Repcrt fvm the Select Committee 0*\ Fciendiy Societies j* REPORT FROM TUK SELECT COMMITTEE ON FRIENDLY SOCIETIES; WITH THE PROCEEDINGS OP THE COMMITTEE. Ordered, by The House of Commons, to be Printed, 6 August 1889. LONDON: PRINTED BY IIENRY HANSARD AND SON; AND Published by Eyre and Spottiswoode, East Harding-street, London, E.C., and 32, Abingdon-street, Westminster, S.W. ; Adam and Charles Black, North Bridge, Edinburgh ; and Hodges, Figgis, and Co., 104, Grafton-street, Dublin. 3 ° 4 - I. ii 1 Friendly Societies Act, 1875. Ordered, — [ Thursday , 28 th February 1889] : — That a Select Committee be appointed to inquire into, and report upon, the operation of Section 30 of “ The Friendly Societies Act, 1875,” as amended by subsequent Acts, and into the organisation or general condi- tion of Societies and Companies to which the said Section applies, and to suggest what amendment of the Law (if any) is required to ensure the better management of such Societies and Companies, and the more complete protection of the interests of their Members. That the Select Committee do consist of Twenty-one Members. Committee nominated of, — Mr. Thomas Fielden. Lord Francis Hervey. Mr. Samuel Hoare. Mr. Howorth. Mr. Wootton Isaacson. Mr. W. F. Lawrence. Sir Herbert Maxwell. Mr. Norton. Mr. Egerton Hubbard. Mr. A. H. Brown. Mr. James Caldwell. That the Committee have power to send for Persons, Papers, and Records. That Five be the Quorum of the Committee. Ordered , — [ Wednesday, 6th March 1889]: — That the Minutes of Evidence taken before the Select Committee on “The Friendly Societies Act, 1875,” in Session 1888, be referred to the Select Committee on “ The Friendly Societies Act, 1875.” Ordered, — [ Thursday, 1th March 1889] : — That Mr. James Stuart be discharged, and that Mr. Cremer be added to the Committee. / Mr. Bradlaugh. Dr. Clark. Mr. Fenwick. Sir Henry Roscoe. Mr. B. Rowlands. Mr. Herbert Gladstone. Mr. F. S. Stevenson. Mr. James Stuart. Mr. P. J. Foley. Mr. Conway. REPORT - - P . iii PROCEEDINGS OF THE COMMITTEE - - - - - p. xxi k n. 21 >?. 25 % 33 4.1 In. 2. n [ iii J REPORT, THE SELECT COMMITTEE appointed to inquire into and report upon the operation of Section 30 of “The Friendly Societies Act, 1875,” as amended by subsequent Acts, and into the Organisation or general Condition of Societies and Companies to which the said Section applies, and to suggest what Amendment of the Law (if any) is required to ensure the better Management of such Societies and Companies, and the more complete Protection of the Interests of their Members ; Have agreed to the following REPORT : — The Select Committee, appointed in July 1888, reported to the House (13th November 1888) the evidence taken before it. Your present Committee consists of the same Members, with one exception, as formed the Committee of last year. They have received a large amount of evidence upon the questions submitted to them, consisting of that given by, — Officials of the Registry of Friendly Societies ; The Assistant Secretary to the Finance Department of the Board of Trade ; Officials and Members of Collecting Friendly Societies ; Officials and Policy-holders of Industrial Assurance Companies ; Coroners, and others. Having regard to the conflicting nature of the statements put forward, the gravity of some of the allegations, and of the interests involved, your Com- mittee resolved (6th March 1889) that the evidence, of all witnesses (except those exempted by special resolution) should be taken upon oath. Your Committee also had before them the Report made by the Hon. Lyulph Stanley to the Chief Registrar of Friendly Societies on the Affairs of the Royal Liver Friendly Society. The evidence leads them to the conclusion that, although the Friendly Societies Act (18/5) has proved, to a certain extent, a safeguard to the interests of members of Collecting Friendly Societies and policy-holders in Industrial Assurance Companies, and sufficiently stringent to sweep away altogether some of the worst of the societies existing at the time of its enact- ment, it requires amendment, extension, and strengthening in more respects than one. Ludlow, 9 (1888). Operation of Section 30 of the Friendly Societies Act, 1875. This section of the Act, as amended, applies only to societies (registered or unregistered) receiving contributions by means of collectors at a greater distance than 10 miles from the registered office or principal place of business, and to companies, as defined by “The Life Assurance Companies Act, 1870,” in respect of assurances for which premiums are received by means of collectors at less periodical intervals than two months, and at a greater distance than 10 miles from the head office of the company. Apparently, a company which does not grant assurances on any one life for less than 20 1 . would be entirely outside the operation of the section. o.;33. a 2 r 50829 Companies IV REPORT FROM THE Sutton, 4G (i8»9). Companies which do not issue or become liable under policies on human life, nor grant annuities upon human life, would appear to be exempt, not only from Section 30, but also from the provisions of the Life Assurance Companies Act. Sub-section 1 provides that members are to receive copies of rules and policies in the case of registered societies ; this appears clear enough. In the case of companies, too, there is, perhaps, no doubt as to what is meant. But in the case of unregistered societies, there may possibly be no committee, and there may be only one manager, and the manager may be the secretary. In other words, it seems to assume that unregistered societies are so constituted that the sub-section, as it stands, is directly applicable. Sub-section 2 provides that where members or persons insured have made default in payment of contributions, no forfeiture is incurred until after a written or printed notice has been delivered or sent by post prepaid to him, or left at last known place of abode, apprising him that in case of default of payment within a specified time, to be not less than 14 days, his interest will be forfeited. This Sub-section allows notice of forfeiture to be either delivered or sent by post prepaid. Sub-section 3 requires written consent of member or person insured as a condition of transfer to another society, and also within seven days of proposal to transfer, a notice in writing to be given by society to which he is to be transferred to the society from which he is to be transferred, but it does not say what information is to be contained in the written notice to be sent by the transferee society. Sub-section 4 provides that no collector, whilst he is such, is to be cap-able of being a member of the committee of management, or other governing body (by whatever name) of the society, or of holding any other office in the society except that of superintending collectors, within an area Loin time to time to be specified. Sub-section 5 provides that no collector of a society is to be capable of voting at or taking part in the proceedings of any meeting of the same. Sub-section 6 requires that at least one general meeting of the society shall be held in every year, but it is not quite clear how far this and the following sub-section are to be considered applicable to companies when policy-holders as such have no voice in the management. Sub-section 7 provides for fixing day, hour, and place of annual or other periodical meetings, either in the rules or by notice by advertisement, or by notice in writing delivered or sent post free to every member. Such notice to specify the objects of the meeting, and in case of proposed amendment of ruies to contain copy of such amendment, and all such notices to be given at least fourteen days beforehand, and copy to be affixed in some conspicuous place at every one of the society’s offices where business is carried on. Sub-section 8 requires a copy of every balance-sheet of a society to be kept open for inspection for the seven days preceding the meeting at which it is to be presented, at every place of business, and shall be delivered or sent prepaid to every member on demand. Sub-section 9 requires the annual returns to be certified by a person carrying on publicly the business of accountant, but not an officer of the society other- wise than auditor thereof. Sub-section 10 provides that all disputes between the society and members or persons insured, or persons claiming through them, may, notwithstanding any provision in the rules to the contrary, apply to the County Court or Court of Summary Jurisdiction for the place where such member or person resides, and such Court may settle such dispute in the manner provided by the Act. Sub-section 1 1 provides for proof of service of notice by post. Sub-section 12 provides that infringement of the provisions of Sub-sections (3) (4) and (5) shall be offences under the Act. Sub-section 13 provides that provisions of the section shall apply to societies existing at commencement of the Act, and shall be contained in the rules of all future societies to which the section applies. Any act or omission which SELECT COMMITTEE ON FRTEXDLY SOCIETIES. V which by virtue of Section 30 and any other section w-ould be an offence on the part of a registered society shall be an offence on the part of any other society to which the Act applies, and of any officer of such society bound to fulfil the duty (if any) whereof such offence is a breach. Sub-section 13 of the section would seem to throw some doubt upon the exact extent of the operation of Section 30, for it says the word “society,” except in Sub-sections (1) (8) and (9), shall include all Industrial Assurance Companies, but makes no reference to the introductory words of the section to the effect that the section only applies to such Industrial Assurance Companies as receive contributions by means of collectors at a greater distance than 10 miles from the head office of the company. Section 30 was framed specially to apply to the three following distinct classes of society or company : — (a) Registered Friendly Societies receiving contributions by means of collectors at a greater distance than 10 miles from the registered office ; (A) Unregistered Friendly Societies receiving contributions by means of collectors at a greater distance than 10 miles from the principal office or place of business ; (c) Industrial Assurance Companies (as defined by the Life Assurance Act, 18/0) collecting premiums at less periodical intervals than two months, and at a greater distance than 10 miles from the head office. It will be observed that these three classes of institution are very different from each other in constitution and management. The intention in bringing them all under the operation of Sub-section 30 was doubtless to provide a substitute for the personal and more or less intelligent and effective interest taken by the members of an ordinary local Friendly Society in its affairs. Your Committee are of opinion that it has proved inadequate to the end in view; and, further, that owing to some doubt on the part of the Chief Registrar as to the interpretation of this and other sections of the Act, that officer, following in one instance the advice of the Treasury, has refrained from action which your Committee are of opinion should have been taken in the interests of members and insured persons. In the case of Industrial Assurance Companies such action is out of the powers of the Chief Registrar, owing to their not having been brought under the Act for such purposes. Registered Collecting Friendly Societies. The special characteristics which distinguish these from ordinary Friendly Societies were clearly set forth by the Chief Registrar, and, as the distinction is not generally before the public, these characteristics may be put in a tabular- form, thus : — Friendly Societies. Collecting Societies. Combine relief in sickness with life insur- ance. Limited to life insurance; relief in sickness discontinued, except in some cases to original members. Monthly, or, in some cases, fortnightly meetings the rule. Meetings, whether district or general, prac- tically disregarded by members. Management inexpensive; officials generally- appointed by intelligent consent of the members. Management rarely costing less than 40 per cent, of premium income; members prac- tically excluded from voice in election of managers. Promoted and conducted for benefit of members. Promoted and conducted for benefit of managers. a J Compared Tompkins, 882 (1888). Ludlow, 270, 931 (1888), 0669 (1889). Sutton, 1222, 1229, 1239 (1888), 169 (1889). Ludlow, 8 (18881. VI REPORT FROM THE Ludlow, 5 (1888). Ludlow, G (1888). Ludlow, 7 (1888). Stanley, 282 (1888). l.udlow, 8 (1888). Fowler, 543 (1889). Sondilands, 1626 (1889). March, 1853 (1889). Simpson, 2244 (1889), Tuustall, 4350 (1889). Taunton, 848 el seq., 2619 el seq. (1889). Ludlow, G698 ( 1889). Q. 2613-4, cl seq. Compared with the total number of Friendly Societies, those registered as Collecting Societies form a very small group. Registered Friendly Societies or Branches. Registered Collecting Societies. England - 24,500 47 Scotland - 900 5 Ireland ----- 400 0 Rut in point of membership and funds these : ew Collecting Societies hear a very different proportion, comprising as they do about one-half of the total number of members (subject to deduction for members insured in more than one society), and possessing about one-third of the total funds. There is this further peculiarity in the statistics of Collecting Friendly Societies, that out of 4/ so registered in England, four consist each of upwards of 100,000 members; being over 90 per cent, of the whole membership, and possessing over 88 per cent, of the funds. These four societies are : — The Royal Liver Friendly Society, The Liverpool Victoria and Legal Friendly Society, The Royal London Friendly Society, and the Blackburn Philanthropic Burial Society. .Mr. Ludlow states that “ Eight other societies in England have over 10,000 members, and these twelve, the four over 100,000 and the eight over 10,000, include nearly 98 per cent, of the members and 9 7 per cent, of the funds So that virtually, in speaking of the group, we only speak of a few large societies.” The rapid growth of the four largest societies in England of late years has been very remarkable. Between 1880 and 1887 their membership increased by about 5275 per cent, and the funds by nearly 66 per cent. ; while the membership of the eight societies over 10,000, but under 100,000, only increased by about 5 per cent., and their funds actually decreased by 2£ per cent. Of the five Collecting Societies registered in Scotland one only, the Scottish Legal Life Assurance Society, exceeds the limit of 100,000, having upwards of 400,000 members and upwards of 220,000/. funds. Two others have over 10,000 and under 100,000 members. Nominally, the members of a Collecting Society under Section 30 are in the position of persons having a right to appoint their committee of management, to amend the rules, to combine to apply for an official inspection into the society’s affairs, to apply for an investigation with a view to an award of dissolution, and other rights equally well defined. But the immense development of the larger societies, the wide area over which their operations have been extended, and their vast membership, has caused the term “farce,” applied to the annual meeting by several witnesses, to be strictly just. The power, even in those societies where the delegate system has been adopted, is practically in the hands of the management, subject to the remarkable influence which the collectors are able to bring to bear on the members. The members never have any real control over the business. An instance of the arbitrary use of this power was given in 1887 by the managers of the Royal Liver Friendly Society. Under Rule 64 of the society it was obliga- tory for one gen ral public meeting to be held annually in Liverpool. Previous to the usual date of this annual general meeting in 1887, a general public meeting of the society was summoned and held in Bristol, at which Rule 64 was revoked, and no general meeting was held that year in Liverpool, where the head office of the society is situated. It is true that the Chief Registrar expresses satisfaction that this was done, owing to the state of popular feeling in Liverpool at the time, but it was obviously an arbitrary act and one that your Committee think should be beyond the powers of managers. Moreover, the programme of the meeting, issued by authority at Bristol, was irregular, containing a& it did a misleading reference to the rules. The control of members is clearly nullified, when the managers alter the place of meeting in order to avoid the expression of popular feeling. The manage- ment further ignored the rule regarding the meeting of a deficiency bv a levy. This general indifference to the* observance of rules, and the employment of de- faulters SELF.CT COMMITTEE ON FRIENDLY SOCIETIES. VII fault ers in the service of the society, were among the many charges formulated by Mr. Stanley. Thus, although it is generally held that it is beneficial to members of Q- 2(W0 et ae< i- Friendly Societies to take an interest in the conduct of their societies affairs, the Committee are compelled to look upon the method of Collecting Societies as of no value whatever towards education in thrift. The competition between these societies is very acute, and seems to have conduced to some dangers against which, in the interest of the general public as well as of the members, additional safeguards are required, or, at least, the existing Acts should he administered with greater stringency. Collectors paid by commission are naturally anxious to make as much Stanley, 308 a 883). profit from their business as possible ; they are liable to temptation to be un- mo* assgj. scrupulous as to the methods by which this end is attained ; it is therefore no Ludlow, 6782 (1889). matter for surprise to find that assurances for sums at death are effected which are not recognised by the Friendly Societies Acts, and are otherwise distinctly opposed to the law. The Friendly Societies Act grants to registered Friendly Societies the privilege of insuring the funeral expenses of the husband, wife, or child of a member, or of the widow of a deceased member, but lays down no limit as to the amount of such funeral expenses. In the case of members, the limit of the sum assured to be received from one or more soc ieties, is fixed at 200 /., and in the case of children (when members) the limits are laid down to be 6 l. under five years of age, and 10/. if under 10 years of age. The Friendly Societies ^ct, Section 15, Sub-section (3), appears further to facilitate the insurance of lives by persons having no insurable interest by authorising a member of a registered society not being under 16 years of age to nominate in writing “ any person not being an officer or servant of the society, unless such officer or servant is the husband, wife, father, mother, child, brother, sister, nephew, or niece of the nominator,” to receive at his or. her death a sum not exceeding 50/. This provision applies to all registered societies whether under Section 30 or not. Unregistered Collecting Societies. Although Section 30 is undoubtedly intended to apply to unregistered Collecting Societies, the Committee received no positive evidence as to societies of this class. The Chief Registrar expressed his disbelief in their existence, but Ludlow, 25 (1888). admitted that he had no means of knowing. Industrial Assurance Companies. The returns of Collecting Companies doing Industrial Assurance business stoneimm, 298, 300, are made to the Board of Trade, but the functions of that office in regard to 4io(i889). them is limited to receiving the annual returns and seeing that they are in conformity with the requirements of the Life Assurance Companies Acts (18/0). There is power to compel the return to be made, but none whatever to insure the accuracy of the figures. The following statistics, therefore, handed to the Committee byMr. Stoneham,of the Finance Department of the Board of Trade, in order to show the progress of the 14 companies doing Industrial Assurance business must be received subject to the proviso that there is no means of checking the accuracy of the returns. £. fin 1878 the Premium Income was ------ 1,488,829 < In 1887 it reached - -- -- -- -- 4,181,852 [in 10 years the Annual Premiums received amounted to - - 28,156,760 The Life Assurance Funds in 1878 amounted to - - - - 726,743 In 1887 to - 5,982,601 The Capital Moneys in 1878 ------- 50,032 In 1887 293,251 The difference mainly arises from profits transferred to the Capital Account. [The Interest on Investments in 1878 amounted to - - - - 28,957 ' In 1887 to 197,784 [in 10 years a total was received of ------ 980,425 (In 1878 the Death Claims paid amounted to - - - - - 508,012 In 1887 to - - 1,664,281 [in 10 years to - -- -- -- -- - 10,576,195 t>33- • a 4 Dewey, 4801 (1889). Stonebam, 319 (1889). Fortune, 3303 (1889). viii REPORT FROM THE £. In 1878 the Commissions paid were - Expenses of Management ------ “ 480,373 287,460 Equal to 51*57 per cent. - £. 767,833 Jn 1887 Commissions were ------ Expenses of Management ------ - 1,146,265 709,598 Equal to 44*38 per cent. - £. 1,855,863 In 10 years the sums paid were for Commission Expenses of Management ------ - 7,978,866 4,731,808 Together ------ £. 12,710,674 Or, equal to 45*41 per cent. These sums were, exclusive of interest and dividends paid to shareholders, 412,750/.; and two sums of 81,946/. and 35,400 /. were transferred by one company from the Industrial to the Ordinary Branch of the business. % Three-fourths of the entire business done by these 14 companies is in the hands of one of them (the Prudential). The cost of management is shown to vary very much, from 4 1 *47 per cent, of the premium income in the case of the Prudential to 90*32 per cent, in that of the Yorkshire Provident. The reduction of the average cost of management from 51*57 per cent, in 1878 to 44*38 per cent, in 1887 is due solely to the reduction shown by the Prudential. But this statement is subject to this consideration, viz.: that 177,969/. spent in 10 years by the companies in promotion or extension are treated in their accounts as assets, although, the sums having been absolutely disbursed, the Board of Trade hold that they are improperly so treated, as they must ultimately become a charge for management on revenues. Of the total 177,969 /. so treated, 152,397 /. has been expended by one company, the London, Edinburgh, and Glasgow* (Limited). The attention of your Committee was drawm to the significant fact that all hough several of these Companies really commenced industrial business since the passing of the Life Assurance Companies Act, they were not obliged to make a deposit with the High Court of Justice of 20,000 /., as required by Section 3 of that Act, because they were established before the passing of that Act. The result is that in these resuscitated Companies the assured appear to have very imperfect security for the payment of their policies when they fall due. It appears doubtful to what extent, if any, these Companies endeavour to insist, or succeed in insisting upon their collectors accepting no assurances (other than on the assurer’s own life, or on those of his children) unless supported by an insurable interest. The term u guardian ” is interpreted generally in a very elastic sense, and the question of the use made of the provisions of the Policies of Assurance Act in connection with policies of Industrial Companies has not been cleared up. The evils, or at least risks, inseparable from a system of collectors depending for their income on a percentage upon contributions collected are the same in the Industrial Assurance Companies as have been described under the head of Collecting Societies. The legal position of policy-holders in the Companies differs from that of the members of Collecting Societies, inasmuch as the policy-holders have none of the rights of membership. They do not possess the control over the management which (in theory) is possessed by members. On the other hand, the collectors of the Companies being servants of the directors, can exercise little influence for their own benefit over the policy-holders, inasmuch as the latter have, speaking generally, no voice in the management of the Companies’ affairs. Therefore, SELECT COMMITTEE ON FRIENDLY SOCIETIES. ix Therefore, although, theoretically, the constitution of Societies under Stanley, 396 ( 1888 ). Section 30 may appear more favourable to the interests of the assured than the constitution of Companies is to persons assured in them, yet the influence of collectors in the former class appears in most cases to neutralise the theoretical superiority of constitution. Having regard, then, only to the pecuniary interests of the assured, it is probably better for them, supposing the pecuniary benefits secured to be equal, that they should not be invested with rights of membership which experience has so often proved to be totally illusory. If that is admitted, then the Industrial Assurance Companies appear to fulfil the requirements of the case better than the Collecting Societies ; but, in the opinion of your Committee, the existing laws affecting the Companies require important modifications to be hereafter described. There is at present no guarantee of honest management; there is no restriction on the proportion of revenue devoted to management, nor is there any obligation to employ properly certified tables of contribution and benefit. Further the audit of the accounts may be made by persons who even with the best intentions to do their work thoroughly, have no trained profes- sional experience and qualifications. Even in the case of companies where there exists no endeavour to hide their financial embarrassment, the existing legal machinery for remedying matters is, for the class of persons directly interested, at all events cumbrous and expensive. It is true that companies are required to send annual accounts, rendered in a certain form, to the Board of Trade, and are also required periodically to have their actuarial valuations made and sent to the same Department, and both these returns are published in a Blue Book. That Department, however, cannot reject these returns ; all it can do is to append to them copies of correspondence relating thereto, and it is only when these reach the hands of competing agents and collectors of rival companies that the information they contain is likely to be disseminated, and then only for trading purposes. To what extent profit can be made by a company doing industrial life assurance business, the evidence relating to the largest of these companies clearly shows. The Prudential Assurance Company, of which the original capital was 10,000/., subsequently increased by bonuses to 200,000/., declared in 188/ a dividend of 389,000/. On the other hand, the state of affairs Martin, 5764, &c. disclosed before the Committee by the witness pm forward by the Yorkshire 1 Provident, shows how serious are the risks to which the humbler class of assurers are exposed at the hands of unskilful or unscrupulous promoters. Infantile and Juvenile Assurance. The public sympathy and indignation having been aroused by recent cases which have come to light, in w r hich the money insured for on the death of infants appears to have acted as an incentive to neglect and even to murder of children, your Committee directed their inquiries with special care to this branch of the subject. Several witnesses, including two coroners, expressed a strong belief, not Stanley, 521 (i 888). only that infant insurance is an incentive to crime, inasmuch as it familiarises lv dl T’<^iw 88) ' l* l* *11 r • r* . . . ” t)74u, u>Ci the parent or guardians with the prospect of pecuniary benefit on the death of (i889). the child insured, but that a wide-spread system exists under which much JVsgg’) 4048 ’ neghct, cruelty, and crime takes place with impunity. Macdonald, 4i«4, &c. ( 1 889). Fortune, 3823 (1889;. °- 33 - b X REPORT FROM THE Stanley, 529 (1888). Waugh, 3748 (1889). Sutton, Appendix, No. 4. Sandilandg, 1544 (1889). Waugh. 3823 (1889). Hicks, 4076 (1889). Macdonald, 4205 (1889). Ludlow, 15 (1888). Ludlow, 79, 102 (1888). Since the close of the evidence before your Committee the following letter, bearing on this point, has been forwarded to the Chairman by direction of the Secretary of State for the Home Department. 12, Bumey-street, Greenwich, S.E., g; r? 11 July 1889. I have the honour to inform you that at the conclusion of the inquests held before me on the 9th instant on the bodies of Sidney Bolton, William Sutton, and Elizabeth Jane Frost, which had previously been exhumed at St. Paul, Deptford, Kent, the jury added to their verdict the following rider, viz. : — “ The jury are of opinion that the facilities given by the loose system of life insurance practised by some “ companies is an incentive to wilful murder for the sake of the insurance money ” ; and they desire me to convey this expression of opinion to you in the hope that the Government may initiate some legislation to remedy this evil. I am, Sir, Your obedient Servant, (signed) Edward N. Wood , Deputy Coroner for London (Greenwich Division). To the Right Hon. The Home Secretary. A large quantity of figures have been submitted to the Committee by various witnesses, purporting to show results favourable or unfavourable to Infantile Insurance, but your Committee are not disposed to base any recommendations upon them one way or another, owing to the difficulty of drawing therefrom a safe conclusion. Mr. Sutton alludes to this difficulty as follows : “ It is well known that during the first year of life, the risk of dying rapidly decreases, day by day, it might almost be said ; so that any comparison made between the death-rates under one year of age, say, of societies and companies which only begin to assure infants when one month, two months, or three months old, with the Registrar General’s mortality rates for the year 0 to year 1 might easily mislead. Further, speaking quite generally, a heavy purse means a light mortality, and particularly so among the very young and the very old ; so that as those assured with these societies and companies are almost universally not favoured with a superfluity of worldly riches, the mortality among them would naturally be found higher than the Registrar General’s figures deduced from all classes.” It must be admitted that insurance for burial expenses is highly valued by the working classes for perfectly legitimate reasons, and that an unnecessary hardship would be inflicted upon them if it were prohibited. No doubt it is a system liable to abuse and one that has probably led to infanticide in many cases that have escaped detection, but all persons who are in a position to profit pecuniarily by the death of another may be said to be exposed to temptation. The question is whether the defenceless state of the children of the poorer classes is such as to make it imperative that this system of insurance should be prohibited, or more stringently guarded. Various substitutes for, or amendments of the existing law have been suggested . It has been proposed by some witnesses that parents or guardians insuring the lives of children for burial should not be allowed to handle the money, but that having insured for burial, burial should be provided by the company or society issuing the policy. One obvious objection to this proposal is that Burial Societies would be started on a large scale by undertakers, and that it would be extremely difficult to trace the transactions which might ensue between the society and the assurers. For instance, a child insured, say, for 6 l., might be interred, at a much smaller cost by the society who might, in order to secure business for which competition would be keen, make a practise of returning a fee or gratuity to the assurer, in which case the object of the enactment would be defeated. Mr. Ludlow advocates the plan of burial by the State, as in certain Continental countries, but the consideration of such a system seems to be beyond the terms of the reference to the Committee. The same remark applies to Mr. Sutton’s suggestion, that the large borough corporations and the county councils might be empowered to undertake the business of Industrial Assurance Companies employing their own col- lectors. The question of extending the Post Office Insurance system, so as to enable it to undertake Industrial Assurance by means of collectors, has been repeatedly referred to in the evidence, but this also seems beyond the limits of the reference to your Committee. In SELECT COMMITTEE ON FRIENDLY SOCIETIES. xi In the event of industrial assurance by collectors being undertaken by the State, the County, Town Council, or the Post Office, the result would be com- petition with existing societies rather than their amendment. Your Committee are convinced that the allegations of culpable and even wilful neglect or violence resulting in the death of children have been, in some cases, well founded ; and that the object of such neglect and violence has not been disconnected with the sums payable on the death of the children. It should be added that, from the nature of the cases, it is almost impossible to obtain direct and inculpating evidence of criminality of this character, which is chiefly committed by a single individual in the privacy of home. Your Committee believe that sufficient precautions are wanting to prevent larger sums than those authorised by the Act being insured for and paid on a child's death. Although the Friendly Societies Act, 1875, makes it an offence to pay money on the death of a child under 10 years of age otherwise than is provided by the Act, that Act does not make it an offence to insure a child’s life for more than the sum provided by the Act. The only way this omission can be accounted for is, to suppose that the promoters of the Act did not see their way to make it an offence to insure a child’s life for a larger sum than that provided by the Act, where such larger sum could only be paid in the event of the child’s death taking place after attaining the limiting maximum age of 10 years. In spite of the apparently stringent provisions of Section 28, it is established to the satisfaction of your Committee that the section has failed to carry out completely the intentions with which it was presumably made part of the law. It is possible that the provisions of the Act are to some extent, at all events, defective. Section 28, Sub-section (2), provides that no society shall pay any sum on the death of a child under 10 years of age, except to the parent of such child or to the personal representative of such parent, and upon the production by such parent or his personal representative of a certificate of death issued by the registrar of deaths, or other person having the care of the register of deaths, containing the particulars after mentioned. Then the following sub-section (3) enacts: “ Whenever a certificate of the death of a child is applied for for the purpose of obtaining a sum of money from a society, the name of such society and the sum sought to be obtained therefrom shall be stated to the registrar of deaths, who shall write on or at the foot of such certificate the words, ‘ to be produced to the Society (naming the same) said to be liable for the payment of the sum of l. (stating the same),’ and all certificates of the same death shall be numbered in consecutive order, and the sum charged by the registrar of deaths for each such certificate shall not exceed 1 s .” It does not appear according to this sub-section, that a registrar of deaths, whenever a certificate of a child’s death is applied lor, is bound to inquire whether such cenificate is applied for lor the purpose of obtaining a sum of money from a society, and as the Act does not grant the privilege of shilling certificates of deaths, in the case of persons (members or not) insured with an unregistered society, it would appear to be eminently desirable that if the receipts from the giving certificates of death form in any way an item in the registrar’s remuneration, it should be made part of his duty to inquire specially in the case of every application for certificate of death of a child under 10 years of age, whether such application is made for the purpose of obtaining money from any Society or Industrial Assurance Company. The medical certificate of the causes of death does not require the medical man to make any inquiries as to whether the child’s life is insured, nor is there apparently any instruction to the reghtrar of deaths that when the medical certificate is produced, and a burial order asked for, he shall, before giving such burial order, inquire whether the child’s life is insured. It is probable that medical men are very often not acquainted with the provisions of the Friendly Societies Act, 1875, whether as regards the maximum sum payable on the death of a child, or the prohibition of payment by the society or company except on production of a registrar’s certificate. Hence it happens that doctors are not unfrequently asked for, and give, more than one certificate as to cause of death, the additional certificates being avowedly obtained for the purpose of getting insurance moneys. 0.33. b J The I Dewey, 5277 (1889). Xii REPORT FROM THE The coroner must apparently be put in motion, either directly, by the medical man refusing to give a certificate, or by the registrar, after coming to the opinion that the certificate given is unsatisfactory. It would certainly appear that before any burial order is given by the registrar it should be made someone’s duty to ascertain whether or not the life is insured, so that when anything transpired of the least unsatisfactory nature the coroner might be called upon to make inquiry before a burial order was issued. Again, under Section 28, Sub-section 2, no money may be paid on a child’s death by a society or company except to the parent of such child or to the personal representative of such parent. Your Committee assume that the words “personal representative” are used in the Act in their strict legal meaning ; but it must be doubtful whether they are taken in this sense by many of those who are called upon to comply with the Act, and it appears very desirable that words should be added setting out clearly who are the persons who alone can receive the money. There does not appear to your Committee any reason why such certificate of death applied for should not contain particulars of the insurances referred to in previously-given certificates of the child’s death. At present, under Section 28, Sub-section (5), societies to whom a certificate, subsequent to the first, is produced, are only bound to inquire as to previous insurances. Section 14 (2) provides that no society shall pay any sum of money upon the death of any person except upon the production of a registrar’s certificate of death, and the registrar of deaths is prohibited from giving certifi- cates of death for the payment in the whole of any sum of money exceeding 6 /. on the death of a child under five years of age, or of a sum of money exceeding 10 /. on the death of a child under 10 years of age; but it does not appear beyond doubt to your Committee if this provision applies to unregistered societies. The next matter in connection with the question of infantile insurance is that of the maximum amounts authorised to be insured and paid. There appears to be some doubt as to whether 6 /. for ages under five, and 10 l. for ages under ten and exceeding five years, are not excessive, bearing in mind that, apart from the peculiarity that certain societies registered priorTo the Act can take children as members, the ordinary position contemplated by the Act is that of a member insuring money to be paid only for the funeral expenses of his child. It is not improbable that in many cases where children die who are insured for the maximum amount payable under the Act, the whole sum is not spent in the ordinary funeral expenses ; but, taking into consideration doctor’s charges, the cost of mourning apparel for the family, and other incidentals, your Committee are not fully satisfied that these amounts are very much in excess of the actual needs. Mr. Ludlow mentions as a suggestion that, they might be reduced from 6 /. and 10 /. to 4 /. and 8 /., increasing at the same time the age of 10 years to 12 years. Mr. Dewey suggests a scale beginning with 2 /. under one year of age, and running up 1 /. a year to 10/. under nine years of age; and he further suggests that a child should only be insured once, that is, with only one society or company. Looking at the fact that the age of 16 years is considered by the Act to be the age at which persons can, apart from exceptional cases, become members of a society and take some part in its proceedings, it appears desirable that the age should be extended as hereafter recommended. Power of Nomination. Another matter which has been brought before your Committee is, that of the power of nomination exercisable by members of societies (when 16 years of age) under Section 15 (3). It appears to your Committee that this right of nomination as it at present stands, is far too open, and may easily be made use of to evade the provisions of the Act, and may possibly, from time to time, act as an incentive to fraud and still more serious crime. It is one of the matters in which Collecting Societies have a great privilege conferred upon them, not conferred upon the policv-holders of companies. In SELECT COMMITTEE ON FRIENDLY SOCIETIES. Xlll In connection with this matter, although no definite information was given to your Committee, they are of opinion that the whole question of insurable interest in connection with the practice of societies and Industrial Assurance Companies might well be inquired into, and, in connection therewith, the kindred subject of the methods adopted by Industrial Assurance Companies for the assignment of policies. General Considerations. Before proceeding to suggest amendments of the law your Committee desire to express their opinion of the general value of the system of assurance by companies and societies depending on collectors. It must be regarded as a means, for which at present there is no effective substitute, of inducing very large numbers of the working classes to make some provision for burial or for benefit to survivors at death, who would otherwise make none ; and so far these societies and companies may be re- garded, when well managed, as commendable institutions, always subject to the consideration that, owing to the commission charged by collectors (from 20 to 25 per cent.), added to the ordinary cost of management, it often happens that nearly half the premium income never goes to the benefit fund. It has been shown that the cost of the management of the Industrial Assurance Companies averaged 45 i per cent, in the 10 years from 1877 to 1887; it follows, therefore, that for every shilling of benefit assured for the assurers had to pay nearly 2 s. An interesting and valuable comparison drawn between the terms offered by the Life Insurance Branch of the Post Office and those offered by a large Collecting Society was laid before the Committee by Mr. Sutton, showing greatly in favour of the cheapness of the Post Office scheme. But then the Society employs collectors, and the Post Office employs none, the result being very fairly shown by Mr. Sutton as fellows: “These differences are of course very considerable, and may be taken to represent very much the same sort of thing as occurs in the ordinary affairs of life between giving a tradesman, when he weekly comes round for orders, an order for a week’s supply of a particular article which he, in due course, sends to your house, and for which you may pay him next week, or, it may be, later, and diligently searching out, at the expenditure of time and trouble, the place, possibly some distance off, where, for cash down, and on taking a year’s supply instead of a week’s, you can get the article at a greatly reduced price.” “ What is termed burial or funeral insurance in Friendly Societies or Industrial Assurance Companies is really,” as the Chief Registrar points out, “ only the insurance of a small sum on life. The sum is not payable to the undertaker but to the person legally entitled through the member, and if the latter chooses to put it in his pocket instead of spending it on the funeral, there is nothing to hinder him from doing so.” Societies coming under Section 30 come also under the other sections of the Act, and the evidence' your Committee have taken shows, conclusively, that however suitable those other sections may he for ordinary local societies or branches of orders, they are not, in many respects, suitable for societies under Section 30. As regards, for instance, two most important sections, they are shown to be ineffective. Section 23 relates to applications for the appointment of inspectors to examine into the affairs of the society, and for the calling of special meetings of a society. In the case of large societies, it is often found very difficult, sometimes quite impracticable, to obtain the requisite number of signatures to such an application, and it appears to your Committee that in the case of societies under Section 30, at all events, considerable alteration in the section might be advan- tageously made. As regards such societies, full discretionary power might be accorded to the Chief Registrar as to the number of signatures to be considered necessary. There is a further difficulty in Sub-section 2 (0), as to requiring applicants to give security for costs before appointing an inspector or calling a general 0.33. b 3 meeting. Sutton, Appendix, No. 4. Ludlow, Appendix No. 3. Sections 23 and 24 XIV REPORT FROM THE meeting. Another matter, brought out in Hon. E. L. Stanley’s evidence, is that the inspector cannot compel the attendance of all witnesses he may consider should be called. Industrial Assurance Companies are specially exempted from its operation. As regards unregistered societies, it is not clear whether it is applicable or not, as there is considerable confusion throughout this and some other sections of the Act between societies registered and societies not registered. Section 24 contains, inter alia, provisions with regard to the conversion of a registered society into a company, but bearing in mind the facts brought out in Mr. Sutton’s evidence, that these societies when converted into companies may not come under the Life Assurance Companies Act, it is clear that some modification of the provisions of the section is desirable, particularly as it is possible, if not probable, that some of the societies thus converted into companies do collecting assurance business. Your Committee further remark that in Section 25 it must, generally speaking, be exceedingly difficult, if not impracticable, to carry out the dissolution of a large society by instrument of dissolution, from the difficulty of getting the necessary consents of the members; and, as regards dissolution upon award, it has been given in evidence that the provisions are a failure. It is evident that with regard to this section considerable modifications are desirable. A “Registrar” (as it at present stands) proceeding under it has all the same powers and authorities, enforceable by the same penalties, as in the case of a dispute referred to him under the present Act, but in all, or nearly all, the cases hitherto dealt with the Chief Registrar has nominated someone else other than himself or an Assistant Registrar, so that these powers were not available. This was notably the case in the investigation held by Mr. Sutton in connection with the affairs of the Independent Mutual Brethren Society. Recommendations. Your Committee, after anxious consideration, have agreed to the following Recommendations : — 1. That a Bill affecting all Collecting Societies and Industrial Assurance Companies now under the provisions of Section 30 of the Friendly Societies Act, 1875, be prepared, to include all such provisions of the said Act as may be deemed applicable, with such alterations and modifications thereto as may be considered desirable, and that the following provisions be included in the Bill ; — 2. The Registry of Friendly Societies chief office shall be constituted, as suggested hereafter, and shall be termed “ The Central Office.” A. — Provisions affecting both Collecting Friendly Societies and Industrial Assurance Companies. 3. Tlie limit of ten miles laid down in Section 30 of the Friendly Societies Act, 18/5, shall be done away with, and all societies and companies leceiving contributions by means of collectors shall be constituted into distinct class and placed under the operation of the proposed Act of Parliament. 4. No collector (as defined by the Friendly Societies Act, 1875) shall be capable of being a member of the committee of management or other governing body by whatever name, or a trustee, manager, or director, or of holding any office jn the society or company, except that of superintendent of collectors, within an area to be from time to time specified, unless and until he has ceased to be a collector or to have interest in any collecting book for at least three years. 5. Section 30, Sub-sections (1) and (2), of the Friendly Societies Act, 1875. 6. Section SELECT COMMITTEE ON FRIENDLY SOCIETIES. XV G. Section 30, Sub-section (3) of the said Act, with the addition that not only the society or company to which the insured is transferred but the collector who takes him over shall also give notice to the society or company from which he is transferred, specifying in the notice full name, address, and particulars of terms of transfer. 7. Section 30, Sub-section (10) and (11), of the said Act. 8. In lieu of Section 30, Sub-section (12), of the said Act, a complete list of offences under the proposed Act should be inserted, with the methods of procedure in connection with each offence, and the respective penalties attaching thereto. 9. In lieu of’ Section 30, Sub-section (9), of the said Act, it shall be enacted that the annual returns to be made in such form as the “ Central Office ” may from time to time prescribe, and shall be signed by two accountants as auditors, one of whom shall be a Fellow of the Institute of Chartered Accountants, or a chartered accountant in Scotland as now recognised, approved for the purpose by the “ Central Office ” ; a list of such accountants approved by the “ Central Office ” to be printed and circulated periodically. Such auditor shall not have, nor during the preceding .three years, shall have had any financial interest in the company or society. The annual returns, up to 31st December in each year, shall be sent to the “Central Office ” not later than 31st March in the following year. The “ Central Office ” shall have power to enforce, when necessary, any report of the anditors. 10. The provisions of Jarvis’s Act, under which proceedings are precluded, except within six months of the date of committal of an offence, shall be modified and excluded in regard to certain offences under the new Act. 11. All societies and companies, once in every five years, shall make valuation returns to the “ Central Office ” ; such returns to be in such form and to contain such particulars as the “ Central Office ” shall prescribe, and the actuary or actuaries making them shall, in all cases, be Fellows of the Institute of Actuaries or Fellows of the Faculty of Actuaries in Scotland. The valuations shall be made strictly in conformity with the Instructions to Public Valuers laid down by the Treasury. The “ Central Office ” shall have the power to insist upon such alterations and modifications of the valuation returns as may, in its opinion, be desirable, and shall have power to advertise the results of such valuation in any way it may think fit, with consent of the Lords of the Treasury, and with such comments thereon as it may consider desirable. 12. Whenever it shall appear to the “ Central Office ” the proper course to pursue in the interests of the members or policy-holders, it shall have power to appoint, without notice to the committee of management, an official receiver, who shall have the same powers as and shall in every respect act in the place of the committee of management until such time as the “ Central Office ” orders other- wise. 13. The “ Central Office ” to have power at anytime on its own motion, or at the instance of members or other persons interested, to appoint one or more inspectors to hold an inquiry into the society’s affairs, with power to administer oaths, and to require the attendance, as witnesses, of any officers or servants of the society, or of any members of the society, or other persons. In lieu of appointing inspectors, the “ Central Office ” may appoint one or more of its own body to act with all the powers conferred upon the Central Office or upon inspectors. 14. The “Central Office” shall have the power to charge the costs of inspection on such persons as it may think proper, or upon the funds of the society, ana to enforce payment of the same. o . 33 ’ b 4 The XVI REPORT FROM THE The “ Central Office ” shall have the power to order dissolution of a society, and to direct in such maimer as it may think fit, that the assets be realised, and to make an award of dissolution of the funds. 15. All assurances effected with any society or company on or after the passing of the Act shall be entitled to a surrender-value when they have subsisted for at least five years, and all contributions due under the rules during the five years have been paid, and the scale of surrender-values allowed by the society shall form part of the registered rules thereof, and shall be certified by an actuary qualified under the Act to make the society’s valuation. It shall not hereafter be lawful to assure any child under 10 years of age in more than one society or company. There shall be incorporated in the proposed Act the following enactments contained in the Companies Clauses Consolidation Act, 1845, and in the Companies Clauses Consolidation (Scotland) Act, 1845, namely, Clauses 111 to 114 (both inclusive) in the former Act., and Clauses 114 to 117 (both inclusive) in the latter Act, being some of the provisions with respect to the accountability of officers as far as those sections relate to books, papers, writings, property, and effects. The provisions with respect to the recovery of damages not specially provided lor and penalties, Section 3 (relating to interpretation of terms). B . — Provisions affecting Collecting Friendly Societies only. 16. It shall not be lawful for any society to which this Act shall apply, to use the title “ Friendly Society,” unless prefixed by the word “ Collecting.” 17. No person shall become a member of any Collecting Society unless and until he has reached the age of 16 years. 1 8. Your Committee recommend that all societies shall be registered. 18tf . The privilege at present enjoyed by some societies of not being required to have a separate provision for management expenses, shall cease after the passing of the proposed Act. 19. Every society, upon applying for registration of a rule as to provision for expenses of management, shall be required to produce the certificate of an actuary, approved as aforesaid, that the said provision may be safely made on the existing scale of benefits and contributions, such rule as regards every class of benefit to specify, in such form as the official authority shall prescribe, the exact nature of that provision. This provision to apply, as far as the “ Central Office ” may think fit, to proposed alterations of rules relating to expenses of management in the case of societies already having a rule or rules relating to the same. 20. The “Central Office” shall have the right to refuse to register any rule or rules of a society, but the society may appeal to the same authorities as provided in Section 11 (8) of the Friendly Societies Act, 1875. It shall, however, be the duty of the “ Central Office ” to appear on such appeal and defend its action. 21. Every society now registered, which has not already done so, shall, within a year from the passing of this proposed Act, submit to the “ Central Office ” for registration rules providing for either the appointment and powers of a standing committee of members for each specially defined district or area over which its business extends, or for the constitution of the society, to be made up of a central executive body, with local branches, or lor constituting the society into specially defined electoral districts, and for the periodical meeting of the members of such districts for the purpose of electing delegates to attend and vote at the periodical meetings of the society. 22. Every society shall deliver notices of meetings of the society to everyr person having the right to attend such meeting, and similar provisions to apply to the meetings of district committees, meeting for SELECT COMMITTEE ON FRIENDLY SOCIETIES. XVI 1 for the election of delegates, or other sectional meetings of members provided for in the rules, in default of rules specially relating thereto. The times and places of such meetings to be in all cases the most suitable for the convenience of the members having a right to attend, the time to be in no case, except those of the general meetings of the society, earlier than eight o’clock in the evening, unless otherwise approved by the “ Central Office.” Every collector shall, on the demand in writing of the member whose money he receives, and who has been a financial member for more than a year, show him the names and addresses of all those whose names are on his book at the time, or permit a copy of the same to be taken for a small fee. The names and addresses of the delegates shall be kept at the Chief Office, and shall be open for inspection to any member within seven days of the election. 23. No collector shall be capable of voting at or taking part in the proceedings of, or be present at, any meeting of the society or of members thereof under the rules. 24. All notices of meetings shall contain full particulars of the business proposed to be done at those meetings, including, in the case of meetings of the society copies of amendments of or additions to rules proposed to be considered. The rules may be amended at the annual meeting upon due notice being given. 25. Section 30, Sub-section 7, of the Friendly Societies Act (1875), except in so far as modified by the proposed Act. 26. In lieu of Section 30, Sub-section 8, it shall be the duty of the society to deliver gratuitously and without request a copy of every annual return, such return including copy of the last valuation balance- sheet for the time being, to be delivered to each member or family within thirty days from the date on which it was signed by the auditors. 27- No society shall hereafter be registered until the applicants for registry shall have deposited with the “ Central Office ” the sum of 500 /., such sum to be retained by the “Central Office” until the annual income from members’ contributions amounts to 1,000/. and the first valuation has been made. If such valuation shows a deficiency, then the 500 l. to be retained until the next valuation, and if that shows a deficiency, the “Central Office ” to order the society to be dissolved, and to repay the 500 /. less any claims by members of the society. 2 7 a. Every proposed rule rejected by the Registrar shall be plainly stamped with the word “ Rejected.” C , — Provisions affecting Industrial Assurance Companies only. 28. All Life Assurance Associations receiving contributions by means of collectors, which are not registered either at the Friendly Societies Office or the Joint Stock Companies Office, shall be declared illegal, if not so registered within a specified time, say twelve months from the passing of Act. 29. It shall not be lawful for any company which was in existence before the passing of the Life Assurance Companies Act (1870) to commence industrial assurance business, unless it shall previously have deposited 20,000 l. as required from new companies under that Act. 30. All companies shall be required to separate their industrial business from their ordinary business, and make annual returns in respect of such industrial assurance business to the “ Central Office.” Such annual returns to be similar in form and subject to similar provisions as shall be laid down for Collecting Societies. 31. All companies shall make valuation returns to the “Central O. 33 . c Office ” xviii REPORT FROM THE Office ” in a similar form and subject to similar provisions as shall be laid down for Collecting Societies. 32. It shall be in the discretion of the “ Central Office,” if it appears from the valuation that any company is not in a position to meet its engagements, or if it appears from the annual return that the business is carried on in an unsatisfactory manner, to withdraw from the company the privilege as to infantile insurance (in respect of new contracts), and to advertise the withdrawal as widely as may appear desirable. 33. Whenever it appeared clear to the Central Office that the Company would be unable to meet its engagements, Section 21 of the Life Assurance Companies Act, 1870, shall be so modified as to enable the Central Office to make application to the Court (as the Section stands in the Life Assurance Companies Act, 1870, the appli- cation must be made by one or more policy-holders or shareholders, but if in the separate Act a clause were inserted relating to companies, much like ihis Clause 21 of the Life Assurance Companies Act, 1870, but giving the Central Office locus standi as if it were “ one or more “ policy-holders or shareholders,” the question of insolvency and winding-up could still be dealt with as heretofore by the Court of Chancery. Of course the clause w'ould require careful consideration and wording, but properly drawn should throw upon the Central Office, when it has before it the Annual Returns and Valuation Returns of the Industrial Branch, the responsibility of looking after the policy-holders’ interests by bringing the matter before the Court). It shall not be lawful for any Industrial Assurance Company to distribute in any year a dividend, including bonus, amounting to more than 10 /. per cent, upon the paid-up capital of the Company, and the remainder of the profits shall be divided among the policy-holders of the Company. Infantile and Juvenile Insurance. Your Committee recommend that the age for the insurance of juveniles be extended from 10 years to 16, making the scale as follows : — £. Under 5 years of age - - 4 j To be the total sums to be insured for Over 5 and under 10 - - 6 on death or payable whether by one Over 10 and under 16 - - 8 j or more societies or companies. Your Committee are strongly of opinion that the Registrar General should add to the form of medical certificate of death a column demanding particulars of insurances on the life of deceased, of whatever age, to be filled up by the medical man, and stating how long the doctor signing such certificate had attended the deceased. In passing from this subject your Committee desire to record their conviction that the evils possible under the law as it exists are by no means limited to infantile insurance. Registry of Friendly Societies. T (install, 4309 (1889). Tompkins, 632 (1888). Ludlow 6872 (1889). In the course of the inquiry it became apparent that there was some dissatisfaction among members of societies owing to the Chief Registrar having refrained from taking action when the affairs of certain societies were known to him to be in a serious condition. This was especially the case in the instances of the Liverpool United Legal, the United Assurance Society, the Liverpool Legal Friendly Society, and the Union Friendly Society. Complaints addressed in letters from members to the Chief Registrar did not produce the interference which the writers imagined to be in the power of that official. Your SELECT COMMITTEE ON FRIENDLY SOCIETIES. xix Your Committee are of opinion that the construction put hy the Chief 926 ‘ 933 Registrar upon the provisions of Section 10, Sub-section 5, Sub-head B., of the Ludlow, 6609 (i 889). Friendly Societies Act, 1875, is an unfortunate one, in the interests of members of Friendly Societies. The Committee hold that when such a state of things Iuf|low g34 ' as was disclosed by the valuation of the United Assurance Society in 1875, Uf °' v ’ namely, a deficiency of 52,220 /., comes to his knowledge, it is the plain duty of the Chief Registrar, under Section 10, to publish information, either generally or in the particular districts. The case in which the Chief Registrar did apply to the Treasury for Ludlow, G669 (i 889). their consent to publish an advertisement was not one connected with the finances of the society concerned, and did not occur until 1883, eight years after the great deficiency was shown in the valuation of the United Assurance Society. Your Committee cannot, therefore, understand how the application to the Treasury, in 1883 could, as he states, be the origin of the impression left on his mind that the effect of the enactment was doubtlul. Clearly, the interpretation put by the Chief Registrar upon Section 10, Sub-section 5, Sub-head B., has rendered it a dead letter. Looking to the importance attached in the public view to the fact that a society is registered, and to the confidence which is reposed on the action of the Chief Registrar, your Committee are of opinion that it is necessary that in future the provisions of Section 10 shall be more vigorously administered. Again, in the administration of Section 16, Sub-section 9, there seems Sutton, 1217 (1888). to have been a failure to carry out the intentions of the Act. Mr. Sutton, the Actuary, expresses his regret that proceedings were not taken against the managers of the United Assurance Society. Mr. Ludlow states that Mr. Sutton, in so expressing himself, overlooked Ludlow, 6674 (1 889). the fact that as the return only came into the Actuary’s hands towards the end of 1877, when more than six months had elapsed since the return was made, a summary proseeuiion was precluded by the provisions of Jarvis's Act. When the Actuary represented to the Chief Registrar that the management provision Sutton, 1218 (1888). of this society had been infringed, it certainly seems strange that the former should not have been informed at the time of the reasons why proceedings did not follow upon his report. Having regard to the importance of the Actuary’s duties in the administration of the Act, it is to be regretted that his representation seems to have been allowed to pass without any explanation having been offered to him until 12 years afterwards, and then indirectly, in reply to a question before your Committee. It has been shown to your Committee that the Chief Registrar refused Ludl(m ’ 6849 (1889). to register certaiu rules passed at the Bristol meeting of the Royal Liver Friendly Society in 1887, whereupon an application was made to compel him to do so. No appearance for the Chief Registrar was made in court; decision was given against him, and the rules were registered under a mandamus. The Chief Registrar, in explanation, stated before your Committee that his office Ludlow, 6852 (1889). never appears in such cases, that he considers the office merely to be stake- holders between the persons who urge the rule and the persons who object to it. But this is manifestly an impossible position. The refusal of the Chief Registrar to register the rule is incompatible with the position of a “ stakeholder,” and your Committee hold that it is his duty to appear in such cases and sustain his objection. The Chief Registrar has expressed the opinion that his office is under- Ludlow, 6799(1889). manned, even for the duties devolving on it under the Act as at present interpreted. The staff consists of the Chief Registrar, the Assistant Registrar, the Ludlow, 1023 (1888). Actuary, the Chief Clerk, two first-class clerks, and five or six clerks, besides writers. It is beyond the reference to your Committee to express any opinion on Mr. Ludlow’s complaint that the office is under-manned, but they are of opinion that before any addition is made to the staff a careful inquiry should be instituted into the administration and internal organisation of the office, and, in view of the Chief Registrar’s statement, they recommend that such an inquiry be made without delay. 0.33. c 2 Your XX REPORT: — SELECT COMMITTEE ON FRIENDLY SOCIETIES. Your Committee hesitate to make any recommendations as to the con- stitution of the Registry of Friendly Societies Office, as they consider that such would be beyond their reference ; nevertheless they venture to throw out the following suggestions in consequence of facts which have come out in the course of their inquiry : — - 1. That the sole official authority upon which all powers be reposed, and all duties be imposed in the administration of the Act, be known as the “ Central Office.” 2. That such Central Office shall be composed of the Chief and Assistant Registrar (or Assistant Registrars) for England, as laid down in the Friendly Societies Act, 1875; of the Actuary appointed under the said Act; and of the Assistant Registrars for Scotland and Ireland, as provided in the same Act, the latter only to be members of the Central Office so far as relates to matters arising in Scotland and Ireland respectively. r 6 August 1889. C xxi ] PROCEEDINGS OF THE COMMITTEE. Wednesday, 6th March 1889. Sir Herbert Maxwell. Dr. Clark. Mr. James Caldwell. Mr. Conway. Lord Francis Hervey. MEMBERS PRESENT : Mr i Mr. Norton. Sir Henry Roscoe. Mr. Egerton Hubbard. Mr. Fenwick. Sir Herbert Maxwell was called to the Chair. The Committee deliberated. Motion made, and Question, c< That the evidence of all witnesses examined before thjs Committee (except those who shall be exempted by special Resolution) shall be taken upon oath ” — (Dr. Clarke ) — put, and agreed to. [Adjourned till Tuesday next, at Twelve o’clock. Tuesday, 12 th March 1889. members present : Mr. Bradlaugh. Dr. Clark. Sir Henry Roscoe. Lord Francis Hervey. Mr. Thomas Fielden. Mr. Fenwick. Mr. W. F. Lawrence, Mr. James Caldwell. Mr. Haworth. Mr. Norton. Mr. Samuel Hoare. Mr. Cremer. In the absence of Sir Herbert Maxwell, Mr. Bradlaugh was called to the Chair. Mr. William Sutton was sworn, and examined. [Adjourned till Friday next, at Twelve o’clock. \ Friday, \bth March 1889. members present : Sir Herbert Maxwell in the Chair. Mr. W. F. Lawrence. Mr. Bradlaugh. Mr. Howorth. Mr. James Caldwell. Mr. Norton. Mr. Egerton Hubbard. Mr. Thomas Fielden. Mr. Samuel Hoare. Mr. P. J. Foley. Mr. Herbert Gladstone Mr. A. H. Brown. Mr. Wootton Isaacson. Sir Henry Roscoe. Mr. William Sutton was re-called, and further examined. Mr. Allen Stoneham was sworn, and examined. [Adjourned till Friday next, at Twelve o’clock. C 6 xxu PROCEEDINGS OF THE Friday, 22 nd March 1889 . MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. W. F. Lawrence. Mr. Bradlaugh. Lord Francis Hervey. Mr. Cremer. Mr. Samuel Hoare. Mr. F. 8. Stevenson. Mr. James Caldwell. Mr. Fenwick. Mr. Egerton Hubbard. Sir Henry Roscoe. Mr. A. H. Brown. Mr. Herbert Gladstone. Mr. A. J. Fowler was sworn, and examined. [Adjourned till Tuesday, 2nd April, at Twelve o’clock. Tuesday , '2nd April 1 889 . MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. Samuel Hoare. Mr. James Caldwell. Dr. Clark. Mr. Bradlaugh. Mr. Lawrence. Sir Henry Roscoe. Mr. Thomas Fielden. Mr. Herbert Gladstone. Mr. Cremer. Mr. Brown. Mr. Frank Taunton was sworn, and examined. [Adjourned till Tuesday next, at Twelve o’clock. Tuesday, 9th April 1889 . MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. Samuel Hoare. Mr. F. S. Stevenson. Mr. James Caldwell. Mr. Wootton Isaacson. Mr. W. F. Lawrence. Dr. Clark. Mr. Watson Ireland was sworn, and examined. Mr. Bradlaugh. Mr. Herbert Gladstone. Mr. Egerton Hubbard. Mr. Cremer. Mr. Conway. I [Adjourned till Friday next, at Twelve o’clock. Friday, 12 th April 1889 . members present : Sir Herbert Maxwell in the Chair. Mr. P. J. Foley. Mr. Egerton Hubbard. Mr. Samuel Hoare. Mr. Bradlaugh. Mr. W. F. Lawrence. Mr. Wotton Isaacson. Mr. James Caldwell. Dr. Clark. Mr. Cremer. Mr. Charles Sandilands was sworn, examined. [Adjourned till Friday, 3rd May, at Twelve o’clock. SELECT COMMITTEE ON FRIENDLY SOCIETIES. XXI11 Friday, 3rd May 1889. MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. Bradlaugh. Dr. Clark. Mr. P. J. Foley. Mr. Samuel Hoare. Mr. W. F. Lawrence. Mr. James Caldwell. Mr. F. S. Stevenson. Mr. Egerton Hubbard. Lord Francis Hervey. Mr. Cremer. Mr. Norton. Mr. T. E. March was sworn, and examined. [Adjourned till Tuesday next, at Eleven o’clock. Tuesday, 7 th May 1889. members present : Sir Herbert Maxwell in the Chair. Dr. Clark. Mr. James Caldwell. Mr. A. H. Brown. Mr. W. F. Lawrence. Mr. Bradlaugh. Lord Francis Hervey. Mr. Fenwick. Mr. Cremer. Mr. Herbert Gladstone. Sir Henry Roscoe. Mr. P. J. Foley. Mr. Thomas March was re-called, and further examined. Mr. Edward Simpson was sworn, and examined. [Adjourned till Friday next, at Eleven o’clock. Friday , 1 Otk May 1889. MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. Wootton Isaacson. Mr. Thomas Fieklen. Mr. Norton. Mr. Howorth. Mr. Cremer. Mr. Frank Taunton was re-called, and further examined. [Adjourned till Tuesday next, at Eleven o’clock. Mr. W. F. Lawrence. Mr. Bradlaugh. Mr. Samuel Hoare. Mr. P. J. Foley. Mr. James Caluwell. Tuesday , 14 th May 1889. MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. Bradlaugh. Mr. James Caldwell. Mr. W. F. Lawrence. Mr. Cremer. Mr. Fenwick. Mr. F. S. Stevenson. Dr. Clark. Mr. Norton. Mr. Herbert Gladstone. Mr. P. J. Foley. Mr, David Fortune was sworn, and examined. [Adjourned till Friday next, at Half-past Eleven o’clock. c 4 0.33. XXIV PROCEEDINGS OF THE Friday, \7th May 1889 . MEMBERS PRESENT: Sir Herbert Maxwell in the Chair. Mr. W. F. Lawrence. Mr. Bradlaugh. Mr. Fenwick. Dr. Clark. Mr. Samuel Hoare. Mr. Egerton Hubbard Mr. James Caldwell. Mr. David Fortune was re-called, and further examined. Mr. William Sutton was re-called, and further examined. The Rev. Bcjnamin Waugh was sworn, and examined. Lord Francis Hervey. Mr. Wootton Isaacson, Mr. F. S. Stevenson. Mr. Howorth. Mr. Cremer. Mr. Thomas Fielden. [Adjourned till Tuesday next, at Half-past Eleven o’clock. Tuesday, 21 st May 1889 . MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. P. J. Foley. Mr. W. F. Lawrence. Mr. Bradlaugh. Mr. Howorth. Mr. Cremer. Lord Francis Hervey Mr. F. S. Stevenson. Mr. Thomas Fielden. Dr. Clark. Mr. James Caldwell. 1 he Rev. Benjamin Waugh was re-called, and further examined. [Adjourned till Friday next, at Half-past Eleven o'clock. Friday, 24 th May 1889 . members present- Sir Herbert Maxwell in the Chair. Mr. Egerton Hubbard. Mr. Bradlaugh. Mr. W. F. Lawrence. Mr. Samuel Hoare. Sir Henry Roscoe. Lord Francis Hervey. Mr. F. S. Stevenson. Mr. Fenwick. Mr. Wootton Isaacson. Mr. James Caldwell. Mr. Norton. Mr. Thomas Fielden. Mr. A. Braxton Hicks, sworn, and examined. [Adjourned till Tuesday next, at Half-past Eleven o’clock. SELECT COMMITTEE ON FRIENDLY SOCIETIES. XXV Tuesday, 28 th May 1889. MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. Samuel Hoare. Mr. W. F. Lawrence. Mr. Bradlaugh. Lord Francis Hervey. Mr. Thomas Fielden. Mr. Howorth. Mr. Norton. Mr. Herbert Gladstone. Mr. James Caldwell. Dr. M‘ Donald (a Member of the House) was sworn, and examined. Mr. Tunstall was sworn, and examined. [Adjourned till Friday next, at Half-past Eleven o’clock. Friday , 31s/ May 1889. MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. Bradlaugh. Mr. P. J. Foley. Mr. Lord Francis Hervey. Mr. A. H. Brown. Mr. Egerton Hubbard. Mr. Wootton Isaacson. Mr. Thomas Dexcey, sworn, and examined. [Adjourned till Fridi Mr. F. S. Stevenson. Mr. W. F. Lawrence. Mr. Cremer. Dr. Clark. Mr. Norton. , 21st June, at Half-past Eleven o’clock. Friday, 21 st June 1889. MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. Bradlaugh. Mr. Howorth. Mr. W. F. Lawrence. Mr. Egerton Hubbard. Lord Francis Hervey. Mr. Cremer. Dr. Clark. Mr. A. H. Brown. Mr. Wootton Isaacson Mr. F. 8. Stevenson. Mr. James Caldwell. Mr. Thomas Dexcey, re-called, and further examined. [Adjourned till Tuesday next, at Twelve o’clock. Tuesday, 25 th June 1889. ME 31 BE US PRESENT : Sir Herbert Maxwell in the Chair. Mr. Wootton Isaacson. Lord Francis Hervey. Mr. James Caldwell. Mr. Howorth. Sir Henry Roscoe. Mr. Dewey was re -called, and further examined. Mr. Whittaker wa3 sworn ; examination postponed. [Adjourned till Tuesday next, at Twelve o’clock. 0.33. d XXVI PROCEEDINGS OF THE Tuesday , 2nd July 1889. MEMBERS PRESENT: Mr. Bradlaugii in the Chair. Mr. James Caldwell. Mr. Wootton Isaacson. Mr. F. S. Stevenson. Mr. Howorth. Mr. John Stewart was sworn, and examined. Lord Francis Hervey. Mr. W. F. Lawrence. Mr. Thomas Fielden. Mr. A. H. Brown. [Adjourned till Friday next, at Half-past Eleven o’clock. Friday , 5th July 1889. MEMBERS PRESENT: Sir Herbert Maxwell in the Chair. Mr. Bradlaugh. Mr. Norton. Mr. James Caldwell. Mr. Howorth. Lord Francis Hervey. Mr. A. H. Brown. Mr. W. F. Lawrence. Dr. Clark. Mr. Herbert Gladstone. Sir Henry Roscoe. Mr. Richard Martin was sworn, and examined. [Adjourned till Tuesday next, at Twelve o'clock. Tuesday, 9th July 1889. members present : Sir Herbert Maxwell in the Chair. Dr. Clark. Mr. W. F. Lawrence. Mr. Bradlaugh. Mr. Samuel Hoare. Mr. Cremer. Mr. P. J. Foley. Mr. James Caldwell. Mr. Wootton Isaacson. Mr. Herbert Gladstone. Sir Henry Roscoe. Mr. Whittaker was re-called, and examined. Mr. Richard Martin was re-called, and further examined. Mr. William Proctor was sworn, and examined. [Adjourned till Friday next, at Twelve o’clock. Friday, 1 2th July 1889. MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. Samuel Hoare. Mr. Cremer. Mr. P. J. Foley. MfrEgerton Hubbard. Mr. Wootton Isaacson. Mr. Fenwick. Mr. F. S. Stevenson. Mr. W. F. Lawrence. Dr. Clark. Sir Henry Roscoe. Mr. Bradlaugh. Mr. Howorth. Mr. James Caldwell. Mr. Ludlow was SAvorn, and examined. [Adjourned till Tuesday, 30th July, at Twelve o’clock. SELECT COMMITTEE ON FRIENDLY SOCIETIES. XXV11 Tuesday, 30 th July 1889. MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. Brad laugh. Mr. Brown. Mr. Caldwell. Dr. Clark. Mr. Cremer. Mr. Fenwick. Mr. Fielden. Mr. Foley. Mr. Herbert Gladstone. Lord Francis Hervey. Mr. Hoare. Mr. Howorth. Mr. Egerton Hubbard. Mr. Wootton Isaacson. Mr. W. F. Lawrence. Mr. Norton. DRAFT REPORT, proposed by the Chairman, read a first time, as follows: — “ 1. The Select Committee, appointed in July 1888, reported to the House the evidence taken before it ( ). Your present Committee consists of the same Members as formed the Committee of last year. We have received a large amount of evidence upon the questions submitted to them consisting of that given by, — “ Officials of the Registry of Friendly Societies ; ff The Assistant Secretary to the Finance Department of the Board of Trade ; “ Officials and Members of Collecting Friendly Societies ; “ Officials and Policy-holders of Industrial Assurance Companies ; “ Coroners, and others. “ 2. Your Committee also had before them the Report made by the Honourable Lyulph Stanley to the Chief Registrar of Friendly Societies on the Affairs of the Royal Liver Friendly Society. “ 3. The evidence leads them to the conclusion that, although the Friendly Societies Act (1875) has proved, to a considerable extent, a safeguard to the interests of members of Collecting Friendly Societies and policy-holders in Industrial Assui'anee Companies, and sufficiently stringent to sweep away altogether some of the rottenest of the societies LiuUow, 9 ( 1888 ). existing at the time of its enactment, it requires amendment, extension, and strength- ening in more respects than one. “ Operation of Section 30 of the Friendly Societies Act, 1875. “ 4. This section of the Act, as amended, applies only to societies (registered or unregistered) receiving contributions by means of collectors at a greater distance than 10 miles from the registered office or principal place of business, and to companies, as defined by ‘ The Life Assurance Companies Act, 1870,’ in respect of assurances for which premiums are received by means of collectors at less periodical intervals than two months, and at a greater distance than 10 miles from the head office of the company. Apparently, a company which does not grant assurances on any one life for less than 20 l. would be entirely outside the operation of the section. “ 5. Companies which do not issue or become liable under policies on human life, nor Sutton, 46 ( 1889 ). grant annuities upon human life, would appear to be exempt, not only from Section 30, but also from the provisions of the Life Assurance Companies Act. “ 6. Sub-section 1. — In the case of registered societies, this appears clear enough. In the case of companies, too, there is, perhaps, no doubt as to what is meant. But in the case of unregistered societies, there may possibly be no committee, and there may be only one manager, and the manager may be the secretary. In other words, it seems to assume that unregistered societies are so constituted that the sub-section, as it stands, is directly applicable. “ 7. Sub-section 2 provides that where members or persons insured have made default in payment of contributions, no forfeiture is incurred until after a written or printed notice has been delivered or sent by post prepaid to him, or left at last known place of abode, apprising him that in case of default of payment within a specified time, to be not less than 14 days, his interest will be forfeited. 0.33. d 2 “ 8 . Sub-section xx vm PROCEEDINGS OF THE “ 8. Sub-section 3 requires written consent of member or person insured as a condition of transfer to another society, and also within seven days of proposal to transfer, a notice in writing to be given by society to which he is to be transferred to the society from which he is to be transferred. “ 9. Suu-section 4 provides that no collector, whilst he is such, is to be capable of beino- a member of the committee of management, or other governing body (by whatever name) of the society, or of holding any other office in the society except that of superin- tending collectors, within an area from time to time to be specified. “ 10. Sub-section 5.' — No collector of a society to be capable of voting at or taking part in the proceedings of any meeting of the same. “ 11. Sub-section 6. — At least one general meeting of the society shall be held in every year. “ 12. Sub-section 7 provides for fixing day, hour, and place of annual or other peri- odical meetings, either in the rules or by notice by advertisement, or by notice in writing delivered or sent post free to every member. Such notice to specify the objects of the meeting, and in case of proposed amendment of rules to contain copy of such amendment, and all such notices to be given at least fourteen days beforehand, and copy to be affixed in some conspicuous place at every one of the society’s offices where business is carried on. “13. Sub-section 8. — Copy of every balance-sheet of a society to be kept open for inspection for the seven days preceding the meeting at which it is to be presented, at every place of business, and shall be delivered or sent prepaid to every member on demand. “ 14. Sub-section 9. — The annual returns to be certified by a person carrying on publicly the business of accountant, but not an officer of the society otherwise than auditor thereof. “ 15. Sub-section 10. — All disputes between the society and members or persons insured, or persons claiming through them, may, notwithstanding any provision in the rules to the contrary, apply to the County Court or Court of Summary Jurisdiction for the place where such member or person resides, and such Court may settle such dispute in the manner provided by the Act. “ 16. Sub-section 11 provides for proof of service of notice by post. “17. Subsection 12 provides that infringement of the provisions of Sub-sections (3) (4) and (5) shall be offences under the Act. “ 18. Sub-section 13 provides that provisions of the section shall apply to societies existing at commencement of the Act, and shall be contained in the rules of all future societies to which the section applies. Any act or omission which by virtue of Section 30 and any other section would be an offence on the part of a registered society shall be an offence on the part of any other society to which the Act applies, and of any officer of such society bound to fulfil the duty (if any ) whereof such offence is a breach. “19. It will be noticed that Sub-section 2 allows notice of forfeiture to be either deliveied or sent by post prepaid. Again Sub-section (3), dealing with transfers, does not say what information is to be contained in the written notice to be sent by the transferee society. As regards Sub-sections (6) and (7) it is not quite clear how far they are to be considered applicable to companies when policy-holders as such have no voice in the management. “ 20. Sub-section 13 of the Section would seem to throw some doubt upon the exact extent of the operation of Section 30, for it says ‘society,’ except in Sub-sections (1) (8) and (9), shall include all Industrial Assurance Companies, but makes no reference to the introductory words of the section to the effect that the section only applies to such Industrial Assurance Companies as receive contributions by means of collectors at a greater distance than 10 miles from the head office of the company. “21. Section 30 was framed specially to apply to the three following distinct classes of society or company : “(a.) Registered Friendly Societies receiving contributions by means of collectors at a greater distance than 10 miles from the registered office ; “ (o.) Unregistered Friendly Societies receiving contributions by means of collectors at a greater distance than 10 miles from the principal office or place of business ; “ (c.) Industrial Assurance Companies (as defined by the Life Assurance Act, 1870) collecting premiums at less periodical intervals than two months, and at a greater distance than 10 miles from the head office. “ 22. It will be observed that these three classes of institution are very different from each other in constitution and management. “ 23. The SELECT COMMITTEE ON FRIENDLY SOCIETIES. XXIX “ 23. The intention in bringing them all under the operation of Sub-section 30, was doubtless to provide a substitute for the personal and more or less intelligent and effective intei'est taken by the members of an ordinary local Friendly Society in its affairs. We are of opinion that in certain resnects it has proved inadequate to the end in view, and, further, that owing to some ambiguity of expression in this and in other sections of the Act the Chief Registrar, acting in one instance on the advice of the Treasury, has refrained from action which would have been proper on the part of the office in the interests of members and insured persons. “Registered Collecting Friendly Societies. “ 24. The special characteristics which distinguish these from ordinary Friendly Societies were clearly set forth by the Chief Registrar, and as the distinction is not generally before the public (owing in great measure to the Collecting Societies having been brought within. the provisions of the Friendly Societies Acts), these characteristics may be put in a tabular form, thus : “Friendly Societies. “ Collecting Societies. “ Main object is relief in sickness. “ Relief in sickness not attempted. “ Contributions generally brought by mem- bers to a centre ; members thus becoming acquainted with each other. “ Contributions collected from house to house, the collector thereby becoming, to the bulk of members, the sole embodiment of the society. “ Monthly, or, in some cases, fortnightly meetings the rule. “ Meetings, whether district or general, practically disregarded by members. “ Management inexpensive; officials gene- rally appointed by intelligent consent of the members. “ Management rarely costing less than 40 per cent, of premium income ; members practically excluded from voice in elec- tion of managers. “ Promoted and conducted for benefit of members. “ Promoted and conducted for benefit of managers. “ 25. Compared with the total number of Friendly Societies, those registered as Collecting Societies form a very small group. “Registered Friendly Societies or Branches. “ Registered Collecting Societies. “ England - _ 24,500 47 “ Scotland - - - 900 5 “ Ireland - - - 400 0 “26. But in point of membership and funds these few Collecting Societies bear a very different proportion, comprising as they do about one-half of the total number of members (subject to deduction for members insured in more than one society), and possessing about one-third of the total funds. “ 27. There is this further peculiarity in the statistics of Collecting Friendly Societies, that out of 47 so registered in England, four consist each of upwards of 100,000 members ; being over 90 per cent, of the whole membership, and possessing over 88 per cent, of the funds. These four societies are : — “ The Royal Liver Friendly Society, “ The Liverpool Victoria and Legal Friendly Society, “ The Royal London Friendly Society, and the “ Blackburn Philanthropic Burial Society. “28. ‘Eight other societies in England have over 10,000 members, and these 12, the four over 100,000 and the eight over 10,000, include nearly 98 per cent, of the members and 97 per cent, of the funds. So that virtually, in speaking of the group, we only speak of a few large societies.’ 0.33. d 3 “ 29. The Tompkins, 882 (1888). Ludlow, 270, 931 (1H88), GG69 (1889). Sutton, 1222, 1229, 1239 (1888), 1G9 (1889). Ludlow, 8 (1888). Ludlow, 5 (1888). Ludlow, 0 (1888). Ludlow, 7 (1888). XXX PROCEEDINGS OP THE Stanley, 282 (1888). Ludlow, 8 (1888). Fowler, 543 (1889). Sandilands, 1626 (1889). March, 1853 (1889). Simpson, 2244 (1889). Tunstall, 4350 (1889). Taunton, 848 et seq. 2019 et seq. (1889). Ludlow, G698 (1889). Stanley, 308 (1888). Ireland, 1279 (1889). Fortune, 3308 (1889). Ludlow, 6782 (1889). “ 29. The rapid growth of the four largest societies in England of late years has been very remarkable. Between 1880 and 1887 their membership increased by about 52*75 per cent, and the funds by nearly 66 per cent. ; while the membership of the eight societies over 10,000, but under 100,000, only increased by about 5 per cent., and their funds actually decreased by 2| per cent. “ 30. Of the five Collecting Societies registered in Scotland one only, the Scottish Legal Life Assurance Society, exceeds the limit of 100,000, having upwards of 400,000 members and upwards of 220,000 1. funds. Two others have over 10,000 and under 100,000 members. The tendency is obviously for the larger companies to swallow up the business of the smaller. “31. Nominally, the members of a Collecting Society under Section 30 are in the position of persons having a right to appoint their committee of management, to amend the rules, to combine to apply for an official inspection into the society’s affairs, to apply for an investigation with a view to au award of dissolution, and other rights equally well defined. But the immense development of the larger societies, the wide area over which their operations have been extended, and their vast membership, has caused the term * farce,’ applied to the annual meeting by several witnesses, to be strictly just. The power, even in those societies where the delegate system has been adopted, is practically in the hands of the management, subject to the remarkable influence which the collectors are able to bring to bear on the members. The members never acquire, or cease to have any control over the business. “ 32. An instance of the arbitrary use of this power was given in 1887 by the managers of the Royal Liver. Under Rule 64 of the society it was obligatory for one general public meeting to be held annually in Liverpool. Previous to the usual date of this annual general meeting in 1887, a general public meeting of the society was summoned and held in Bristol, at which Rule 64 was revoked, and no general meeting was held that year in Liverpool, where the head office of the society is situated. “ 33. It is true that the Chief Registrar expresses satisfaction that this was done, owing to the state of popular feeling in Liverpool at the time, but it was obviously an arbitrary act and one that we think should be beyond the powers of managers. The control of members is clearly nullified, when the managers alter the place of meeting in order to avoid the expression of popular feeling. Thus, although it is generally held that it is beneficial to members of Friendly Societies to take an interest in the conduct of their societies’ affairs, we are compelled to look upon the method of Collecting Societies as of no value whatever towards education in thrift. “ 34. The competition between these societies is very acute, and seems to have con- duced to some dangers against which, in the interest of the general public as well as of the members, additional safeguards are required, or, at least, the existing Acts should be administered with greater stringency. “35. Collectors paid by commission, are naturally anxious to make as much profit from their business a? possible ; they are liable to temptation to be unscrupulous as to the methods by which this end is attained ; it is therefore no matter for surprise to find that assurances for sums at death are affected that are not recognised by the Friendly Societies Acts, and otherwise distinctly opposed to the law. “ 36. The Friendly Societies Act grants to registered Friendly Societies the privilege of insuring money to be paid for the funeral expenses of the husband, wife, or child of a member, or of the widow of a deceased member, but lays down specifically no limit as to the amount of such funeral expenses. “ 37. In the case of members, the limit of the sum assured to be received from one or more societies, is fixed at 200 /.. and in the case of children (when members) the limits are laid down to be 6 l. under five years of age, and 10 /. if under 10 years of ago. “ 38. The Friendly Societies Act, Section 15, Sub-section (3), appears further to facilitate the insurance of lives by persons having no insurable interest by authorising a member of a registered society not being under 16 years of age to nominate in writing ‘ any person not being an officer or servant of the society, unless such officer or servant is the husband, wife, father, mother, child, brother, sister, nephew, or niece of the nominator,’ to receive at his death a sum not exceeding 50 l. “ 39 This provision applies to all registered societies whether under Section 30 or not. “Unregistered Collecting Societies. “ 40. Although Section 30 is undoubtedly intended to apply to unregistered Collecting Societies, the Committee received no positive evidence on this class of society. The Chief Registrar expressed his disbelief in their existence, but admitted that he had no means of knowing. Ludlow, 25 (1888). SELECT COMMITTEE ON Fill EXULT SOCIETIES. XX \l “Industrial Assurance Companies. “41. The returns of Collecting Companies doing Industrial Assuiance business are Sj roneliarn 208, 306, made to the Board of Trade, but the functions of that office in regard to them is limited ‘ 1 h to receiving the annual returns and seeing that they are in conformity with the require- ments of the Life Assurance Companies Acts (1870). There is power to compel the return to be made, but none whatever to insure the accuracy of the figures. “42. The following statistics, therefore, handed to us by Mr. Stoneham, of the Finance Department of the Board of Trade, in order to show the progress of the 14 companies doino- Industrial Assurance business must be received subject to the proviso that there is no means of checking the accuracy of the returns. £. “ The Accumulated Funds amounted in 1878 to - - - - 726,748 “In 1887 they reached a total of ------ 5,982,601 f In 1878 the Premium Income was ------ 1,488,829 “ In 1887 it reached -------- - 4,181,852 [in 10 years the Annual Premiums received amounted to - - 28,156,760 “ The Life Assurance Funds in 1878 amounted to 726,743 “In 1887 to - - - 5,982,601 “ The Capital Moneys in 1878 ------- 50,032 “In 1887 - - 293,251 “ The difference mainly arises from profits transferred to the Capital Account. f The Interests on Investments in 1878 amounted to - - - 28,957 “ In 1887 to--------- - 197,784 [ In 10 jears a total was received of - 980,425 I In 1878 the Death Claims paid amounted to 508,012 In 1887 to - - - 1,664,281 [ In 10 years to--------- - 10,576,195 “'In 1878 the Commissions paid were - - - “ Expenses of Management - - 480,373 287,460 “ Equal to 51 ‘57 per cent. - £. 767,833 “In 1887 Commissions were - “ Expenses of Management - - 1,146,265 709,598 “ Equal to 44 ‘38 per cent. - £. 1,855,863 “ In 10 years the sums paid were for Commission “ Expenses of Management - - 7,978,866 4,731,808 “ Together ------ £. 12,710,674 “ Or, equal to 45'41 per cent. “ 43. These sums were, exclusive of interest and dividends paid to shareholders, 412,750 /.; and two sums of 8 1,946 /. and 35,400 /. were transferred by one company D ewe y, 4801 (1889). from the Industrial to the Ordinary Branch of the business. “ 44. Three-fourths of the entire business done by these 14 companies is in the hands of one of them (the Prudential). “45. The cost of management is shown to vary very much, from 41 ’47 per cent, of the premium income in the case of the Prudential to 90 - 32 per cent, in that of the Yorkshire Provident. The reduction of the average cost of management from 5P57 per cent, in 1878 to 44’38 per cent, in 1887 is due solely to the reduction in the rate shown by the Prudential. But this statement is subject to this consideration, viz. : that 177,969 /. spent in 10 years by the companies in promotion or extension are treated in their accounts as assets, although, the sums having been absolutely disbursed, the Board of Trade hold that they are improperly so stated, as they must ultimately become a charge for management on revenues. Of the total 177,969 l. so treated, 152,397 l. has been expended by one company, the London, Edinburgh, and Glasgow (Limited). “46. In making a comparison between the cost of managing Collecting Friendly Societies, and that of managing Industrial Assurance Companies, it should be borne in mind that industrial assurance is an extremely profitable business (legitimately so, in 0.33. d 4 good xxxu PROCEEDINGS OF THE Stoneham, 319 (1889). Fortune, 3303 (1889). Stanley, 39(1 C 1888). Martin. 5704, &c. (1889).' good hands), and that, while the cost of collection in both classes is much the same, the managers of the Companies can afford to work for much smaller salaries than those of the Collecting Societies, drawing, as the former frequently do, a handsome dividend upon such shares as they hold in the concern. “47. Our attention was drawn to the significant fact that although several of these Companies really commenced business since the passing of the Life Assurance Com- panies Act, they were not obliged to make a deposit with the High Court of Justice of 10,000 /., as required by the Act of 1870 (Section 3), because they were established before the passing of that Act. The result is that in these resuscitated Companies the assured appear to have very imperfect security for the payment of their policies when they fall due. “48. To what extent, if any, these Companies endeavoured to insist, or succeed in insisting upon their collectors accepting no assurances (other than on the assurer’s own life, or on those of his children) unless supported by an insurable interest, appears extremely doubtful. The term ‘ guardian ’ is interpreted generally in a very elastic sense, and the question of the use made of the provisions of Assurance Act in connection with policies of Industrial Companies, has not been cleared up. “ 49. The evils, or at least risks, inseparable from a system of collectors depending for then' income on a percentage upon contributions collected are the same in the Industrial Assurance Companies, as have been described under the head of Collecting Societies. “ 50. The legal position of policy-holders in the Companies differs from that of the members of Collecting Societies, inasmuch as the policy-holders have none of the rights of member- ship. They do not possess the control over the management which (in theory) is possessed by members. On the other hand, the collectors of the Companies are the servants of the directors, and can exercise little influence over the policy-holders for their own benefit, inasmuch as the latter have, speaking generally, no voice in the management of the Com- panies’ affairs. “51. Therefore, although, theoretically, the constitution of Societies under Section 30 may appear more favourable to the interests of the assured than the constitution of Com- panies is to persons assured in them, yet the influence of collectors in the former class appears to neutralise the theoretical superiority of constitution. “52. Having regard, then, only to the pecuniary interests of the assured, it is probably better for them, supposing the pecuniary benefits secured to be equal, that they should not be invested with rights of membership which experience has proved to be totally illusory. “ 53. If that is admitted, then the Industrial Assurance Companies would appear to fulfil the requirements of the case better than the Collecting Societies ; but, in our opinion, the existing laws affecting the Companies require important modifications to be hereafter described. “ 54. There is at present no guarantee of honest management ; there is no restriction on the proportion of revenue devoted to management, nor any properly certified tables of contribution and benefit. “ 55. Further, the audit of the accounts may be made by persons who, even with the best intentions to do their work thoroughly, have no trained professional experience and qualifications. Even in the case of companies where there exists no misleading endeavour to hide their financial embarrassment, the existing legal machinery for remedying matters is, for the class of persons directly interested, at all events cumbrous and expensive. “ 56. It is true that companies are required to send annual accounts, rendered in a certain form, to the Board of Trade, and are also required periodically to have their actuarial valuations made and sent to the same Department, and both these returns are published in a Blue Book. That Department, however, cannot reject these returns ; all it can do is to append to them copies of correspondence relating thereto, and it is only when these reach the hands of competing agents and collectors of rival companies that the information they contain is likely to be disseminated, and then only for trading purposes. “ 57. To what extent profit can be made by a successful company doing industrial life assurance business, the evidence relating to the largest of these companies clearly shows. On the other hand the state of affairs disclosed before the Committee by the witness put forward by the Yorkshire Provident, shows how serious are the risks to which the humbler class of assurers are exposed at the hands of unskilful or unscrupulous pro- moters. “ Infantile Assurance. “ 58. The public sympathy and indignation having been aroused by recent cases which have come to light, in which the money insured for on the death of infants appears to have acted as an incentive to neglect and even to murder of children, your Committee directed their inquirieswith special care to this branch of the subject. “ 59. They SELECT COMMITTEE ON FRIENDLY SOCIETIES. XXX1U « 59 , They were unable to obtain any convincing evidence as to specific cases ; several witnesses, including two coroners, expressed a strong belief, not only that infant in- surance is an incentive to crime, inasmuch as it familiarises the parent or guardians with the prospect of pecuniary benefit on the death of the child insured, but that a wide- spread system exists under which much cruelty and crime takes place with impunity. But this belief, be it well or ill-founded, seemed to be grounded upon surmise, hearsay, or general impression. Even when a specific case could be adduced, it is to be observed that the insurance effected would have been legal under the ordinary law, because it would have been an insurance coupled with an interest. Stanley, 521 (1888). Ludlow, 14 (1888). Waugh, 3740, &c (1889). Hicks, 4048, &c. (1889). Macdonald, 4184, See. (1889). Fortune, 3823 (1889.) Ludlow, 21 (1888). 1 “ Since the close of the evidence before your Committee the following letter , bearing on this point, has been forwarded to the Chairman by direction of the Secretary of State for the Home Department. 12, Burney-street, Greenwich, S.E., “ Sir, 11 July 1889. “ I have the honour to inform you that at the conclusion of the inquests held before me on the 9tli instant on the bodies of Sidney Bolton, William Sutton, and Elizabeth Jane Frost, which had previously been exhumed at St. Paul, Deptford, Kent, the jury added to their verdict the following rider, viz. : — The jury are of opinion that the facilities given by the loose system of life insurance practised by some companies is an incentive to wilful murder for the sake of the insurance money’; and they desire me to convey this expression of opinion to you in the hope that the Government may initiate some legislation to remedy this evil. “ I am, Sir, your obedient Servant, “ (signed) Edward N. Wood, “ Deputy Coroner for London (Greenwich Division). “ To the Right Hon. the Home Secretary. “ 60. A large quantity of figures have been submitted to us by various witnesses, Stanley, 529 (1888). purporting to show results favourable or unfavourable to Infantile Insurance, but we are ' Vau s h > 3748 (1889). not disposed to base any recommendations upon them one way or another, owing to the difficulty of drawing therefrom a safe conclusion. “61. ‘ It is well known that during the first year of life, the risk of dying rapidly Sutton, Appendix, decreases day by day, it might almost be said ; so that any comparison made between the No - 4 * death rates under one year of age, say, of societies and companies which only begin to assure infants when one month, two months, or three months old, with the Registrar General’s mortality rates for the year 0 to year 1 might easily mislead. Further, speaking quite generally, a heavy purse means a light mortality, and particularly so among the very young and the very old ; so that as those assured with these societies and companies are almost universally not favoured with a superfluity of worldly riches, the mortality among them would naturally be found higher than the Registrar General’s figures deduced from all classes.’ “ 62. It must be admitted that insurance for burial expenses is highly valued by the Sandilands, working classes for perfectly legitimate reasons, and that an unnecessary hardship would 1344 (1889). be inflicted upon them if it were prohibited. No doubt it is a system liable to abuse, and one that has probably led to infanticide in many cases that have escaped detection, but all persons who are in a position to profit pecuniarily by the death of another may be said to be exposed to temptation. The question is whether the defenceless state of the children of the poorer classes is such as to make it imperative that this system of insurance should be prohibited, or more stringently guarded. “ 63. Various substitutes for, or amendments of the existing law have been suggested. “ 64 It has been proposed by some witnesses that parents or guardians insuring the Waugh, 3823 0889). lives of children for burial should not be allowed to handle the money, but that having Hicks, 4076 (1889). insured for burial, burial should be provided by the company or society issuing the policy. ^ggg° nald ’ 4 ~°'‘ One obvious objection to this proposal is that Burial Societies would be started on a large scale by undertakers, and that it would be impossible to trace the transactions which might ensue between the society and the assurers. For instance, a child insured, say, for 6 l., might be interred, at a much smaller cost by the society who might, in order to secure business for which competition would be keen, make a practice ot returning a fee or gratuity to the assurer, in which case the object of the enactment would be defeated. “ 65. Mr. Ludlow advocates the plan of burial by the State, as in certain Continental Lu 41 ow, 15 ( 1888). countries, but the consideration of such a system seems to be beyond the terms of our reference. “ 66. The same remark applies to Mr. Sutton’s suggestion, that the large borough cor- Sutton, Appendix, porations and the county councils might be empowered to undertake the business of Industrial Assurance Companies employing their own collectors. “67. The question of extending the Post Office Insurance system, so as to enable it to Ludlow, 79, 102 undertake Industrial Assurance by means of collectors, has been repeatedly referred to ( 1888 )- in the evidence, but this also seems beyond the limits of our consideration of the organ- isation and condition of existing companies and possible amendment of the law to ensure their better management. 0.33. e “ 68 . Whether XXXIV PROCEEDINGS OF THE “ 68. Whether the State, the County Council, or the Post Office were to undertake Industrial Assurance by collectors, the result would be competition with existing societies rather than their amendment. “ 69. On the whole we are convinced that the allegations of culpable and even wilful neglect or violence resulting in the death of children, have been, in some cases, well founded ; and that the object of such neglect and violence has not been disconnected with the sums payable on the death of the children. Further, we believe, that sufficient precautions are wanting to prevent larger sums than those authorised by the Act being insured for and paid on a child’s death. “ 70. It is somewhat remarkable that although the Friendly Societies Act, 1875, makes it an offence to pay money on the death of a child under 10 years of age other- wise than is provided by the Act, that Act does not make it an offence to insure a child’s life for more than the sum provided by the Act. The only way this omission can be accounted for, is to suppose that the promoters of the Act did not see their way to make it an offence to insure a child’s life for a larger sum than that provided by the Act, where such larger sum could only be paid in the event of the child’s death taking place after attaining the limiting maximum age of 10 years. “71. In spite of the apparently stringent provisions of Section 28, it is established to the satisfaction of your Committee that the section has failed to carry out completely the intentions with which it was presumably made part of the law. It is possible that the provisions of the Act have to some extent, at all events, to blame. Section 28, Sub- section (2), provides that no society (? unregistered) shall pay any sum on the death of a child under 10 years of age, except to the parent by such child or to the personal repre- sentative of such parent, and upon the production by such parent or his personal representative of a certificate of death issued by the registrar of deaths, or other person having the care of the register of deaths, containing the particulars after mentioned. Then the following Sub-section (3), says : ‘ Whenever a certificate of the death of a child is applied for for the purpose of obtaining a sum of money from a society, the name of such society and the sum sought to be obtained therefrom, shall be stated to the registrar of deaths, who shall write on or at the foot of such certificate the words, “ to be produced to the Society (naming the same) said to be liable for the payment of the sum of 1. (stating the same;,” and all certificates of the same death shall be numbered in consecutive order, and the sum charged by the registrar of deaths for each such certificate, shall not exceed 1 s.’ “ 72. As the Act at present stands, it does not appear that a registrar of deaths, when- ever a certificate of a child’s death is applied for, is bound to inquire whether such certificate is applied for for the purpose of obtaining a sum of money from a society, and as the Act does not grant the privilege of shilling certificates of deaths, in the case of persons (members or not) insured with an unregistered society, it would appear to be eminently desirable that if the receipts from the giving certificates of death form in any way an item in the registrar’s remuneration, it should be made part of his duty to inquire specially in the case of every application for certificate of death of a child under 10 years of age, whether such application is made for the purpose of obtaining money from any Society or Industrial Assurance Company. The medical certificate of the causes of death does not require the medical man to make any inquiries as to whether the child’s life is insured, nor is there apparently any instruction to the registrar of deaths that when the medical certificate is produced, and a burial order asked for, he should, before giving such burial order, inquire whether the child’s life is insured. “ 73. The coroner must apparently be put in motion, speaking generally, either directly, by the medical man refusing to give a certificate or by the registrar, after coming to the opinion that the certificate given is unsatisfactory. It would certainly appear that before any burial order is given by the registrar, it should be made some one’s duty to ascertain whether or not the life is insured, so that when anything transpired of the least unsatisfactory nature, the coroner might be called upon to make inquiry before a burial order was issued. “ 74. Then, again, no money (Section 28, Sub-section (2) is to be paid on a child’s death by a society (? unregistered) or company except to the parent of such child or to the personal representative of such parent. Your Committee assume that the words ‘personal representative’ are used in the Act in their strict legal meaning; but it must be doubtful whether they are taken in this sense by many of those who are called upon to comply with the Act, and it appears very desirable that words should be added setting out clearly who are the persons who alone can receive the money. “ 75. There does not appear to your Committee any reason why such certificate of death applied for should not only be numbered, but should contain particulars of the insurances referred to in previously given certificate of the child’s death. At present, under Section 28, Sub-section (5), societies to whom a certificate, subsequent to the first, is produced, are only bound to inquire as to previous insurances. “ 76. Section 14 (2) provides that no society (? registered only) shall pay any sum of money upon the death of any person except upon the production of a registrar’s certificate of death, and the registrar of deaths is prohibited from giving certificates of death for the payment SELECT COMMITTEE ON FRIENDLY SOCIETIES. XXXV payment in the whole of any sum of money exceeding 6 /. on the death of a child under five years of age, or of a sum of money exceeding 10 /. on the death of a child under 10 years of age ; but it does not appear beyond doubt to your Committee if this provision may be held to apply to unregistered societies. “ 77. The next matter in connection with the question of infantile insurance is that of the maximum amounts authorised to be insured and paid. There appears to be some doubt as to whether the 6 /. for ages under five, and 10/. for ages under 10 and exceeding five years are not excessive, bearing in mind that, apart from the peculiarity that certain societies registered prior to the Act can take children as members, the ordinary position contemplated by the Act is that of a member insuring money to be paid only for the funeral expenses of his child. “ 78. It is not improbable that in many cases where children die who are insured for the maximum amount payable under the Act, the whole sum is not spent in the ordinary funeral expenses ; but, taking into consideration doctor’s charges, the cost of mourning apparel for the family, and other incidentals, your Committee are not fully satisfied that these amounts are very much in excess of the actual needs. Mr. Ludlow mentions as a suggestion that they might be reduced from 6 /. and 10 /. to 4 /. and 8 /., increasing at the same time the age of 10 years to 12 years. “79. Mr. Dewey suggests a scale beginning with 2 /. under one year of age, and Dewev, 5277 (1889). running up 1 /. a year to 10/. under nine years of age ; and he further suggests that a child should only be insured once, that is, with only one society or company. The latter suggestion of Mr. Dewey is a natural one probably for the manager of the Industrial Branch of the Prudential to make, but is not one your Committee are disposed to adopt. ‘ 80. Looking at the fact that the age of 16 years is considered by the Act to be the age at which persons can, apart from exceptional cases, become members of a society and take some part in its proceedings, your Committee are disposed to recommend the extension of the age from 10 years to 16, making the scale as follows : — £. “ Under - - 3 years of age - 41 To be the total sum payable on “ Over 3 and under 10 „ 6 l death whether by one or more “ Over 10 and under 16 „ - lOj societies or companies. “Power of Nomination. “81. Another matter which has been brought before your Committee is, that of the power of nomination exercisable by members of societies (when 16 years of age) under Sectipn 15 (3). It appears to your Committee that this right of nomination as it at present stands, is far too open, and may easily be made use of to evade the provisions of the Act, and may possibly, from time to time, act as an incentive to fraud, and still more serious crime. It is one of the matters in which Collecting Societies have a great privilege conferred upon them, not conferred upon the policy-holders of companies. “ 82. In connection with this matter, although no definite information was given to your Committee, they are of opinion that the whole question of insurable interest in connection with the practice of societies and Industrial Assurance Companies might well be inquired into, and, in connection therewith, the kindred subject of the methods adopted by Industrial Assurance Companies for the assignment of policies. “• General Considerations. “ 83. Before proceeding to suggest amendments of the law your Committee desire to express their opinion of the general value of the system of assurance by companies and societies depending on collectors. “ 84. It must be regarded as a means, for which at present there is no substitute, of inducing very large numbers of the lower industrial classes to make some provision for burial or for benefit to survivors at death, who would otherwise make none; and so far these societies and companies may be regarded, when well managed, as commendable institutions, always subject to the consideration that, owing to the commission charged by collectors (from 20 to 25 per cent.), added to the ordinary cost of management, it often happens that nearly half the premium income never goes to the benefit fund. “ 85. It has been shown that the cost of the management of the Industrial Assurance Companies averaged 45| per cent, in the 10 years from 1877 to 1887; it follows, therefore, that for every shilling of benefit assured for the assurers had to pay nearly 2 s. “ 86. An interesting and valuable comparison drawn between the terms offered by the Sutton > Appendix, Life Insurance Branch of the Post Office and those offered by a large Collecting Society ‘ 4 ' was laid before the Committee by Mr. Sutton, showing greatly in favour of the cheapness of the Post Office scheme. But then the Society employs collectors, and the Post Office employs none, the result being very fairly shown by Mr. Sutton as follows: ‘These differences are of course very considerable, and may be taken to represent very much the 0.33. e 2 same XXXVI PROCEEDINGS OF T1IE same sort of thing as occurs in the ordinary affairs of life between giving a tradesman, when he weekly comes round for orders, an order for a week’s supply of a particular article Avhich he, in due course, sends to your house, and for which you may pay him next week, or, it may be, later, and diligently searching out, at the expenditure of time and trouble, the place, possibly some distance off, where for cash down, and on taking a year’s supply instead of a week’s you can get the article at a greatly reduced price.’ “ 87. ‘ What is termed burial or funeral insurance in Friendly Societies or Industrial Assurance Companies is really,’ as the Chief Registrar points out, * only the insurance of a small sum on life. The sum is not payable to the undertaker but to the person legally entitled through the member, and if the latter chooses to put it in his pocket instead of spending it on the funeral, there is nothing to hinder him from doing so.’ “ 88. Societies coming under Section 30, come also under the other sections of the Act, and the evidence your Committee have taken, shows, conclusively, that however suitable those other sections may be for ordinary local societies or branches of orders, they are not, in many respects, suitable for societies under Section 30. “ 89. As regards, for instance, two most important sections, they arc shown to be ' ineffective. “ 90. Section 23, relates to applications for the appointment of inspectors to examining into the affairs of the society, and for the calling of special meetings of a society. “ 91. In the case of large societies, it is often found very difficult, sometimes quite impracticable, to obtain the requisite number of signatures to such an application, and it appears to your Committee that in the case of societies under Section 30, at all events, considerable alteration in the section might be advantageously made. As regards such societies, full discretionary power might be accorded to the Chief Register as to the number of signatures to be considered necessary. “ 92. There is a further difficulty in Sub-section 2 (5), as to requiring applicants to give security for costs before appointing an inspector calling a general meeting. Another matter brought out in Hon. E. L. Stanley’s evidence is that the inspector cannot compel the attendance of all witnesses he may consider should be called. “ 93. Then, again, Industrial Assurance Companies are specially exempted from its operation. As regards unregistered societies, it is not clear whether it is applicable or not, as there is considerable confusion throughout this and some other section of the Act between societies registered and societies not registered. “ 94. Section 24 contains, inter alia, provisions with regard to the conversion of a registered society into a company, but bearing in mind the facts brought out in Mr. Sutton’s evidence, that these societies when converted into companies may not come under the Life Assurance Companies Act, it is clear that some modification of the pro- visions of the section would be desirable, particularly as it is possible, if not probable, that some of the societies thus converted into companies do collecting assurance business. “ 95. Again, in Section 25, it would, generally speaking, be exceedingly difficult, if not impracticable, to carry out the dissolution of a large society by instrument of dissolution, from the difficulty of getting the necessary consents of the members ; and, as regards dissolution upon award, it has been given in evidence that the provisions are a failure. It is evident that with regard to this section considerable modifications would be desirable ; a ‘ Registrar ’ (as it at present stands) proceeding under it has all the same powers and authorities, enforceable by the same penalties as in the case of a dispute referred to him under the present Act, but in all, or nearly all, the cases hitherto dealt with, the Chief Registrar has nominated some one else other than himself or an Assistant Registrar, so that these powers were not available. This was notably the case in the investigation held by Mr. Sutton in connection with the affairs of the Independent Mutual Brethren Society. “ Recommendations. “ 96. Your Committee, after anxious consideration, have agreed to the following Recommendations : — “ 1. That a Bill affecting all Collecting Societies and Industrial Assurance Companies now under the provisions of Section 30 of the Friendly Societies Act, 1875, be prepared, to include all such provisions of the said Act as may be deemed applicable, with such alterations, modifications, and substitutions thereto as may be considered desirable, and that the following provisions be included in the Bill : — “ 2. The Registry of Friendly Societies chief office shall be constituted, as suggested hereafter (paragraph 108 of this Report), and shall be termed ‘ The Central Office.’ SELECT COMMITTEE ON FRIENDLY SOCIETIES. xxxvn “ A. — Provision affecting both Collecting Friendly Societies and Industrial Assurance Companies. “ 3. The limit of ten miles laid down in Section 30 of the Friendly Societies Act., 1875, be done away with and all societies and companies receiving con- tributions by means of collectors be constituted into a distinct class and placed under the operation of a separate Act of Parliament. “ 4. No collector (as defined by the Friendly Societies Act, 1875) to be capable of being a member of the committee of management or other governing body by whatever name, or a trustee, manager, or director, or of holding any office in the society or company, except that of superintending collectors, within an area to be from time to time specified, unless and until he has ceased to be a collector for at least three years. “ 5. Section 30, Sub-sections (1) and (2), of the Friendly Societies Act, 1875. “ 6. Section 30, Sub-section (3) of the said Act, with the addition that not only the society or company to which he is transferred, but the collector who takes him over shall also give notice to the society or company from which he is transferred, specifying in the notice full name, address, and particulars of terms of transfer. “ 7. Section 30, Sub-section (10) and (11), of the said Act. “ 8. In lieu of Section 30, Sub-section (12), of the said Act, a complete list of offences under the separate Act should be inserted, with the methods of procedure in connection with each offence, and the respective penalties attaching thereto. “ 9. In lieu of Section 30, Sub-section (9), of the said Act, it shall be enacted that the annual returns to be made in such form as the * Central Office ’ may from time to time prescribe, and shall be signed by two accountants as auditors, who shall in all cases be Fellows of the Institute of Chartered Accountants, or chartered accountants in Scotland as now recognised, approved for the purpose by the * Central Office ’ ; a list of such accountants approved by the £ Central Office’ to be printed and circulated periodically. “ 10. The provisions of Jarvis’s Act, under which proceedings are precluded, except within six months of the date of committal of an offence, should be modified and perhaps excluded in regard to certain offences under the new Act. “11. All societies and companies, once in every five years, shall make valuation returns to the ‘ Central Office ’ ; such returns to be in such form and to contain such particulars as the ‘ Central Office ’ shall prescribe, and the actuary or actuaries making them shall, in all cases, be Fellows of the Institute of Actuaries or Fellows of the Faculty of Actuaries in Scotland. The valuations shall be made strictly in conformity with the Instructions to Public Valuers laid down by the Treasury. The ‘Central Office’ shall have the power to insist upon such alterations and modifications of the valuation returns as may, in its opinion, be desirable, and shall have power to advertise the results of such valuation in any way it may think fit, with consent of the Lords of the Treasury, and with such comments thereon as it may consider desirable. These returns up to 31st December in each year shall be sent to the * Central Office ’ not later than 31st March in the following year. “ 12. Whenever it shall appear to the ‘ Central Office ’ the proper course to pursue in the interests of the members or policy-holders, it shall have power to appoint, without notice to the committee of management, an official receiver, who shall have the same powers as and shall in every respect act in the place of the committee of management until such time as the * Central Office ’ orders otherwise. “ 13. The * Central Office’ to have power at any time on its own motion, or at the instance of members or other persons interested, to appoint one or more inspectors to hold an inquiry into the society’s affairs, with power to administer oaths, and to require the attendance, as witnesses, of any officers or servants of the society, or of any members of the society, or other persons. “ In lieu of appointing inspectors, the ‘ Central Office ’ may appoint one or more of its own body to act with all the powers conferred upon the ‘ Central Office ’ or upon inspectors. “ 14. The ‘ Central Office ’ shall have the power to charge the costs of inspection on such persons as it may think proper, or upon the funds of the society, and to enforce payment of the same. “ The ‘ Central Office ’ shall have the power to order dissolution of a society, e 3 and 0.33. PROCEEDINGS OF THE and to direct in such manner as it may think fit, that the assets be realised, and to make an award of dissolution of the funds. “ 15. All assurances effected with any society or company on or after the passing of the Act shall be entitled to a surrender-value when they have sub- sisted for at least three years, and all contributions due under the rules during the three years have been paid, and the scale of surrender-values allowed by the society shall form part of the registered rules thereof, and shall be certified by an actuary qualified under the Act to make the society’s valuation. B. — Provisions affecting Collecting Friendly Societies only. “ 16. It shall not be lawful for any society to which this Act shall apply to use the title 1 Friendly Society,’ unless prefixed by the word ‘ Collecting.’ “17. No person shall become a member of any Collecting Society unless and until he has reached the age of 16 years. “ 18. The privilege at present enjoyed by some societies of not being required to have a separate provision for management expenses, shall cease from the time of making the next valuation return, after the passing of the separate Act. “ 19. Every society, upon applying for registration of a rule as to provision for expenses of management, shall be required to produce the certificate of an actuary that the said provision may be safely made on the existing scale of benefits and contributions, such rule as regards every class of benefit to specify, in such form as the official authority shall prescribe, the exact nature of that provision. “ This provision to apply, as far as the ‘ Central Office ’ may think fit, to proposed alterations of rules relating to expenses of management in the case of societies already having a rule or rules relating to the same. “ 20. The ‘ Central Office ’ shall have the right to refuse to register any rule or rules of a society, but the society may appeal to the same authorities as provided in Section 11 (8) of the Friendly Societies Act, 1875. It shall, how- ever, be the duty of the * Central Office ’ to appear on such appeal and defend its action. “21. Every society now registered, which has not already done so, shall, within a year from the passing of this separate Act, submit to the * Central Office ’ for registration rules providing for either the appointment and powers of a standing committee of members for each specially defined district or inclosed area over which its business extends, or for the constitution of the society, to be made up of a central executive body, with local branches, or for constituting the society into specially defined electoral districts, and for the periodical meeting of the members of such districts for the purpose of electing delegates to attend and vote at the periodical meetings of the society. “ 22. Every society shall deliver notices of meetings of the society to every person having the right to attend such meeting, and similar provisions to apply to the meetings of district committees, meeting for the election of delegates, or other sectional meetings of members provided for in the rules. The times and places of such meetings to be in all cases the most suitable for the convenience of the members having a right to attend, the time to be in no case, except those of the general meetings of the society, eariier than eight o’clock in the evening. “23. No collector shall be capable of voting at or taking part in the pro- ceedings of any meeting of the society or of members thereof under the rules, but shall only be permitted to attend at the doors to verify the cards af admis- sion of members. “ 24. All notiges of meetings shall contain full particulars of the business proposed to be done at those meetings, including, in the case of meetings of the society, copies of amendments of or additions to rules proposed to be considered. “25. Section 30, Sub-section 7, of the Friendly Societies Act (1875), except in so far as modified by the separate Act. “ 26. In lieu of Section 30, Sub-section 8, to require that it shall be the duty of the society to deliver gratuitously and without request a copy of every annual return, such return including copy of the last valuation balance-sheet for the time being, and to be delivered within fourteen days from the date on which it was signed by the auditors. “ 27. No society, except those now in existence and unregistered, shall here- after be registered until the applicants for registry shall have deposited with the ‘Central Office’ the sum of 500/., such sum to be retained by the ‘Central Office ’ until the annual income from members’ contributions amounts to 1,000 /., and SELECT COMMITTEE ON FRIENDLY SOCIETIES. xxxix and the first valuation has been made. It such valuation shows a deficiency, then the 500 1 . to be retained until the next valuation, and if that shows a deficiency, the ‘ Central Office ’ to order the society to be dissolved, and to repay the 500/. less any claims by members of the society. ** C. — Provisions affecting Industrial Assurance Companies only. “ 28. All Life Assurance Associations receiving contributions by means of collectors, which are not registered either at the Friendly Societies Office or the Joint Stock Companies Office, shall be declared illegal, if not so registered within a specified time, say twelve months from the passing of Act. “ 29. It shall not be lawful for any company which was in existence before the passing of the Life Assurance Companies Act (1870) to commence industrial assurance business, unless it shall previously have deposited 20,000 1. as required from new companies under that Act. “ 30. All companies shall be required to separate their industrial business from their ordinary business, and make annual returns in respect of such indus- trial assurance business to the ‘ Central Office.’ Such annual returns to be similar in form and subject to similar provisions as shall be laid down for Collecting Societies. “31. All companies shall make valuation returns to the ‘ Central Office ’ in a similar form and subject to similar provisions as shall be laid down for Collecting Societies. “ 32. It shall be in the discretion of the ‘ Central Office,’ if it appears from the valuation that any company is not in a position to meet its engagements, or it appears from the annual return that the business is carried on in an unsatisfactory manner, to withdraw from the company the privilege as to infantile insurance (in respect of new contracts), and to advertise the withdrawal as widely as may appear desirable. “ 33. Whenever it appeared clear to the Central Office that the Company would be unable to meet its engagements, Section 21 of the Life Assurance Companies Act, 1870, shall be so modified as to enable the Central Office to make application to the Court (as the Section stands in the Life Assurance Companies Act, 1870, the application must be made by one or more policy-holders, or shareholders, but if in the separate Act a clause were inserted relating to com- panies, much like this Clause 21 of the Life Assurance Companies Act, 1870, but giving the Central Office locus standi as if it were ‘one or more policy-holders or shareholders,’ the question of insolvency and winding-up could still be dealt with as heretofore by the Court of Chancery. Of course the clause would require careful consideration and wording, but properly drawn should throw upon the Central Office, when it has before it the Annual Returns and Valuation Returns of the Industrial Branch, the responsibility of looking after the policy- holders’ interests by bringing the matter before the Court). “ Registry of Friendly Societies. “ 97. In the course of the inquiry it became apparent that there was some dissatisfac- tion among members of societies owing to the Chief Registrar having refrained from taking action when the affairs of certain societies were known to him to be in a serious condition. This was especially the case in the instances of the Liverpool United Legal, the United Assurance Society, and the Union Friendly Society. Complaints addressed in letters from members to the Chief Registrar did not produce the interference which the writers imagined to be in the power of that official. “ 98. A our Committee are of opinion that the construction put by the Chief Registrar upon the provisions of Section 10, Sub-section 5, Sub-head B., of the Friendly Societies Act, 1875, is an unfortunate one, in the interests of members of Friendly Societies. The Committee holds that when such a state of things as was disclosed by the valuation of the United Assurance Society in 1875, namely, a deficiency of 52,220 /., comes to his know- ledge, it is the plain duty of the Chief Registrar, under Section 10, to publish information, either generally or in the particular districts. *' 99. The case in which the Chief Registrar did apply to the Treasury for their consent to publish an advertisement was not one connected with the finances of the society concerned (the Mutual Brethren Friendly Society), and did not occur until 1883, eight years after the great deficiency was shown in the valuation of the United Assurance Society. We cannot, therefore, understand how the application to the Treasury in 1883 could, as he states, be the oiigin of the impression left on his mind that the effect of the enactment was doubtful. Clearly, the interpretation put by the Chief Registrar upon Section 10, Sub-section 5, Sub-head B , has rendered it a dead letter, 0.33. n 4 Tunstall, 4309 (1889). Tompkins, 632 (1888). Ludlow. 926. 933 (1888). Ludlow, 6639(1889). Ludlow, 934 (1888). Ludlow, 6669 (1889). “ 104. Looking Sutton, 1217 (1888), Ludlow, 6074 (1889). Sutton, 1218 (1888). Ludlow, 6849 (1889). Ludlow, 6852 (1889). Ludlow, 6799 (1889). Ludlow, 1023 (1888). xl PROCEEDINGS OF THE “ 100. Looking to the importance attached in the public view to the fact that a society is registered, and to the confidence which is reposed on the action of the Chief Registrar, your Committee are of opinion that it is necessary that in future the provisions of Section 10 shall be more rigorously administered. “ 101. Again, in the administration of Section 16, Sub-section 9, there seems to have been a failure to carry out the intentions of the Act. Mr. Sutton, the Actuary, expresses his regret that proceedings were not taken against the managers of the United Assurance Society. “ 102. Mr. Ludlow states that Mr. Sutton, in so expressing himself, overlooked the fact that as the return only came into the Actuary’s hands towards the end of 1877, when more than six months had elapsed since the return was made, a summary prosecution was precluded by the provisions of Jarvis’s Act. When the Actuary represented to the Chief Registrar that the management provision of this society had been infringed, it certainly seems strange that the former should not have been informed at the time of the reasons why proceedings did not follow upon his report. Having regard to the importance of the Actuary’s duties in the administration of the Act, it seems to be regretted that his representation seems to have been allowed to pass without any explanation having been offered to him until 12 years afterwards, and then indirectly, in reply to a question before your Committee. “ 103. Your Committee are of opinion that the provisions in Section 10, Sub-section (3) of the Friendly Societies Act (1875), to the effect that the Chief Registrar shall be a barrister of not less than 12 years’ standing ; and that the Assistant Registrar for Ireland shall be a barrister or solicitor of not less than seven years’ standing ; and that the Assistant Registrar for Scotland shall be an advocate, writer to the signet, or solicitor, of not less than seven years’ standing, should be rescinded. Looking to the importance of the actuarial side of the administration of" the Act, and to the control exercised by the Treasury over the legal opinions and adviceof the Chief Registrar, your Committee believe that the retention of these restrictions might act prejudicially in the case of future appointments. “ 104. It has been shown to your Committee that the Chief Registrar refused to register certain rules passed at the Bristol meeting of the Royal Liver Friendly Society in 1887, whereupon an application was made to compel him to register. No appearance for the Chief Registrar was made in court ; decision was given against him and the rules were registered under a mandamus. The Chief Registrar, in explanation, stated before your Committee that his office never appears in such cases, that he considers the office merely to be stake-holders between the persons who urge the rule and the persons who object to it. But this is manifestly an impossible position. The refusal of the Chief Registrar to register the rule is incompatible with the position of a ‘ stakeholder,’ and your Committee hold that it is his duty to appear in such cases and sustain his objection ; otherwise the objection is frivolous. “ 105. The Chief Registrar has expressed the opinion that his office is under- manned, even for the duties devolving on it under the Act as at present interpreted. “ 106. The staff consists of the Chief Registrar, the Assistant Registrar, the Actuary, the Chief Clerk, two first-class clerks and five or six clerks, besides writers. “ 107. It is beyond the reference to your Committee to express any opinion on Mr. Ludlow’s complaint that the office is under-manned, but they are of opinion that before any addition is made to the staff a careful inquiry should be instituted into the internal organisation of the office, and, in view of the Chief Registrar’s statement, they recommend that such an inquiry be made without delay. “ 108. Your Committee hesitate to make any recommendations as to the constitution of the Registry of Friendly Societies Office, as they consider that such would be beyond their reference ; nevertheless they venture to throw out the following suggestions* in conse- quence of facts which have come out in the course of their inquiry : — “ 1. That Sub-section (3), Section 10, from the commencement to ‘ standing,’ in line 6 of the Sub-section be rescinded. “ 2. That the sole official authority upon which all powers be reposed, and all duties be imposed in the administration of the Act, be known as the ‘ Central Office.’ “ 3. That such Central Office shall be composed of the Chief and Assistant Registrar (or Assistant Registrars) for England, as laid down in the Friendly Societies Act, 1875 ; of the Actuary appointed under the said Act ; and of the Assistant Registrars for Scotland and Ireland, as provided in the same Act, the latter only to be members of the Central Office so far as relates to matters arising in Scotland and Ireland respectively.” Question, That the Draft Report, proposed by the Chairman, be read a second time, paragraph by paragraph, — put, and agreed to. Paragraph 1, SELECT COMMITTEE ON FRIENDLY SOCIETIES. xli Paragraph 1. amended, and agreed to. Paragraph 2, postponed. Paragraph 3. Amendment proposed, in line 2, to leave out the word “ considerable,” in order to insert the word “certain” — (Mr. Norton ). — Question put, That the word “considerable” stand part of the paragraph. — The Committee divided : Ayes, 3. Mr. A. H. Brown. Mr. Foley. Mr. Wootton Isaacson. Noes, 10. Mr. Bradlaugh. Dr. Clark. Mr. Fenwick. Mr. Thomas Fielden. Mr. Herbert Gladstone. Lord Francis Hervey. Mr. Hoare. Mr. Egerton Hubbard. Mr. W. F. Lawrence. Mr. Norton. Question, That the word “ certain ” be there inserted, — put, and agreed to. Another Amendment made. Paragraph, as amended, agreed to. Paragraphs 4 — 5, agreed to. Paragraphs 6 — 8, amended, and agreed to. Paragraph 9, agreed to. Paragraphs 10 — 15, amended, and agreed to. Paragraphs 16 — 18, agreed to. Paragraph 19, disagreed to. Paragraph 20, amended, and agreed to. Paragraphs 21 — 22, agreed to. Paragraph 23. Amendment proposed, in line 4, to leave out the words “ in certain respects ” — (Mr. Bradlaugh). — Question, That the words “in certain respects” stand part of the paragraph, — put, and negatived. Another Amendment proposed, in line 5, to leave out the words “ some ambiguity of expression in,” in order to insert the words, “ some doubt on the part of the Chief Registrar as to the interpretation of” — (Mr. Hoare). — Question, That the words proposed to be left out stand part of the paragraph, — put, and negatived. — Question, That those words be there inserted, — put, and agreed to. Another Amendment made. Another Amendment proposed, in line 6, to leave out the words “ the Chief Registrar acting,” in order to insert the words, “ that officer following ” — (Mr. Hoare). — Question, That the words proposed to be left out stand part of the paragraph, — put, and negatived. — Question, That the proposed words be there inserted, — put, and agreed to. Another Amendment made. Another Amendment proposed, in lines 7 and 8, to leave out the words “ would have been proper on the part of the office,” in order to insert the words “ your Committee are of opinion should have been taken,” — (Mr. Bradlaugh ). — Question put, That the words proposed to be left out stand part of the paragraph. — The Committee divided : Ayes, 2. Mr. Cremer. Mr. Howorth. Noes, 13. Mr. Bradlaugh. Mr. A. H. Brown. Mr. Caldwell. Dr. Clark. Mr. Fenwick. Mr. Fielden, Mr. Herbert Gladstone. Lord Francis Hervey. Mr. Hoare. Mr. Egerton Hubbard. Mr. Wootton Isaacson. Mr. W. F. Lawrence. Mr. Norton. 0.33. f Question, xlii PROCEEDINGS OF THE Question, That the words “ your Committee are of opinion should have been taken be there inserted, — put, and agreed to. Another Amendment proposed, at the end of the paragraph, to add the words “ In the case of Industrial Assurance Companies such action is out of the powers of the Chief Registrar, owing to their not having been brought under the Act for such purposes ” — (Mr. Hoare). — Question put. That those words be there added. — The Committee divided : Ayes, 15. Mr. Bradlaugh. Mr. A. H. Brown. Mr. Caldwell. Dr. Clark. Mr. Cremer. Mr. Fenwick. Mr. Fielden. Mr. Herbert Gladstone. Lord Francis Hervey. Mr. Hoare. Mr. Howorth. Mr. Egerton Hubbard. Mr. Wootton Isaacson. Mr. W. F. Lawrence. Mr. Norton. Paragraph, as amended, agreed to. Paragraph 24. — An Amendment made. Another Amendment proposed, in line 7 (column 1), to leave out from the word “ Main,” to the word “ other,” in line 10, in order to insert the words “ Combine relief in sickness with life insurance ” — (Mr. Howorth). — Question put, That the words proposed to be left out stand part of the paragraph, — put, and negatived. — Question, That the pro- posed words be there inserted, — put, and agreed to. Another Amendment proposed, in line 7 (column 2), to leave out from the word “ Relief” to the word “ society,” in line 11, in order to insert the words “ Limited to life insurance; relief in sickness virtually discontinued” — (Mr. W. F. Lawrence). — Question proposed, That the words proposed to be left out stand part of the paragraph, — put and negatived. — Question proposed. That the proposed words be there inserted. — Amend- ment proposed to proposed Amendment, to leave out the Avoid “ virtually ” — (Mr. Cremer). — Question, That the Avord “virtually” stand part of the proposed Amend ment, — put, and negatived. — Proposed .Amendment further amended, and agreed to. Another Amendment proposed, in line 18 (column 2), after the word “ and ” to insert the word “ mainly ” — (Mr. Cremer). — Amendment, by leave, withdrawn. Paragraph, as amended, agreed to. Paragraphs 25 — 29, agreed to. Paragraphs 30 — 31, amended, and agreed to. Paragraph 32, agreed to- Paragraph 33, postponed. Paragraph 34, agreed to. Paragraphs 35 — 36, amended, and agreed to. Paragraph 37, agreed to. Paragraphs 38 — 40, amended, and agreed to. Paragraph 41, agreed to. Paragraphs 42 — 43, postponed. Paragraph 44, agreed to. Paragraph 45, amended, and agreed to. Noe, 1. Mr. Foley. Paragraph 46 SELECT COMMITTEE OX FRIENDLY SOCIETIES. xliii Paragraph 46, amended, and disagreed to. Paragraph 47, amended, and agreed to. Paragraph 48, amended, and further consideration postponed. Paragraph 49, postponed. Paragraph 50, amended, and agreed to. Paragraph 51. — Amendment proposed, in line 4, after the word “appears,” to insert the words “in most cases ” — (Dr. Clark). — Question, That those words be there inserted, — put, and agreed to. — Paragraph, as amended, agreed to. Paragraphs 52 — 53, amended, and agreed to. Motion made, and Question proposed. That the Committee do adjourn until Friday, at half-past Eleven o’clock. — Amendment proposed, to leave out the word “ Friday,” iu order to insert the word “Thursday” — (Mr. Lawrence). — Question put. That the word “ Friday,” stand part of the Question. — The Committee divided: Ayes, 5. Mr. Bradlaugh. Mr. Caldwell. Mr. Cremer. Mr. Fenwick. Lord Francis Hervey. Noes, 6. Dr. Clark. Mr. T. Fielden. Mr. Foley. Mr. Howorth. Mr. Lawrence. Mr. Norton. Question, That the word “ Thursday ” be there inserted, — put, and agreed to. [Adjourned till Thursday next, at Half-past Eleven o’clock. Thursday , \st August 1889. MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Lord Francis Hervey. Mr. Norton. Mr. S. Hoare. Dr. Clark. Mr. Howorth. Sir Henry Roscoe. Mr. W. F. Lawrence. Mr. Fielden. Mr. Herbert Gladstone. Paragraphs 54 — 55, amended, and agreed to. Paragraph 56, agreed to. Paragraph 57. — Amendment proposed, in line 2, after the word “ shows ” to insert the words “ The Prudential Assurance Company, of which the original capital was 10,000 l., subsequently increased bv bonuses to 200,000 l., declared in 1887, dividend of 389,000 7.” —(Mr. W. F. Lawrence). — Question put, That those words be there inserted. — The Committee divided : Ayes, 4. Dr. Clark. Lord Francis Hervey. Mr. W. F. Lawrence. Sir Henry Roscoe. Noes, 4. Mr. T. Fielden. Mr. S. Hoare. Mr. Howorth. Mr. Norton. Whereupon the Chairman declared himself with the Ayes. Paragraph 58, agreed to. Paragraph 59. f 2 0.33. Amendment xliv PROCEEDINGS OF THE Amendment proposed, in line 1, to leave out the words “ they were unable to obtain any ” — (Mr. Haworth ). — Question put. That the words proposed to be left out stand part of the paragraph. — The Committee divided : Ayes, 3. Dr. Clark. Mr. S. Hoare. Mr. Norton. Noes, 5. Mr. T. Fielden. Lord Francis Hervey. Mr. Ho worth. Mr. W . F. Lawrence. Sir Henry Roscoe. Another Amendment proposed, in line 1, to leave out the words “ convincing evidence as to specific cases ” — (Mr. Howorth). — Question, That the words proposed to be left out stand part of the paragraph, — put, and negatived. Another Amendment proposed, in line 5, after the word “ much ” to insert the word “neglect.” — Question put, That the word “neglect” — (Mr. Hoare ) — be there inserted. — The Committee divided : Ayes, 6. Mr. T. Fielden. Lord Francis Hervey. Mr. S. Hoare. Mr. Howorth. Mr. Norton. Sir Henry Roscoe. Noes, 2. Dr. Clark. Mr. W. F. Lawrence. Another Amendment proposed, in line 5, to leave out all the words after the word “impunity” to the end of the paragraph — (Mr. Howorth). — Question, That the words proposed to be left out stand part of the paragraph, — put, and negatived. — Paragraph, as amended, agreed to. Paragraph 60. — Question put, That this paragraph stand part of the Report. — The Committee divided : Ayes, 8. Dr. Clark. Mr. T. Fielden. Mr. Herbert Gladstone. Lord Francis Hervey. Mr. S. Hoare. Mr. W. F. Lawrence. Mr. Norton. Sir Henry Roscoe. Paragraph 61, amended, and agreed to. Paragraph 62. Amendment proposed, in lines 4, 5, and 6, to leave out the words “ but all persons who are in a position to profit pecuniarily by the death of another, may be said to be exposed to temptation ” — (Mr. Howorth ). — Question put. That the words proposed to be left out stand part of the paragraph. — The Committee divided : iNoe, i. Mr. Howorth. Ayes, 7. Dr. Clark. Mr. T. Fielden. Mr. Herbert Gladstone. Lord Francis Hervey. Mr. S. Hoare. Mr. W. F. Lawrence. Mr. Norton. Paragraph agreed to. Nces, 2. Mr. Howorth. Sir Henry Roscoe. Paragraph 63, agreed to. Paragraphs 64 — 65, amended, and agreed to. Paragraph 66, agreed to. Paragraphs 67 — -70, amended, and agreed to. Paragraph 71, amended, and further consideration postponed. Paragraphs 72 — 77, amended, and agreed to. Paragraph 78, agreed to. Paragraphs SELECT COMMITTEE ON FRIENDLY SOCIETIES. xlv Paragraphs 79 — 80, amended, and agreed to. Paragraphs 81 — 82, postponed. Paragraph 83, agreed to. Paragraph 84. — An Amendment made. — Another Amendment proposed, in line 2, to leave out the words “ lower industrial,” in order to insert the word “ working ” — (Mr. Norton). — Question, That the words proposed to be left out stand part of the paragraph, — put, and negatived. — Question put, That the word “ working” be there inserted. — The Committee divided : Ayes, 4. Dr. Clark. Mr. S. Hoare. Mr. T. Fielden Mr. Norton. Paragraph, as amended, agreed to. Paragraphs 85 — 91, agreed to. Paragraphs 92 — 95, amended, and agreed to. Paragraph 96, Sub-section 1, amended, and agreed to. [Adjourned till To-morrow, at Twelve o’clock. Noes, 2. Lord Francis Hervey. Mr. W. F. Lawrence. Friday , 2nd August 1889. MEMBERS PRESENT: Sir Herbert Maxavell, in the Chair. Mr. Norton. Mr. Bradlaugh. Mr. HoAvorth. Lord Francis Hervey. Dr. Clark. Mr. S. Hoare. Mr, W. F. Lawrence. Mr. Wootton Isaacson. Sir Henry Roscoe. Mr. Cremer. Mr. Herbert Gladstone. Paragraph 96, further considered. Sub-section 2 amended. Question put, That this sub-section, as amended, stand part of the Report. — The Com- mittee divided : Ayes, 5. Mr. S. Hoare. Mr. Howorth. Mr. Wootton Isaacson. Mr. Norton. Sir Henry Roscoe. Noes, 4. Mr. Bradlaugh. Dr. Clark. Lord Francis Hervey. Mr. W. F. Lawrence. Sub-sections 3 — 4, amended, and agreed to. Sub-section 5, agreed to. Sub-section 6, amended, and agreed to. Sub-section 7, agreed to. Sub-section 8, amended, and agreed to. Sub-section 9. — Amendment proposed, in line 3, to leave out the words ‘Gwo accountants as” — (Mr. Hoare). — Question, That the words proposed to be left out/stand part of the sub-section,— put, and agreed to. Another Amendment proposed in line 4, to leave out the words “who shall in all cases be Fellows,” in order to insert the Avords “one of whom shall be a FcIIoav ” — (Mr. Hoare). — Question, That the words proposed to be left out, stand part of the sub-section, — put, and negatived. — Question, That the proposed Avords be there inserted, — put, and agreed to. Another Amendment made. f 3 0,33. Another xlvi PROCEEDINGS OF TIIE Another Amendment proposed, at end of the sub-section, to add the words “ such auditors shall not have nor during the three preceding years, shall have had any financial interest in the Company or Society” — (Mr. IV ootton Isaacson). — Question, That those words be there added, — put, and agreed to. Another Amendment made. Another Amendment proposed, after the word “ year,” at the end of the foregoing Amendment, to add the words, “ The Central Office shall have power to enforce when necessary any report of the Auditors” — (Lord Francis Hervey). — Question, That those words be there added, — put, and agreed to. Sub-section, as amended, agreed to. Sub-section 10, amended, and agreed to. Sub-section 11. — Amendment proposed, in line 4, after the word “ Fellows” to insert the words “ or associates” — (Dr. Clark ). — Question put, That the words “or associates” be there inserted. — The Committee divided : Ayes, 2. Dr. Clark. Mr. S. Hoare. An Amendment made. Sub-section, as amended, agreed to. Sub-sections 12 — 14, agreed to. Sub-section 15. — Amendments made. Another Amendment proposed, at the end of the Sub-section, to add the words, “ There shall be incorporated in the proposed Act the following enactments contained in the Companies Clauses Consolidation Act, 1845, and in the Companies Clauses Consolidation (Scotland) Act, 1845, namely, Clauses 111 to 114 (both inclusive) in the former Act, and Clauses 114 to 117 (both inclusive) in the latter Act, being some of the provisions with respect to the accountability of officers as far as those sections relate to books, papers, writings, property, and effects. The provisions with respect to the recovery of damages not specially provided for and penalties. — Section 3 (relating to interpretation of terms) ” — (The Chairman). — Question, That those words be there added, — put, and agreed to. Sub-section, as amended, agreed to. Sub-sections 16 — 17, agreed to. Sub-sections 18— 19 amended, and agreed to. Sub section 20, agreed to. Sub-section 21, amended, and agreed to. Sub-section 22.— Amendments made. Noes, 6. Mr. Bradlaugh. Lord Francis Hervey. Mr. Iloworth. Mr. Wootton Isaacson. Mr. W. F. Lawrence. Sir Henry Roscoe. Another Amendment proposed, at the end of the Sub-section, to add the words, “ Every society shall keep at its various offices a list of names and addresses of persons who are its members residing within the district, and of delegates to general meetings, and permit the same to be inspected by its own members for a small fee. Copy of same to be either allowed or given to inquirers ” — (Mr. W. F. Lawrence). — Question proposed, That those words be there added : — Amendment, by leave, withdrawn. Another Amendment proposed, at the end of the Sub-section, to add the words, “ Every collector shall, on the demand in writing of the member whose money he receives, show him the names and addresses of all those whose names are on his book at the time, or permit a copy of the same to be taken for a small fee ” — (Mr. W. F. Lawrence ). — Ques- tion put, That the words “ Every collector shall on the demand in writing of the member whose money be receives ” be there added. — The Committee divided : Ayes, 8. Mr. Bradlaugh. Dr. Clark. Mr. Cremer. Lord Francis Hervey. Mr. Howorth. Mr. Wootton Isaacson. Mr. W. F. Lawrence. Sir Henry Roscoe. Noe, 1. Mr. S. Hoare. Amendment SELECT COMMITTEE ON FRIENDLY SOCIETIES. xlvii Amendment proposed to the proposed Amendment, after the word “ receives,” to insert the words “ and who has been a financial member for more than a year ” — (Mr. Cremer). — Question, That those words be there inserted, — put, and agreed to. Question, That the words “ show him the names and addresses of all those whose names are on his book at the time, or permit a copy of the same to be taken for a small fee ” be there added, — put, and agreed to. Another Amendment proposed at the end of the foregoing Amendment, to add the words, “ The names and addresses of the delegates shall be kept at the Chief Office, and shall be open for inspection to any member within seven days of the election.” — (Dr. Clark). — Question, That those words be there added, — put, and agreed to. Sub-section, as amended, agreed to. Sub-section 23. — An Amendment made. Sub-section 10, amended, and agreed to. Another Amendment proposed, in lines 3 and 4, after the word “ rules,” to leave out all the words to the end of the sub-section — (Dr. Clark ). — Question put. That the words proposed to be left out stand part of the sub-section. — The Committee divided : Ayes, 2. Mr. S. Hoare. Mr. Howorth. Noes, 7. Mr. Bradlaugh. Dr. Clark. Mr. Cremer. Lord Francis Hervey. Mr. Wootton Isaacson Mr. W. F. Lawrence. Sir Henry Roscoe. Sub-section, as amended, agreed to. Sub-section 24. Amendment proposed, in line 4, after the word “ considered ” at end of Sub-section, to add the words, “ The rules may be amended at the annual meeting upon due notice being given ” — (Dr. Clark). — Question put, That those words be there added. — The Committee divided : Ayes, 6. Mr. Bradlaugh. Dr. Clark. Lord Francis Hervey. Mr. Howorth. Mr. W. F. Lawrence. Sir Henry Roscoe. Sub-section, as amended, agreed to. Sub-sections 25 — 27, amended, and agreed to. Sub-sections 28 — 33, agreed to. Question, That paragraph 96, as amended, stand part of the Report,— put, and agreed to. Amendment proposed, that the following new paragraph be inserted in the Report : “ A suggestion as to licensing the collectors by the Central Office or other authority has been brought before us, by which some check may be kept on a body whose power of control, in societies especially, is unusually great and irresponsible. Such a system would be more in the interest of the insured than of the societies and their managing class, to whom the idea does not seem to recommend itself. The Committee has not received sufficient information on the subject to enable it to report specially in its favour, but deem the idea worthy of consideration” — (Mr. W. F. Lawrence). — Question put, That this paragraph be inserted in the Report. — The Committee divided : Noes, 2. Mr. Cremer. Mr. Wootton Isaacson. Ayes, 2. Dr. Clark. Mr. Lawrence. Noes, 6. Mr. Bradlaugh. Mr. Cremer. Mr. Herbert Gladstone. Lord Francis Hervey. Mr. Howorth. Sir Henry lloscoo. [Adjourned till Tuesday, at Twelve o’clock. f 4 A 0.33. xlviii PROCEEDINGS OF THE Tuesday . 6th August 1889. MEMBERS PRESENT : Sir Herbert Maxwell in the Chair. Mr. Bradlaugli Mr. W. F. Lawrence. Lord Francis Hervey. Mr. Fenwick. Mr. Norton. Mr. YVootton Isaacson. Mr. Caldwell. Sir Henry Roscoe. Dr. Clark. Mr. Cremer. Mr. Foley. Mr. Conway. Amendment proposed, that the following new paragraph be inserted in the Report : “Your Committee recommend that the age for the insurance of juveniles be extended from 10 vears to 16, making the scale as follows: — j ' o £. * . Under 5 years of age - 4 I To be the total sums to be insured for Over 5 and under 10 - - - on death, or payable, whether by Over 10 and under 16 - - - 8[ one or more societies or companies” — (The Chairman). — Question, That this paragraph be inserted in the Report, — put, and agreed to. Another Amendment proposed, that the following new paragraph be inserted in the Report: “It is probable that medical men are very often not acquainted with the provisions of the Friendly Societies Act, 1875, whether as regards the maximum sum payable on the death of a child, or the prohibition of payment by the society or company except on production of a registrar’s certificate. Hence it happens that doctors are not unfrequently asked for, and give, more than one certificate as to cause of death, the additional certificates, being avowedly obtained for the purpose of getting insurance moneys. Your Committee are strongly of opinion that the Registrar General should add to the form of medical certificate of death a column demanding particulars of insurances on the life of deceased, of whatever age, to be filled up by the medical man, and stating how long the doctor signing such certificate has attended the deceased.” — Question proposed, That this paragraph be inserted in the Report — (The Chairman ). — Amendment proposed, to proposed Amendment, to add the words, “We further recommend, that a fee of 2 s. 6 d. should be paid to every medical man who gives a certificate ” — (Mr. Wootton Isaacson). — Qifestion put, That those words be there added. — The Committee divided : Ayes, 2. Mr. Caldwell. Mr. Wootton Isaacson. Noes, 6. Mr. Bradlaugh. Mr. Fenwick. Lord Francis Hervey. Mr. Norton. Sir Henry Roscoe. Mr. W. F. Lawrence. Question, That this paragraph be inserted in the Report, — put, and agreed to. Another Amendment proposed, that the following new paragraph be inserted in the Report: “ In passing from this subject your Committee desire to record their conviction that the evils possible under the law as it exists are by no means limited to infantile insurance, but are equally likely to follow upon the insurance of the very old” — (The Chairman ). — Question proposed, That this paragraph be inserted in the Report. — Proposed new paragraph amended. — Question, That this paragraph, as amended, be inserted in the Report, — put, and agreed to. Paragraph 97. Amendment proposed, in line 5, after the first word “Society,” to insert the words “the Liverpool Legal Friendly Society” — (Mr. W. F. Lawrence). — Question, That those words be there inserted, — put, and agreed to. '"^Ml&ragraph 98, agreed to. Pa: aragraph 99, amended, and agreed to. Paragraphs 100 — 101, agreed to. Paragraph 102, amended, and agreed to. ■graph 103, disagreed to. Paragraph SELECT COMMITTEE ON FRIENDLY SOCIETIES. xlix Paragraph 104. — An Amendment made. — Another Amendment proposed, in line 12, to leave out the words “otherwise the objection is frivolous” — (Lord Francis Herveg). Question put, That the words proposed to be left out stand part of the paragraph.— The Committee divided : Paragraph, as amended, agreed to. Paragraphs 105 — 106, agreed to. Paragraphs 107 — 108, amended, and agreed to. Amendment proposed, that the following new paragraph be inserted in the Report: “ Having regard to the conflicting nature of the statements put forward, the gravity of some of the allegations, and of the interests involved, your Committee resolved (6th March 1889) that the evidence of all witnesses (except those exempted by special Resolution), should be taken on oath”— (The Chairman). — Question, That this para- graph be inserted in the Report, — put, and agreed to. Postponed paragraph 2, agreed to. Postponed paragraph 33. Amendment proposed, in line 3, after the word “ managers,” to insert the words “ Moreover, the programme of the meeting, issued by authority at Bristol, was irregular, containing, as it did, a misleading reference to the rules” — (Mr. IV. F. Lawrence ). — Question, That the proposed words be there inserted, — put, and agreed to. Another Amendment proposed, in line 5, after the word “ feeling,” to insert the words “ The management further ignored the rule regarding the meeting of a deficiency by a levy. This general indifference to the observance of rules, and the employment of defaulters in the service of the Society, were among the many charges formulated by Mr. Stanley ” — (Mr. iV. F. Lawrence).— Question, That those words be there inserted, — put, and agreed to. Paragraph, as amended, agreed to. Postponed paragraph 42, amended, and agreed to. Postponed paragraph 43, agreed to. Postponed paragraph 48, amended, and agreed to. Postponed paragraph 49, agreed to. Postponed paragraph 57, further considered, amended, and agreed to. Postponed paragraph 71, further considered, amended, and agreed to. Postponed paragraphs 81 — 82, agreed to. Amendment proposed, that the following new paragraph be inserted in the Report : “ It shall not be lawful for any Industrial Assurance Company to distribute in any year a dividend, including bonus, amounting to more than 10 l. per cent, upon the ordinary capital of the Company ” — (Mr. Cremer). — Question proposed, That this paragraph be inserted in the Report. — Proposed new paragraph amended. Question put, That this paragraph, as amended, be inserted in the Report. — The Committee divided : Ayes, 4. Mr. Caldwell. J)r. Clark. Mr. Cremer. Mr. Wootton Isaacson. Noes, 7. Mr. Brad laugh. Mr. Fenwick. Mr. Foley. Lord Francis Ilervey. Mr. W. F. Lawrence. Mr. Norton. Sir Henry Roscoe. Ayes, 6. Noes, 5. Mr. Caldwell. Dr. Clark. Mr. Cremer. Mr. Wootton Isaacson. Mr. Norton. Sir Henry Roscoe. Mr. Bradlaugh Mr. Conway. Mr. Fenwick. Mr. Foley. Lord Francis 0.33, g 1 PROCEEDINGS : — SELECT COMMITTEE ON FRIENDLY SOCIETIES. Another Amendment proposed, that the following new paragraph he inserted in the Report : “Your Committee recommend that all societies shall be registered” — (Mr. Bradlaugh). — Question, That this paragraph be inserted in the Report,— put, and agreed to . Another Amendment proposed, that the following new paragraph be inserted in the Report: “ That anv rejected by the Registrar should be plainly stamped with the Avoid “ 'Rejected' — (Mr. Cremer). — Proposed new paragraph amended. — Question, That this paras- ri ph’ as amended, be inserted in the Report, — put, and agreed to. Another Amendment proposed, that the follotving new paragraph be inserted in the Report : “ That every certificate issued by the Registrar should contain the following : This certificate affords no guarantee as to the financial soundness of the Society — (Mr. Cremer). — Question proposed, That this paragraph be inserted in the Report. Amendment, by leave, withdrawn. Another Amendment proposed, that the following new paragraph be inserted in the Report: “ It shall not hereafter be lawful to insure any child under 10 years of age in more than one Society or Company ” — (Mr. Foley). — Question, That this paragraph be inserted in the Report, — put, and agreed to. Question, That this Report, as amended, be the Report of the Committee to the House, — put, and agreed to. Ordered , To Report, together with Minutes of Evidence and Appendix. EXPENSES OF WITNESSES. NAME OP WITNESS. Profession or Condition. From whence Summoned. Number of Days Absent from Home, under Orders of Committee. Allowance during Absence from Home. Expenses of Journey to Londonand back. Total Expenses allowed to Witness. A. J. Fowler Commercial Tra- Everton, Liver- 3 £. s. d. 2 5 - £• *. d. 2 11 6 £• d. 4 16 6 Watson Ireland veller. Registrar of Births pool. Oldham 3 3 3 - 2 15 4 5 18 4 Charles Sandilands - and Deaths. Printer Edinburgh 3 1 10 - 3 10 4 5-4 David Fortune - Manager of Glasgow 6 6 6 - 5 15 3 12 1 3 J. Tunstall Wholesale Sta- tionery and Pub- lishing Ware- house. Surveyor - Liverpool 3 6 6 - 3 3 - 9 9 - John Stewart - Managing Trea- Glasgow 3 3 3 - 3 7 1 6 10 1 F. Taunton surer. Secretary Royal Liverpool 12 12 12 - 7 6 - 19 18 - Richard Martin Liver Friendly Society. Divisional Mana- Burnley 6 4 10 - 3 11 10 8 1 10 ger Yorkshire Provident Life Assurance So- ciety. 1 Tota LS - - £. 71 15 4 I