OBSERVATIONS, (Hansard, 16 August 1867)

§ THE EARL OF LICHFIELD

rose to call attention to the Return of the Number of Friendly Societies in each County of England and Wales enrolled and certified since June, 1793 (33 Geo. III. c. 54), to the 31st of May, 1867; and also of the Number of such Societies which have been dissolved or broken up (laid before the House on the 11th of July last). The Return to which he desired to direct their Lordships' attention stated that in 1793 the number of those Friendly Societies was 38,315. Of these, 13,935 had been dissolved, and 24,380 remained. It should be remembered in considering these Returns that during the last ten or twelve years from 10,000 to 11,000 societies had been established, and that of these a very small proportion had proved themselves sound, and a very great amount of misery had been entailed on the working classes throughout the country through their failure. It was undesirable to point out the evils connected with these societies unless their Lordships were prepared to go somewhat deeply in to the cause and ascertain whether some remedy could be provided. The first class of society was that which it was undoubtedly the intention of the Legislature to encourage when they 1598 passed the first Friendly Societies Act in 1793—those by which a certain number of persons clubbed together to provide relief for each other in case of sickness, and in some cases to provide a superannuation after a certain time of life. This class included not only the ordinary village club, but large affiliated bodies, like the Odd Fellows and Foresters. He was happy to say that latterly a great deal of the suspicion which had existed in the minds of the upper and educated classes as to these societies had been almost, if not entirely, removed; and, on the other hand, there was a growing disposition on the part of those societies to place confidence in any attempt which might be made to legislate with regard to them. There could be no doubt that though some of the lodges or branches of these societies might not be managed as well as could be wished, yet on the whole they had done a marvellous amount of good—especially the Odd Fellows and Foresters. Among the difficulties which in many cases existed to the satisfactory working of these societies was that of obtaining speedy redress in case of disputes. Under the rule providing for arbitration the matter had generally to be first referred to a district committee, and from them to the central body; so that the matter was decided upon at last probably at a great distance from the place where the claimant lived. This objection referred more particularly to the large affiliated bodies; and he could not help thinking that the anxiety shown by the managers to improve the position of those societies would lead them to see the necessity of some improvement in this respect. Another objection applied to almost all societies of this description—namely, that under the Friendly Societies Act now in operation—the 18 & 19 Vict.—any person bringing a complaint against one of these societies must do so on behalf of the society. It was very desirable to remedy this, and to provide that any member on his own account, or the Registrar, should be allowed to bring the complaint and to take proceedings in his own name in case of misappropriation of funds. Great complaint was also made of the manner in which the returns of the financial statements of these societies were made to the Registrar. During the last year, out of 22,834 returns asked for by the Registrar under this Act, only 10,345 were received. A great difficulty in the working of the Friendly Societies Act arose, also, from 1599 the time at which returns were required to be made to the Registrar. At present this time was fixed at the 1st of June; but they should be sent by March instead of June. No action could possibly be taken upon any matter which appeared to the Registrar to be contrary to the provisions of the Act of Parliament if the returns were not sent to him before the 1st of, June, because after six months had elapsed it would be too late to take any action in the matter; and it followed that, as the returns related to what had taken place in the previous year, six months must in all cases have elapsed between the time of the irregularity and the return being laid before the Registrar. Of these large societies, the Odd Fellows numbered 400,000, with £2,000,000 of money put by; the Foresters 300,000, with £1,000,000. It was impossible to deny how much credit the managers deserved for their efforts to improve their respective societies; it did happen, however, that a large number of their lodges were not in the position they ought to hold, and some provision was necessary which would give the governing body a greater control over the lodges, and compel them to conform in all respects to the rules laid down by the governing body. Knowing how frequently these societies found themselves in difficulties, he would quote one case to show what a sound and well-managed society could do. The society he alluded to was established in 1828; it began with thirty-five members, and in 1867 it had 285 members, with an income of £850, and an available balance of £12,404, the expenses of management during that time not having exceeded 3 per cent. This showed what could be done by a society if it were properly managed; and any measure that would put such societies on a more secure footing than they at present occupied would be worthy of the most serious consideration. He wished to call special attention to a description of society which had sprung up of late years in London, Liverpool, and Manchester. These societies contemplated the provision of a sum at death for those who insured in them, and their ramifications extended to almost every village in the country, the premiums being obtained through the agency of collectors, who were paid a very large commission upon the sums they received for the societies. The business was in the hands of a committee at Liverpool, London, or Manchester; the members took no part in the management; they had no 1600 one but the collector to look to; and the annual meeting was a farce. It was quite clear that these societies in no way corresponded with the societies which the Legislature contemplated when they passed the first Friendly Societies Act. Notwithstanding the enormous funds of these societies and the lavishness with which they were squandered, they received all the benefits and privileges of friendly societies in being exempt from income and other taxes, and to a certain extent from probate duty—exemptions which were very considerable in amount. It was astonishing what an enormous proportion of their income some of these societies spent in management. He obtained his figures from their published reports, and he did not think there could be any objection to mentioning the names of the societies to which he referred, because, being under the Friendly Societies Act, they were bound annually to send in their accounts, which thus became public property. He would first of all call attention to the Royal Liver Society of Liverpool, which had been in existence seventeen years, and the number of members of which it would be very difficult to ascertain; the number was supposed to be from 130,000 to 150,000, and the premium income £125,000 a year. This money was obtained from the poorest classes of the people of this country; and yet during 1866 no less a sum than £45,864 was spent upon management. From every £100 received £36 12s. 9d. was spent on management, or 15s. for every 20s. spent for relief, sickness, and burials. Although the accumulated assets were said to amount to £103,000, the interest was only £2,795. Could it be conceived for a moment that a society established upon a basis of payments certified to be sufficient for certain benefits could be sound if 50 per cent were taken for the expenses of management? A number of members of this society wrote to Mr. Spens, who had certified its tables, asking him if he had done so with the knowledge that by the thirteenth rule 30 per cent was deducted for management expenses, and 25 per cent for collectors' commission. The reply was as follows:— The table No. 2, to which you refer, was certified by me as an abstract table without reference to the rules of the Liver Society or anything beyond the table. At the time the table was submitted to me I thought it was my duty to examine it and give the opinion I did. The table which I certified bore simply the title, 'Table of weekly payments required for persons of the age undernoted 1601 for burial money in the years of entry undernoted.' The rates are quite inadequate if subjected to a deduction of 55 per cent. He wished also to refer to the Victoria Legal Provident Assurance Society of Birmingham. It had 8,637 members, and its available funds were £232. During 1866 it received in premiums from the working classes £1,764, and the expenses of management were £1,125. He was present at the Court of Quarter Sessions in Staffordshire on the occasion of the trial of a collector charged with defrauding the society of a sum of money. It came out in the course of the trial that the trustee, secretary, and treasurer were one and the same person, and that he, in fact, managed the society and controlled the collector. After the trial there was put into his hands a letter written by the wife of the trustee, secretary, and treasurer, and addressed to the collector who was tried; and this letter showed pretty clearly how the affairs of the society were conducted. It was in these terms— Dear Sir,—Yours to hand this morning. Was sorry to hear that Mr. Rhodes had been showing your letter about. I am sure it was not Mr. Davies's wish, and I shall name it to him when he comes in the morning. As Mr. Davies is in London, I shall undertake to say that whatever he promised you when you were here yesterday you may take it for granted, as I can assure you he is a man to his word. If he promised you not to press the charge he will not do so. Bear in mind Mr. Davies is the prosecutor, not Mr. Rhodes; so I hope you will not trouble yourself any further about it, and in like manner we shall expect you to fulfil your promise in showing up the members to Our agent.—Yours respectfully, M. A. DAVIES, pro William Davies. In the case of this society, for every 20s. spent in relief £3 was spent on management. The next society he would name was the St. Patrick's. Its income was £33,270, and its management cost £16,552; or for every 20s. given in relief 16s. 3d. was spent on management. It was not known whether the number of members was 150,000 or 300,000; and, although it was established in 1832, the funds in hand did not amount to more than half one year's income. The society had often been before the Courts, and it was managed by one person. Another society he would name was the Liverpool United Legal, which had been established many years. It had as patron a noble Earl, who was very much surprised when certain figures were put before him. There were 57,350 members; the accumulated assets were £10,000; its premium income 1602 was £14,838; and its management cost £7,141 per year. There were some cases in which from friendly societies they had become joint-stock companies—a change which ought to be carefully guarded against; and under no circumstances whatever ought the privileges of a friendly society to be given to a society carrying on its operations by means of collectors. It was no slight undertaking to bring forward a subject of this magnitude at a period of the Session so far advanced, and with the knowledge that their Lordships must be already tired, but he was anxious that during the recess attention might be directed to the subject. Some suggestions which had occurred to himself he had embodied in the shape of a Bill; but for any substantial advance upon this question they could only trust to improved education of the working classes.