dissentient workmen may address com- 
 munications to him, stating their views. This ap- 
 pears to be required by the Act, although as no 
 scheme can be certified which contains an obligation 
 upon the workmen to join it as a condition of their 
 hiring, the dissentient workmen are not bound by 
 the scheme. It has the advantage, if acted upon, 
 of enabling the Registrar to hear both sides of the 
 question, and possibly to suggest some modification 
 of the scheme which would enable the dissentient 
 workmen to take advantage of it. As we have 
 seen, the mere consent of a certain number, or even 
 of all of the workmen, in a given employment is 
 not of itself sufficient to show that a scheme is on
 
 Industrial Welfare. 127 
 
 the whole not less favourable to them than the pro- 
 visions of the Act would be. 
 
 2. The Registrar must certify that the scheme is on the 
 whole not less favourable to the general body of 
 workmen and their dependants than the provisions 
 of the Act. The consent of the workmen not being 
 conclusive, it must be found as a fact that it is not 
 less favourable to them than the Act would be. In 
 order to arrive at a judgment upon this point, many 
 things have to be considered. One of great im- 
 portance is, the previous experience of accidents in 
 the industry. There is no general scale of liability 
 to accident which can be applied without discrimi- 
 nation to any industry. Even in the same calling, 
 as, for instance, the mining industry, the liability 
 to accident differs in different districts, and is greater 
 or less according to the nature of the mine, the 
 method of working, the customs of the miners, the 
 efficiency of the control and regulation, and other 
 circumstances. The best plan appears to be to 
 take the experience of the particular workmen af- 
 fected during as long a series of years as it can be 
 conveniently supplied, and apply to it the provisions 
 of the Act, so as to ensure that the employer shall 
 pay in future years at least as much as he would 
 have had to pay in past years if the Act had then 
 been in force. The past is not conclusive as to the 
 future; for the experience of the past few years 
 may have been favourable, and it may be right to 
 allow a margin for the probability that that of the 
 next few years may exceed the average. Something 
 also may have to be allowed for defects in the 
 record. Again, the Act itself, by the greater liber- 
 ality of its provisions, may tend to increase the
 
 128 Provident Societies and 
 
 number and the prolongation of the claims, but 
 this latter is a risk which some might think ought 
 in equity to be borne by the workmen. 
 
 The next question to be considered, is whether the 
 workmen will derive an equivalent advantage under the 
 scheme to that which they derive under the Act. To 
 solve it, it is necessary to see in what respects the assur- 
 ance against accident provided by the scheme is less 
 than that provided by the Act, and what are the other 
 benefits which the scheme provides corresponding to the 
 difference. A form commonly taken by schemes is that 
 of joint equal contribution and joint management be- 
 tween the employer and the workmen. Where this is 
 the case, it will follow that the aggregate benefits the 
 workman is to derive under the scheme must be at least 
 double the aggregate benefits the workman would derive 
 under the Act if there were no scheme. It will be ob- 
 served that it is not necessary to show that each indi- 
 vidual workman will get twice as much as the Act would 
 give him, but only that the advantages to the general 
 body of workmen are on the whole not less. The dis- 
 cretion left to the Registrar is so absolute and so uncon- 
 trolled that it would be open to him to take any sur- 
 rounding circumstance into consideration, but it will 
 probably be wise for him in general to restrict himself 
 to the question of actual financial equivalents. 
 
 It will appear from what has been said that the ex- 
 pression in the rubric of the Act which describes these 
 schemes as " contracting-out " schemes is hardly accu- 
 rate. When it is made essential to such a scheme that 
 the workmen shall have that which an independent 
 officer declares to be an equivalent for all that the Act 
 would give them, the scheme becomes rather a means of
 
 Industrial Welfare. 129 
 
 carrying the Act into effect than a means of contracting- 
 out of it. Either by schedule or by scheme the work- 
 man is to get in meal or in malt all that the Act says he 
 shall have. 
 
 Having regard to the difficulty of ascertaining with 
 precision what is an exact equivalent to the benefits 
 provided by the Act, two important safeguards are 
 contained in it. The Registrar may give a certificate 
 to expire at the end of a limited period not less than five 
 years; and it is proposed that that period should in 
 general be five years and six months, so as to allow of 
 a quinquennial actuarial valuation being made, and thus 
 of any defect in the original scheme being ascertained 
 and remedied before the certificate is renewed. The 
 Registrar may also revoke the certificate upon com- 
 plaint made by or on behalf of the workmen. It is to 
 be observed that the certificate is not to be revoked at 
 the instance of the employer, who is held to his bargain 
 as long as the certificate remains in force, even though 
 the scheme should be shown by experience to be more 
 burdensome on him than the Act would have been. The 
 complaint of the workmen may be on any of the follow- 
 ing grounds : 
 
 1. That the provisions of the scheme are no longer so 
 
 favourable to the general body of workmen and 
 thtnr dependants as the provisions of the Act. 
 
 2. That the provisions of the scheme are being violated. 
 
 3. That the scheme is not being fairly administered. 
 
 4. That satisfactory reasons exist for revoking the 
 
 certificate. 
 
 Upon receiving such a complaint, the Registrar is to 
 examine into it. If satisfied th.it good cause exists for 
 it, he is to give an opportunity to the employer to re- 
 
 (M&10) I
 
 130 Provident Societies and 
 
 move the cause of complaint. If this is not done, the 
 Registrar has no option in the matter, but is required 
 by the Act to revoke the certificate. Upon the revoca- 
 tion of a certificate, or if one expires and is not renewed, 
 the funds held for the purpose of the scheme are to be 
 distributed as the employer and workmen agree, or if 
 they fail to agree, as the Registrar may determine. 
 
 When a scheme has been certified, the Registrar may 
 require the employer to answer inquiries and to furnish 
 accounts in regard to it; and thus information may 
 gradually be accumulated which will in time change the 
 present experimental and provisional character of the 
 measure into one of more assured certainty. Looking 
 at the statute as a whole, whether its provisions are 
 carried out in their integrity, or are substituted by an 
 equivalent certified scheme, we anticipate that it will be 
 beneficial. It had long been admitted on all sides that 
 the Employers' Liability Act of 1880 required amend- 
 ment, and that cases of great hardship arose under it. 
 The further modification or entire repeal of the doctrine 
 of common employment had frequently been proposed ; 
 but the present statute takes the wiser and more com- 
 prehensive course of rendering it immaterial, so far as 
 the purview of the Act extends. As we have said, it 
 imposes a new burden on the employer; and the bill 
 met with criticism upon that ground; but it must be 
 borne in mind that it is really beyond the power of 
 the legislature permanently to disturb the relations 
 between master and workman. If the existing wages 
 paid to the workmen are adequate, and this Act trans- 
 fers from the shoulders of the workmen to those of 
 the employer the burden, whatever it may be, of in- 
 surance against accidents for which the employer was 
 not liable when that rate of wages was settled, the
 
 Industrial Welfare. 131 
 
 burden will only rest there until the next occasion when 
 the rate of wages comes up for settlement, when it will 
 be shifted back again to the shoulders of the workmen 
 in the form of a diminution of wages. If the existing 
 wages paid to the workmen are not adequate, the 
 transfer to the employer of that burden merely antici- 
 pates an increase of those wages which would have had 
 to be granted in due course. It is the market, not the 
 legislature, that can alone determine what a workman's 
 wages shall be. The temporary incidence of this extra 
 burden on the employer has undoubtedly raised a tem- 
 porary sense of grievance. In like manner, among the 
 workmen, the long-standing conviction that contracting- 
 out would place them at a disadvantage, and that they 
 did not meet the employer on equal terms when they 
 retired from the strong position given to them by the 
 Act, has led them in some branches of industry to look 
 with coldness upon proposals for mutual schemes : but 
 this feeling will probably give way when it is found by 
 experience that what are called contracting-out schemes 
 are not really so. Under the schedule of the Act, the 
 workmen obtain a substantial advantage, the benefits 
 of which they will reap until some future reduction in 
 wages takes place, and the individual workman gets a 
 protection against the casualties attending his industry 
 which he had not before. Under the equivalent schemes, 
 encouragement is given to the establishment and main- 
 tenance of good feeling between employers and workmen, 
 and to their forming and manifesting a common interest 
 in the better providing not alone against casual risks 
 but against the ordinary and certain ills of life.
 
 132 Provident Societies and 
 
 Chapter X. 
 Co-operative Societies. 
 
 Having provided the young man whom we have 
 conjectured at the beginning of several previous chap- 
 ters with insurance against a great many contingencies, 
 we will now imagine him, a little later on in life, happily 
 married, but finding that his income, after payment of 
 his Friendly Society contributions, does not go far in 
 procuring for his wife and little family the necessaries, 
 not to say the comforts, he would like them to enjoy. 
 He will be shrewd enough to see that for many things 
 which he has to buy in small quantities, he pays a much 
 higher relative price than the rich man, who can afford 
 to buy the same things in large quantities. He will 
 observe, moreover, that tradesmen give credit to others, 
 if they will not to himself, and frequently make bad 
 debts ; and he knows that those who do pay must neces- 
 sarily make up for those who do not. He concludes 
 that, for this reason also, he is paying for what he buys 
 more than its real value. If he himself obtains credit 
 from the tradesmen, he finds himself even worse off, for 
 he knows he must pay some day, and in the meanwhile 
 has to accept what quality of goods his creditor may 
 impose upon him. Finally, he has no substantial 
 guarantee for the purity of the things that are supplied. 
 Here the co-operative store comes to his assistance. A 
 combination of small retail buyers can go into the 
 market, get what its members want at wholesale prices, 
 and either distribute it among them at cost price, or 
 return the overplus to them as profit; it gives, or ought 
 to give, no credit, at any rate none beyond what each
 
 Industrial Welfare. 133 
 
 member has deposited in the fund as his share money; 
 and it has no temptation to buy and distribute impure 
 commodities, but, on the contrary, makes it a principle 
 to obtain a guarantee of purity. This is the distributive 
 department of its working. The power of combination 
 goes much further. The distributive store dispenses 
 with one of the middlemen who do so much to increase 
 the price of commodities the retail dealer; but it has 
 to go to the wholesale dealer, who is another middle- 
 man. If a co-operative store, or a union of a number 
 of co-operative stores, produce the goods themselves, 
 they may dispense with him. Thus we get productive 
 co-operation. 
 
 Mr. Holyoake, the historian of co-operation, tells (in 
 a charming book entitled Self-Jielp One Hundred Years 
 Ago, published in 1888) the story of the establishment, 
 by Dr. Shute Barrington, Bishop of Durham, in the 
 year 1794, of a co-operative store at Mongewell, in 
 Oxfordshire, for the benefit of the poor of that and three 
 small adjoining parishes. The bishop thus describes its 
 operations: "A quantity of such articles of consumption 
 as they use was procured from the wholesale dealers, as 
 bacon, cheese, candles, soap, and salt, to be sold at prime 
 cost, and for ready money. They were restricted in their 
 purchases to the supposed weekly demand of their 
 families. The bacon and cheese, being purchased in 
 Gloucestershire, had the charge of carriage." The 
 storekeeper was an infirm old man, unable to read or 
 write, but so correct in his receipts that there was no 
 reason to regret his want of scholarship. "As he had 
 parish pay, and his house rent was discharged, he was 
 perfectly contented with his salary of one shilling per 
 week, having also the common benefit of the shop." 
 The transactions in 1796 amounted 10^223, 14^. 2d. , and
 
 134 Provident Societies and 
 
 produced a saving of ^48, is., or 21 per cent. From the 
 adoption of this plan, the bishop observes, "the poor 
 will have good weight, and articles of the best quality; 
 which, without imputing dishonesty to the country 
 shopkeeper, will not always be the case at a common 
 shop. . . . Another benefit of this measure is the pre- 
 venting the poor running into debt. The credit given 
 them adds much to the sufferings they undergo from 
 their situation. . . . Another striking benefit to be 
 derived is giving to the poor the full enjoyment of their 
 earnings; for whoever attends to the circumstances 
 under which the labouring country poor usually purchase 
 the necessaries of life must be sensible of the incon- 
 veniences to which they are subjected." Mr. Holyoake 
 mentions also two other stores established shortly after- 
 wards : one by the Rev. Dr. Glasse at Greenford, and 
 the other by the Rev. George Glasse at Hanwell, both 
 in Middlesex, which were opened in 1800. 
 
 The oldest productive co-operative institution was the 
 Hull Anti-Mill and General Industrial Society, estab- 
 lished in 1795, and registered in 1856. It existed more 
 than 100 years, and was wound up in 1897. 
 
 Mr. Holyoake mentions, as next in order, a parish 
 windmill erected in 1796 on Barham Downs. Eight 
 subscribers furnished a capital of ^40 each to start it, 
 and the profits, after paying them interest at 5 per cent, 
 were to be applied towards reducing the capital to 
 150, and afterwards to the benefit of the labouring 
 industrious poor of the parish. A similar mill was 
 erected in 1797 at Chislehurst in Kent. 
 
 Two existing co-operative societies date back to the 
 year 1800. The Bridgeton Old Victualling and Baking 
 Society in the county of Lanark has 1056 members, and 
 carries on a business of ^66,944 a year on a capital of
 
 Industrial Welfare. 135 
 
 ^3230. It showed a balance of profit on the year's 
 transactions of ^15,251, and has assets worth ; 11,548. 
 The Pelican Provident Society at Radford, Notts, has 
 only 33 members, and its receipts and expenditure were 
 both 605. 
 
 Nineteen other existing societies, 10 in England and 
 9 in Scotland, began before the Victorian era. The 
 Lennoxtown Friendly Victualling Society, Stirlingshire 
 (1812), is distributive, and turns over 160 a week. 
 The Sheerness Economical Industrial and Provident 
 Society, Kent (1816), has 1334 members, and does a 
 business of ^28,569 a year. Its capital is ^17,272, 
 and its assets 20,092. The Larkhall Victualling 
 Society, Lanark (1821), does ^"20,708 a year. The 
 Meltham Mills Provident Co-operative Trading Society, 
 Yorkshire (1827), ^4628. The Leven Baking Society, 
 Fifeshire (1828), ^7410. The Upperby Industrial 
 Society, Cumberland (1829), ^2878. The Paddock 
 Friendly Co-operative Trading Society, Yorkshire 
 (1830), ^4072. The Bannockburn Co-operative Society, 
 Stirling (1830), ^30,699. Its capital is ^12,518, and 
 its assets ^17,236, of which ^6052 is buildings, fix- 
 tures, and land used in trade. The Parkhead and 
 Westmuir Economical Society, Glasgow (1831), sells 
 for ^17,571, and has 10,617 assets, of which ^6424 
 is buildings, &c. 
 
 Five existing societies date from the year 1832. The 
 Stockport Great Moor Society turns over ^7431 a year. 
 Two societies at Foleshill, the Lockhurst Lane Society, 
 ^11,038, and the Stoney Stanton Road Prudential 
 Society, ^10,947. The Ripponden Society, ^10,635. 
 The Cadder Society, Lanark, ^11,141. 
 
 The Arbroath Equitable Society, having 1061 mem- 
 bers and ,10,146 capital, does ^18,989 business, and
 
 136 Provident Societies and 
 
 has ^"14,076 assets. The Brechin United Co-operative 
 Association, with noo members and ^"12,800 capital, 
 does ^35,050 a year, and its assets are ^34,210. Both 
 these Forfarshire societies were established in 1833. 
 
 The Arbroath West Port Association, in the same 
 county, was established in 1834. It has 2229 members, 
 whose investments amount to ^"24,148. It turns over 
 ^"49,142 a year, and has ^32,834 assets. The Field 
 Head Society, at Kirkheaton, established in the same 
 year, does ^5882 business. 
 
 Whether the Devonport Coal Association, established 
 in 1837, is to be treated as before or after the accession 
 of Her Majesty, does not appear, but it has ever since 
 continued its modest but useful operations, and supplies 
 its 842 members with coal to the value of ^2381 a year. 
 
 The co-operative enterprises of Robert Owen, dictated 
 by a comprehensive spirit of philanthropy, do not appear 
 in England even to have lasted for his lifetime. Those 
 founded by him in America did not for a long period 
 survive him. 
 
 A great impetus was given to the co-operative move- 
 ment by the efforts of the brilliant group of young men 
 who were the friends and disciples of the Rev. Frederick 
 Denison Maurice, and though the particular institutions 
 founded by them had a comparatively brief existence, 
 the influence of their advocacy and energy has never 
 spent itself. Of all the names which deserve to be 
 venerated by co-operators, that of Mr. Edward Van- 
 sittart Neale stands foremost. A country squire and 
 large land-owner, he sacrificed much of his wealth for the 
 benefit of the labouring poor. When these munificent 
 gifts were exhausted, he might have been pardoned if 
 he had thought that he had done enough, and even if he 
 had turned with some bitterness from the scene of failure
 
 Industrial Welfare. 137 
 
 and of ingratitude. That was not his nature. He re- 
 mained during the whole of a long life the trusted friend 
 and adviser of the co-operative movement, and late in 
 years, when the office of secretary to the Co-operative 
 Union was vacant, the grand old man, who had suc- 
 ceeded to a beautiful landed estate on the banks of the 
 Thames, accepted the arduous office without fee or 
 reward, and laboured at its routine duties, constantly 
 travelling from London to Manchester, till almost the 
 close of his life. He was a skilful conveyancer, and 
 aided the societies by his legal knowledge and ingenuity 
 to surmount many difficulties. 
 
 Among the same group were the Rev. Charles 
 Kingsley, whose forcible writings under the name of 
 "Parson Lot" did much to awaken public feeling on 
 the evils which made the hearts of these "Christian 
 Socialists " burn within them, and whose career is 
 traced by the sympathetic pen of Dean Stubbs in 
 another volume of the present series; Mr. Thomas 
 Hughes, afterwards member of Parliament, Queen's 
 Counsel, and judge of County Courts, and his close 
 friend Mr. John Malcolm Ludlow, of whom we have 
 already said something in chapter I., and who is now 
 the last survivor. These also were the lifelong friends 
 and advisers of the co-operative movement, which they 
 benefited by their legal skill and knowledge, as well as 
 by their eloquent pens and voices, their far-seeing judg- 
 ment, their strong convictions, and their invincible up- 
 rightness and sincerity. 
 
 An even more powerful impetus was given to the 
 movement by the remarkable success which attended 
 some of the stores in Lancashire. In 1844, a few work- 
 ing men of Rochdale joined in establishing the Equitable 
 Pioneer Society, and that society extended its operations
 
 138 Provident Societies and 
 
 so rapidly, and conferred such signal benefits upon its 
 members, that its prosperity led to the establishment of 
 other similar societies in many parts of the country. It 
 thus vindicated its title of " pioneers", for in its consti- 
 tution and rules it embodied all the best principles, the 
 generous and progressive ideas, which have character- 
 ized the movement. It now has 12,719 members, with 
 a capital of ^360,371. Its sales during" the year 1896 
 were ^292,336, and its profits ^36,552, of which it 
 applied ^892 to educational purposes. The total assets 
 are ^384,467. While so many other societies have 
 succumbed to the temptation of giving credit, this 
 pioneer society has remained true to its original co- 
 operative principles, and still gives no credit. 
 
 Some statistics illustrating the rapid growth of co- 
 operative societies are given in the WJiolesale Societies 
 Annual. In 1862 the total sales of the societies are 
 recorded as ^2,333,523; by 1872 they had increased to 
 ^"13,012,120; by 1882 to ^27,541,2 12; and in 1895 they 
 were ^55,100,249, or nearly 24 times the figure of 1862. 
 On the 3ist December, 1895, their members numbered 
 1,430,340, having a share capital of ^16,749,826, and 
 a loan capital of ^4,58 1,573. The profits for the year 
 were ^5,389,071. The total sales from 1862 to 1895 
 are summed up as ^815,760,341, and the total profits 
 during the same time as ^72,075,568. 
 
 Other statistics, which have recently been published 
 by a committee of the International Co-operative Con- 
 gress, enable us to distinguish between the various 
 classes of co-operative societies. They state the number 
 of distributive societies or stores as 1453, and the num- 
 ber of wholly productive societies as 259. Exclusive of 
 credit banks, the total number of co-operative societies is 
 given as 1741. It will of course be understood that many
 
 Industrial Welfare. 139 
 
 of the societies reckoned as distributive, that being 1 their 
 main function, have important productive departments. 
 The number of members in distributive societies is for 
 England 1,142,204, for Scotland 233,907, for Ireland 
 1925; in productive societies 25,637, and in all societies 
 except credit banks 1,492,371. The number of persons 
 employed by the productive societies is 8475; and the 
 total number of persons employed by all the societies is 
 61,322, of which 33,619 are engaged in the productive 
 departments of work. 
 
 The sales of the Distributive Societies in England 
 were .29,342,755, in Scotland 7,547397 in Ireland 
 ,51,878; of the Productive Societies, 2,625,938; of all 
 the societies, 57,318,426. These figures sufficiently 
 indicate the great expansion of the co-operative move- 
 ment since the commencement of the Victoria era. 
 
 The Friendly Societies Act of 1846 enabled societies 
 to be established for the frugal investment of the savings 
 of the members by providing themselves with corn, coal, 
 flour, and other necessaries, and under this Act the 
 Rochdale Pioneers and many other early societies were 
 registered. The legal advisers of the societies, notably 
 Mr. Ludlow and Mr. Neale, drew attention to some pro- 
 visions of the Friendly Societies Acts then in force which 
 hampered their operations, and Mr. H. A. Slaney, at 
 their instance, introduced a Bill which became the In- 
 dustrial and Provident Societies Act 1852. This Act, 
 though it opened a separate register for these societies, 
 continued to apply to them many of the clauses of the 
 Friendly Societies Act. The expression, "Industrial 
 and Provident Societies", which it introduced, has never 
 superseded the term "Co-operative Societies", by which 
 they are familiarly known. It aptly indicates their two- 
 fold operation. They are "industrial" in their pro-
 
 140 Provident Societies and 
 
 ductive sense, as combining" the labour of many for the 
 benefit of the whole; they are "provident" in the dis- 
 tributive sense, as enabling" the member to economize 
 the cost of the necessaries of life, and thus to obtain 
 some modest luxuries, to increase his standard of com- 
 fort, to accumulate profits, to apply them to educational 
 purposes, to become by their means the proprietor of his 
 own dwelling-, and in many other ways to improve his 
 position. The industrial side of the system is most 
 truly co-operative when it pays good wages, and gives 
 the worker a share in the profits. 
 
 By 1862 the growth and development of the system 
 rendered further legislation necessary, and a new act 
 was passed, granting the societies the privilege of in- 
 corporation, and assimilating them rather to companies 
 under the Companies Acts than to societies under the 
 Friendly Societies Act. It retained, however, their 
 more cheap and simple system of registration. They 
 became, in fact, what the French call socidtts a capital 
 variable, and in that lay the principal distinction be- 
 tween them and companies with fixed capital. 
 
 In 1867 further amendments were made. 
 
 In 1876 Mr. Neale prepared a bill to consolidate 
 and amend the acts relating to Industrial and Provident 
 Societies, which was passed in August of that year. 
 The tendency apparent in 1862 and 1867 to assimilate 
 the law to that of Companies was now completely 
 reversed, for with the exception of the incident of in- 
 corporation and its consequences, the Act is almost a 
 transcript of the Friendly Societies Act of the previous 
 year. 
 
 In 1893 the Co-operative Union, with the aid of Mr. 
 George Howell, M.P., obtained the passing of another 
 consolidating and amending act. The amendments it
 
 Industrial Welfare. 141 
 
 introduced were few, but some of them were important. 
 The Act of 1876 had provided for the free inspection of 
 the books by every member or person having an interest 
 in the funds, saving only such entries as related to the 
 individual affairs of other members. The Act of 1893 
 materially restricts this right, except in the case where 
 it is granted by a subsequent amendment of rules. 
 
 The Act enables societies to receive deposits of 10 shil- 
 lings at one time instead of 5 shillings, and it reduces the 
 number of members who may apply to the registrar to 
 appoint inspectors or call a special meeting to one- 
 tenth of the whole number, or where the whole number 
 exceeds 1000, to 100 members. Among the privileges 
 which the legislature grants to the societies are exemp- 
 tion from income-tax, where the society is not one that 
 is limited to a certain number of members, and that deals 
 with the public; nomination for payments at death; and 
 all the privileges of incorporation. 
 
 The important development of Co-operative Societies 
 into a kind of co-operation raised to the second power, 
 or co-operation among the societies by the combin- 
 ation of the local stores as corporate shareholders into 
 a wholesale society, for supplying them with the com- 
 modities they sell by retail, occurred in 1864 in England 
 and in 1868 in Scotland. The progress of both societies 
 has been very rapid. In 1865 the sales of the English 
 Wholesale were ,120,754; in 1880, 3.339,681; in 
 1896, i 1,1 15,056. It consists of 1044 societies, which 
 have in the whole 993, 564 members, and have subscribed 
 a capital of 682,656. It acts as their banker, and 
 turns over in that capacity forty millions sterling per 
 annum, holding in loans and deposits 1,195,895. It 
 runs 7 steamships, and employs 8647 persons, of whom 
 5214 are in the productive works. Its profits for the
 
 142 Provident Societies and 
 
 year were ^"177,419, and its total profits from the 
 beginning 1 , ^1,842,722, upon total sales amounting to 
 ^135,769,82 1, which may indicate how near it is able 
 to approach the supply of goods at cost price. The 
 Scottish Wholesale Society sold in 1869 for 81, 094; 
 in 1880, for ^"845,221; and in 1896, for ^3,822,580, 
 showing progress somewhat less rapid than that of the 
 English Wholesale, but still very great. 
 
 A further development of the movement took place in 
 1869, when the first Co-operative Congress was opened 
 by an address from Mr. Thomas Hughes. He referred 
 to a previous Co-operative Conference that had been 
 held in 1852, in the hall belonging to the Working 
 Tailors' Association of that day. That association, 
 which gave so much innocent pride to Charles Kingsley, 
 when he first put on the coat it had made for him, was 
 broken up, and of the fifteen working associations, as 
 distinguished from co-operative stores, which had been 
 represented at that conference, only one, the Hatters' 
 Association of Manchester, had survived to 1869. At 
 that time, therefore, productive associations were a 
 failure, but the co-operative stores, and their centre, the 
 Wholesale, which was then called the North of England 
 Co-operative Wholesale Society, were prosperous and 
 progressive. They had, indeed, arrived at a point when 
 they no longer required some of the capital which their 
 members had subscribed, and part of Mr. Hughes's 
 address was directed towards advising them not to 
 return their excess of capital, but to use it in the en- 
 couragement of productive undertakings. 
 
 Of recent years, the productive movement, as may 
 have been gathered from the statistics we have already 
 given, has much increased. In one branch of productive 
 industry, co-operative farming, many attempts have
 
 Industrial Welfare. 143 
 
 been made, but have not in general been permanently 
 successful. A recent development of co-operation is the 
 establishment in Ireland of a number of co-operative 
 creameries, which give promise of excellent results ; and 
 another is the establishment of agricultural credit 
 banks. To credit societies registered under the Friendly 
 Societies Act as specially authorized societies we have 
 referred in a previous chapter. As to those registered 
 under the Industrial and Provident Societies Act, the 
 requirement that the capital is to be divided into shares, 
 and the privilege of limitation of liability, are incon- 
 sistent with the adoption in its integrity of the Raiffeisen 
 system. Societies to carry on the business of banking 
 generally have also been registered, but some of them 
 are of doubtful stability. 
 
 The legislative definition of the purposes for which 
 Industrial and Provident Societies may be registered has 
 passed through some suggestive changes. In 1862 it 
 was "for carrying on any labour, trade, or handicraft, 
 including the business of banking, and applying the 
 profits to any purposes mentioned in the Rules". In 
 1871 the trade of the buying and selling of land was 
 defined as a trade that might be carried on. In 1876 
 the words as to profits were omitted. In 1893 the 
 definition was altered to "any industry, trade, or busi- 
 ness, including dealings of any description with land". 
 This is comprehensive enough to permit of almost any 
 society being registered under the Act. Working-men's 
 clubs, " to carry on the business of club proprietors", 
 and a host of miscellaneous bodies have thus been 
 incorporated. The fact of registry under the Act is not 
 therefore conclusive evidence that a society is genuinely 
 co-operative. 
 
 Since the Act of 1871 was passed, many Industrial
 
 144 Provident Societies and 
 
 and Provident Land and Building 1 Societies have been 
 formed. They differ from societies under the Building 
 Societies Acts, to which we shall refer in a future 
 chapter, in respect that the interest of a member in an 
 Industrial and Provident Society is limited by the 
 Statute to ^200. They have therefore been mostly 
 concerned in the allotment and distribution of small 
 estates. There has also for many years been growing 
 up in the co-operative stores a movement for applying 
 their profits and accumulated funds towards enabling 
 the members to buy their own houses. We drew the 
 attention of the Statistical Society to this movement in 
 1876, when we showed that in 1872 about a quarter of a 
 million had been so employed. By 1891 this had increased 
 to ^2,497,855. About one-half of this has been accumu- 
 lated by societies in Lancashire, one-fourth in Yorkshire, 
 and one-fourth in the remainder of the United Kingdom. 
 From the earliest formation of co-operative stores, it 
 has been made a feature of the scheme that some of the 
 profits should be applied to educational purposes. This 
 is a matter that should not be overlooked, even in so 
 brief a summary of the subject as the present, because it 
 embodies the idea of self-improvement and self-help, 
 which is fundamental to the movement. The general 
 practice is to apply a specific small proportion of the 
 profits to an educational fund, and entrust the applica- 
 tion of the money to a sub-committee. In this way 
 many fine libraries have been formed and reading-rooms 
 opened, and other educational measures adopted. An 
 act passed in the session of 1898 has for object the 
 enabling the committees of these and other libraries to 
 regulate and maintain order in them. The Co-operative 
 Wholesale Societies have developed the educational 
 branch of their work by the publication in their annual
 
 Industrial "Welfare. 145 
 
 reports of a series of instructive articles by writers of 
 authority upon economic subjects. 
 
 A report presented to the Co-operative Congress of 
 1898 by its special committee on education, divides the 
 educational work of the movement into three branches: 
 education in the principles and methods of co-operation, 
 provision for the acquisition of knowledge on general 
 subjects, and arrangements for recreation and pleasure. 
 Upon these, as much as ^42,391 was expended in the 
 year 1895. The committee made a number of practical 
 recommendations, with a view to promote the study of 
 economic theory and practice and of citizenship, and to 
 act in conjunction with local bodies in the furtherance 
 of technical education. From the very first the educa- 
 tion of the citizen has been the aim of co-operators, and 
 it is rather in such moral aims than in any specialization 
 of method that the idea of true co-operation consists. 
 In this connection, it is interesting to note that the co- 
 operators have commemorated the labours of Judge 
 Hughes and Mr. Neale by the foundation of scholarships 
 at Oriel College, Oxford; and that university extension 
 lectures and classes for study, and examinations with 
 rewards to successful students under the auspices of the 
 Co-operative Union, are largely supported by them. 
 
 However some of the more enthusiastic spirits, who 
 saw in the co-operative movement the promise of a 
 coming millennium, may have been disappointed, its 
 beneficial operation in contributing to the material com- 
 fort and the mental progress of the members has been 
 immeasurable. Like all spontaneous and self-regulating 
 processes, it has given rise to varieties of treatment and 
 differences of opinion among its ardent promoters. These 
 have had relation, in many cases, to the burning ques- 
 tion, how to apply the profits: a question which is in a 
 {MHO) K
 
 146 Provident Societies and 
 
 large degree the test of the really co-operative character 
 of a society. Like all trading operations, it has had its 
 periods of depression, and the managers and members 
 have been taught some hard lessons in the school of 
 experience, as may be inferred from the fact that the 
 mean expectation of future existence of a co-operative 
 society at the date of its formation has been ascertained 
 by calculation to be about thirteen years ; but the spirit 
 of self-reliance, which first inspired it, has enabled them 
 speedily to recover lost ground, and the co-operative 
 movement stands to-day as one of the most practical 
 and the most successful efforts to promote industrial 
 welfare. 
 
 Its beneficial operation has extended far beyond the 
 range of the actual members of societies. The competi- 
 tion which it has set up with the local tradesmen has 
 shown them that it is as unwise as it is unfair to make 
 the purchaser who pays cash provide for the loss of 
 interest and sometimes of principal caused by the pur- 
 chaser who takes credit, and has reduced the share of 
 the middleman in the profit of commodities to a mini- 
 mum. The whole community has benefited by this 
 change. 
 
 The example shown by the Rochdale pioneers has 
 had its direct followers among other classes of persons. 
 The Civil Service Supply Association is a registered 
 Industrial and Provident Society. Other large stores 
 have been constituted under the Companies Acts, such 
 as the Civil Service Co-operative Society, the Army and 
 Navy Co-operative Society, the Army and Navy Auxili- 
 ary Society, and the Junior Army and Navy Co-opera- 
 tive Society. The curious observer at the doors of 
 any of those institutions may find food for reflection in 
 the thought that the same means by which the neces-
 
 Industrial Welfare. 147 
 
 saries of life have been cheapened and improved for the 
 poor have been found available to increase the luxuries 
 and amenities of life for the rich. 
 
 Chapter XL 
 Building Societies. 
 
 Our thoughtful and prosperous young working-man 
 will find that house rent forms a considerable portion of 
 his expenditure, and will set himself to devise some 
 means by which that burden can be diminished. He 
 will reflect that the good and paying tenant has to make 
 up to the landlord the losses he sustains from tenants 
 who cannot and tenants who will not pay; that it is 
 bothersome to have to go to the landlord for every 
 necessary repair and every desirable improvement to the 
 premises ; that if he were the owner of his own house 
 he could contrive many convenient and useful fixtures 
 that it would be folly for him to make while the land- 
 lord has the power to appropriate them to himself on 
 the determination of the tenancy, or possibly to make 
 them the subject of a claim for increase of rent. The 
 more he gets accustomed to the house which has been 
 the scene to himself and his wife of so many innocent 
 pleasures and home endearments, the more he will wish 
 to make it his own. We have seen to how large an 
 extent this instinct has been satisfied by appropriations 
 of the accumulated funds of Co-operative Societies. A 
 similar movement has been taking place for some years 
 in Friendly Societies, especially where there are District 
 Investment funds, to which the subordinate branches
 
 148 Provident Societies and 
 
 contribute. It becomes essential to lay such funds out 
 to the best advantage, and a long mortgage on a free- 
 hold or leasehold house, repayable by instalments, pro- 
 duces as large a return of interest as any sound security 
 can give with little pressure upon the borrower. The 
 objection that would be felt to locking up the money for 
 a long time by the individual lodge or court, viz., that 
 the money might be wanted to meet the claims upon 
 the fund before the end of the term, is not great where 
 a central fund is formed by the contributions of many 
 lodges or courts, inasmuch as all are not likely to be 
 wanting their money at the same time, and the accruing 
 income from repayments and interest will in general be 
 sufficient to meet the claims as they accrue. Hence a 
 very considerable business, in the nature of a Building 
 Society business, has come to be transacted as a means 
 of the investment of the funds of Friendly Societies. 
 
 Building Societies, strangely so called, for they never 
 build, but are societies for lending money on mortgage 
 to their members, were first specifically dealt with by 
 the legislature in 1836, the last year of the reign of 
 King William IV. Their existence as bodies specially 
 encouraged and protected by the law is exactly com- 
 mensurate with the Victorian era. The Act 6 and 7 
 William IV. cap. 32, enacted that all Building Societies 
 established prior to the ist June, 1836, should be 
 entitled to its benefits on their then present rules being 
 duly certified by the Barrister and deposited with the 
 Clerk of the Peace as directed by the Friendly Societies 
 Acts, without altering in any manner the rules under 
 which they were governed. The preamble alleged that 
 societies, commonly called Building Societies, had been 
 established in different parts of the kingdom, principally 
 amongst the industrious classes, for the purpose pf
 
 Industrial "Welfare. 149 
 
 raising 1 by small periodical subscriptions a fund to assist 
 the members thereof in obtaining a small freehold or 
 leasehold property. A mention of " Building- Clubs" in 
 Birmingham occurs in 1795; one is known to have been 
 established by deed in 1809 at Greenwich; another is 
 said to have been founded in 1815 under the auspices 
 of the Earl of Selkirk at Kirkcudbright. Other institu- 
 tions of a similar kind were afterwards established in 
 Scotland under the title of " Menages ", and the system 
 was soon adopted by societies formed in the neighbour- 
 hood of Manchester and Liverpool and other parts of 
 the North of England. Though the expression " Build- 
 ing Society " was commonly used, yet in London and 
 other parts some further descriptive title was frequently 
 added, such as "Accumulating Fund", "Savings Fund", 
 or " Investment Association ". Several societies were 
 described as "Societies for obtaining freehold property", 
 or as "Mutual Associations", or "Societies of Equa- 
 lity". In Scotland, the expression "Property Invest- 
 ment Company " was frequently used. After the passing 
 of the Act in 1836 the expression " Benefit Building 
 Society" became general, and from 1849 to 1874 was 
 the one solely adopted. 
 
 The Act of 1874 divided Building Societies into two 
 classes: a terminating society being one which by its 
 rules is to terminate at a fixed date, or when a result 
 specified in its rules is attained; a permanent society, 
 one which has not by its rules any such fixed date or 
 specified result at which it shall terminate. Permanent 
 societies were not invented until 1846. The early 
 societies were all terminating, consisting of a limited 
 number of members, and coming to an end as soon as 
 every member had received the amount agreed upon as 
 the value of his shares. We borrow from our own
 
 150 Provident Societies and 
 
 article in the ninth edition of the Encyclop&dia Britan- 
 nica a simple typical example of the working of such a 
 society. The shares are 120 each, realizable by sub- 
 scription of los. a month during 14 years. Fourteen 
 years happens to be nearly the time in which, at 5 per 
 cent compound interest, a sum of money becomes 
 doubled. Hence, the present value, at the commence- 
 ment of the Society, of the 120 to be realized at its 
 conclusion, or (what is the same thing) of the subscrip- 
 tion of los. a month by which that 120 is to be raised, 
 is 60. If such a society had issued 120 shares, the 
 aggregate subscriptions for the first month of its exis- 
 tence would amount to exactly the sum required to pay 
 the member the present value of one share. One mem- 
 ber would accordingly receive a sum down of 60 ; and 
 in order to protect the other members from loss, would 
 execute a mortgage of his dwelling-house for ensuring 
 the payment of the future subscriptions of los. per 
 month until every member had in like manner obtained 
 an advance upon his shares, or accumulated the 120 
 per share. As 60 is not of itself enough to buy a 
 house, even of the most modest kind, every member 
 desirous of using the Society for its expressed purpose 
 of obtaining a dwelling-house by its means would 
 require to take more than one share. This and other 
 causes would give rise to delay and consequent loss of 
 interest; and the question soon arose whether it would 
 not be advantageous to the Society to borrow money in 
 aid of the subscriptions of the members for obtaining 
 advances more speedily. 
 
 The definition of Building Societies in the Act of 1836 
 was in many respects perplexing. " Societies for the 
 purpose of raising, by the monthly or other subscrip- 
 tions of the several members of such societies, shares
 
 Industrial Welfare. 151 
 
 not exceeding the value of i$o for each share, such 
 subscription not to exceed in the whole 2os. per month 
 for each share, a stock or fund for the purpose of en- 
 abling each member thereof to receive out of the funds 
 of such society the amount or value of his or her share 
 or shares therein, to erect or purchase one or more 
 dwelling-house or dwelling-houses, or other real or 
 leasehold estate, to be secured by way of mortgage to 
 such society until the amount or value of his or her 
 shares shall have been fully repaid to such society with 
 the interest thereon, and all fines or other payments in- 
 curred in respect thereof." The limitations of shares 
 parenthetically introduced were probably intended to 
 confine the operations of the society to the "indus- 
 trious " classes, but as the limitations attached only to 
 shares, and there was nothing to prevent a single 
 member holding any number of shares, they were of no 
 effect. The words relating to erection or purchase of 
 houses and estates might also have been intended as 
 restrictive, but it was judicially decided that they did 
 not prevent a member obtaining an advance on pro- 
 perty already in his possession. The question whether 
 the Act admitted of a society borrowing money passed 
 through several different phases. At first rules were 
 made by several societies authorizing it, and some such 
 rules are to this day acted upon without restriction as 
 to amount. After a while, doubts were raised, and the 
 Attorney-General of the day was appealed to. He gave 
 it as his opinion that no rule for borrowing could be 
 certified as in conformity with law and with the pro- 
 visions of the Acts. This opinion was acted upon for 
 some years, until the validity of a rule for borrowing 
 came for judicial decision before Vice-Chancellor Page 
 Wood, afterwards Lord Hatherley, who held that the
 
 152 Provident Societies and 
 
 rule was good, provided it was limited to such reason- 
 able amount or proportion of the advances as would 
 secure that the borrowing was for the legitimate pur- 
 poses of the society. 
 
 As time went on, the Act of 1836 was found to be 
 defective in many other respects. It applied to Build- 
 ing Societies all the provisions of the Friendly Societies 
 Acts of 1828 and 1834, so far as the same or any part 
 thereof may be applicable to the purpose of any Benefit 
 Building Society, and to the framing, certifying, enroll- 
 ing and altering the rules thereof. A few years after, 
 those Acts were repealed as regards Friendly Societies, 
 but being thus incorporated in the Building Societies 
 Act, their obsolete provisions remained still applicable 
 as regards Benefit Building Societies. They left in 
 doubt the question whether a person under age could 
 be a member. He could of course be a member of a 
 Friendly Society, but as he could not execute a mort- 
 gage or erect or purchase a house, could he be a 
 member of a Building Society? As the Building Society 
 movement grew, it was found that, in addition to their 
 original object, Building Societies were very useful and 
 remunerative means of investment; and as an en- 
 couragement to thrift, many parents desired to induce 
 their children to become members of Building Societies 
 in early life, and it was doubtful whether they could 
 lawfully do so. Gradually, the members of Building 
 Societies separated into two distinct classes, borrowing 
 members and investing members; but the Act of 1836 
 seems to have contemplated that every member (except, 
 at any rate, the last) should be a borrowing member. 
 As under the Acts of 1828 and 1834 all documents 
 relating to a Building Society had to be enrolled with 
 the Clerk of the Peace for the county in which it was
 
 Industrial Welfare. 153 
 
 established, it could not remove its place ot meeting 
 out of that county ; thus, a society established on the 
 south side of the Thames could not remove to the north 
 side, nor a society in Birkenhead change its place of meet- 
 ing to Liverpool. These Acts contained no provisions en- 
 abling a society to change its name; and greatly restricted 
 societies in the investment of their surplus funds. 
 
 The development of the system of Permanent Societies 
 brought these and other defects of the law into promin- 
 ence. The terminating form of society works smoothly 
 in its earlier years, but as the society approaches its 
 termination, difficulties arise in obtaining interest for its 
 money on account of the shortness of the term for which 
 an advance can be made. Hence arose a practice of 
 establishing a series of societies in succession to one 
 another. As each society filled its list, a new one was 
 started, and was able to assist the earlier ones, to the 
 convenience of all. This led to the suggestion that a 
 society might have a continuous existence with suc- 
 cessive series of members, so that the membership 
 should be terminable, but the society permanent. The 
 plan was found to have other advantages. It was not 
 necessary to fix one single term for the membership of 
 every member. A man might subscribe for a 5 years' 
 or 10 years' share as well as for a 14 years' share, or 
 might pay up his share in full. A borrower might in 
 like manner borrow for any term of years that suited his 
 convenience. The terminating form of society held a 
 member to his bargain until there was enough to pay 
 out every other member the amount or value of his 
 share. If losses occurred, this time might be pro- 
 longed. In any event, it could not be precisely ascer- 
 tained beforehand. The permanent plan substituted for 
 this a fixed contract for a definite term of years. Hence
 
 154 Provident Societies and 
 
 the amount payable by the society upon withdrawal of 
 an unadvanced share, or by the member upon redemp- 
 tion of his mortgage, could be more accurately ascer- 
 tained. The part of the question relating" to possible 
 losses was usually left in the background, but when it 
 became necessary to find a solution for it, rules were 
 made directing" a deduction from the amount payable to 
 members withdrawing" in cases where these members 
 had all the profits, and an additional payment by 
 borrowers where they also shared in the profits. The 
 permanent society therefore brought into high relief 
 the differences between the investing class of member 
 and the borrowing- class, though the distinction in the 
 Act was merely that of a share on which an advance 
 has been made and a share on which an advance has 
 not been made. 
 
 The business of a Building" Society, legitimate and 
 profitable as it was in general when it was restricted to 
 the early intention of enabling each member to buy his 
 own dwelling-house, took upon itself in many places by 
 degrees a speculative character. Large sums were lent 
 to builders and other persons who had not sufficient 
 capital of their own to provide against the risks of the 
 transaction. They fell into arrear with their repayments, 
 and the society had ultimately to take the property into 
 possession. Where it was situated in the suburbs of 
 London or of some growing town, the centrifugal force 
 which drives the inhabitants to seek their homes farther 
 and farther from the centre came into operation, and the 
 property declined in value. Where it was badly built, 
 heavy charges for repair fell on the society. Many 
 societies thus made losses and got into positions of 
 difficulty. 
 
 Another cause of loss which too frequently came into
 
 Industrial Welfare. 155 
 
 operation was direct peculation. In societies of this 
 kind, much is necessarily left to the manager. If he 
 happens to be a clever rogue, he will not have great 
 difficulty in getting the control of the concern into his 
 own hands. He is exposed to the temptation of 
 frequently receiving large sums of money by way of 
 redemption money, fully paid-up shares and the like, 
 which a little astuteness, if there be no adequate super- 
 vision, may easily manipulate in the accounts or omit 
 from them altogether. Yet the only provision in the 
 Act of 1836 for audit was that it should be conducted by 
 two of the members. Unless a society had a profes- 
 sional accountant among its members, it was compelled 
 to elect as auditors persons who had not that qualifica- 
 tion. To the lay auditor the necessity of many precau- 
 tions, such as inspection of the mortgages and verifica- 
 tion of the other securities, would rarely occur. No 
 annual return was required to be sent to any public 
 office. There was, accordingly, in many cases a com- 
 plete lack of effective supervision, and the opportunity 
 made the thief. 
 
 When, from these or other causes, winding up a society 
 became urgent, it was found that nothing in the Acts of 
 1828 or 1834 met the case. The Companies Act 1862, 
 contained provisions for winding up unregistered com- 
 panies, sections 199 et seg., and these entailed the most 
 costly and burdensome form of procedure known to that 
 Act. Every such winding up must be under the com- 
 pulsory clauses, and must be proceeded with in the High 
 Court of Chancery. When it was found that this was 
 the only way of winding up an insolvent Building 
 Society, it was evident that the disaster was made 
 worse, and that little or nothing would be saved out of 
 the wreck for the unfortunate members.
 
 156 Provident Societies and 
 
 In 1870 these considerations had become so pressing 
 that the managers of several large Building Societies 
 formed themselves into a committee to draw up a bill 
 to amend the law. That bill was submitted to the 
 Royal Commission on Friendly Societies, and they pro- 
 ceeded to take evidence on the question, and made the 
 amendment of the law of Building Societies the subject 
 of their second Report, presented in 1872. Ultimately, 
 the Building Societies Act 1874, was passed, carrying 
 into effect some of the recommendations of the Royal 
 Commission. These were, that the form of the Building 
 Society (the prefix "benefit" might usefully be sup- 
 pressed) as distinct from the joint-stock company, 
 should be maintained ; that the law on the subject 
 should be consolidated and amended; that Building 
 Societies should continue to be registered with the 
 Registrar of Friendly Societies; that the certificate of 
 registration should carry corporate powers; that the 
 exemption from stamp-duty on mortgages should be 
 limited (it was in the result wholly taken away) ; that 
 the privilege of paying small sums on intestacy without 
 letters of administration should be raised to a maximum 
 of ^50 ; that the privilege of priority against the estates 
 of deceased debtors (that is, those who are officers hold- 
 ing funds by virtue of their office) should be abolished ; 
 that the rules should provide whether there shall be any 
 power to borrow, and to what extent, within the limits 
 fixed by the law, and whether preferential capital may 
 be issued, and as to withdrawals and redemptions; that 
 the limit of the borrowing power should be two-thirds 
 of the total value of the amounts for the time being 
 secured on mortgage, or, as an alternative for terminat- 
 ing societies, six (this became twelve) months' subscrip- 
 tions; that societies should be required to produce their
 
 Industrial Welfare. 157 
 
 mortgages to the auditors; that the Registrar should 
 be invested with power to settle disputes; that the en- 
 forcement of the law should be secured by an efficient 
 system of penalties; and that other matters should be 
 provided for, in particular, joint-membership. 
 
 The Act of 1874 left existing societies under the Acts 
 of 1828, 1834, and 1836 until they should, on their own 
 application, become incorporated under that of 1874. A 
 casual error in an amendment made in the House of 
 Lords caused it to express a different intention, but this 
 was corrected by a short act passed in 1875. Later on, 
 an amending act, of which we shall have to speak 
 presently, repealed the Act of 1836, so far as regards 
 societies established after 1856. The only societies, 
 therefore, which now remain under the operation of the 
 three old acts are those established before 1857 which 
 have not become incorporated under the Act of 1874. 
 Of these, 304 are not known to have ceased to exist, 
 but only 71 are known to be in actual existence. None 
 of these are in Scotland or Ireland. 
 
 The Act of 1874 also provided for making annual 
 returns to the Registrar, and laid down the important 
 requirements that the statement of the amount due 
 upon mortgage securities as an asset is not to include 
 prospective interest; it introduced a simple method of 
 dissolving societies by means of an instrument of dis- 
 solution, signed by three-fourths of the members holding 
 two-thirds of the shares; and restricted the right of 
 applying to the Court (which was defined to be the 
 County Court and not the Court of Chancery) for wind- 
 ing up compulsorily or under supervision to a judgment 
 creditor for a sum exceeding ^50, or a member author- 
 ized by a meeting of the society to present a petition. 
 
 Other amending acts were passed in 1877, 1884, and
 
 158 Provident Societies and 
 
 1888 to remove doubts which had arisen as to matters 
 of detail; but the policy of the law was not again 
 brought under general review until the events occurred 
 which led to the passing of the Act of 1894.- During the 
 intervening twenty years, in England and Wales, more 
 than 600 old societies had been incorporated under 
 the Act of 1874, and as many as 3351 new societies 
 had been formed. Of these 1526 had ceased to exist. 
 The Act had, it was evident, given rise to the formation 
 of a great number of mushroom societies. The assets of 
 Building Societies (old and new) under the Act of 1874 
 reached their highest point in 1890, when they were 
 returned at ^50,778,797. They dropped ^196,432 in 
 the return published in 1891 ; ^869,363 in that pub- 
 lished in 1892; ^7,029,731 in that published in 1894. 
 A similar though smaller diminution is shown in the 
 return for Scotland and Ireland. 
 
 The explanation of this sudden cessation of apparent 
 prosperity is found in the stoppage of the Liberator 
 Building Society of London, one of the largest on the 
 list, which had drawn its funds from provident persons 
 in almost every class of society, who were led by specious 
 representations to believe in its absolute safety. It 
 appeared upon investigation that nearly all the legiti- 
 mate Building Society business the society ever had 
 had been converted into book entries against a number 
 of other concerns under the same management, which 
 shared in the general crash, and that every penny of 
 the shareholders' capital had absolutely melted away. 
 The aggregate losses in the whole of the concerns 
 amounted to many millions of money, and in the 
 Liberator alone exceeded one million. The misery and 
 suffering caused by this failure were wide-spread and 
 enormous; many who had relied upon their savings
 
 Industrial Welfare. 159 
 
 invested in these concerns found themselves destitute: 
 some became paupers, some died in want or committed 
 suicide in despair. 
 
 Other societies came to grief about the same time, 
 and public confidence in Building Societies generally 
 was severely shaken. A "run" was made upon several 
 societies which had been in the habit of receiving 
 deposits repayable on demand. In the case of the 
 principal society of the class, the "Birkbeck", one of 
 those established under the Act of 1836 before 1857, and 
 not incorporated under the Act of 1874, it had its re- 
 sources so largely invested in available securities that it 
 was able to meet every claim; and the "run" strength- 
 ened the credit and reputation of the society instead of 
 weakening it. With that exception, the loss of public 
 confidence arising from the failure of the Liberator and 
 other societies was so marked and so prejudicial to 
 Building Societies generally that all parties were agreed 
 that a considerable amendment of the Building Societies 
 Acts was a matter of great urgency. In the session of 
 1893 as many as four bills were brought into the House 
 of Commons for that purpose, and they were all referred 
 to a select committee, of which Mr. Herbert Gladstone 
 was chairman. Their deliberations resulted in the pass- 
 ing in the next session of the Building Societies Act 
 1894. 
 
 That Act conferred large and unusual powers upon 
 the Registrar, to whom any three members may supply 
 evidence by way of statutory declaration of facts which 
 call for investigation, or for recourse to the judgment of 
 a meeting of the members; and if the society fails to 
 furnish a satisfactory explanation of such facts within 
 fourteen days, the Registrar may appoint an inspector 
 or may call a special meeting. He may also do so if
 
 160 Provident Societies and 
 
 s 
 
 one-tenth of the whole number of members in a small 
 society, or 100 members in a society which consists of 
 more than 1000 members, apply to him; and may do so 
 of his own motion, if the society has been guilty of per- 
 sistent neglect to make returns, or persistent neglect to 
 correct or complete an inadequate return. 
 
 Any ten members, each of not less than twelve 
 months' standing, may apply to the Registrar to appoint 
 an accountant or actuary to inspect the books of a 
 society and to report thereon. Upon proper application, 
 also, the Registrar may dissolve a society, if it cannot 
 meet the claims of the members, and if a dissolution 
 would be for their benefit, and may direct the manner 
 in which its affairs are to be wound up. This provision 
 has been made available in a variety of circumstances. 
 In the case of a society where the transactions were 
 large, and an exhaustive investigation of the proceedings 
 of the managers appeared to be called for, it was directed 
 that the society should be wound up, as nearly as might 
 be, in the same manner as if the Registrar's award of 
 dissolution were an order of a court under the Com- 
 panies Acts; in other cases, the direction has been for 
 winding up in the same manner as if the award were an 
 instrument of dissolution signed by the members; and 
 in others, detailed directions have been given according 
 to the circumstances of the case. He may cancel or 
 suspend the registry of a society which persists in an 
 illegal course after notice from the Registrar; and may 
 take proceedings against societies to enforce the pro- 
 visions of the Act, and against persons misapplying the 
 funds of societies. For most of these purposes he has 
 to obtain the approval of the Secretary of State. 
 
 Every society is required to include in its rules tables 
 showing, in respect of unadvanced shares, the amount
 
 Industrial "Welfare. 161 
 
 due by the society for principal and interest separately, 
 and in respect of advanced shares the amount due from 
 the borrower after each stipulated payment, unless the 
 Registrar is of opinion that such tables are not appli- 
 cable to the society. Except in the case, therefore, 
 where the scheme of the society is such that no tables 
 could be given as, for example, the case of a society 
 which makes its advances by sale every member is 
 able to find out by mere inspection of the table in his 
 rules how much is due to him from the society at any 
 given time, or how much it would cost him to redeem his 
 mortgage. Under the old system it frequently happened 
 that a society, after charging a member interest at a 
 high rate for the whole term of his mortgage, would 
 allow him discount at a low rate, so that if he desired to 
 redeem, after having paid a considerable sum on account 
 of principal, the society would still be able to claim 
 from him as much as the original amount advanced, and 
 sometimes even more. The society can do so still, but 
 is not so likely to adopt that course when the result has 
 to be printed in a table in the rules. 
 
 Every society is also required to make in its rules 
 express provision as to how losses are to be ascertained 
 and provided for, and when membership is to cease. 
 Great injustice has been done to the members of societies 
 where the rules have not contained provisions requiring 
 members withdrawing to contribute to the losses in- 
 curred while they were members, as in the case of the 
 decision of the House of Lords in Auld v. The Gfasginv 
 Building Society, and it is hoped that this may be 
 avoided in future. 
 
 The society's power to borrow is considerably re- 
 stricted by the provision that in calculating the limit 
 of two-thirds of the amount secured to the society by 
 
 ( M 610 ) L
 
 162 Provident Societies and 
 
 mortgages from its members, mortgages more than 
 twelve months in arrear, and mortgages on property of 
 which the society has taken possession for twelve 
 months, are not to be included. Schedules of such 
 mortgages are to be appended to every annual state- 
 ment of account, as well as of mortgages exceeding 
 ^5000; and the auditors are required to certify that the 
 accounts are correct, duly vouched, and in accordance 
 with law, and that they have in fact inspected all the 
 mortgages, stating the number. The annual accounts 
 and statements of societies are to be uniform. 
 
 While the measure was under consideration, it ap- 
 peared desirable to obtain information as to the extent 
 to which properties were held in possession by societies, 
 and the House of Commons resolved, on the motion of 
 the Right Hon. W. L. Jackson, to present an address to 
 Her Majesty, asking for a return on the subject. Ac- 
 cordingly the Secretary of State addressed a request for 
 the information to 2371 societies. In answer, 1436 
 societies stated that they had no properties in posses- 
 sion, and 716 stated that they had properties in 
 possession which, in the aggregate, had been originally 
 valued at ^5, 100,115, on which they had advanced 
 ^4,342,182, of which ^4,120,457 was still due, and 
 stood in their assets as ^3,715,106. They derived a 
 gross income during the year from rents, &c., amount- 
 ing to ^291,945, against which were to be reckoned 
 outgoings amounting to ^163,861. The remaining 219 
 societies withheld the information called for, although 
 the Secretary of State more than once renewed his 
 request for it. 
 
 It will be interesting to compare these figures with 
 those for the year 1896, now that it has been made 
 obligatory upon the societies to furnish the information.
 
 Industrial Welfare. 163 
 
 The properties in possession now returned as assets 
 amount to ,5,526,804; and a comparison of the returns 
 of individual societies with those for the year 1892 
 shows that during the four years the societies generally 
 have unloaded themselves of a considerable portion of 
 the properties in possession which they then held. An 
 examination of the returns of the 219 societies which 
 declined to furnish the information in 1892 leads to the 
 conclusion that they had then in possession an amount 
 at least equal to that returned by the other societies; 
 in other words, that the properties in possession have 
 been reduced in the four years from 7^ millions to $}4 
 millions. 
 
 This diminution of two millions is largely due to the 
 indirect operation of the Act. It has no doubt been 
 obtained at some cost, but in general it is the wiser 
 course for a society boldly to face its losses. The 
 remaining 5^ millions will probably not be realized 
 without further loss, and will postpone for many societies 
 the time when they can again become the profit-earning 
 concerns that they used to be in the early years of the 
 movement. 
 
 Besides the properties taken into possession, mort- 
 gages amounting to ,509,036 had fallen into arrear for 
 more than twelve months. The mortgages for sums 
 exceeding 5000 amounted in the whole to 2, 010,811. 
 As the total mortgages held by 2360 incorporated 
 societies in England and Wales are for ^38,770,032, it 
 follows that 14*3 per cent of the total are on properties 
 in possession, 1*3 per cent are in arrear, 5*2 per cent 
 are for large amounts, and 79^2 per cent are unaffected 
 by these conditions and may be taken to represent the 
 legitimate and profitable business of the societies. 
 
 Taking incorporated and unincorporated societies for
 
 164 Provident Societies and 
 
 the whole of the United Kingdom, returns have been 
 obtained from 2635 societies having 635,716 members. 
 Their aggregate receipts during the financial year 
 ending in 1897 were ^33,306,638. Their assets were: 
 balances due on mortgage, ^43,350,439; other assets, 
 ^13,047,018; total, ^56,397,457. Of this, shareholders' 
 capital stood for ^34,845,218; debts to depositors and 
 others, ^"19,030,242; and net profit balances, 2, 52 1,997. 
 
 If to these large figures, representing the existing 
 business of building societies, we add the vast sums 
 that during the last 60 years have been advanced to and 
 repaid by their members, we shall have some idea of 
 the marvellous extent of their beneficial operations. If 
 we reduce the 43 millions due on mortgage by 20 per 
 per cent, for large mortgages, mortgages in arrear, and 
 properties in possession, we get a net sum of 35 mil- 
 lions. Taking the average mortgage at ^300, the 
 number of existing mortgages would be 115,000. Look- 
 ing back on the whole history of Building Societies, it is 
 certainly not too much to say that a quarter of a million 
 persons have been able by their means to become the 
 proprietors of their own homes. 
 
 To many a man among these the day when the repay- 
 ments terminated and he was able henceforth to live in a 
 house of his own, rent free, was a beginning of days of 
 prosperity and comfort, leading in some cases to com- 
 parative opulence, or at least to such an amount of 
 provident accumulation as to remove all cause of anxiety 
 from the contemplation of approaching old age.
 
 Industrial Welfare. 165 
 
 Chapter XII. 
 Savings-banks. 
 
 Savings-banks of the type now called Trustee Savings- 
 banks, were well established before the Victorian era 
 began, but that period has seen a wonderful develop- 
 ment of them, and some change in their character. 
 Daniel Defoe gave the first hint of them in his fruitful 
 Essay on Projects, published in 1697. They took root on 
 the continent of Europe before they began to be estab- 
 lished in England. Between 1765 and 1796, Savings- 
 banks were formed in Brunswick, Hamburg, Olden- 
 burg, Berne, Loire, Basil, Geneva, and Kiel. In 1797 
 Bentham revived Defoe's suggestion under the name of 
 "Frugality Banks", and in 1799 the first English Savings- 
 bank was founded at Wendover in Bucks by the Rev. 
 Joseph Smith. Miss Priscilla Wakefield had established 
 a Friendly Society at Tottenham in Middlesex in 1798, 
 and in 1801 she added a Savings-bank to it. Savings- 
 banks were shortly after established in London, Bath, 
 Dumfriesshire, Edinburgh, Kelso, Hawick, Southamp- 
 ton, and elsewhere. In the latter part of the eighteenth 
 and beginning of the nineteenth century, methods of 
 bettering the condition of the industrial population were 
 much in men's minds, as we have already seen in con- 
 nection with the history of Friendly Societies. Many 
 well-intended measures were introduced into Parliament 
 for making comprehensive provision for the poorer 
 classes, especially with reference to their old age. 
 These failing, the simple expedient of providing for the 
 safe-keeping of small sums, and accumulating them at 
 compound interest, was widely adopted. From the
 
 166 Provident Societies and 
 
 beginning to the present time, Savings-banks have 
 been distinguished from all the other bodies which we 
 have discussed in one important particular. They are 
 managed for the depositors, not by the depositors. 
 The management is exercised by a body of volunteers, 
 in the election of whom the depositors have no voice. 
 These persons, termed trustees and managers, are ex- 
 pressly prohibited by statute from deriving any remun- 
 eration or profit for themselves out of the transactions of 
 the Savings-banks, and the name "Trustee Savings- 
 banks " aptly marks out this distinguishing character- 
 istic. 
 
 As the safety of the deposits is a matter of primary 
 importance, it was from the first provided that they 
 should be invested in government stock. In 1817, acts 
 were passed to encourage the establishment of banks 
 for savings in England and Ireland, and the govern- 
 ment then undertook itself to receive the deposits from 
 the trustees of the Savings-banks, through the Commis- 
 sioners for the Reduction of the National Debt, into 
 whose accounts at the Banks of England and Ireland the 
 trustees were to pay in all they received. Upon these 
 sums a fixed rate of interest of 3^. per day, or ^4, us. 3^. 
 per cent per annum, was to be paid ; and the government 
 undertook to return the deposits in full when required. 
 This appears to be a high rate of interest; but it is to 
 be remembered that for nearly forty years the price of 
 government stock had then been so low that upon the 
 average ^4, 1 1 s. ^d. could easily have been earned by 
 investment in that security. Unfortunately for the 
 Savings-bank fund, but fortunately for the nation at 
 large, almost immediately after this, the tide turned. 
 Our military and naval successes in the war with France 
 re-established the credit of the country. Stock went up,
 
 Industrial Welfare. 167 
 
 and the Commissioners became unable to realize the rate 
 f $> lls > 3^' P er cent n their purchases. Each year, 
 however, interest was credited upon the deposits, 
 whether it had been earned or not. The result was, 
 that a deficiency of capital accrued, taking the stock at 
 its cost price. It shortly became evident that something 
 must be done; and in 1828, the rate of interest was 
 reduced to 2}4d. per day, or ^3, i6s. o*d. per cent 
 per annum. It is a pity that a sum had not been voted 
 each year by Parliament to make up the deficiency in 
 interest. The question never really affected the Savings- 
 banks themselves, as the government accepted the re- 
 sponsibility of repaying the deposits at par, and there- 
 fore the depositors could lose nothing, but it was a bad 
 principle in finance to leave the deficiency to accumulate 
 instead of meeting each year's claim as it arose. The 
 result of this financial error was that the income from 
 the investments soon became insufficient to meet the 
 claims for interest even at the reduced rate, inasmuch 
 as it was derived from a diminished capital. 
 
 Meanwhile, the Savings-banks were largely increasing 
 their business. The full government security for the 
 amounts deposited with the Commissioners, and the 
 liberal rate of interest allowed, made them exceedingly 
 popular. By 1837, there were about 300 banks in exis- 
 tence, having about 600,000 depositors, and the amount 
 to their credit was nearly 20 millions sterling, or about 
 155. per head of the population of the country. The 
 growth of the deficiency again forced itself on the 
 attention of the legislature, and in 1850 the rate of 
 interest was reduced to zd. per diem, or ^3, os. \od. 
 per annum. The defective financial system was not 
 remedied till many years after, when the existing 
 deficiency was provided for, and a vote is now taken
 
 168 Provident Societies and 
 
 annually for each year's deficiency as it arises. As in 
 1888 the rate of interest was again reduced to 2, i$s. 
 per cent, there would now be little or no deficiency, if 
 the government were not bound by its contracts with 
 Friendly Societies. These were allowed to deposit 
 their funds without limit with the National Debt Com- 
 missioners, and so long" as any assurances exist, which 
 were contracted for before 1828, 1850, and 1888 respec- 
 tively, the Commissioners continue to pay the high rates 
 of interest on the premiums received under these 
 insurances. 
 
 The legislation as to Savings-banks in Scotland was 
 somewhat later than that for England and Ireland. An 
 act for their protection was passed in 1819, but it was 
 not till 1835 that they were permitted to deposit their 
 funds with the National Debt Commissioners. They 
 came in consequence to be called "National Security" 
 Savings-banks, but that name has now been discontinued ; 
 and the Consolidating Act of 1863 applies to Savings- 
 banks in all parts of the United Kingdom. 
 
 Though the growth of the deficiency in the Savings- 
 banks and Friendly Societies Fund arising from insuffi- 
 ciency of interest has now been stopped, there is another 
 consideration which makes every contract by the govern- 
 ment to accept deposits repayable on demand unfavour- 
 able to the State. The times when deposits are made 
 and money has to be invested are times of general 
 prosperity, when the funds are at a high price; the 
 times when deposits are withdrawn, and money has to 
 be withdrawn from investment, are times of general 
 depression, when the funds are at a low price. Hence, 
 the government has always to buy in the dearest market 
 and sell in the cheapest. This is shown very clearly by 
 the late Mr. Scratchley in an analysis of the transactions
 
 Industrial Welfare. 169 
 
 of the eighteen years from 1840 to 1858. During those 
 quarters when the funds were at an average price of 
 par, the deposits by trustees of Savings-banks with the 
 Commissioners exceeded their withdrawalsby ^1,300,000; 
 when the funds were at an average price of 96, deposits 
 exceeded withdrawals by ^2,coo,ooo; when the funds 
 fell to an average of 90^, withdrawals exceeded deposits 
 by more than 4^ millions, and when funds were as low 
 as 83^6, withdrawals exceeded deposits by more than 
 4 millions. This state of things affects the State only 
 in its self-imposed office of banker to the trustees, and 
 does not affect the trustees or the depositors. 
 
 A system thus grew up by which large sums of money 
 were entrusted to the philanthropic and benevolent per- 
 sons who took upon them the unpaid office of trustees 
 and managers, upon condition that they should hand 
 the money to the government, and that the depositors 
 should get government security for it. The legislature 
 sought in 1828 to restrict the benefits of the system to 
 the poorer classes by limiting the amount that any one 
 person might deposit to ^30 in any one year, and i$o 
 in the aggregate. There was a weak joint in the armour 
 by which the depositors were to be protected from the 
 risk of losing their money. Government was responsible 
 for all that it received, but not for what it did not re- 
 ceive. Unpaid trustees and managers are apt to become 
 negligent. Many disastrous cases arose in which the 
 paid servant of the Savings-bank entered upon a career 
 of fraud, continued it for years, and when he finally 
 died or disappeared, or some accident caused his detec- 
 tion, it was found, to the dismay of the trustees and 
 managers, as well as of the unfortunate depositors, that 
 the funds that had been paid over to the National Debt 
 Commissioners were less by many thousands of pounds
 
 170 Provident Societies and 
 
 than the amount which had been received from the 
 depositors. For these deficiencies the government was 
 in no way responsible. Thus, in 1848 a Savings-bank 
 in Cuffe Street, Dublin, closed with a deficiency of 
 ^56,000; in the same year, one in Tralee, with ^36,000, 
 and about the same time, another in Killarney. In 
 1849, the actuary of the Savings-bank at Rochdale died, 
 in high repute for honesty, probity, and wealth. It 
 was then found that out of ^100,403 received by the 
 bank, only ^"28,626 was left, the actuary having mis- 
 appropriated ^71,717. Other smaller cases came to 
 light at various times, the latest important one being 
 that at Cardiff, which was investigated by the Hon. 
 Lyulph Stanley, and ultimately wound up in the Chan- 
 cery Division of the High Court under an act passed in 
 1891 enabling insolvent Savings-banks thus to be dealt 
 with. 
 
 The loss to the depositors was in some cases mitigated 
 by personal responsibility having been established against 
 the trustees or voluntarily assumed by them; but this 
 did not avail in all cases to meet the whole of the 
 deficiency, and where it was not so, and heavy loss fell 
 upon the depositors, the Trustee Savings-banks failed 
 in their primary object of the "safe custody" of the 
 deposits, and this caused wide-spread distrust of their 
 system and a feeling of insecurity among depositors 
 generally. The liability of these gratuitous trustees 
 beyond that for their own acts is limited to cases where 
 they fail to take security from their officers, or to main- 
 tain the checks which are required by the Act of 1863. 
 Altogether, it seems probable that losses to the amount 
 of near ^200,000 have had to be borne by depositors in 
 Savings-banks. Though this is a small amount as com- 
 pared with the enormous sums that have been deposited,
 
 Industrial Welfare. 171 
 
 its moral effect is great. Two measures have been 
 taken in consequence. The first is the establishment 
 by Mr. Gladstone in 1861 of the system of Post-office 
 Savings-banks, to which we shall refer in the next 
 chapter, by which every deposit, as soon as it is made 
 to the local postmaster, is fully guaranteed by govern- 
 ment. The second is the establishment in 1891 of the 
 Inspection Committee of Trustee "Savings-banks, by 
 which the requirements of the Statute are enforced upon 
 negligent trustees. This latter measure has been so 
 successful, that whereas in 1892, the inspectors employed 
 reported that in 167 Savings-banks, 608 instances of 
 neglect of statutory requirements had been discovered, 
 the inspectors in 1896 visited the whole of the 245 Sav- 
 ings-banks then existing, and found in all of them only 
 219 such instances. 
 
 The effect of the establishment of the Post-office Sav- 
 ings-bank has been to stop the formation of new Trustee 
 Savings-banks, and to cause the dissolution of many 
 old ones. In 1861, when the Post-office Bank was com- 
 menced, there were 640 Trustee Banks; there are now 
 only 239. The business of the Trustee Savings-banks 
 has not, however, diminished to any great extent; the 
 20 millions of 1837 having increased to 45 millions, 
 though such increase is largely due to the accumulation 
 of interest. It may be said generally that the Post- 
 office Savings-bank has not so much drawn business away 
 from the old banks as it has opened out new facilities 
 for saving, and obtained fresh business for itself. 
 
 The Inspection Committee, which was created in 1891, 
 is not a government department. A majority of its 
 members are representatives of the Savings-banks them- 
 selves, and the others are an officer of the Bank of 
 England, representatives of the Institute of Chartered
 
 172 Provident Societies and 
 
 Accountants and the Law Institution, and a member 
 appointed by the Chief Registrar of Friendly Societies. 
 The chairman is Sir Albert Rollit, M.P., who represents 
 the important Savings-bank at Hull. The principle of 
 its constitution is to throw upon the Savings-banks the 
 responsibility of themselves devising means to safeguard 
 the deposits, and to provide them with the assistance of 
 a small body of experts to enable them to discharge it. 
 
 Besides the formal inspection of the banks by ac- 
 countants appointed by the committee, which at first 
 extended over two or three years, and is now completely 
 made every year, the committee has prepared a set of 
 model rules which it recommends Savings-banks to 
 adopt by way of complete amendment of their existing 
 rules ; has framed regulations by which the auditors are 
 required to inspect a certain number of the pass-books 
 of depositors on each occasion of audit; has taken 
 measures to enforce the requirements of the law upon 
 negligent trustees ; and has especially watched over the 
 proceedings of those Savings-banks which have what 
 are called special investment departments. 
 
 These special investments arise from a provision of 
 Section 12 of the Act of 1827 that it should not prevent 
 the trustees of a Savings-bank receiving from any de- 
 positor sums for a specific purpose of investment. The 
 object of this provision appears to have been that when 
 a depositor had accumulated as much in his ordinary 
 Savings-bank account as was allowed (which at that 
 time was ^150 only) the trustees should be permitted 
 to invest any further sums for him in stock, so as to 
 save him the trouble of instructing a broker, and the 
 risk of being tempted to spend his money. It was so 
 understood for many years, though only one important 
 bank, that at Exeter, allowed the depositors to avail
 
 Industrial "Welfare. 173 
 
 themselves of the privilege. The section was re-enacted 
 in the Act of 1863 as section 16, and that seems to have 
 drawn the attention of managers of Savings-banks to 
 the facilities it affords for helping those depositors who 
 have more than they are allowed to invest in the ordin- 
 ary way, or desire higher interest than the bank can pay 
 on its ordinary deposits. In respect of such investments 
 the trustees are equally bound to act gratuitously as in 
 relation to the ordinary business of the bank; but the 
 investment is entirely at the depositors' risk, and wholly 
 for his benefit. Several Savings-banks adopted rules 
 enabling them to open special investment departments, 
 in which, instead of taking the depositors' express in- 
 structions as to the investment, and earmarking the stock 
 bought by his deposit on his behalf, they received sums 
 from any number of depositors, paying withdrawals 
 out of receipts, and investing the balance on such 
 securities as the trustees thought fit. The interest 
 earned was distributed each year among the several 
 depositors, but frequently a reserve was kept to meet 
 contingencies and provide for equalizing dividends, so 
 that in fact the business became that of an ordinary 
 deposit bank granting interest on deposits at an agreed 
 rate. 
 
 By the Acts of 1827 and 1863 these transactions were 
 left wholly unregulated, but in 1891, when the act 
 establishing the Inspection Committee was passed, the 
 legislature thought fit to prohibit the opening any 
 special investment branch by any Savings-bank which 
 had not one already, and to stringently regulate the 
 special investments of those which were allowed to 
 continue the business. This led to several banks closing 
 their special investment branches. Those that remain 
 are now only 14 in number, having 40,410 accounts,
 
 174 Provident Societies and 
 
 and ^4,952,260 invested. The closing of the special 
 investment business has led to some curious questions. 
 The plan of keeping- a reserve for future contingencies 
 raised a difficulty, inasmuch as the trustees are bound 
 to hold all the produce of the investment for the benefit 
 of the several depositors. As these reserve funds are 
 undoubtedly part of the interest earned by the invest- 
 ments, they clearly belong to the depositors, and the 
 question arose, how were they to be distributed among 
 them. Many depositors had closed their accounts. 
 Some, it was alleged, had given a full discharge to the 
 trustees. Where a profit arose on realizing the securi- 
 ties, other questions had to be settled. It clearly 
 belonged to the depositors, by whose money the securi- 
 ties had been bought; but no particular security could 
 possibly be earmarked as derived from any particular 
 deposit, inasmuch as a running account of receipts and 
 withdrawals was kept, and only the surplus invested. 
 Fortunately, the legislature had provided a cheap and 
 easy method of settling all disputes by reference to the 
 Registrar of Friendly Societies, and had enacted that 
 there should be no appeal from the decision. On such 
 a case being brought before the Registrar, it was held 
 that the gain arising from excess of interest belonged 
 to all the depositors, and should be distributed among 
 them in proportion to the amount distributed by way 
 of interest; and that the gain arising from profit on 
 realization belonged only to such depositors as remained 
 until the close, those who withdrew earlier being taken 
 to have elected to accept their money at par. Upon 
 these lines, it was possible to draw up a simple scheme 
 of application of the surplus fund which equitably distri- 
 buted it among the past and present depositors accord- 
 ing to their respective interests.
 
 Industrial 'Welfare. 175 
 
 A few specimens of the disputes which are settled 
 by the Registrar under the provisions of the Trustee 
 Savings-banks Acts may be interesting. s was 
 deposited in 1838, by someone whose name is not 
 known, for the repair of a school in the parish of C. 
 The school then in operation ceased to exist in 1852, 
 and the trustees of the fund are long since deceased. 
 Another school for the parish was founded in 1850. 
 That school is now existing, and the Registrar felt 
 justified in awarding that the deposits be applied to the 
 repairs of the existing school. A charity was founded 
 about sixty years ago, without trust deed or written 
 constitution of any sort. The trustees desired that the 
 funds should be dealt with by the rector and church- 
 wardens of the parish, and the Registrar made an 
 award that the deposits be paid to them accordingly. 
 A depositor died in 1892, leaving a child dependent 
 upon her relatives. Her husband had left her in 1883, 
 and had contributed nothing to the support of the child. 
 The Registrar awarded that the deposits should be 
 applied for the maintenance and benefit of the child. 
 The vicar of a parish in 1874 induced the members of an 
 old Benefit Club to register it and deposit its money in 
 the Savings-bank, but the members did not take kindly 
 to the new system and gradually dropped off. The 
 rector died, and the surviving trustees refused to act. 
 The Registrar caused inquiry to be made as to the 
 persons who had been members, and made an award 
 distributing the funds among them. Many cases of 
 interest arise out of claims of the guardians of the poor 
 to money deposited by, or on behalf of, persons who 
 became chargeable to them; others out of claims by 
 creditors who have obtained judgment against debtors 
 and cannot get satisfaction without recourse to the
 
 176 Provident Societies and 
 
 deposit account; others where depositors or persons 
 entitled to deposits have not been heard of for more 
 than seven years and are presumed to be dead. In some 
 cases, disputes arise where, for some reason or other, 
 a person has made deposits in the name of some other 
 person, and afterwards desires to recover the money, or 
 where a person entrusts another with money to deposit 
 on his behalf. The vicar of a parish collected money 
 for a missionary society and deposited it in the 
 Savings-bank in his name as treasurer of the society. 
 He in due course paid the money collected to the society 
 out of his own funds, but did not withdraw it from the 
 Savings-bank, where it remained at his death, when the 
 question arose, Did the money belong to the society or 
 to his estate. It was found that it belonged to the 
 estate, and was ordered to be paid to the executors. 
 The treasurer of a small Provident Society of workmen 
 paid in its funds to the Savings-bank. Upon his death, 
 his successor in office applied, on behalf of all the 
 subscribers, that the money should be paid to his 
 widow, in sympathy with her at the loss of her husband. 
 The rules of some Savings-banks contain a provision 
 that in case no claim is made within a certain time after 
 the death of a depositor, the deposits are to be trans- 
 ferred to the surplus fund. The Registrar has held 
 that such a rule is not valid, being contrary to several 
 sections of the Act, and that its having been certified 
 does not make it binding upon the depositors, even if 
 they have given their written consent to be bound by 
 the rules. This becomes an important matter when 
 a Savings-bank is wound up, and the depositors who 
 have not claimed their money are transferred to the 
 Post-office. It is now necessary that the Savings-bank 
 should pay over to the Post-office the amount of the
 
 Industrial Welfare. 177 
 
 deposits, which, if such a rule had been valid, would 
 have been transferred to the surplus fund. There is, in 
 fact, no statute of limitation applicable to Savings-bank 
 deposits, and a Savings-bank is not at liberty to make 
 one for itself. The trustees are only discharged from 
 their responsibility for a deposit once made by the 
 receipt of the depositor or of the person lawfully claim- 
 ing through him, or by the award of the Registrar 
 directing payment to any person. Cases frequently 
 arise of deposits being claimed after many years. 
 
 The authority of the Registrar to settle disputes 
 extends to deposits in the Post-office Savings-bank, and 
 we shall therefore have another opportunity of referring 
 to the interesting cases that frequently arise. 
 
 The 239 Trustee Savings-banks had 1,495,903 de- 
 positors on zoth Nov. 1896, and their deposits amounted 
 to ^46,699,687. The assets of the banks were 
 ^"47,665,024. If to these be added the investments in 
 stock on behalf of individual depositors, ^"1,082,248, 
 and the special investments already referred to, the 
 total amount of the assets of Trustee Savings-banks is 
 ^53,699,532. It may be mentioned that the Trustee 
 Savings-banks in Glasgow, Liverpool, and Manchester 
 have an organization of Penny Banks attached to them 
 in the various elementary schools of the town, in which 
 the children and others are encouraged to deposit small 
 savings, with the provision that when the deposit 
 reaches a certain amount, it shall be exchanged for a 
 deposit-book of the Savings-bank. The Penny Banks 
 of Liverpool, which have been organized very success- 
 by Mr. T. Banner Newton, the able actuary of the 
 Liverpool Savings-bank, have effected a million transac- 
 tions in a single year. This may serve to show the 
 tendency of any sound movement to throw out vigorous 
 
 (M510) M
 
 178 Provident Societies and 
 
 offshoots. Though, in a certain sense, the Savings- 
 bank is a rudimentary instrument of thrift as compared 
 with the self-governing bodies, which are not only 
 media for profitable investment of small capitals, but 
 also valuable as an education in the knowledge of 
 affairs, yet it has been of infinite use to many whose 
 savings without it would not have been made, or would 
 have been lost or squandered. 
 
 Chapter XIII. 
 Post-office Savings-banks. 
 
 We have seen that about the year 1860 the system of 
 the Trustee Savings-banks had fallen somewhat under 
 a cloud. The frauds were an undoubted blot upon it; 
 and the deficiency in the stock held by the National 
 Debt Commissioners, though the Savings-banks were 
 in no way to blame, prejudiced the public mind. People 
 began to think whether a plan by which the direct 
 security of the government could be given to every 
 depositor from the moment he made his deposit, and 
 the rate of interest might be fixed so low as to be not 
 beyond that earned, could not be devised. The idea of 
 using the Post-office for these purposes was not a new 
 one; it had been thrown out as early as 1807 by Mr. 
 Whitbread ; but the credit of reviving it, and making the 
 public familiar with it, was due to Sir Charles Sikes 
 of the Huddersfield Joint-stock Bank. The credit of 
 adopting it was due to Mr. Gladstone, who made a 
 memorable speech on the second reading of the bill, 
 and to the Postmaster-General of his government, Lord
 
 Industrial "Welfare. 179 
 
 Stanley of Alderley. They had the valuable assistance 
 of Mr. George Chetwynd and Mr. Frank Ives Scudamore 
 in elaborating the details. The preliminary report of 
 Mr. Chetwynd, on 3oth Nov. 1860, the observations 
 thereon, and financial estimates of Mr. Scudamore, 
 dated 7th Jan. 1861, and the subsequent reports of both 
 gentlemen, when the Post-office Savings-banks Act had 
 been passed, on the arrangements to be made for putting 
 it into operation, dated 3oth July and i3th September, 
 1 86 1, are masterly documents. The system they then 
 laid down has been continued in its main features to the 
 present day. 
 
 The Act was passed on the I7th May, 1861, and 
 recites that "it is expedient to enlarge the facilities 
 now available for the deposit of small savings, and to 
 make the General Post-office available for that purpose, 
 and to give the direct security of the State to every such 
 depositor for repayment of all moneys so deposited by 
 him, together with the interest due thereon". It was 
 not contemplated that the new banks would at once 
 supersede the old ones, and the result has shown that 
 they have not done so, but have opened up new sources 
 of saving, and directed them into a different channel. 
 The position of the Post-office Bank differs in several 
 respects from that of a Trustee Savings-bank. A 
 depositor in a Trustee Savings-bank pays his money to 
 the officer appointed to receive it, who enters it in the 
 deposit-book, which is handed to the manager or check 
 officer (as the Act requires two persons to be present 
 at every transaction with a depositor, so as to form a 
 double check), who transcribes the entry into a check- 
 book kept by himself, which is verified with the cash 
 at the closing of the bank for the day. The book is 
 handed back to the depositor, and the transaction is
 
 180 Provident Societies and 
 
 complete. A like procedure is adopted in case of with- 
 drawal, except that where the amount to be withdrawn 
 is large, a previous notice has to be given. In the 
 Post-office Savings-bank the depositor pays the money 
 to the local postmaster, who enters it in the deposit- 
 book, and also on a record of the day's transactions, and 
 returns the deposit-book to the depositor. The record 
 is sent at the close of the day to the head office of the 
 Savings-bank Department in London, and there entries 
 are made in the ledgers, and an acknowledgment sent 
 to every depositor by post. Thus the entry by the local 
 postmaster in the deposit -book is only a temporary 
 acknowledgment : the final acknowledgment is that 
 on a separate slip of paper, which is sent through the 
 post to the depositor. In cases of withdrawal, the 
 depositor obtains a form of notice from the local post- 
 master, and transmits it filled up and signed to the 
 Savings-bank Department. A warrant is then made 
 out in that department, after comparison of the signature 
 to the notice with the signature of the depositor to the 
 declaration made on opening the account, and sent to 
 the depositor by post. This warrant is made payable 
 at the local post-office specified by the depositor in the 
 notice, where the depositor attends, and, having signed 
 the warrant, receives the money. The local postmaster 
 enters the payment in his record, which is transmitted 
 at the end of the day to the Savings-bank Department, 
 and there entered in the ledgers. These form a vast 
 number of volumes, kept by a large staff of male and 
 female clerks. Where there appears any reason for 
 doing so, the local postmaster is instructed, when a 
 warrant is issued, by a separate communication from 
 the Department, to see that it is paid to the right 
 person. The precautions thus taken are necessary to
 
 Industrial "Welfare. 181 
 
 secure the safety of the deposits, and to prevent frauds 
 upon depositors or upon the public by local postmasters 
 and their assistants or other persons. 
 
 Some curious cases of dispute have arisen where the 
 entry in the deposit-book and the acknowledgment from 
 the chief office have not agreed. A young lady made a 
 deposit which was entered in her book as 6, but only 
 j5 was entered on the record sent to the department. 
 She maintained that it was 6, and an award was made 
 in her favour. A young man placed a coin on the 
 counter of the local post-office, which was entered in his 
 deposit-book as 1, but as soon as he had left the room 
 was found to be a half-sovereign only; los. was entered 
 on the record, and the fact reported. The depositor 
 asserted that he had actually paid 1, but his statement 
 was not accepted. The mother of a depositor sent cer- 
 tain money in June, 1892, to be paid to her credit, which 
 was entered in the deposit-book as 16, but on the 
 record as j6, los. only, and the acknowledgment from 
 the chief office was accordingly for 6, ios. t and not 
 for ;i6; this acknowledgment was put aside unopened. 
 On the deposit-book being sent to the chief office for 
 examination in the following February, the discrepancy 
 was discovered. The mother, who was the wife of a 
 tradesman in a large way of business, stated that it was 
 her practice to save all the crown pieces she received for 
 the benefit of her children, and that the sum in question 
 consisted of a number of such crown pieces, a ^5 note, 
 and a sovereign: that she examined the deposit-book as 
 soon as her messenger brought it back, and told him 
 that it was correct. After much evidence had been 
 taken, it was held that the entry in the deposit-book 
 must be taken to be correct, and an award was made 
 accordingly.
 
 182 Provident Societies and 
 
 It follows from these cases that depositors should be 
 very careful 
 
 1. To examine their deposit -books before leaving" the 
 
 post-office, and see that the entries are correct. 
 
 2. To examine the acknowledgments they receive from 
 
 the Savings-bank Department. 
 
 3. To preserve those acknowledgments, as they, and 
 
 not the deposit-book, are conclusive evidence against 
 the Postmaster-General. 
 
 Other interesting cases have arisen in respect of with- 
 drawals. A depositor gave notice of withdrawal for 
 16, received and signed a warrant for 16; the pay- 
 ment of ;i6 was entered in her deposit-book; yet she 
 said she had only received 10, that she meant the figure 
 16 in the notice of withdrawal to stand for 10; that 
 when she signed the warrant, the office was rather dark, 
 and although asked to sign again after the gas had been 
 lit, did not on either occasion observe the figure 16, 
 though her second signature was immediately under it, 
 and did not become aware until some weeks afterwards 
 that 16 was entered in the book. The officers at the 
 local post-office recollected having paid 16 sovereigns, 
 and it was awarded that the depositor had not shown 
 that she had not received that amount. 
 
 A depositor made, on 3rd July, 1890, a withdrawal, 
 which was entered in her book as ^50, and signed a 
 receipt, on which fifty pounds was clearly written in 
 words and figures. She nevertheless, in 1895, stated 
 positively that she had only asked for $ and only re- 
 ceived ^"5; that when she signed the receipt she did 
 not observe the amount written upon it; that she did 
 not observe that $o was entered against her in her 
 deposit-book at the time, nor on 24th October, when
 
 Industrial Welfare. 183 
 
 she paid in ^7; nor on i7th January, 1891, when she 
 paid in $, ios., nor on nth August, when she with- 
 drew ^35; nor on numerous occasions when she sent 
 her book to be examined and credited with interest. 
 She had married on i3th July, 1890, and separated from 
 her husband twelve months afterwards ; but both agreed 
 that no sum exceeding ^5 was necessary to be drawn 
 for any expenses incurred by her on her marriage. She 
 first found out the alleged error about two years after, 
 and did not complain to the Controller of the Savings- 
 bank Department until three years after that. It was 
 held that the receipt for 50 was a good discharge to 
 the Postmaster-General ; that after so long a delay, the 
 entry in the deposit-book could not be impeached except 
 by cogent evidence; and that the evidence of the de- 
 positor, by itself, was not sufficient. An award was 
 made against her accordingly ; and it was shortly after- 
 wards found that she had really received ^50, and had 
 immediately thereupon deposited ^45 of it with a bank, 
 where it had remained untouched, and had been utterly 
 forgotten by her. 
 
 An inmate of the social wing of the Salvation Army 
 left their depot to enter a lunatic asylum, leaving his 
 book in a locker, the key of which he kept. On his 
 discharge, he found that the locker had been broken 
 open, the book stolen, and the money withdrawn by a 
 notice and warrant signed with his name. As these 
 were forgeries, they were no discharge to the Postmaster- 
 general, and an award was made for payment. 
 
 A female depositor was married in October, 1891. In 
 February, 1892, she made a withdrawal. In May she 
 made another, and then found that a leaf had been re- 
 placed in her book which was not there when the Feb- 
 ruary withdrawal had been made, and which contained
 
 184 Provident Societies and 
 
 an entry that had been erased with a knife. Inquiries 
 being- made, it was discovered that the erased entry 
 related to a withdrawal of 30 in November, 1891. 
 The notice of withdrawal and warrant were signed in 
 the married name of the depositor, and the person re- 
 ceiving the money was also required to sign a fresh 
 declaration, in consequence of the change from the de- 
 positor's maiden name to her married name. These three 
 signatures were all forgeries. An award was made for 
 payment of the ^30 with interest to the depositor. 
 
 In September and October, 1894, the local postmaster 
 induced the fifteen-year-old daughter of a depositor to 
 sign her mother's name to notices of withdrawal, and 
 appropriated the money to his own use. Upon the 
 forgery being detected, he induced the girl to throw the 
 blame upon her father. An award was made for pay- 
 ment of the money to the depositor. 
 
 Many other cases of interest have arisen, of which we 
 can only give a few examples. A valuable privilege 
 which Savings-bank depositors enjoy in common with 
 members of Friendly Societies, Co-operative Societies, 
 and Trade-unions, is that of nominating the person who is 
 to receive the deposits on the death of the depositor. A 
 nomination cannot be made of any sum exceeding 100. 
 It is evident that the directions of the regulations as to 
 nominations must be closely followed. Thus, where a 
 depositor wrote on a blank leaf of his deposit-book: " I 
 wish my brother William to have the money what is due 
 to me at my death" that did not operate as a nomina- 
 tion, and the money had to be paid to the administrators 
 of the estate of the deceased. On the other hand, a mere 
 allegation by the executor that the nominee had been 
 incorrectly described, when there was no question as to 
 his identity, did not invalidate the nomination. Where
 
 Industrial Welfare. 185 
 
 a depositor had made a valid nomination under the Act 
 of 1883, and being desirous that it should take effect as 
 if made under the regulations of 1888, revoked it, and 
 made another nomination in precisely the same terms, 
 and it was alleged that this revocation and renomination 
 were void, not having been signed in the presence of the 
 persons whose names were subscribed as witnesses, it 
 was held that the revocation and renomination were only 
 so in form, and that in substance what happened was a 
 confirmation of the original nomination, which had never 
 become invalid. The defect in the attestation, even if 
 provable in evidence, which is doubtful, did not affect 
 the validity of such a confirmation, which required no 
 attestation. 
 
 A telegraph messenger, though a married man, made 
 a nomination in favour of his father, and on the death 
 of the father, revoked it and made another in favour of 
 his mother. When he was near death, he expressed 
 some trouble about provision for his wife, and called 
 for writing materials, but the nomination was never 
 revoked. After urging the parties to come to terms, 
 the Registrar was compelled to make an award in 
 favour of the nominee. Where a nominee is an infant, 
 the money is payable to him at the age of 16, but not 
 earlier. In a case where a nominee was only 1 1 years 
 of age at the death of the nominator, a claim was put 
 in against the deposits when he reached the age of 16 
 for past maintenance, and an application was made by 
 a relative that in the nominee's own interest the payment 
 might be postponed till he was older. The claim for 
 maintenance was rejected, but the nominee consented 
 that an award by which he should receive the amount 
 due to him by instalments would be to his own advan- 
 tage, and an award was made accordingly. In a case
 
 186 Provident Societies and 
 
 where a depositor made a nomination in 1890 and a will 
 in 1893, and where the estate not affected by the nomi- 
 nation was insufficient to pay the debts and testamentary 
 expenses, the Registrar held that the will could not over- 
 ride the nomination ; but that the nomination could not 
 avail to defeat the lawful claims of creditors, including 
 the claim of the executors for funeral and testamentary 
 expenses. It was awarded accordingly that after pay- 
 ment of these claims, the balance of the deposits should 
 be payable to the nominee. 
 
 In order that deposits in Savings-banks should be as 
 much as possible restricted to persons belonging to the 
 industrious classes, it was provided that no depositor 
 (other than a Friendly or Provident Society) should de- 
 posit more than ^30, afterwards increased to $o, in 
 one year, or more than i$o, afterwards increased to 
 ^200, in the whole; and in order to ensure compliance 
 with this enactment, that a declaration should be made 
 by each depositor on opening an account that he had no 
 account in any other Savings-bank, and that if such 
 declaration were false, or if a depositor infringed these 
 limits, he should incur the penalty of forfeiture of the 
 whole of the deposits. This was afterwards modified 
 by a provision that the forfeiture should only be incurred 
 if the barrister should be of opinion that the offence had 
 been committed with a fraudulent intention. In 1891 it 
 was still further modified by a provision that the for- 
 feiture should only apply to such portions of the deposits 
 illegally made, as the Postmaster-General or the National 
 Debt Commissioners should think just in all the circum- 
 stances of the case. The original penalty of forfeiture 
 of the whole deposits was out of all proportion to the 
 magnitude of the offence. So obvious was this that on 
 one occasion (in Ireland), where a forfeiture of ^2000
 
 Industrial Welfare. 187 
 
 had been incurred, Parliament voted ^1000 towards 
 mitigating the penalty. It is now in practice restricted 
 within reasonable limits. The prohibition of double de- 
 posits has given rise to some curious cases. A man died 
 apparently in great poverty in a room in Whitechapel. 
 His effects, apart from money and securities for money, 
 were valued at 5$., but in his room were found 20 in 
 cash, and a number of deposit receipts, notes, and Build- 
 ing Societies' pass-books to the value of ^2600 and 
 upwards. He had an account in the Blomfield Street 
 Savings-bank in his own name, and another in the Post- 
 office (transferred from the Whitechapel) Savings-bank 
 with a fictitious Christian name. The latter amounted 
 to 170, \2s. nd. On the death of a man whose 
 name was James M'P , deposit-books of the Post- 
 office Savings-bank in the name of John M'P for 
 
 146, i2s. iod., and of the Liverpool Savings-bank in 
 
 the name of Patrick M'P for ^30 were found among 
 
 his papers, both opened by himself in the names of 
 brothers who had been dead for more than twenty years. 
 A depositor who already had an account of her own, 
 opened another as a joint account between herself (omit- 
 ting her first Christian name) and her daughter-in-law (by 
 her maiden name). A depositor on the morning of 7th 
 August, 1894, paid in 20 to an account which he had 
 opened that year, and to which 30 had been already 
 paid in. On the afternoon of the same day he sent his 
 daughter with his book to the same post-office to deposit 
 50. She was told that no more could be paid in to her 
 father's account, and opened an account in her own 
 name, though advised that her father might invest it in 
 Government stock. Differences arose between them, 
 when the father claimed the money as his, and the 
 daughter asserted that it had been given to her as re-
 
 i88 Provident Societies and 
 
 numeration for services. The father admitted that she 
 had rendered services without remuneration, and a 
 reasonable sum was awarded to the daughter, the re- 
 mainder being" declared to be the money of the father, 
 subject to any forfeiture he had incurred. 
 
 A Savings-bank deposit is not transferable, except in 
 the manner provided by the regulations. It is not 
 available as a security for a loan or other debt. The 
 possession of the deposit-book gives no title to the 
 deposits. The statutes and regulations prescribe to 
 whom a deposit shall be payable. Cases arise, however, 
 in which it becomes necessary to inquire who is the real 
 owner of a deposit, and the Registrar has to make an 
 award accordingly. The son of a mother, who had 
 unhappily contracted drunken habits, induced her to 
 sign a notice of withdrawal of her deposits and an 
 authority for payment to himself, and then deposited a 
 portion of the money in his own name. He promised 
 to maintain her, but did not fulfil the promise. It was 
 shown that the money, though deposited in the mother's 
 name, really belonged to the father, and successive 
 awards were made applying the money in the manner 
 most beneficial to the father and mother. A young man 
 having in his possession money belonging to a young 
 woman to whom he was engaged to be married, and 
 who was on her death-bed, deposited it in his own name, 
 and claimed it as his. His claim was shown to be 
 without foundation, and the deposits were ordered to 
 be paid to the brother and sister of the deceased. A 
 mother retained the deposit-book of a daughter who 
 had left home, and made deposits of her own money in 
 the account. This was admitted by the daughter, and 
 the deposits ordered to be paid to the mother. A father 
 who received a gratuity on retirement from the public
 
 Industrial Welfare. 189 
 
 service, placed it in the care of one daughter, who gave 
 some of the money to another, who deposited it in her 
 own name in trust for a third daughter, without the 
 knowledge or consent of the father, in favour of whom 
 an award was made. A son gave his father money to 
 deposit for him, and he deposited it in his own name; 
 an award was made for payment to the son. The pur- 
 chaser of a Post-office policy paid the premium into the 
 account of the person whose life was insured, who 
 refused to consent to the transfer of the money unless 
 paid for doing so, so that the purchaser had to pay it 
 over again to prevent the policy lapsing; and an award 
 was made in his favour for the return of the money. 
 A woman with whom 106 had been placed by her 
 mother-in-law for safe custody, deposited some of it in 
 her own name and induced another woman to deposit 
 some of it in hers ; and an award was made for payment 
 of the balances to the mother-in-law. 
 
 Many other cases might be cited from the records of 
 the references to the Registrar, which have been several 
 thousands in number, but these may suffice as speci- 
 mens of the strange circumstances in which Savings- 
 bank deposits are frequently made, and the curious 
 questions to which they give rise. The Post-office 
 Savings-bank was, from the first, a conspicuous success, 
 and its business has continuously increased to the present 
 time. Local post-offices, at which deposits may be 
 made, are to be found in every town and almost every 
 village in the kingdom; they are open daily for the 
 receipt of deposits during all the hours in which the 
 postal business is carried on ; and thus facilities for 
 making deposits are brought within the reach of every 
 one. The complete guarantee of the Government for 
 the safety of the deposits is given from the moment
 
 igo Provident Societies and 
 
 they are made; so that if, as in some of the cases we 
 have mentioned, the local postmaster is fraudulent or 
 careless, the depositor's claim on the Postmaster-general 
 is fully acknowledged. So excellent is the organization, 
 however, that the cases of fraud, not affecting- the 
 depositor, but the public who have to make up for the 
 defalcation, have been few and trifling 1 . Their total 
 amount would be represented by an insignificant fraction 
 of the annual rate of interest. 
 
 One of the fundamental principles which were laid 
 down when the Post - office Savings - bank was estab- 
 lished, viz. that it should be self-supporting is about 
 to receive a severe strain, and the authorities will pro- 
 bably soon be called upon to consider whether any and 
 what measures should be adopted. The rate of interest 
 is now fixed at 2, los, per cent, and the expenses of 
 management add a fractional amount to that rate. 
 Consols have been reduced to 2^ per cent, and are 
 about to be reduced to 2^, and yet the national credit 
 is so good that the market price of consols is much 
 above par. It will shortly become impossible for the 
 interest paid to be earned by an investment in govern- 
 ment stock, and the question will then have to be 
 determined whether the rate of interest generally shall 
 be reduced, or whether other investments of less security 
 should be made. We believe the first alternative, if 
 adopted, will in no appreciable degree affect the popu- 
 larity of the Post-office Savings-bank, which depends 
 much more largely on the security it offers than on the 
 promise of high interest. If that is not so, if there is 
 to any extent a practice of depositing money with the 
 Post-office for the purpose of getting higher interest 
 for it than can be got in the market, which we do not 
 think credible, that would be only another reason why
 
 Industrial Welfare. 191 
 
 the reform should be effected, for such deposits are not 
 desirable from any point of view. 
 
 The Post-office, like some of the large Trustee Savings- 
 banks to which we have referred, assists in the organiz- 
 ation of Penny Savings-banks, and supplies them with 
 forms and directions. By the system of stamp cards 
 for deposits, and in many other ways, it has sought to 
 promote thrift. It is an agent for the purchase and 
 sale of stock for depositors, and in conjunction with the 
 Commissioners for the Reduction of the National Debt 
 it does a large business though perhaps not so large 
 as is to be desired in connection with Government Life 
 Assurances and Government Immediate and Deferred 
 Annuities. 
 
 A History of the Post-office Savings-bank, appended 
 to the 43rd Report of the Postmaster-general, speaks of 
 the impetus given to its work by the late Mr. Fawcett, 
 who became Postmaster-general in 1880. " It was his 
 constant endeavour, by speech and pamphlet, to make 
 the system familiar and acceptable to all classes of the 
 people. Under his direction the annuity and insurance 
 business of the Post-office became a part of the Savings- 
 bank system, and the Savings-bank also began to act 
 as agent for persons of small means who might desire 
 to deposit in the national funds. The ordinary business 
 of the Savings-bank owes to him the rapid increase of 
 branch offices in the villages ; the special attention paid 
 to bodies of navvies and workmen at their places of 
 employment ; and above all, the arrangement for making 
 small deposits by slips of postage stamps." The num- 
 ber of such stamp slip deposits was, in 1896, 1,741,000, 
 and their amount ^95,000. 
 
 In 1891, the maximum amount of deposits was raised 
 from 150 to 200, and in 1893 the annual limit was
 
 192 Provident Societies and 
 
 raised from ^30 to $o. In 1893 also arrangements 
 were made for withdrawal of money by telegraph. In 
 1896, 102,500 such withdrawals were made. It is 
 understood that the precautions against the risk of 
 fraud on these transactions have been successful. 
 
 At the close of the year 1896 there were 11,867 Post- 
 office Savings - banks open. The number of deposit 
 accounts was 6,862,035, and the amount standing to 
 their credit was ^108,098,641 ; the average amount 
 standing to the credit of each account being 1$, i$s. 
 The number of transactions during the year was seven- 
 teen millions, being 12,638,307 deposits amounting to 
 ^36,258,350, and 4,367,594 withdrawals amounting to 
 ^"28,489,329. ^2,460,645 was credited to the deposi- 
 tors for interest. The expenses of management amounted 
 to 6d. upon each transaction, or 75. ii%d. per cent of 
 the total amount of deposits. In both respects there 
 has been a steady diminution. The Postmaster-general 
 is justified in saying that "these figures speak eloquently 
 of the popularity of the Post-office Savings-bank and 
 of the place which it has taken in the social economy of 
 the nation". 
 
 Chapter XIV. 
 Other Provident Societies. 
 
 Among the measures which have been taken by the 
 employers of labour for the benefit of their workmen, 
 Railway Savings-banks deserve to be prominently men- 
 tioned. The Manchester, Sheffield, and Lincolnshire 
 Railway Company established such a bank in 1860, and 
 it has now 4341 depositors with a capital of ^546,089,
 
 Industrial Welfare. 193 
 
 or i 26 to each depositor. The South-Eastern Railway 
 Savings-bank, established 1869, has an even larger 
 number of depositors, numbering 4530, for a capital of 
 386,893 or 85 to each. The Caledonian, established 
 1874, exceeds these figures, for it has 4699 depositors of 
 515,000, or 109 for each. The Great Eastern, dating 
 from 1878, heads the list in regard to number of deposi- 
 tors, having 4981 with .235,322 capital, or 47 to each. 
 
 The 16 Railway Savings-banks, of which 5 are in 
 Scotland and the remainder in England, have, in the 
 aggregate 37,087 depositors, and a capital of 3, 124, 069, 
 an increase in a single year of 3948 depositors and more 
 than 270,000 capital. The transactions of the year 
 appear to have been 185,000 deposits amounting to 
 640,000, and 25,000 withdrawals amounting to 
 475,000. Interest was added at an average rate of 
 3 5 /6 per cent. 
 
 The persons who are admitted to deposit in these 
 banks are the employees of the company and their near 
 relatives. Accounts are sometimes opened for benefit 
 clubs and other societies established among the work- 
 men; but the funds of a registered Friendly Society 
 cannot lawfully be deposited in a Railway Savings- 
 bank. There is no restriction to the amount of each 
 depositor's holding; and the figures given above show 
 that the privilege of depositing large sums is freely used. 
 The average amount of each deposit account in the 16 
 banks exceeds 84 a sum which contrasts with the 
 Post-office average of 15, 15.1. 
 
 The funds are deposited with the railway company, 
 and are, in general, secured upon the profits of the 
 undertaking, next after the charges for debenture stock. 
 The high rate of interest is no doubt an attraction to 
 depositors. It is at the same time a substantial benefit 
 
 (M610) K
 
 194 Provident Societies and 
 
 to the employees of the company, and the figures show 
 that they appreciate it. That 37,000 workmen in a 
 single branch of industry have entrusted their employers 
 with savings amounting to more than three millions 
 sterling is a remarkable fact. 
 
 As the establishment of Savings-banks is virtually an 
 extension of the borrowing powers of the companies, 
 it is obvious that it should not be authorized by statute 
 except under proper conditions. For this purpose a 
 clause was drawn up by Mr. Ludlow in 1876, and has 
 been inserted (subject to such slight modifications as 
 have been required by changes in the acts of parliament 
 referred to therein) in every private act since promoted 
 by a railway company for the establishment of Railway 
 Savings-banks. 
 
 This clause confers upon the banks and depositors 
 certain privileges, such as that of nomination for sums 
 payable at death, and of the settlement of disputes by 
 the Registrar of Friendly Societies. It requires the com- 
 panies to make and register proper rules, and to furnish 
 annual accounts to the depositors and the public. The 
 Railway Savings-bank is, in the case of several com- 
 panies, only one of a number of large and liberal or- 
 ganizations mainly supported by them in the interests of 
 their workmen. Of many companies it may be said that 
 the directors show a praiseworthy desire to be models to 
 other employers of labour in respect of the enlightened 
 interest they take in methods of promoting the welfare 
 of those they employ. The sums of money accumulated 
 at a high rate of interest, which amount in two com- 
 panies to averages of ^109 and ^126, and in cases of 
 individual deposits must exceed even those amounts, 
 must form to the depositors a substantial provision for 
 the future.
 
 Industrial "Welfare. 195 
 
 It is not improbable that similar arrangements exist 
 between employer and workman in other branches of 
 industry, but escape public notice, as the industries con- 
 cerned are not, like railways, regulated by act of parlia- 
 ment. A notable example is afforded by the arrange- 
 ments made by Mr. Livesey, the manager of the South 
 Metropolitan Gas Company, for the benefit of its work- 
 men. 
 
 The legislature has also been moved of late years to 
 grant parliamentary powers to numerous municipal cor- 
 porations for the establishment of thrift funds for the 
 benefit of the persons employed by them. Some such 
 funds have indeed existed for a considerable period of 
 years ; but in those cases they were entered upon without 
 much consideration of the probable ultimate burden that 
 would fall upon the ratepayers, and were merely arrange- 
 ments by which, in consideration of a small deduction 
 from wages or salaries, retiring pensions would be pro- 
 mised to the officers and servants. More recently, it has 
 become common to insert in the general powers bills of 
 corporations provisions of this kind ; and the committees 
 of both houses of parliament, by whom these bills have 
 been considered, have given careful attention to the 
 nature of the safeguards that should be introduced into 
 them. These have been settled in the case of the Car- 
 diff Corporation Act 1894, and other subsequent acts, 
 and will probably be adopted in the event of bills of the 
 same kind being presented by other corporations in the 
 future. The general scheme of these measures is that 
 the employees submit to a deduction from their salaries 
 or wages, usually not exceeding 2^ per cent, and that 
 the corporation guarantee pensions to them at a rate 
 to be fixed in a scheme to be framed after consultation 
 with an actuary. It is also in general provided that at
 
 196 Provident Societies and 
 
 stated intervals there shall be actuarial valuations made 
 of the funds and of the liabilities of the corporation. 
 This is a very essential provision, as otherwise the rate- 
 payers would have no knowledge of the extent of the 
 responsibility they were accepting to be liquidated in 
 future years. The only principle upon which a municipal 
 corporation or other public body, or indeed any private 
 employer, should undertake to pay pensions to the per- 
 sons employed, is the principle of deferred pay. 
 
 The payments made to any person employed, whether 
 by salary or by pension, cannot be a mere gratuity, for 
 no public body has authority to give away the money of 
 other people in gratuities. Whatever is paid by the 
 employer is earned by the employed. The employer 
 either pays enough to the workman to enable him to 
 provide for his own old age in the way that best pleases 
 him; or pays him something less than that adequate 
 wage, upon the understanding that the remainder is to 
 be given by way of pension. This is so whether the 
 pension is paid directly by the employer, or whether he 
 passes through the formality of raising a fund to which 
 the workman and the employer jointly contribute. There 
 is no difference in principle between the contribution of 
 the workman and the contribution of the employer. 
 Both are really contributions by the workman ; that is, 
 both are equally portions of the agreed remuneration for 
 his labour. That principle is understood and acted 
 upon in the Civil Service. The formality of deducting a 
 contribution from salaries is dispensed with, and the 
 state pays the whole of the pension according to a fixed 
 scale. The principle applies equally to a private em- 
 ployer. He has no fund out of which to pay gratuities. 
 The competition of other employers would soon deprive 
 him of it if he had.
 
 Industrial Welfare. 197 
 
 It is nevertheless not unusual for employers to seek 
 the sanction of parliament to clauses by which they 
 claim for themselves the whole control of the pension 
 fund, however raised, and the right to grant or withhold 
 pensions at their pleasure. They also claim the right to 
 retain the employer's contribution to the fund, and in 
 some cases also the men's contribution as well, in the 
 case of a man retiring from their service or being dis- 
 missed before the pensionable age. As we have seen 
 that there, is no difference in principle between the two 
 contributions, these are provisions which are unjust in 
 themselves, and to which the legislature should not 
 consent. 
 
 It is easy to see, on the other hand, that an arrange- 
 ment of the kind would commend itself to the employer, 
 as giving him security for the continued services and for 
 the good behaviour of the employed. Where it is entered 
 into as a free contract between the two parties, it may 
 even be advantageous to the well-conducted workman, 
 as enabling him to obtain better pay as an equivalent 
 for the concession he makes; but that is not a ground 
 upon which the legislature should consent to an enact- 
 ment of a compulsory kind. There is a possible excep- 
 tion in the case of a dismissal arising from conduct of a 
 fraudulent character by which the employer has suffered 
 loss, in which it might not be unjust to apply the share 
 of the employed in the pension fund towards meeting 
 such loss. 
 
 There are two points which should be considered. 
 The first is, that where a workman has no contract with 
 his employer for a pension, it is because the rate of 
 wages which he has agreed to accept and his employer 
 to give is offered and taken as the full value of his 
 services, including such provision for the future as is
 
 198 Provident Societies and 
 
 necessary to cover the waste of wage-earning power 
 that the workman has to suffer. He therefore accepts 
 for himself the responsibility of providing" for his own 
 old age. If he had stipulated with his employer for a 
 pension, he would have had to accept lower wages. 
 The question of " living wage" does not arise. He has 
 fixed his own value upon that. The second is, that 
 whether a workman has a contract with his employer for 
 a pension or not, it rests with him to secure by other 
 means the payment of a sum at death; as the whole 
 equivalent of the deferred pay is included in the pension, 
 which is calculated at a higher rate for the reason that 
 it does not include any provision for a payment at death 
 before the pensionable age. 
 
 Some interesting light on the granting of life-annuities 
 in early times is thrown by a volume recently printed for 
 the General Life Assurance Society of the Netherlands at 
 Amsterdam, and presented to the members of the Inter- 
 national Congress of Actuaries. In the communal ar- 
 chives of Tournai, one of the most ancient cities of 
 Holland, and the seat of the Merovingian kings as far 
 back as the fifth century, seven contracts for life- 
 annuities have been discovered, dated 1228 and 1229, 
 which have escaped the destruction that befell those 
 archives shortly after, and are therefore probably only 
 specimens of a much larger number of similar contracts 
 that may have been entered into. By one of these 
 documents, the Provosts, Jurors, Echevins, Electors, 
 Maire, and all the Commune of Tournai acknowledge 
 that they owe to John, son of William le Parcier, a 
 burgess of Arras, 28 livres parisis of annual rente, to 
 be paid to him as long as he shall have life in his body, 
 on the festival of All Saints, at Arras, or in some other 
 place at the same distance from Tournai, in a peaceful
 
 Industrial Welfare. 199 
 
 land, or at least in a sure place, indicated by the said 
 John, acting in good faith; but if he dies before Elisa- 
 beth, daughter of Hubert le Parcier, half of the annuity 
 shall be annulled, and the other half shall be paid to 
 Elisabeth as long as she lives; but if John shall marry 
 in a legitimate manner while Elisabeth is alive, he may 
 substitute his legitimate wife for Elisabeth as the 
 annuitant in respect of the half allowed to her as 
 survivor. They also covenant, in case of default of 
 payment of the annuity, to pay any expenses that John 
 and Elisabeth may swear they have incurred, as well as 
 the arrears; and in case John or Elisabeth should take 
 the religious habit, still to pay the annuity. In some of 
 the other policies, the local authorities bind themselves 
 to submit to public excommunication by the bishop if 
 they fail to fulfil their contract. Two similar contracts, 
 dated 1273 and 1288, have been discovered in the 
 archives of Ghent. The first was granted by St. John's 
 Hospital to Heer Sanderse van den Boengaerde, secur- 
 ing him an annual rent of nine sous for his life, in 
 consideration of his having ceded a farm to the hospital 
 in perpetuity, as alms for the good of his soul. The 
 other was granted by the echevins and community of the 
 city of Ghent. 
 
 The grant by the religious house was similar to the 
 corodies which the king or other founder of a monastery 
 frequently reserved to himself for enabling a chaplain or 
 other inmate to be maintained in the house during life 
 or to obtain a pension out of its revenues. Such corodies 
 were sometimes purchased by private persons; in which 
 case it is probable that the monastery, like the hospital 
 of St. Jean of Ghent, did not often get the worst of the 
 bargain. 
 
 There is thus very ancient precedent for the system
 
 200 Provident Societies and 
 
 of sale of life-annuities which the Commissioners for the 
 Reduction of the National Debt have now carried on 
 for many years. In the early part of their history the 
 principles of annuity assurance were not so well known 
 as at present, and the effect of an annuity in prolonging 
 life was not fully appreciated. Mr. John Finlaison 
 (who, by a rare felicity in the public service, has been 
 succeeded in the office of actuary to the National Debt 
 by his son and grandson) investigated this matter, and 
 prepared tables on proper principles, so that these 
 contracts are now as profitable to the community as 
 they are convenient to the individuals who enter into 
 them. 
 
 The Company of Mercers of the City of London 
 passed through a curious experience in relation to 
 annuity transactions. In the year 1698 the Rev. Dr. 
 Assheton, rector of Beckenham, Kent, conceived a 
 philanthropic scheme which was to relieve the wives of 
 the clergy and of other professional men from all fear 
 of pecuniary distress at the death of their husbands. 
 An enthusiastic clergyman can generally get a hearing 
 for any scheme with such an object; and Dr. Assheton 
 found his willing audience in the general court of the 
 Mercers' Company. His plan was this : That for 
 every 100 paid down to the company by a husband, 
 the company should guarantee to the wife ^30 a year 
 for every year she survived him. As in those days 
 nothing was known of the science of vital contingencies, 
 for it will be recollected that the early insurance com- 
 panies charged ^5 per cent all round, irrespective of 
 age, and that Necker granted annuities for life of 10 per 
 cent in the same way, the preposterous nature of this 
 contract was not seen through; and the company, 
 which had recently spent large sums in rebuilding the
 
 Industrial Welfare. 201 
 
 Royal Exchange, thought an opportunity of practical 
 benevolence presented itself which would restore the 
 capital expended. Deeds were drawn up by Sir Nathan 
 Wright, afterwards Lord-keeper of the Great Seal, and 
 Edward Northey, afterwards Attorney-general, for 
 effecting these contracts and appropriating the income 
 of the company's estates for the payment of the annui- 
 ties as they should fall due, and were formally executed 
 by the company on 4th October, 1699. For several 
 years the company received money under these contracts, 
 but their improvident nature soon came to be seen. In 
 January, 1709, an order was made that husbands above 
 45 years of age were not to be admitted if their wives 
 were 15 years younger. In 1716 the annuities were 
 reduced to 25 per cent for future contracts; in 1723, to 
 20 per cent; in 1740, to 15 per cent; and in 1745 the 
 company found its position in the matter intolerable, 
 and made proposals for determining the contracts and 
 closing the business. Both the annuitants and the 
 company appealed to Parliament, and their respective 
 statements are very quaint documents. The matter 
 ended in the company being allowed to raise funds by 
 means of a lottery. 
 
 This interesting story may serve to show that it is 
 not only the members of Friendly Societies who have 
 had to learn by experience that contracts depending on 
 the duration of life cannot safely be entered upon except 
 in accordance with accurate scientific data. The skilled 
 actuary may be thought to be a very troublesome person, 
 but some attention to his advice at the inception of a 
 scheme may save a great deal of disappointment and 
 embarrassment a long time after. 
 
 The Loan Societies Acts of 1835 and 1840 were, it 
 would seem, intended to promote societies of a semi-
 
 202 Provident Societies and 
 
 charitable type, granting debentures to the people who 
 contributed the funds, and taking repayment on easy 
 terms from borrowers for the small sums lent to them. 
 The amount to be lent to each borrower is not to exceed 
 15, and no borrower is to have a second loan until 
 the first one is repaid. A variety of schemes are pro- 
 vided in the schedule to the Act, in which, by a careful 
 adjustment of the date of the first instalments and of 
 the amount of each instalment with the amount to be 
 deducted from interest, it is arranged that the interest 
 payable on the loan should be equivalent to 12 per cent 
 per annum. Thus, taking the most popular arrange- 
 ment, that of repayment by instalments of 6d. in the 
 per week in 40 weeks, it is provided that the first 
 payment is not to be made until the i6th day after the 
 loan, and that the interest to be deducted is not to 
 exceed is. in the . If, however, the rate of repayment 
 selected were is. per per week, then the amount to 
 be deducted for interest would be only 8d. per , and 
 the first repayment would not be due until the 35th day. 
 The variety of schemes may be indefinitely increased by 
 pushing backward or forward the date of first payment, 
 and forward or backward the amount of interest, at the 
 rate of 14 days for every id. per interest. As if all 
 these options might not be sufficient, it was provided 
 that a society might adopt any scheme which the 
 Actuary to the National Debt might certify to be equi- 
 valent; and several such certificates have been granted. 
 As the rate of interest adopted in these calculations is 
 higher than the rate which was legal at the time of the 
 passing of the acts, it became necessary to exempt the 
 Loan Societies from the operations of the Usury Acts. 
 Those acts, however, have long since been repealed for 
 many good reasons, among which the easiness with
 
 Industrial Welfare. 203 
 
 which they could be evaded, the encouragement they 
 give to breach of contract, and the difficulties they 
 place in the way of the honest borrower, are not the 
 least in importance. Though not liable to the penalties 
 of the Usury Laws, the societies were expressly pro- 
 hibited from charging any borrower, directly or in- 
 directly, by way of fine, or purchase of books, papers, 
 or other things, or in any other way, more than the 
 amount allowed for interest by the scheme adopted. 
 They were permitted to charge a sum not exceeding 
 is. 6d. for each loan as an inquiry fee, but this is. 6d. 
 was to -be in full of all demands for inquiry, for exe- 
 cuting the note, for the pass-book, and for all other 
 charges. 
 
 The semi-benevolent Loan Societies have almost wholly 
 died out, and their places have been taken by the Friends 
 of Labour Loan Societies. These are, as far as possible, 
 mutual societies, making little or no distinction between 
 borrower and lender. In some, indeed, it is required 
 that every member should become a borrower. Their 
 place has been to some extent occupied by the specially 
 authorized Loan Societies, and their business has de- 
 creased, especially of late years; but every year new 
 societies are formed under the Act of 1840, and they 
 appear still to fulfil a public demand. Thus in the three 
 years 1892 to 1895, the number of societies has 
 diminished from 358 to 341, the number of members 
 from 40,492 to 37,711, the total amount due to deposi- 
 tors and shareholders from ^290,582 to ,265,869, and 
 the number of borrowers from 68,823, to 61,724. 
 
 Though the societies are strictly tied down to a 
 prescribed rate of interest, yet as that rate is so liberal 
 as to be equivalent to 12 per cent per annum, it has 
 been found to be an attraction to investors. Thus,
 
 204 Provident Societies and 
 
 though of the whole 341 societies, only 72 have more 
 than 10 per member, 17 have more than 100 
 per member. A society at Bradford, with only four 
 members, has a capital of ^"4696. This is really a 
 partnership of small capitalists. The society having 
 the largest number of members is one in Pimlico, with 
 870. The Loan Societies Act does not extend to Scot- 
 land or Ireland. 
 
 One side of the transactions of these societies which 
 has a certain painful kind of interest is the measures 
 which they are under the necessity of taking to recover 
 the money they lend. In the year 1895, 2947 sum- 
 monses were issued to recover ^6554, and ^4777 was 
 recovered by this means. The number of distress 
 warrants that had to be issued was 373. Dividing the 
 societies into two groups, according to the amount of 
 capital per member, we find that in the 17 societies of 
 small capitalists where each member on the average has 
 ^300 in the funds, the summonses and distress war- 
 rants were nearly three times as many, compared with 
 the amount of money in circulation, as the summonses 
 and distress warrants issued by the 324 societies in the 
 aggregate of which each member has on the average a 
 capital of 6 only. It would seem therefore that the 
 society of small capitalists presses more hardly upon 
 the borrower than the mutual society does. 
 
 The mutual societies mainly exist in the south of 
 England: Middlesex, Surrey, and Hampshire claiming 
 the greatest number. The small capitalist societies 
 belong principally to the north. The legislation relating 
 to Loan Societies is of an antiquated type, but the cir- 
 cumstance that it is still put in operation seems to show 
 that they exercise a useful function. As in all societies 
 where the individual interest is too small to ensure
 
 Industrial Welfare. 205 
 
 adequate supervision, they are liable to loss by the 
 peculation of officials. There is no reason to think that 
 they bear hardly on borrowers, and, speaking- generally, 
 it may be assumed that the investing member suffers 
 more and is more deserving of sympathy than the 
 borrower, who pays a rate of interest which, though 
 liberal, is not more than enough to produce the neces- 
 sary reserve against default. 
 
 Societies for the promotion of literature, science, and 
 the fine arts are hardly to be ranked with Provident 
 Societies ; yet they contribute so largely to the individual 
 welfare of those in all classes of life who avail them- 
 selves of their benefits that it is not altogether without 
 reason that the Registrar of Friendly Societies has been 
 entrusted with the duty of certifying that they are 
 entitled to the benefit of exemption from local rates 
 which is conferred upon them by an Act passed in 1843, 
 in the session of the sixth and seventh years of Her 
 Majesty's reign; and we may with the same good 
 reason be permitted to refer to them here. The con- 
 ditions under which the certificate is to be granted are : 
 
 1. That the body applying is a society. 
 
 2. That it is wholly or in part supported by annual 
 
 voluntary contributions, which means contributions 
 of money. 
 
 3. That it is exclusively for purposes of literature, 
 
 science, and the fine arts. 
 
 4. That by its rules it may not make any dividend, gift, 
 
 division, or bonus in money unto or between any 
 of its members. 
 
 Several cases either of granting or of refusal of certifi- 
 cate under this Act have come to be reviewed in the
 
 206 Provident Societies and 
 
 law-courts, and the tendency of most of the decisions 
 has been to narrow the benefits of the Act. It has been 
 held that the purpose of education, though mainly 
 directed to the subjects enumerated, is not within the 
 Act; that where a scientific society has in view the 
 professional advancement of its members, it is not 
 entitled to a certificate; and that the expression, volun- 
 tary contributions, is to be interpreted to mean contri- 
 butions in respect of which no return in kind is to be 
 made. The recent decision of the Court of Appeal in 
 favour of the Royal College of Music is possibly an 
 indication of a tendency in the direction of a more 
 liberal construction of the statute. A considerable 
 number of Free Libraries in various parts of the country 
 have brought themselves within its terms and obtained 
 certificates; and as their main, though not their only, 
 means of support is a contribution from the rates, there 
 appears to be no good reason why they should not be 
 exempted from payment of rates. An essential con- 
 dition of the exemption is, however, that they should 
 be, in part at least, supported by voluntary contribu- 
 tions of money. 
 
 Chapter XV. 
 Industrial Welfare. 
 
 We now proceed to consider what has been the effect 
 of all these provident movements upon industrial welfare 
 during the Victorian era. We have seen that in the 
 earlier part of that era Trades-unions were held to be
 
 Industrial Welfare. 207 
 
 unlawful. We find them now not certainly covering the 
 whole field of labour, skilled or unskilled, nor, in fact, 
 covering more than a fractional part of it; not accumu- 
 lating large funds, and yet not shrinking from pledging 
 all the funds they have on the doubtful issue of a 
 strenuous conflict; nevertheless exercising a powerful 
 influence on both parties in the state, and recognized as 
 representatives of the interests of labour. We find they 
 have a wonderful faculty of recovering after a defeat, 
 and great resources in the heroic self-denial of their 
 members. Have not these bodies contributed to the 
 welfare of the industrial community? The superficial 
 observer takes note of the loss of wages suffered during 
 a prolonged strike, of the sufferings caused by it to the 
 workmen and their wives and children, of the disadvan- 
 tage to the community that arises when capital invested 
 in a large plant lies idle and production is suspended, 
 and of the possibility that trade is diverted to other 
 countries, and concludes that Trades-unions are pesti- 
 lent institutions, which our ancestors were right in 
 suppressing, and that it is a pity we cannot do the 
 same. The more accurate thinker takes note rather of 
 the normal operation of Trades-unions in securing by 
 peaceable means the concession of their rights to the 
 great mass of workmen, in creating a body of thought- 
 ful and well-informed men who know when the condition 
 of the labour market justifies them in urging a claim 
 and when it would be folly to do so, and in providing 
 for workmen, by means of combination, the opportunity 
 of meeting their employers on equal terms. For one 
 dispute that is brought to the stern decision of a strike, 
 there are many that are settled by peaceful conference. 
 Though, in general, the rough test of the rightfulness of 
 a strike is its success, it is not every strike that is the
 
 aoS Provident Societies and 
 
 fault of the workmen, and not every unsuccessful strike 
 that leaves them wholly defeated. 
 
 We have also seen great and continuous increase in 
 the operations of Friendly Societies, especially of that 
 highly-organized class called the affiliated orders. The 
 amount of the increase is difficult to ascertain precisely ; 
 but all the indications that can be obtained show that it 
 has been progressive in a marked degree. In measuring 
 the extent to which they have contributed to industrial 
 welfare, we observe, in the first place, not so much the 
 large amount of capital they have accumulated, as the 
 amount which they have distributed. In that point of 
 view, any errors of calculation of which they may have 
 been guilty become immaterial those errors have not 
 affected the application of the funds, which have all 
 gone to the relief of sickness or distress. One member 
 or another may have received more sick pay than is 
 the mathematical equivalent of the contributions he 
 made, and may accordingly have left behind, in the 
 funds, an insufficient provision for those who have not 
 yet been sick; but so far as he himself is concerned, he 
 has not received more than he wanted. Every penny 
 the societies have spent has been spent beneficially, 
 even if better knowledge would have distributed the 
 benefits in a more equitable manner. No estimate of 
 the amount thus distributed in sixty years would be 
 trustworthy; and we have had occasion to use so many 
 big figures upon authentic data, that any big figures 
 we might employ upon hypothesis would fail in effect: 
 but the reader may imagine for himself the vast sums 
 that have been distributed by these voluntary and 
 mutual societies among their sick and distressed mem- 
 bers. As to the present financial circumstances of these 
 societies, we have written so fully and so plainly that it
 
 Industrial Welfare. 209 
 
 is not necessary here to emphasize the fact that they are 
 essential elements in the security and prosperity of those 
 who belong to them. 
 
 The social side of Friendly Society work has always 
 been one of its attractions. The insurance side of it has, 
 as we have seen, largely developed out of the social side. 
 As time has gone on, it has gradually become relatively 
 more and more important, but has not yet extinguished, 
 and probably never will extinguish, the social element. 
 This has a great value in accustoming men to the 
 observance of the requirements of courtesy and mutual 
 consideration, in promoting well-ordered discussion and 
 debate, in training them in the knowledge of affairs, and 
 in many other ways. 
 
 The institution of Working-men's Clubs, in which no 
 insurance element enters, has the same advantages. 
 We have entered upon these fully in a previous chapter, 
 and have also dealt with some drawbacks incidental to 
 the constitution of these clubs. If we contrast the 
 elements of social life which are embodied in these clubs 
 with such social amenities as were open to the working- 
 man before these clubs existed, which in general cen- 
 tred in the smoking-room of the village inn, or of the 
 tavern in towns, we shall see that by the unpretending 
 efforts of the Working-men's Clubs a considerable addi- 
 tion to the welfare of the industrial classes has been 
 quietly achieved. 
 
 The other bodies to which the provisions of the 
 Friendly Societies Act extend represent methods of 
 meeting various requirements of civil life by the appli- 
 cation of the fruitful principle of free and self-governing 
 combination, and earn- to a greater or smaller number 
 of people benefits and facilities which they appreciate as 
 suited to their particular wants. In this point of view 
 
 ( H 610 ) O
 
 210 Provident Societies and 
 
 they are all signs of progress, and indications that the 
 power of association is more and more found to be 
 applicable and advantageous. 
 
 The Industrial and Provident Societies have contri- 
 buted to the improvement of the condition of their 
 members by enabling them to supply themselves with 
 good and cheap food, and other necessaries of life; by 
 raising their standard of enjoyment; by the profitable 
 investment of their savings; and by measures of a 
 directly educational kind. In the productive depart- 
 ment they have provided employment for their members 
 at fair rates, and placed on the market trustworthy and 
 well-made commodities. The great wholesale societies 
 have formed themselves into a centre of the movement, 
 chartered a fleet of ships, built vast manufactories, 
 established a system of credit and of supervision, to the 
 great advantage of the smaller societies, and contributed 
 to the promotion of the national welfare. The benefits 
 of the co-operative system have extended far beyond the 
 circle of the members, not merely by the establishment 
 of large stores dealing with particular classes of the 
 public, such as civil servants and officers in the army 
 and navy, but more especially by the blow they have 
 dealt to the system of obtaining credit from traders by 
 private individuals. The general rule of these stores 
 being to require payment in cash, and to sell the com- 
 modities dealt with at cash prices, persons who are able 
 to pay ready money have learnt that it is not worth 
 their while to pay the prices which traders who give 
 credit are bound to exact in order to get interest for 
 their money, and meet the losses arising from debtors 
 who cannot or will not pay. The result of the competi- 
 tion between cash stores and credit dealers has thus 
 been to compel the tradesmen to lower their prices, and
 
 Industrial Welfare. 211 
 
 for that purpose to restrict within narrower bounds the 
 practice of giving credit to individuals, to the great 
 benefit of themselves and their customers. 
 
 Building Societies and other organizations that have 
 done the like work are also to be credited with having 
 greatly contributed to industrial welfare. At a con- 
 ference recently held by the Building Societies Asso- 
 ciation at Bradford, it was stated by a local resident 
 that nine out of ten of the houses in that town have 
 been built by the aid of Building Societies. If this 
 computation be correct, it is probable that Leeds, 
 Rochdale, Oldham, and other towns would not be far 
 behind. 
 
 The large sums deposited in Savings-banks, or in- 
 vested through their means, indicate that the owners 
 possess a surplus after providing themselves with the 
 necessaries of life. So far as the facilities they offer 
 for saving, and the attraction afforded by the rate of 
 interest, have operated to induce persons to save who 
 would not otherwise have done so, they have tended to 
 the creation of wealth; but it is not to be supposed that 
 all the vast sums deposited are thus to be accounted for. 
 Some no doubt would have been saved if no Savings- 
 banks had existed, even if the savings had been placed 
 idly away in an old stocking or a battered teapot. Sav- 
 ings-banks, moreover, are open to the public generally, 
 and it is not therefore to be assumed that all the deposits 
 belong to the industrial classes. The Postmaster-general 
 made an effort in the year 1896-97 to determine by what 
 classes of the community the Post-office Savings-bank 
 was chiefly used. The method he adopted was to record 
 for a period of three months the occupations of all new 
 depositors, as furnished by themselves on opening their 
 accounts. Assuming these to be fairly typical of the
 
 212 Provident Societies and 
 
 whole number, the result would be that for every 10,000 
 depositors, 155 belong to the professional class, 281 are 
 officials, 101 engaged in education, 388 in commercial 
 pursuits, 183 in the agricultural and fishing industries, 
 1843 in other industrial occupations, 296 in railways, 
 shipping, and transport, 814 are tradesmen and their 
 assistants, 861 domestic servants, 37 not capable of 
 being grouped otherwise than as miscellaneous, and 
 5041 described as married women, spinsters, widows, 
 and children. As the last item forms more than one- 
 half of the whole, it will be seen that the materials for 
 classification are imperfect. The Postmaster-general 
 adds that women and children of all ranks, including 
 those so described, are believed to be 6059 in every 
 10,000 of the total number of depositors. 
 
 To sum up. We have seen that the Trade-unions pos- 
 sess ^"2,138,296, the Friendly Societies ^25,408,253, 
 the Working-men Clubs ^107,938, other societies under 
 the Friendly Societies Acts ^535,301, the Industrial and 
 Provident Societies ^28,451,328, the Building Societies 
 ;5 6 >397>457> th e Trustee Savings-banks ^53. 6 9953 2 
 the Post-office Savings-bank ^"108,098,641, the Railway 
 Savings-banks ^3, 124,069, the Loan Societies ^265,869. 
 We have thus an aggregate of ^277,955,815 indepen- 
 dent of the annuities and assurances granted by the 
 National Debt Commissioners altogether, not far short 
 of 300 millions of money accumulated in these various 
 institutions. We have endeavoured under each head 
 fairly to state the considerations which, on one side and 
 the other, are to be borne in mind in estimating the 
 effect of the several movements; and we cannot resist 
 the conclusion that, after every allowance has been made, 
 there has been throughout the Victorian era an exten- 
 sion of the principles and methods of Provident Societies
 
 Industrial Welfare. 213 
 
 that is beyond comparison greater than in any previous 
 time in history, and has been the instrument of wide- 
 spread moral and material benefit, especially to that 
 section of the community which has been growing 
 steadily in political importance, and is comprehended in 
 the expression, "the industrial population". Though 
 much may still remain to be desired, it cannot be 
 doubted that their condition has greatly improved 
 during the period under observation. 
 
 More direct evidence is available. Mr. Ludlow was 
 asked in 1892 lo give the Royal Commission on Labour 
 his general impression as to the changes in the condition 
 of the working-classes during the long time in which he 
 had made a careful study of it. He said, " I think the 
 condition of the working-class has changed immensely, 
 but not so much, I am happy to say, as the change in 
 public opinion on the subjects relating to that class. I 
 find now that boys and girls fresh from school are at a 
 point of advancement in relation to this question which 
 in 1848 we could not bring grown-up people to, and were 
 considered heretics and revolutionists for trying to bring 
 them to. I think the change in public opinion on that 
 subject has been something perfectly marvellous. I 
 cannot express it sufficiently. The working-class also 
 has developed enormously in intellectual acquirements 
 and habits of business and largeness of outlook, though 
 perhaps they have lost a little of that enthusiasm and 
 spirit of generous aspiration which I think distinguished 
 my working-men friends of the earlier days. Now the 
 black spots in the country may, I think, almost be 
 counted on the fingers. In former days it was very 
 nearly all black with but few white spots." 
 
 In 1867 Mr. Ludlow published, in association with the 
 late Mr. Lloyd Jones, a work on the Progress of the
 
 214 Provident Societies and 
 
 Working'- classes since 1832. That date was selected 
 with relation to the passing" of the Reform Bill, but it is 
 sufficiently near the date of the commencement of the 
 Victorian era to warrant us in treating the progress he 
 recorded as marking the half-way house between that 
 time and the present. In Part I. of the work, Mr. 
 Lloyd Jones described, in the main from personal know- 
 ledge, the condition of the working-class in 1832. He 
 quoted the testimony of Sir J. P. Kay Shuttleworth as 
 to the long hours of labour, the insufficient and unwhole- 
 some food, the half-savag-e domestic habits, the unwhole- 
 some conditions of life of the Manchester cotton workers. 
 The children then employed in all the principal branches 
 of manufacture throughout the kingdom worked during- 
 the same number of hours as the adults. They began 
 to work in some rare instances at five years old the 
 greatest number were under nine. The effects were 
 deterioration of the physical constitution, deformity and 
 disease, and the partial or entire exclusion from the 
 means of obtaining adequate education and acquiring- 
 useful habits. The Factory Acts belonging to the early 
 portion of the Victorian era to some extent stopped over- 
 work, and brought an educational machinery into oper- 
 ation; but in 1843 it was reported that in the area of 
 eight miles by four comprising the boroughs of Oldham 
 and Ashton, for a population of 105,000 there was 
 not a single public day-school for the children of the 
 humbler ranks. The factory schools which the chil- 
 dren were required to attend for two hours in the day 
 were insufficient, and such education as was given was 
 derived from the Sunday-school. As to the amuse- 
 ments of the masses, Mr. Lloyd Jones drew an equally 
 unfavourable picture: " Sullen, silent work alternated 
 with noisy, drunken riot; and Easter and Whitsuntide
 
 Industrial Welfare. 215 
 
 debauches, with an occasional outbreak during some 
 favourite wakes, rounded the whole life of the factory 
 worker ". 
 
 The ordinary artisan of the workshop was a far differ- 
 ent man. He had time for study when inclined, and as 
 a rule had received more education. Still, the workshop 
 of those days was by no means the most desirable school 
 for a youth to commence the active duties of life in. In 
 the highest-paid trades, work was not to be had on a 
 Monday from the artisan ; many men only began their 
 week on the Thursday. There were some grave men 
 devoted to intellectual pursuits, but they were excep- 
 tional. Mr. Lloyd Jones tells a story of one, an enthu- 
 siastic entomologist, coming to work after an absence 
 of several days, and explaining the cause of it by saying 
 that he had been attending his own funeral, and making 
 merry over his departure from the world. The fact was, 
 he had gone to the officers of his Burial Club, and com- 
 pounded his future claims for cash down, which he had 
 spent in making himself jolly. It was with the more 
 sober and thoughtful artisans that the agitation for the 
 Short-time Bill began. They saw and felt much sooner 
 than the factory workers themselves what a curse the 
 system as it then existed was, and it was long before 
 those most directly interested in the agitation could be 
 brought to take much concern in it. A friend of Mr. 
 Lloyd Jones told him of having gone to speak at a short- 
 time meeting at a village near Manchester; he found 
 himself, as he neared the spot, in the midst of a crowd 
 of factory operatives going in the same direction. De- 
 lighted, he said to one of them, " We shall have a good 
 meeting in favour of the Short-time Bill". "Nay," 
 shouted the man, " it's nobbut a dog-fight." 
 
 The Trade -unions of that day, Mr. Lloyd Jones
 
 216 Provident Societies and 
 
 describes as "generally ill-managed, secret in their 
 rules and deliberations, and too often tyrannical in their 
 proceedings. In nearly all of them there was a tend- 
 ency to violence." He knew personally two men belong- 
 ing to different trades who had been rendered at 
 different times totally blind by having vitriol thrown in 
 their faces by men on strike. Knobsticks, as men who 
 worked under price were called, were maltreated and 
 sometimes murdered. Apart from the unions, great 
 damage was done by riotous mobs. He himself was 
 present "during the destruction by fire of one of the 
 Manchester factories. The burning building was sur- 
 rounded by thousands of excited people, whose faces, 
 reddened by the ascending flames, expressed fierce and 
 savage joy. As the fire forced its way from floor to 
 floor, darting through the long rows of windows, cries 
 of exultation were shouted by the crowd j and when, 
 finally, bursting through the roof, it went roaring into 
 the heavens, the maddened multitude danced with 
 delight, shouting and clapping their hands as in uncon- 
 trollable thankfulness for a great triumph." 
 
 Mr. Ludlow, in a note appended to the work, which 
 was written before Trades-unions were legalized, re- 
 ferred to the Broadhead case in Sheffield. He said, 
 "what we see is but the last flickering out, not the first 
 outbreak of a baleful flame. There is no novelty in any 
 of the outrages; the only novelty is the knowing all 
 about them. At the time when the combination laws 
 were repealed they were common to many trades and 
 towns, instead of being confined to a few trades in one 
 or two towns ; they have simply lingered in these since 
 the time when every trade society was an illegal com- 
 bination, and when personal violence was almost the 
 only agency that could be employed to enforce the
 
 Industrial Welfare. 217 
 
 behests of committees. Frightful as these revelations 
 are . . . they show that the habit of exclusively con- 
 sidering- the class interest of the worker may beget a 
 temper as reckless, as deadly, as fiendish as the religious 
 fanaticism of a sect of assassins." 
 
 We have quoted freely from this excellent work, long 
 since out of print, and now rarely met with, on account 
 of both the intrinsic interest and the unimpeachable 
 authority of the statements. Mr. Ludlow traces to the 
 Factories Act, the Mines Act, and a number of other 
 statutes relating to industrial occupations, the great 
 amelioration in some of the conditions of industrial life 
 which had already taken place when he wrote; and 
 the operation of those legislative measures has been 
 continued and strengthened to the present day. The 
 inspection has become more and more efficient. The 
 excellent measure of appointing women inspectors of 
 factories has only recently been adopted. If factory 
 legislation is necessary for men, who ought to be able 
 to help themselves, how much more is it obligatory 
 upon the legislature to do all that can be done to help 
 women and children who cannot help themselves. In 
 carrying out the provisions of the Factories Acts, as 
 well as in the fulfilment of the functions of guar- 
 dian of the poor, the services of accomplished and 
 enlightened women cannot but be of the highest pos- 
 sible value. 
 
 Another cause to which Mr. Ludlow rightly attributes 
 much of the progress of the working-classes is the 
 recognition by the state of education as an object of 
 national policy. The first vote of ^30,000 for public 
 elementary education in Great Britain occurs in the 
 Appropriation Act of the 3rd and 4th Viet., nth August, 
 1840; and the vote of the next year, 1841, was even less
 
 2i8 Provident Societies and 
 
 only 1 5,000. The grant for the session of 1886, 
 when Mr. Ludlow wrote, was .694,530. The grant for 
 the session of 1898, moved by Sir John Gorst in a 
 memorable speech, is 4,920,175. Great as is this 
 expenditure out of national funds, it has to be supple- 
 mented by contributions of the ratepayers where board 
 schools exist, and by voluntary contributions where 
 voluntary schools only exist. 
 
 Until the year 1870, a married woman could hold no 
 property of her own. All that she possessed belonged 
 in law to her husband, and he could do with it what he 
 willed. The wealthy classes sought to remedy this 
 wrong by the system of marriage settlements. The pro- 
 perty intended to be secured to the wife, free from her 
 husband's control, was legally vested in trustees for her 
 benefit. This remedy was not available for the poor. 
 The drunken and worthless husband of an industrious 
 woman had the absolute right to every penny she earned. 
 If she placed her earnings in a Savings-bank, her receipt 
 would be a good discharge to the trustees, but only so 
 long as her husband did not claim the money. The 
 records of the earlier disputes in relation to Savings- 
 banks deposits are full of pathetic instances in which 
 poor women availed themselves of every possible ex- 
 pedient to prevent their husband getting scent of the 
 fact that they had saved money. The Act of 1870 
 directed that the wages and earnings of any married 
 woman, gained after its passing, in an employment, 
 occupation, or trade carried on by her separately from 
 her husband, and any property acquired by her through 
 the exercise of any literary, artistic, or scientific skill, 
 should be taken to be property held and settled to her 
 separate use, independent of her husband, and it made 
 provision that deposits in Savings-banks, property in
 
 Industrial Welfare. 219 
 
 the funds, shares in companies, and benefits in Friendly 
 and other societies, might also be so held. The Married 
 Women's Property Act, 1882, greatly extended these 
 remedies, and gave to a married woman full powers of 
 holding property without the intervention of trustees, 
 and the absolute right to all earnings and property 
 acquired by her from her own exertions, or devolving 
 upon her; it also provided that the deposits, shares, 
 and other benefits referred to in the previous Act should 
 be deemed to be her separate property until the contrary 
 be shown. Though the hard-working woman may still 
 have to endure much at the hands of a bad husband, 
 these statutes have been for her a charter of freedom, 
 and are the concession of an act of justice which had 
 been only too long delayed. 
 
 Mr. Ludlow points out that the Newspaper Act of 
 1836 commenced the emancipation of the newspaper 
 press, which the acts for the removal of the taxes on 
 knowledge have since carried out. As to the value of 
 the newspaper press as an educational organ, the testi- 
 mony of Mr. John Morley may be taken. He suggests 
 that classes should be formed for the study of the daily 
 paper, and shows that not a single issue of it ever 
 appears which does not test and extend the knowledge 
 of the best informed among us. 
 
 Other reforms such as that by which working-men 
 have been appointed to the justices' bench, elected 
 members of municipal corporations, and of parliament 
 itself the abolition of the vexatious indirect taxation 
 of a past day the better provision for sanitation of 
 towns, villages, and dwellings have had an important 
 share in promoting the welfare of the industrial popula- 
 tion ; but it remains as one of the great glories of the 
 Victorian era, that, as we have attempted to show, that
 
 220 Provident Societies. 
 
 welfare has been established in a very large degree by 
 the labours and the sacrifices of working - men them- 
 selves, and by the wise and judicious legislation which 
 has permitted and encouraged their endeavours in the 
 direction of self-help. Those who have thus been able 
 "to cheer and aid, in some ennobling cause, their 
 fellow-men " fyave not lived in vain.
 
 Index. 
 
 Abbotts' Ann Friendly Society. 68. 
 Agricultural Credit Societies. 105. 
 Albury, Deposit Society at. 67. 
 Ansell. Mr. C, 85. 
 Arch, Mr. J., 33. 
 
 Bailey. Mr. A, H.. 23. 
 
 Barham Mill, 134. 
 
 Barrister Certifying Savings-banks, 
 
 9- 
 
 Basle Savings-bank, 165. 
 Becher, Rev. J. T.. 58. 
 Benevolent Societies, 98. 
 Berne Savings-bank, 165. 
 Best. Hon. and Rev. S.. 68. 
 Bircham, Mr. F. T.. 18. 
 Birkbeck Building Society, 159. 
 Birmingham Benefit Societies, 69. 
 Birmingham Building Clubs, 149. 
 Blackburn. Burial Societies at. 75. 
 Bradford Boiler-makers' Union. 27. 
 Bradford Building Societies, an. 
 Branches. 61. 
 
 Bridgeton Victualling Society, 134. 
 Broadhurst. Mr. H., 40. 
 Brunswick Savings-bank. 165. 
 Building Societies. 147 ; Benefits of. 
 
 164, an ; Borrowing by. 151; 
 
 Losses in. 161 ; Returns of. 157; 
 
 Winding up. 155. 
 Burial Societies, 74. 
 Burnett. Mr. J., 35. 
 
 Cardiff Corporation. 195. 
 
 Carter. Mr. J. B.. 17. 
 
 Cattle Insurance Societies, 97. 
 
 Chetwynd, Mr. G. . 179. 
 
 China, Long-life Companies in, 43. 
 
 Chislehurst Mill, 134. 
 
 Chorley, Burial Societies at, 75. 
 
 Civil Service Stores. 146. 
 
 Collecting Societies. 75. 
 
 Compositors, Ix>ndon .Society of, 31. 
 
 Co-operative Congress, 142. 
 
 Co-operative Societies, 16, 132. 
 
 Co-operative Union, 140. 
 
 Coote. Mr. H. C.. 44. 
 
 County Societies, 65. 
 
 Cremer. Mr. G., 40. 
 
 Culley. Mr. G.. 18. 
 
 Daniell. Mr. E. L.. 18. 
 Deposit Societies, 67. 
 Devonshire. Duke of, 39. 
 District Investment Funds, 147. 
 Dividing Societies. 69. 
 Dorset Labourers' Union, 33. 
 Durham (Dr. Barrington), Bishop of, 
 33- 
 
 Educational Funds, 145. 
 Engineers, Amalgamated Society of. 
 
 3'- 
 
 F.ngland, Bank of, 11; Building So- 
 cieties in, 157, 163; Collecting 
 Societies in, 56 ; Co-operative So- 
 cieties in. 139; Friendly Societies 
 in, 55 ; Loan Societies in, 204 ; 
 Money Clubs in, 102; Provident 
 Societies in, 12; Trade -unions 
 in, 29.
 
 222 
 
 Index. 
 
 Factories Acts, 217. 
 
 Fawcett, Right Hon. H., 191. 
 
 Finlaison, Mr. A. G., 86, 200. 
 
 Finlaison, Mr. A. J., 200. 
 
 Finlaison, Mr. J., 200. 
 
 Foresters, Ancient Order of, 63. 
 
 Foresters, Royal, 64. 
 
 Frjendly Societies, Benefits of, 208 ; 
 Deficiencies in, 92; Financial Posi- 
 tion of, 84; Privileges of, 53; Pur- 
 poses of, 41; Registry of, 9; Royal 
 Commission on, 17, 156; Rules of, 
 48; Statistics of, 55; Valuation of, 
 90; Varieties of, 56. 
 
 Friends of Labour Societies, 203. 
 
 Germany, Accident Insurance in, 
 
 121. 
 
 Giffen, Sir Robert, 30. 
 Gladstone, Right Hon. H. J., 159. 
 Gladstone, Right Hon. W. E., 178. 
 Glasgow Building Society, Auld v. , 
 
 161. 
 
 Glasse, Rev. Dr., 134. 
 Glasse, Rev. G., 134. 
 Gorst, Right Hon. Sir J., 218. 
 Greenford Co-operative Store, 134. 
 Greenwich Building Club, 149. 
 Guarantee Societies, 107. 
 
 Hamburg Savings-bank, 165. 
 Hanwell Co-operative Store, 134. 
 Hearts of Oak Friendly Society, 67. 
 Hicks- Beach, Right Hon. Sir M. , 17. 
 Highland Society, 85. 
 Holland, Life Annuities in, 198. 
 Hollo way, Mr. H. , 115. 
 Holyoake, Mr. G. J., 133. 
 Howell, Mr. G., 40, 140. 
 Huddersfield Working-men's Club, 
 
 99- 
 
 Hughes, Judge T., 137, 142. 
 Hull Anti-mill Society, 134. 
 Hull Savings-bank, 172. 
 
 Iddesleigh, Earl of, 60. 
 Independent Mutual Brethren, 83. 
 
 Industrial and Provident Societies, 
 139 ; their Benefits, 210 ; their Ob- 
 jects, 143. 
 
 Industrial Assurance Companies, 79. 
 
 Industrial Welfare, 206. 
 
 Infant Mortality, 80. 
 
 Inspection Committee of Trustee 
 Savings-banks, 20, 171. 
 
 Ireland, Agricultural Credit Societies 
 in, 105; Bank of, n; Barrister in, 
 12; Collecting Societies in, 56; 
 Co-operative Societies in, 105, 139; 
 Friendly Societies in, 55 ; Trade- 
 .unions in, 33. 
 
 Jackson, Right Hon. W. L., 162. 
 Jewish Societies, 108. 
 Jones, Mr. Lloyd, 213. 
 Juvenile Societies, 73. 
 
 Kingsley, Rev. C., 137. 
 Kirkcudbright Building Club, 149. 
 
 Lancashire, Burial Societies in, 75; 
 Purchase of Land in, 144. 
 
 Land and Building Societies, 144. 
 
 Lanuvium, Burial Club in, 43. 
 
 Leeds Building Societies, 211. 
 
 Leicester Working-men's Club, 99. 
 
 Liberator Building Society, 158. 
 
 Lincolnshire, Cattle Insurance So- 
 cieties in, 98. 
 
 Liverpool Penny Banks, 177. 
 
 Liverpool United Legal Society, 83. 
 
 Livesey, Mr. G., 195. 
 
 Loan Societies, 201. 
 
 Loire Savings-bank, 165. 
 
 London, Bishop of, 24; Bryanston 
 Club, 99; Registry Office in, 19, 
 102; Savings-bank Department in, 
 180; Trade Guilds in, 23, 25. 
 
 Lowe, Right Hon. R., 17. 
 
 Ludlow, Mr. J. M., 19, 137, 213. 
 
 Macclesfield, Burial Societies at, 75. 
 Macdonald, Mr. J. , 40.
 
 Index. 
 
 223 
 
 Manchester Brariers' Union, 32. 
 Manchester Burial Societies, 75. 
 Manchester Factory Riots, 216. 
 Manchester Unity of Oddfellows, 61, 
 
 116. 
 
 Married Women's Property, 218. 
 Maurice, Rev. F. D., 136. 
 Medical Association, 72. 
 Mercers' Company, aoo. 
 Middlesex, Working-men's Clut in, 
 
 99- 
 
 Moffrey. Mr. R. W.. 58. 
 Money Club, 103. 
 
 Mongewell Co-operative Store, 133. 
 Morley, Right Hon. J., 219. 
 Municipal Thrift Funds, 195. 
 
 National Debt Commissioners, n, 
 
 166, aoo. 
 National Deposit Friendly Society, 
 
 67. 
 
 Neale. Mr. E. V.. 136. 
 Neison. Mr. F. G. P., 86. 
 Newspapers, 219. 
 Newton, Mr. T. B., 177. 
 
 Oddfellows, 59, 63. 
 Old-age Pensions, 112. 
 Oldenburg Savings-bank, 165. 
 Oldham Building Societies, 211. 
 Oldham Factory Schools, 214. 
 Owen, Robert, 136. 
 Oxford, Scholarships in, 145. 
 
 Pattison. Mr. W. P., 18. 
 
 Penny Banks, 106. 
 
 Permanent Building Societies, 149, 
 
 'S3- 
 
 Pitt. Right Hon. W., n. 
 
 Plunkett, Right Hon. H. C., 105. 
 
 Poor-law, 46. 
 
 Post-office Sayings-bank. 178; De- 
 positors in. 21 1 ; Disputes in, 181; 
 Returns of, 192. 
 
 Pratt, Mr. Hodgson, tot. 
 
 Pratt. Mr. John Tidd. n. 
 
 Preston, Burial Societies at, 75. 
 Provident Societies' Funds, 212. 
 Prudential Assurance Company, 79. 
 
 Radford Provident Society, 135. 
 RaifTeisen System, 105, 143. 
 Railway Savings-banks, 192. 
 Ratcliffe. Mr. H.. 86. 
 Restraint of Trade, 24. 
 Richards, Mr. E. M., 18. 
 Rochdale Building Societies, 211. 
 Rochdale Equitable Pioneers, 137. 
 Rollit, Sir A., 172. 
 Roundell. Mr. C. S., 17. 
 Royal Liver Society, 83. 
 
 Salford, Burial Societies at. 75. 
 
 Savings-banks, 165, 211; Assets of, 
 177; Disputes in, 174. 
 
 Scientific Societies, 205. 
 
 Scotland, Advocate in, 12; Building 
 Clubs in, 149; Collecting Societies 
 in, 56; Co-operative Societies 
 in, 139; Free Gardeners in, 58; 
 Friendly Societies in, 55; Observa- 
 tions of Sickness in, 85; Trade, 
 unions in, 33. 
 
 Scottish Legal Society. 83. 
 
 Scratchley, Mr. A., 168. 
 
 Scudamore, Mr. F. I., 179. 
 
 Self-help Societies. 104. 
 
 Sheffield. Outrages in, 32. 216. 
 
 Sikes, Sir C., 178. 
 
 Slaney, Mr. H. A., 139. 
 
 Smith, Rev. J.. 165. 
 
 Solly. Rev. H.. 101. 
 
 Special Investment Funds, 172. 
 
 Specially Authorized Societies, no. 
 
 Spitalnelds, Huguenot Friendly So 
 cieties in, 45. 
 
 Stanley, Hon. E. L., 18, 77. 
 
 Stanley of Aldcrley, Ix>rd, 179. 
 
 Stead. Mr. Ballan. 47. 
 
 Stephenson, Sir Augustus, 17, 19. 
 
 Stewponey Becher Club, 58. 
 
 Sutton. Mr. W., 86. 96.
 
 224 
 
 Index. 
 
 Swindon, Working-men's Clubs in, 
 100. 
 
 Terminating Building Societies, 149. 
 Tottenham Savings-bank, 165. 
 Trade-unions, 22, 206, 215. 
 
 United Kingdom, Building Societies 
 in, 164; Friendly Societies in, 56; 
 Workmen in, 30. 
 
 Valuations, 90. 
 
 Wakefield, Miss P., 165. 
 Wales, Sickness in, 87; Working- 
 men's Clubs in, 102. 
 
 Walford, Mr. C, 44. 
 Walworth Radical Club, 99. 
 Waterlow, Sir S. , 17. 
 Webb, Mr. and Mrs. S. , 29. 
 Wendover Savings-bank, 165. 
 Wholesale Societies, 141. 
 Wilkinson, Rev. J. F., 58. 
 Wisbech Working-men's Club, 99. 
 Working Classes, Progress of, 213. 
 Working-men's Clubs, 99, 209. 
 Workmen's Compensation, 21, 120. 
 
 Yorkshire, Working-men's Clubs in, 
 
 99. 
 Young, Sir G. , 18.
 
 Dr' 
 
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