FRIENDLY SOCIETIES. (Hansard, 25 February 1846)

§ MR. T. DUNCOMBE
moved the Second 105 Reading of the Friendly Societies Bill. The House was aware, that in the year 1829, an Act was passed to consolidate the Friendly Societies Act. In 1834, 4th and 5th William IV., another Act was passed to extend the objects of the former Statute, which had worked remarkably well until within a short period since. The object of the Bill was to remove doubts which had arisen in consequence of a decision of the Court of Queen's Bench upon an appeal in a case connected with the South Shields Loan Investment Society. A dispute had arisen between that society and one of its members named John Scott, who had allowed his contributions to fall in arrear. He was summoned before the magistrates, who refused to interfere; a mandamus was obtained from the Court of Queen's Bench, and the question to be argued was raised by doubts which existed as to the interpretation and construction of the Act; of which doubts, Scott, for the purpose of avoiding the payment of his contributions, had taken advantage. The case came on before Mr. Justice Wightman. It was shown that the society was established on the 7th of December, 1841, and that its rules had been duly certified by Mr. Tidd Pratt, shortly after which this dispute arose. The case was ably argued, and the decision of Mr. Justice Wightman, as reported in the Legal Observer, was as follows:— I am of opinion that this society is not a friendly society, and that the words 'or any other purpose not illegal,' in the second section of the 4th and 5th William IV., c. 40, must be construed so as to bear some relation to the declared objects of the Act—namely, for the mutual relief and maintenance of all and every the members there-of, their wives, children, &c., in sickness, infancy, advanced age, widowhood, or any other natural state or contingency whereof the occurence is susceptible of calculation by way of average. If these words were to receive a more extended construction, they would then include societies which it is not contended fall within the Act, namely, for insurance on lives, and numerous others. But there is an additional circumstance which leads me to this conclusion, which is, that the Legislature has passed distinct Acts for the regulation of loan societies, and I cannot make any real distinction between the societies framed under the 5th and 6th William IV., c. 23, and the present. That Act does not expressly provide for the case of loans to the members themselves; but I see nothing to exclude such a case from its operation, or to prevent rules from being framed to meet it. However that may be, at all events this does not appear to me to be a friendly society, and consequently the present rule must be discharged. It certainly would be very unbecoming in him to impugn the correctness of Mr. Justice 106 Wightman's views; but he thought it full time that some decision should be come to in reference to the numerous societies of the same nature which were now in existence, and that the learned Judge could not have been acquainted with their importance in the country. At that very moment there were not less than 5,000 societies, possessing capital from 50,000l. up to 70,000l., founded for the mutual relief of the members, their wives and families, in sickness and advanced age, and other contingencies. The greatest consternation would be caused by that decision among the numerous persons connected with those bodies. In the event of any disputes, the magistrate would refuse to interfere, and the case would then be brought into the Court of Queen's Bench, where expense and delay would waste the funds of the society; or the trustees might run off with all the money in the interval, and nothing but confusion and actual robbery could ensue from such a construction of the Act of Parliament. The question was no crotchet of his—it was no business of his; but in consequence of that decision, Mr. Tidd Pratt was obliged to hold his hands, and could not enrol parties who were perpetually applying to him; and it was with the sanction of that gentleman that he (Mr. Duncombe) brought the matter before the House. The decision in effect was, that no societies could be enrolled or entitled to the benefit of the Act, except those "ejusdem generis," with the object of mutual benefit to the members. He believed that those friendly and loan societies were of the greatest advantage to the poorer classes, and that the more their sphere could be extended, and the less the members were put to expense in having their rules and regulations certified, the better would it be for the country. The only alteration he sought to effect in the Bill was, after the words "or for any purpose which is not illegal," to add, "whether of the same description as is hereinafter mentioned, or otherwise."

§ SIR J. GRAHAM
said, that no person could be more favourably disposed towards friendly and mutual benefit societies than he was; or be more willing to promote their extension. However, as he had not had any opportunity of conferring with Mr. Tidd Pratt on the subject, he thought it would not be proper to enter at once into the views of the hon. Member. There were considerable difficulties in the alterations he proposed. Any one looking to the Bill 107 would see that its whole purpose was contained in the words "and otherwise." The preamble contained the whole force of the law, which was applicable to mutual insurance and friendly societies, ejusdem generis, as the purposes specified, with objects legal in themselves, and of the same kind. By the insertion of the words "and otherwise," the privileges of friendly insurances and mutual societies would be extended to societies for promoting or carrying out all objects of every kind. What would be the effect of that extension? There were many objects, not illegal in themselves, which it might not be the policy of the State to encourage. Friendly societies, as at present constituted, had a great many advantages. They could make by-laws which might be enforced in the most stringent manner, and had numerous facilities in the advantageous employment of their capital. It would be well to pause before those advantages were universally extended. For instance, he was not prepared to say that a combination of masters to reduce the rate of wages, or of workmen to raise them by legal means, was illegal, and might be inexpedient; but if workmen were to enter into friendly and mutual benefit societies to maintain themselves during a strike, though it might not be illegal in itself, he nevertheless doubted whether it would be the policy of the State to extend the advantages of those societies to men engaged in any such object. The words sought to be introduced, however, would have the effect of sanctioning their enrolment. He was not prepared to deny, that all objects, ejusdem generis, should be brought under the general Act; but the words in question would extend the present application of the law to societies of any kind. He could not understand that any societies for political purposes, though not illegal in themselves, should be brought under the provisions of the Act. Reserving to Government the full right of opposing the introduction of those words on a future occasion, he would, with that protest, consent to the second reading of the Bill. The hon. Member had stated his objects with candour and clearness, and he thought it right to be equally explicit in stating the course which he would be prepared to take in reference to the Bill before the House.

§ MR. HENLEY
was extremely favourable to friendly societies; he believed they were of great value to the class of people who made use of them; but he feared the 108 adoption of a measure so vague in general as the one now proposed would endanger the operations of a system which had hitherto worked so well. As the right hon. Baronet had justly stated, it might be applied to purposes extremely inconvenient. The House ought to bear in mind too the great privileges which friendly societies presented in regard to the depositing of their money in savings banks; and if care was not taken the country might be subjected to great convenience by extending this privilege to societies instituted for improper purposes. There was one matter, however, connected with friendly societies which had come under his own knowledge, which he wished to state to the House; he meant the power of carrying actions against friendly societies into the Court of Chancery, which he feared might become a great abuse. In the county with which he was connected (Oxfordshire), a dispute similar to the one referred to by the hon. Member (Mr. Duncombe) arose in a friendly society, which was taken hold of by a professional man, who raised a Chancery suit against the whole members of the society; and he understood that the latter had consented to pay the costs, amounting to a considerable amount of money, rather than allow the action to go on, because they were afraid that the proceedings might be so protracted as to swallow up the whole of their funds. He (Mr. Henley) did not know whether any means could be adopted to improve the law in this respect; but he thought the point well worthy of consideration.

§ Mr. DUNCOMBE
assured the House, that as the object of the Act 4th and 5th William IV. was understood to extend the operations of friendly societies to all purposes not illegal, and as a construction had been put upon that Act at variance with this object, he only wished, by the present measure, to carry out the intentions of the original framers of that measure. The right hon. Baronet (Sir J. Graham) had expressed his fears of political objects coming under the operation of this measure. He could only say that he had introduced the measure for no political purpose whatever; but, after all, political societies were not illegal, and he did not see any harm would be done, even if they were to come under its operation. Since he had brought in this Bill he had been overwhelmed with letters complaining of its defects, and asking him to introduce all sorts of amendments, but which he had declined to do, because it would require a new Act of Parliament to 109 meet the wishes of all the people who had addressed him. He intended merely to confine himself to extending the operations of friendly societies to the objects originally intended by the last alteration of the law. He hoped the right hon. Baronet would take an early opportunity of seeing Mr. Tidd Pratt, who would explain the matter much better than he (Mr. Duncombe) could do, and who could assure him that there was no such danger to be apprehended from the measure as he seemed to think.

§ Mr. J. S. WORTLEY
said, that Mr. Duncombe had misconceived the intention of the Act 4 and 5 William IV.; for, so far as the object being as he had stated, in 1834, when the Act was passed, an Amendment by Mr. Bernal, the Member for Weymouth, that it should be extended to other purposes than those ejusdem generis which were specified in the Bill, was proposed in Committee and rejected, on the ground that it might be abused. With reference to Mr. Justice Wightman's decision, he had not seen any authorized report of it; and he believed that great misconception often arose from trusting to those ephemeral reports which appeared in the weekly law journals. But if any doubt had arisen as to whether societies for the mutual insurance of lives came within the meaning of the Act, the simplest way would be to introduce a Declaratory Act, removing the doubt; but he thought it most desirable that these societies should be preserved from the contamination of political or religious objects.

§ MR. HAWES
urged on the right hon. Baronet (Sir James Graham) the necessity of giving this Bill, at the earliest period, his best consideration; he also suggested whether or not the Bill ought to have a retrospective effect, so as to cover all those societies which might be registered now, but whose legality was rendered doubtful by the recent decision.

§ SIR J. GRAHAM
said, that if the hon. Member (Mr. Duncombe) would put the Bill for Committee on Wednesday next, he (Sir J. Graham) would take the opportunity before that time of seeing Mr. Tidd Pratt, of conferring with the law officers of the Crown, and considering the effect of Mr. Justice Wightman's judgment. He would also confer with the hon. Member himself before Wednesday, and point out what alterations he wished in the Bill.