HC Deb 11 April 1864 vol 174 cc789-809

Order read, for resuming Adjourned Debate on Amendment proposed to Question [17th March], "That Mr. Speaker do now leave the Chair;" and which Amendment was, to leave out from the word "That" to the end of the Question, in order to add the words" The Bill be committed to a Select Committee," — (Sir Minto Farquhar,)—instead thereof.

Question again proposed, "That the words proposed to be left out stand part of the Question."

Debate résumed.


said, he should be glad to promote any proceeding which might lead to practical legislation on the subject of Insurances for the working classes, but the question before the House was not whether they should legislate for the evils that had long existed in regard to the conduct of Assurance Societies, but whether they should at once pass the Bill of the Chancellor of the Exchequer without any inquiry, and without satisfying themselves by any authentic means or evidence of the reasonable character and necessity for passing that Bill. He was in favour of the proposition of the hon. Gentleman opposite for a Select Committee. The Chancellor of the Exchequer had thought proper to make important statements involving very grave imputations upon existing institutions. No doubt hon. Members connected with those institutions would be able to defend whatever admitted of defence in the conduct of their affairs, but he was bound to ask himself whether, supposing the statements of the Chancellor of the Exchequer were true, they afforded any reason for the Bill under consideration. Supposing, as stated by the Chancellor of the Exchequer, there had been an immense collapse of Life Assurance Companies within the last eighteen years, it only proved that there had been great eagerness to carry on that business; for, besides that great collapse, no less than 220 companies were projected in the same time, and did not even take root so far as to be regarded as having been founded. It proved that thousands of persons had been ready to embark in business of assurance of all kinds, but the market was so overstocked by the companies already formed, of standing and position, that they were not able to obtain sufficient custom to keep them alive. But if that was so, what necessity was there for the Government to interfere in that business? The right hon. Gentleman said that many of these societies conducted their business badly, but he really had not entered sufficiently into the merits of the question. Many Assurance Societies with large capital, and resting on a solid foundation, rejected for the most part the small premiums paid by the working classes, because they knew that that branch of business was attended with such risks and difficulties as would probably involve more loss than gain to them. Surely, then, the State ought to hesitate before it embarked in operations which men accustomed to large undertakings shrank from. The right hon. Gentleman sought to enlist the favour of the House for the measure by citing the success attained by his Post Office savings banks; but so far from the results of their legislation relating to savings banks affording any support to the Bill, they went rather to establish an opposite conclusion. There used, no doubt, to be great abuses in the management of savings banks, and it was necessary to legislate on the subject. Chancellors of the Exchequer, some time ago, without correcting these evils, brought forward measures which those who managed these institutions thought necessarily tended to put an end to them. Consequently, the proceedings of those Chancellors of the Exchequer were opposed in that House; and the right hon. Member for Wiltshire (Mr. Sotheron Estcourt), in order to defeat the late Sir George Lewis, moved for a Committee of Inquiry. The Committee sat, and found that the savings of the whole body of the working classes were, to a considerable extent, imperilled from defective legislation. The Government ought at once to have taken the Report of that Committee into consideration, and proposed a law giving adequate protection to the deposits of the people. But, though asked to bring in a Bill founded on that Report, the Chancellor of the Exchequer refused; and why? Because he had conceived the project of establishing Post Office savings banks. He, therefore, felt himself at liberty to neglect all the warnings given by that inquiry, and contented himself with setting up a rivalry between the Government and the existing savings banks. That was an abandonment of the duty incumbent on a responsible Minister of the Crown, of watching over the general interests of the people; and it ought to operate as a caution to them against a repetition of the same error in regard to Friendly and Benefit Societies. It had been left to him and one or two other private Members to deal with the subject which the Chancellor of the Exchequer ought to have taken up, and they had to bring in a Bill to amend and consolidate the law relating to savings banks. The first difficulty they had to encounter was the impossibility under which private Members laboured of passing through the House a Bill of that character, unless they cut it down to the narrowest possible limits; and, therefore, they were obliged to reject several valuable provisions for a reform of these institutions. The hon. Member for Oldham (Mr. Hibbert) had proposed that the savings banks might be made to facilitate the system of small Life Assurances for the people; but the promoters of the Bill were unable to entertain that suggestion. The Chancellor of the Exchequer did not undertake the responsibility of dealing with it; and so the people were deprived of that most legitimate opportunity of using the savings banks effectually for carrying out the very objects which the right hon. Gentleman now had in view. That illustrated the necessity of keeping the Government from operations like this, which could be and were managed by institutions wholly apart from the State. But the right hon. Gentleman said the Post Office savings banks had been very successful, and by their rivalry had improved the administration of private institutions. Now, he denied that proposition. In 1858, when the agitation which had existed against the savings banks generally was put an end to, the deposits in the savings banks were £36,200,000; and from 1858 to 1860, being a period of only two years, after confidence had been restored, they increased no less than five millions sterling. From 1860 to the present time, since the Chancellor of the Exchequer declined to take upon his shoulders the responsibility of watching over these institutions, and set up as a rival in their business instead, what had been the result? In 1860 the gross capital was £41,258,000; and in 1863 that gross capital was £41,237,000; being a decrease of £21,000, It was a great question, then, whether the Post Office Savings Banks Bill had been any great advantage at all. But a possible future evil might arise from the Post Office savings banks. Let them once reach the position of having a capital such as could be felt in the money market in London; let them be as successful as other savings banks had been, and let there be 40 millions accumulated and payable on demand, and he ventured to predict that it would be in the power of any man, however insignificant, in a time when the interest for money was high and the wealthy got 5 or 6 per cent, to raise a cry that the poor were only getting 2½ per cent, and that cry would re-echo through the kingdom, and there was not a merchant or banker in that House who would not go down on his knees and beg that that 2½ per cent should be made 3 or 4 per cent to save the country from the consequences of the demand that must necessarily arise for the payment of that money. The danger incident to that mode of legislation was that it brought the people face to face with the Government, and there would be no intermediate moral influence operating such as existed in regard to all other savings banks, in the case of which, moreover, there were legal restrictions which would prevent such a contingency arising. The whole tendency of these transactions with reference to savings banks warned them to be careful as to what they should do on the present occasion. To his mind they afforded a conclusive argument in favour of the most full and complete investigation of the merits and application of the Bill before them. He wished the Chancellor of the Exchequer, in moving the second reading, had not made any reference to the efforts of working men for improving the condition of their fellows; for, whatever he might think of the labours of such persons, there could be no doubt they had been far more useful than extreme freetraders were apt to imagine. No doubt there had been an immense development of industry as the result of free trade; but, to use the language of Adam Smith, the higher they carried organized industry the greater the degradation they might inflict on the people; and he believed that result would have been seen in England but for the labours of those who had associated themselves for the purpose of having their labour respected, and compelling employers to conduct themselves with some regard to moral restraints. It was a pity, then, that the Chancellor of the Exchequer had spoken in so disparaging a tone of Mr. Potter, a man who was admired and respected by the working classes, and those who were associated with him. Such remarks were likely to give reason to suspect the motives for the introduction of the measure, and it was to be regretted that the right hon. Gentleman had not made a more complete and frank apology to the House than he had yet done. He had evinced an amount of ill-feeling which was wholly unnecessary for the purposes of his Bill. With respect to that class of Assurance Societies that were likely to be affected by the Bill, the Chancellor of the Exchequer had thrown a cloud of odium upon them by speaking of them as creatures of the State, subsidized by considerable bounties; but he did not explain in his usual clear manner what he meant by those statements. Friendly Societies received, some of them, rates of interest higher than those which now prevailed; but that was only the result of past errors of the right hon. Gentleman's predecessors in office, and was not to be regarded as a boon given at the present moment. The Government had no alternative but to adhere to its engagements to these societies. These were founded upon the then current rate of interest, and no precautions had been taken that, when it was reduced, the societies should submit to a corresponding reduction in the rate they received. It could not, therefore, be said that these institutions were subsidized by the State, but that the country was paying for the errors of past legislation. It could not be said that these institutions were really subsidized by the State in the shape of small exemptions from taxation; they were rather relieved from what would otherwise be an unjust and oppressive burden. When it was recollected for what purpose they were established, he did not think these institutions should be described as protected societies, using the old shibboleth of Protection in its invidious signification. They were not protected in the sense of an abuse of protection; they only enjoyed the requisite securities for carrying out their most beneficent design. But these institutions, it was said, were badly managed, and the only way to remedy that evil was for the Chancellor of the Exchequer to have a model institution of his own, and leave some 20,000 institutions, in which hundreds of thousands of persons were interested, entirely at the mercy of accident and circumstances on the grand principle that free trade would bring about a cure. That was a most dangerous doctrine to accept in all the latitude of its announcement by the Chancellor of the Exchequer. What were the evils of the Friendly Societies? If they carefully and minutely examined into the matter, they would be able to arrive at the conclusion that there were specific general heads of mismanagement, which being cured, all the rest that was necessary would follow as a consequence. They might be summed up in two or three remarks, and illustrated in a thousand different ways, but they would result in two or three simple points in the end. He granted that it was true that they were ignorantly established with insufficient tables to accumulate the funds necessary to meet liabilities; and great loss and misery had in some instances ensued. But was there no remedy? If the Chancellor of the Exchequer's Bill was sound, they would be told there was an ample remedy. The Chancellor of the Exchequer, it was said, had arrived at a theory and a principle that he could construct a table for working men's assurance that would operate of itself without any special knowledge of circumstances, and free from all risk and danger. If there was that patent table—if the nation could adopt it and make it the foundation of a new law, and work it out for all the people of England, was it not the duty of the House to see that the same table was made compulsory on these Assurance Companies? But others would say that the Bill was unsound, and that they could not have a universal table that would be self-working without loss or inconvenience. If so, there was an end of the argument. That was one difficulty. Then it was said the people suffered on account of lapsed policies. He was really surprised to find the Chancellor of the Exchequer had fallen into this error of puffing Assurance Companies. The objection was evidently unsound when it came to be examined in detail. Of course, every one who paid and allowed his policy to lapse contributed something and got nothing in return; the accumulated fund was thus greatly increased; and if there was no lapse the companies would be obliged to charge a great deal more. In order to show how fallacious was the great argument about lapsed policies, he would refer to what had taken place under the present system. By the existing law a man could purchase an annuity absolutely, without any claim to a contingent return of payments, or he might purchase one upon certain conditions, giving him the power to receive back a certain amount. Thus it appeared from the Government tables, that if a man aged twenty-two wished to secure himself an annuity of £12 when he attained the age of sixty, and was willing to run the risk of the policy lapsing before the time of his receiving the benefit derived, he would have to pay 2s. per month. If, however, he desired to reserve to himself the power of getting back, under any contingency, the money he had paid, he would be required to pay 3s. per month. Thus, by the Government system, as it now existed, a man who chose to run the risk of his policy lapsing, could insure for 50 per cent less than under the other arrangement. But if there was a doubt of the view taken by the great bulk of the people as to this great evil of lapsing policies, he would again refer to the practice under the existing system. There had been, up to the present time, 10,800 annuities granted, amounting to £219,000 per annum, for which no less than £2,522,000 had been paid. But under the other arrangement, of insuring against the lapse of policies, only £59,000 had been paid for annuities. It was plain, therefore, that the boon of guarding against lapse of policies was regarded by the public as merely nominal and illusory. Then again, it had been said that the expense of the management of the Friendly Societies had been very great. That was true, but he feared that it was impossible for any society to avoid large expenses when engaged in minute transactions with the people. It was impossible to persuade people that it was for their interest to take their pence every week or month to the Insurance Office to pay the premiums; but they would have a collecting agent to call at their houses, although the cost of such a proceeding entailed upon them a charge of 25 per cent. If the officers of any of those societies were asked upon that point, they would state that if they did not go themselves to gather the pence, their business would speedily come to nothing. It was the same with these offices as it was with the baker, and although it was possible for him to make a 41b. loaf, the people were not satisfied they had their weight unless they had a bit of bread over. It was impossible to alter the habits of the people, and it was useless to complain that the present mode of insuring was expensive, nor was that a reason for Government interference. Another objection, and a strong one, was that the smaller Friendly Societies conducted their business at public-houses. That was an objectionable state of things, but it was not an evil that could not be got rid of. If Parliament were to enact that it should be illegal for these societies to hold their meetings at public-houses, an end would at once be put to the system, and school-houses and similar places would be selected instead. But it must be recollected that the working classes were not without excuse in the example of other classes who met in taverns to discharge their business. In the City of London there was a great corporation which seemed to exist only for the purpose of feeding people; and, in our courts of justice, the Judges and barristers had to qualify themselves by the processes of eating and drinking, and a Queen's Counsel could not rise to the dignity of the Bench unless he almost swam in wine up to the table at which he sat. These things no doubt had an effect upon the people, but they were no arguments for the Chancellor of the Exchequer setting up an opposition establishment. He wished, however, to call the attention of the Chancellor of the Exchequer to what was really the source of this proposal — the opinion of Mr. Tidd Pratt. That gentleman was invested with the authority over all the Friendly Societies, but from want of moral influence he was incapable of exercising that authority. He was, doubtless, an active and intelligent gentleman, but the people all over England would not be governed by a person in an office in London. The consequence was that Mr. Tidd Pratt's communications were disregarded. But there was a remedy other than this Bill. If the moral weight of a recognized officer of the Crown holding a position in the country was brought to bear upon the Friendly Societies, there could be no doubt but that those societies would be managed as well as the Poor Law Board, or any other Government department was managed. When it was found that the Manchester Unity Friendly Society was badly managed, their central committee having great influence, remonstrated with the branch offices, the result of which was that reforms were introduced which made the society the best managed in the country. But what kind of a remedy would the Bill be for the evils now complained of? Were all the existing members of these societies to be left exposed to those evils, or were private Members of Parliament to be expected to take up that subject? It seemed to him that Mr. Tidd Pratt himself had suggested a scheme which was worthy of consideration. That Gentleman had proposed a Bill to place the supervision of those societies in the Boards of Guardians. The Bill was introduced into the other House, but as it was to some extent a taxing Bill it could not be passed; and he (Mr. Ayrton) had intended to introduce it with some modifications into this House. It would be well that the provisions of the Bill should be explained to the Committee before any decision was come to as to the Bill now under discussion. The area over which the system would extend would be enormous, though not so large as the Chancellor of the Exchequer had stated. He believed, however, that without limitation or diminution it would include 9,500,000 persons. If the Bill were successful, the result would be that in every parish and hamlet a stipendiary officer of the Crown would be located, whose duty it would be to institute an examination into the private affairs of individuals. The services of medical men and employers of labour would also be enlisted in the same direction, and such an organization would, he believed, be an unfortunate thing for all classes in the country. The Government would pursue a much better plan if they were to encourage the establishment of associations among the people themselves, for it was through the exercise of local administration that a nation became most fitted for the enjoyment of political rights. What they needed was a thorough and searching inquiry into the real character of the Bill, and not an examination into the mis-doings of all the Insurance Societies in the country, the result of which would only afford matter for contention, and tend to the gratification of rival companies. The Committee ought to examine such men as Mr. Tidd Pratt, to have the evidence of practical and independent persons who had made such subjects the study of their lives. There was no reason why that course should not be adopted, because there was not the slightest necessity for passing the measure hurriedly through Parliament. The measure did not press; it did not matter whether the Bill were passed in three months' or twelve months' time. He did not desire to defeat legislation on the subject. On the contrary, the Bill he had intended to bring in might be considered as hostile to the Friendly Societies now existing, but it was on a principle different from the present Bill, and more in accordance with the character and spirit of our institutions.


considered, that much of the hostility displayed towards the Bill, was excited in consequence of its being introduced under a title which neither explained its real nature and character, nor the intentions of the Government in bringing it forward. He believed, however, that the defect had been atoned for by the right hon. Gentleman's speech, in which he had given the requisite information. Any prejudice which had existed against the measure arising out of the mode of its introduction had passed away, and there was much in it that commended it to the acceptance of the House. The principle that Government should not interfere with schemes which could not be satisfactorily undertaken by individuals or private societies was generally good, but there were undoubtedly cases in which the interference of Government would be attended with benefit. The establishment of banks for the receipt of the small savings of the labouring classes was an instance of this, for the security elsewhere could not be so great as that afforded by the Government, and the increased security would probably be the occasion of attracting more deposits, the result of thrift and frugality. He therefore thought it was a measure the House might fairly entertain. He looked upon it as an extension of the Post Office savings banks principle, which had received the sanction of the country. When Government pro- posed to establish a rate of interest which could in any way be supposed to compete with the operations of other societies, jealousy would not unnaturally be excited; but in a case of that kind such a feeling need not arise. At present the Government paid upon these deposits the moderate rate of 2½ per cent interest, and repaid the capital in only one way—namely, at call. They now proposed to leave to the depositors the choice of receiving their money in the form of deferred annuities, or in a sum payable at death. No doubt, Government would incur a strong risk, but he did not regard that as an objection to the measure. If the Government thought they could accept the responsibility, and carry out the system without endangering the finances of the country, he for one should not object; but he would strongly impress upon the Government the advisability of paying the same rate of interest upon the deposit money, in whatever form it was to be withdrawn. It was his intention to support the Motion of his hon. Friend the Member for Hertford (Sir Minto Farquhar), but he believed that there would be no difficulty in so framing the Bill as to meet at once the purpose of the Government and the views of those who were at present opposed to the measure.


said, that he had received many letters both for and against the Bill, and in this conflict of testimony he must necessarily pause before he gave his vote. The question ought to be considered dispassionately in a Committee, and the House would be better able to form a judgment after that Committee had reported. One of the soundest principles of political economy was that the Government should never do that for the people which the people could do for themselves; and the question was whether the maxim had not been violated by the Government measure. On the other hand he was quite sure it would be to the advantage of the working classes to get the Government security, because the Government would be able to pay. He should vote for the Amendment.


said, he objected altogether both to the inquiry proposed and to the principle of the Bill. According to the practice of the House, to vote for a Committee was to sanction the principle of a measure, and that he was not prepared to do. There was great danger, if the Bill passed, of overloading that already overloaded department—the Post Office, and of incurring great risks and liabilities hereafter on the part of the State. His vote would be given both against the Committee and against going on any further with the Bill.


This discussion appears to have arrived now at its natural close, and this is the less to be regretted because possibly the Amendment of my hon. Friend does not present to the House any difference of opinion. The effect of the Amendment will be that the House, at its discretion, will name a competent number of Gentlemen as a Select Committee. These Gentlemen will meet and probably will appoint me, as the author of the Bill, the Chairman of the Committee. I should then have the opportunity of giving all the information which it is in my power to afford respecting the Bill, and the views with which I should endeavour to act upon it, assisted by such officers of the Government as were able to render me assistance. After the Committee had been nominated, a further question would arise—namely, whether the Committee should have power to send for persons, papers, and records. Upon this proposal would arise practically the question, whether the Committee shall be a Committee upon the clauses of the Bill, or a Committee of general inquiry into the subject of the Bill. I certainly could not agree to any general inquiry, and it is but right we should have a clear understanding upon the point. I see no mode by which if "persons, papers, and records" were to be sent for, the Committee could avoid falling into great difficulty. The officers of the Government, and persons favourable to the Government plan, who would be examined, would give evidence upon a very complex question, involving an immense amount of detail, and then the Committee would say very naturally that they were bound to hear persons of intelligence and information who entertained opposite views. Now, that is a kind of investigation which it would be totally impossible to undertake. In the first place, it would amount on my part to an entire abnegation of the regular and ordinary duties of my office were I to become in any degree the organ of the Government in conducting an investigation of this sort. In the next place, great practical evils would arise from an investigation which it would be impossible to separate from a great deal of controversial matter. It would be said that it was necessary to inquire into the manner in which the Bill would operate upon the interests of existing societies, and this would essentially involve the inquiry how these societies were conducted, and whether it was a good part or a bad part of their management which would be affected. We should thus in effect become a Committee of investigation and inquisition into the management of these societies, and Her Majesty's Government are not prepared to become responsible for such an inquiry. But we may accept the Amendment as it stands, with the limitation I have mentioned, the fact being, I believe, that the appointment of a Committee is supported by some hon. Gentlemen who agree in thinking that a general investigation would be far from expedient. I will now notice two or three of the points which have been touched upon, with his usual ability, by my hon. and learned Friend (Mr. Ayrton). Let me remind the House that this Bill was met by a powerful concerted and organized opposition. There is nothing in the fact discreditable to the parties with whom the opposition originated, for they had a perfect right to organize an opposition if they thought right. But I certainly never remember a case of a Bill which was the subject of such an opposition out of doors, and yet gained ground by long delay. Generally speaking a long postponement is fatal, but in this instance during the considerable interval which has elapsed since the Bill was introduced there has been a remarkable development of public opinion in its favour. I appeal to the opponents of the Bill as well as to its supporters, and I ask whether the opinion of the press has not been declared in a very singular degree in favour of the measure, irrespective, so far as I know, of party interests and opinions. Certainly, in my public life of thirty years, I have never received so many letters upon any one measure as I have with reference to this Bill, expressing approval and even gratitude from all classes of the community, and especially from those who have a strong interest in the question. At the commencement of the discussion upon the Bill there was a great number of petitions against it, many of them drawn up in a common form. Now, meetings are held in favour of the Bill, and petitions in its favour are coming forward—petitions from working men, who can have none but the most disinterested motives in supporting it. My hon. Friend (Mr. Ayrton) lately presided over a great meeting at Exeter Hall, called in opposition to the measure; but the independent working men mustered so strongly on the other side, that my hon. Friend could not determine on which side the majority lay, though some who favoured the Bill said that, had they been in the chair, they should not have been at all doubtful. And lastly, I must say, I have observed with peculiar satisfaction, that not only some public meetings, but also boards of guardians in the country are beginning to give their minds to this matter, and from many places petitions have been presented on behalf of the boards of guardians, expressing a hope that this House will not withhold so great a boon to the working classes as they think this law will prove. Under these circumstances, I most cordially wish to return to the position in which we stood when this Bill was introduced, and to free the discussion from the controversial element. It was not of my will that this element crept into our debates on the Bill, and what I did afterwards I did under the pressure of a public necessity. I think, however, that this necessity has passed away, and therefore I have not a word of accusation or reproach to utter against any society or public company. But I wish to define the precise extent to which I meant to carry my remarks in respect of living societies. I do not mean dead societies, of which I introduced examples, but such societies as the Royal Liver, the British Prudential, and other societies. I did not presume to attach, nor do I think I should be justified in attaching to any of these societies a fraudulent character. What I meant to do was this—the societies adopted certain language. They said, "We are quite aware there is a great field for insurance among the people of England; it is quite true that there is a great portion of that field unoccupied; it is quite true that the Friendly Societies, notwithstanding the large numbers of their members, leave the unoccupied portion of that field untouched;" but they also said, "we are ready to do the work, and therefore we claim that you should leave us to do it, and not have the Government enter upon it." That being so, as against that exclusive claim, I thought it right, by reference to the manner in which the most staple and respectable Life Assurance Companies were conducted, to show that those societies were not entitled to set up so high a claim, and that they could not give the working man so positive a security after his twenty, or thirty, or forty years' payments as the great Insurance Societies give to the wealthy classes where they made a judicious selection of an office for that purpose. That is the extent to which I went. I would not be justified in saying that any of the existing societies were fraudulent societies. I disclaim the imputation that I said so before, and certainly I do not say so now. But, when I used language which I regret to say I am not prepared to retract respecting the heartless iniquity that had been at work, I did not mean it to be understood that any such language was applicable to existing societies. I further said, and I repeat it now, regarding the Professional Society, and every other society to which I alluded, that, though I believe all my statements to have been correct, no one shall be better pleased if it can he shown that the construction I put on my facts was an erroneous one, and that although there may have been a want of prudence and a want of care, still no corrupt motives have been at work. I am told by my hon. Friend the Member for York that he is of that opinion with respect to the Professional Society, and I am glad to accept my hon. Friend's opinion on the point. I think the case was one of the most reckless, hazardous, and. even unjustifiable management; but still I am willing to believe that the facts are not incompatible with the absence of fraudulent intention on the part of the managers. My hon. Friend the Member for the Tower Hamlets has alluded to what I said on the subject of working men's trades unions, and expressed his regret that I had not made a full explanation and apology. My reason for not having made a more full explanation is, that I have not had the opportunity of doing so since I first spoke on the subject, though I intimated in two words my wish to do so. The explanation is briefly this:—On a former occasion I adverted to a meeting which had been held under the presidency of Mr. Potter, at Exeter Hall; and, as far as my memory serves me, I stated that the name of Mr. Potter had been very much connected with that sort of agency, and those proceedings on the part of trades unions which were believed by the public to imply the coercion of the minority of the working class by the majority of the working class. I have been assured since I made that statement that my description would not be a true description of trades unions as they exist at present. I am told that there was a great deal of that character attachable to them in former times; but that the real advances which the working class has been making, not only in intelligence and in the means of existence, but in the whole view of their social duties, has essentially and materially altered the character of these societies, and that there are few of them, if any, against which the charge would lie. I can only say I made those observations out of no hostility or indifference to the working class. I believe that to this hour, in certain cases and in certain parts of the country, there are instances in which a portion of the working class still tyrannizes over its own members. Those proceedings, I am glad to hear, are certainly alien to the views and feelings of the trades unions of London; and, therefore, I am extremely glad to believe that there is no foundation for any charge of that description being made against them. My hon. Friend has also referred to two other points. He mentioned the question of tables. He said I had not overcome the difficulty which arose on that point, and he then referred to a plan by which it might be overcome —namely, by proposing to this House to enact that the use of a certain set of tables should be compulsory; but my hon. Friend seemed to lose sight of a grand distinction between assurance by Government and assurance by private societies. The grand difference in favour of private societies arises from the fact that, after all, the rate at which assurance business can be done depends in the main upon the rate at which the managers can, with prudence and propriety, be allowed to make investments. Private societies working for themselves can make investments at a rate which it is impossible to aim at. You cannot say to the Chancellor of the Exchequer of the day and those who advise him that they are prudent men, and you will allow them to go into the money market and invest the public money to the best advantage. You compel them to invest in securities on which they can get only 3 or 3¼ per cent; but it would be a very great hardship if we were to come down to this House with a set of tables which would absolutely preclude any private societies from adopting any other investment. My hon. Friend, moreover, anticipates great danger from the successful working of this Bill, and he denies that the Post Office savings banks have succeeded, alleging that all the money they have got has been filched from the old savings banks. Now, I take the liberty of saying that this last conclusion of his is one which he will not be able to prove by figures. Then, he says, if the time ever comes when a vast sum of money is in the hands of the Government on account of the Post Office savings banks, and if at the same time the rate, of interest is high, there will be what the right hon. Gentleman the Member for Oxfordshire once called, I think, "an ugly rush," and we shall be called on to reimbuse those funds which will be only bearing 2½ per cent interest. [Mr. AYRTON: Or to pay a higher interest.] Yes, of course, that is an alternative. The rate of interest allowed on money deposited in the Post Office savings banks is now 2½ per cent; and I am not prepared to say it ought ever to be higher. At the same time, I do not altogether exclude from my mind the hope that some addition may yet be made in that respect, compatibly, of course, with the essential requisite that the public is not to subsidize the Post Office savings banks to the extent of a single farthing, but should even reserve to itself a margin sufficient for its own perfect security. Within the last few months we have had a singular example of the preference of the public for low interest on Government security, rather than high interest in other quarters. The Birmingham Savings Bank determined, in consequence of the Act of last year, to close their establishment. At that moment the rate of discount in London was 8 per cent, and there were, of course, plenty of people in Birmingham to make by advertisement to the depositors offers of high interest, to the extent of 5 and even 6 per cent for the money at call. There were 35,000 depositors, but I believe two-thirds of the whole number and of the entire capital, went to the Post Office banks, giving only £2 10s., rather than to other banks giving much higher terms. I feel the greatest confidence in the political security of these banks, and even if the argument of the hon. Member were good as regards these institutions, it would not hold good in regard to the present measure. If a man chooses to insure with the Government a sum of money payable on death, he cannot very well fulfil the necessary condition and claim his money just because there happens to be a high rate of interest in the market, I judge from the tone of the debate that the House thinks we have gone sufficiently into this subject, and I hope my hon. Friend opposite understands exactly from my explanation what the Government is prepared to do.


said, that supposing they agreed to the Committee without a division, he should at a future period propose the Committee to the House, and, in doing so, should follow it up by asking for leave to send for persons, papers, and records. He thought it desirable that the Committee should examine such gentlemen as Sir A. Spearman, Mr. Chadwick, Mr. Scudamore, Mr. Tidd Pratt, several actuaries, and three or four gentlemen connected with Friendly Societies and Industrial Insurance Offices. He should like that evidence to be distinctly taken and printed for the benefit of the House, so that they might be assisted to come to a decision on the subject.


said, he rose to say a few words on behalf of certain societies to which the Chancellor of the Exchequer had made allusion on more than one recent occasion in that House. The right hon. Gentleman had indulged in a series of observations regarding these societies which the House was little accustomed to. He stated that the Professional Society had transferred its business to the European Society, but that, in order to make themselves safe, the European made it a condition that the amount of liability should be inscribed on each policy, in a manner and under circumstances which the right hon. Gentleman described. This, the Chancellor of the Exchequer said, was no better than wholesale robbery. And wholesale robbery it would have been if there had been a particle of truth in the right hon. Gentleman's description of the transaction. The Chancellor of the Exchequer went farther, and said that a good many of these proceedings were worse than wholesale robbery, and that many persons who had never seen the inside of a gaol were fitter to be there than many a rogue convicted ten times over at the Old Bailey. Did the right hon. Gentleman apply this to the European?


said, he had applied that expression to many transactions of the kind, namely, amalgamations, but not to that particular case.


said, it was then a misfortune that so great a master of language should have expressed himself in such a way that there was not a man of common understanding who would not imagine that the right hon. Gentleman had referred to one or the other of those societies, or to both; but he was glad to receive the explanation of the right hon. Gentleman. The right hon. Gentleman would, he was sure, feel gratified when he (Sir FitzRoy Kelly) stated that there was no ground whatever for imputing the slightest impropriety of conduct to either of those two societies. He did not understand what the right hon. Gentleman meant by saying that, supposing there was a policy for £1,000, the outstanding value was £600, and the premiums paid £200. How could a policy of assurance, while the person was in life, be worth more than the aggregate amount of premiums paid upon it? The Professional, owing, perhaps, to undue expenditure in the management, and the misfortune of having a defaulting secretary, who embezzled a large sum of money, was obliged to suspend its payments and resort to the Court of Chancery for winding up. The affairs of the society were investigated by the Master of the Rolls, and the very transactions which the right hon. Gentleman had condemned— the combination of the Professional and European — was made with the express sanction of that learned Judge. That transaction did not involve the principle that a policy of the value of £600 should be treated as worth a great deal less. At the time the Professional Society was wound up there were outstanding policies to the amount of £1,500,000, and debts amounting to £150,000, £100,000 of which was for ordinary liabilities and money borrowed, and £50,000 necessary to make up to the European the difference between the value of the policies upon which certain premiums had been paid and the policies upon which for the first time the European should then assume a liability. And this, so far from coming to anything like 60 per cent, if there had been any loss, which there was not, would amount to only 3 or 4 per cent. That which the right hon. Gentleman described as loss to the extent of 60 per cent amounted to only between 3 and 4 per cent, but was no loss at all, for the directors, who must have considered themselves in some respects responsible, in a pecuniary point of view, for the misdeeds of their officers, advanced £50,000 to meet their liabilities; and out of the £150,000 of liabilities £100,000 had already been discharged, a contribution of 2s. 6d. in the pound had been paid on the other £50,000, and a further call had been made under which every shilling would be eventually paid. He (Sir FitzRoy Kelly) was not a defender of all these Insurance Societies. He listened to the opening speech of the right hon. Gentleman, when introducing the. measure, with much gratification. He thought the Bill, if it passed, would effect a very great public benefit if judicious amendments were introduced into it in Committee. All that could be said in favour of the Bill he was prepared to say, with some modifications and qualifications; but, with regard to the Professional Society, there was no ground for imputing to the managers misconduct of any kind, or anything beyond that misfortune which might happen to any company. He was quite sure the right hon. Gentleman would take some opportunity of doing justice to those gentlemen.


said, he had paused for a moment before rising to reply, in. the hope that some Gentleman would say something about the society to which the hon. and learned Gentleman had referred, but he regretted that superior attractions had drawn Gentlemen away from the performance of that duty. He trusted, therefore, that after what the hon. and learned Gentleman had said, the House would allow him to make a few remarks by way of explanation. In the strongest part of the language which the hon. and learned Gentleman had quoted he did not refer particularly to the Professional Company, but alluded to other societies, which he did not think it necessary to name. When he spoke of the wholesale loss inflicted upon holders of policies of the Professional Company he meant to describe the effect of rash and reckless speculation, without imputing any improper motives. It too frequently happened that persons of great respectability involved themselves in undertakings of this kind, which had the effect of deluding and robbing others, without the smallest impurity of motive on their own part. He believed, after what the hon. and learned Gentleman had stated, that there was no impurity of motive on the part of the Professional directors. It was also to be hoped—and might, indeed, be believed—that nothing would ultimately be lost to such of the policy-holders as might have kept their policies alive; while he did not think that the ruinous loss inflicted upon the shareholders was in the slightest degree attributable to any intention on the part of the Directors.

Question put, and negatived.

Words added.

Main Question, as amended, put, and agreed to.

Ordered, That the Bill be committed to a Select Committee.