HC Deb 10 March 1891 vol 351 cc606-48
*(4.15.) MR. HOWARD VINCENT (Sheffield, Central)

rose to call attention to the condition of Friendly Societies in the United Kingdom, and to move— That, in the opinion of this House, the ensouragement of more general voluntary provision for sickness and old age should engage the attention of Her Majesty's Government, and that the sound principles of provident insurance should be included in the subjects prescribed by the Education Code for instruction in elementary schools. The hon. Member said: In bringing this matter under the consideration of the House, I must make an especial appeal to the patience and indulgence of hon. Members, and this on more grounds than one. In the first place, the subject is enormously complicated—far more so than I had any idea of when I first applied myself to its study. At every stage of inquiry one is met by a fresh condition of facts unknown before. In the second place, the Mover of a Resolution such as this runs enormous risks of having his motives wholly misconstrued. Now, while I have received many encouraging letters of approval and appreciation at the raising of the question there have not been wanting signs of fear on the part of some of the great Affiliated Orders that I have some sinister design of forcing either State control upon them, or compusory insurance upon the nation. Now I desire, Mr. Speaker, to say, once for all, and with the utmost emphasis, that a member myself of nearly every one of the great Orders of Friendly Societies, I am a very sincere admirer of the priceless national work they have done, and are doing, and can find no adequate words wherewith to express my unqualified respect for the hundreds of hard-working men who sacrifice their leisure for the good of their fellows, and by their precept and exemplary example, whether as Trustees, Grand Masters, District Officers, or Lodge Secretaries, are invaluable pillars in the State. Without further preface, then, Mr. Speaker, let me invite the House to review the present position of Friendly Societies. Beyond all question, if this task could have been undertaken by the hon. Baronet the Member for Wigtonshire (Sir Herbert Maxwell) who almost continuously, from 1885 to 1889, presided over Select Committees of Inquiry into National Insurance and the composition of Friendly Societies, it would have been very advantageous. I hope, however, that the House may have the advantage of his free participation in this Debate, rather as an individual than as a Member of the Government. Let me, in the first place, remind the House what is a Friendly Society. It is defined in the last issue of the Year Book of the Friendly Societies' Registry Office as— A body established to provide for its purposes by the voluntary contributions of its members, with or without the aid of donations. A most instructive article in Blackwood's Magazine for March, 1890, entitled "Improvident Thrift," published anonymously, but written, he authorises me to say, by the hon. Baronet the Member for Wigtonshire, gives a most interesting picture of the different classes of Friendly Societies. There are three classes differing, as he says, widely in aim, constitution, and merit. We have, in the first place, the real Friendly Societies promoted and conducted at small cost by office-holders elected by the members for their mutual aid in (a) the relief of members in sickness, (b) the payment of a sum of money on death, generally for funeral expenses. These genuine Friendly Societies number nearly 12,000 in the United Kingdom, for each separate lodge or Benefit Club is a separate Friendly Society with an independent status. The second class comprise what are known as Collecting Societies. They number only about 50, and their benefits are practically limited to life insurance. They are managed at heavy cost—seldom less than 40 per cent. of the premium income, and by largely salaried managers, for the benefit of the proprietors, uncontrolled in effect by the members. In the same category is the third class or Industrial Assurance Companies, nine or so only in number, I think, but with an enormous membership. All these three classes of Friendly Societies are admitted to registration, and the registry established in London under the Friendly Societies' Act, 1875—as well as Working Men's Clubs-including even Brass Band Clubs, besides Benevolent Societies and others. But no society, let the House note, is under any compulsion to register, and the Registry has no knowledge whatever of legions of mushroom societies, which, under the most fanciful names, spring constantly into existence, to ensnare the hard-earned savings of industry, and disappear in the very moment of need. Nor has it any knowledge of those societies which, once registered, make default in their Returns, are first suspended, then re-suspended, and finally removed from the Registry—a number ranging, I understand, from 150 to 200 societies a year. But even in respect to those societies which are registered, the Chief Registrar, to whom and to whose officials, and particularly to Mr. Sutton, the Actuary, I am indebted for much valuable information, is careful to say— It cannot be too strongly insisted on that the Registrar cannot ensure the good management of Friendly Societies, and that the mere fact of registry affords no guarantee that a society is solvent or even honest. The fact, then, is clear that, under the present condition of things, the thrifty among the industrial classes have no solid guarantee whatever that the benefits they hope to derive from their savings will ever be realised. It is true that in the great Affiliated Orders—in the Oddfellows, the Foresters, the Shepherds, and the Druids—there is comparatively little risk, although each lodge is a separate society. But in every town, and almost every village, there are sad instances of the exploiting of the honest and thrifty poor, either by unscrupulous adventurers or incompetent friends. Each instance is sufficiently melancholy in itself, but unfortunately it acts as an eloquent encouragement to that want of thrift, which shares with drink the responsibility of a vast mass of the poverty around us. By a Return moved for in 1881, by my hon. Friend opposite, the Member for the Southwestern Division of Devonshire (Lord Lymington) it appeared that in 576 Eng- lish unions, out of a total of 647, there were among the male indoor paupers former members of Benefit Societies to the total number of 11,304, or about an eighth of the total number of indoor male paupers in that year. Of the 11,304 former members of Benefit Societies 7,391 had either been unable to keep up their contributions or had been dismissed, but 3,913 had been deprived of the benefits they had counted upon by the breaking up of their societies, and 555 had been—poor fellows—members for 30 years and upwards, 612 for over 20 years and less than 30 years, and 1,026 for over 10 years and less than 20 years. As the Chancellor of the Exchequer recently said:— There is no subject which excites greater sympathy than the case of agricultural labourers or other wage earners who make contributions towards a fund for providing for their sickness and old age, and then find their hopes disappointed. Under these circumstances it cannot be otherwise than gratifying to the House to think that at the end of 1885 there were upwards of 3,500,000 of members in Friendly Societies in the United Kingdom, with total funds estimated at £19,250,000. The Chief Registrar in giving me those figures stated, however, that they could not be accurately relied upon, and I am informed upon most reliable authority that fully one-fourth must be deducted for multiple membership. Indeed, instances are common of membership of four or five societies. The collecting societies boast a membership also of 3,600,000 with £2,000,000 of funds. The last quinquennial Returns moved for by my right hon. Friend the Member for West Birmingham (Mr. Chamberlain) will doubtless show a great advance on this total alleged membership of 7,000,000. But it may be interesting for a moment to consider what proportion the thrifty bear to the industrial population. We have, unfortunately, only the Census of 1881 to guide us. But the House will, I venture to think, agree that the 317,000 men and the 1,900,000 women engaged in domestic service, the 2,435,000 men and the 215,000 women engaged in agriculture, the 5,899,000 men and the 2,000,000 women engaged in industries should be induced, as far as possible, to insure against sickness and old age. These make a total of 12¾ millions of people, and if we add at least 3,000,000 people returned in other classes, but who are wage-earners, who ought also to be insured, we shall have a total of about 16,000,000, of whom 10,000,000 are men. The House will thus see, although there are many insured, how many there are who in sickness and old age have no other resource but the humiliating one of the workhouse and the poor rate. The position, then, of Friendly Societies at the present time would appear to be satisfactory in many respects, but capable of vast improvement. Much may, I believe, be done to strengthen their position, independently of a suggestion I shall presently make, by less acute local competition among lodges, and by a greater concentration of heads and finances. Women, too, should be admitted to membership, considerable earners as they often are both in domestic service and in industry. It is probable, also, that a reduction in the number of convivial gatherings would lead to lessened expenses and the acquisition of greater financial strength, and would enable the large Orders to have halls of their own in the great towns, and, if they wished, professional secretaries. In the meantime, much might be done by the carrying out of the recommendations of the Select Committee of 1888, appointed to inquire into the operation of the Friendly Societies Act, 1875, and to suggest what amendment of the law was required to insure the better management of such societies and companies, and the more complete protection of the interests of its members. The Committee reported in August, 1889, and made no fewer than 33 definite recommendations, all of which appear to have been comfortably shelved.


Perhaps I may be allowed to say that of those 33 recommendations some have been already carried into effect in the re-organisation of the Registry Office.


I am glad to learn that the Friendly Societies Registry has been re-organised. I was aware of that, but I think the House will agree with me that a large number of the recommendations remain to be considered and acted upon by Her Majesty's Government. The most im- portant of all is the suggestion that all collecting societies shall be registered. I will go even farther and say that every Society obtaining money from the humbler classes for alleged future benefits should be compelled not only to register, but also to submit its accounts and assets to public audit. If this had been so, many honest men, I know, would not be in the impoverished state in which they now are. Indeed, this view was taken by the Select Committee on National Provident Insurance against Pauperism, which was appointed in May, 1885, and re-appointed in 1886 and 1887, when it reported. Here is what I said:— The present system of registration of Friendly Societies cannot be considered satisfactory. If greater powers were given to the Registrar in connection with the registration of Societies rules, and with a view to the securing of an efficient audit, the proper investment of funds, and the protection of benefit funds from any inroads upon them for management expenses, it is believed that registration would he of far greater value to the members of these Societies. In this view I must express full concurrence. I would make the registration obligatory, effective, and of real value to the insured, and the registry not a mere recording office in a back street, but an accessible place where any member of a Friendly, Collecting, or Benefit Society could obtain full information concerning his society, its present position, and probable stability. I am sensible that I must not occupy too much of the time of the House on this question, and that I am making a very large draft indeed on the indulgence and patience of hon. Members, but I should like to speak—as shortly as the importance of the subject admits of—upon the second branch of the Resolution I have put on the Paper, that is to say, the old age or superannuation question. I know this subject amongst the masses of the people has often been the subject of Debate, and I know that it has often been the subject of Parliamentary inquiry. Not to go even further back than 1882, I find the much-lamented Mr. Fawcett presiding over a Select Committee— To inquire into the operation of the Act which authorizes the Post Office to grant annuities and issue policies of life assurance. The Report said— The Committee attribute special importance to encouraging in every possible way the habit of making some provision for old age," &c. As a consequence, greatly increased facilities were afforded to the public—due to the exertions of Mr. Fawcett himself, who, I believe, was then Postmaster General. I should like to ask how have the public availed themselves of these facilities? Whether or not the long Latin phrase "deferred annuity" "frightened the public," as one important witness averred, it is certain that "the old-age pension" obtainable through the Post Office is little called for. As a letter I have received from a high and most competent authority says:— Any amount of efforts have been made to puff—nay, to bring before the public—the real and incontestable advantages offered by the Post Office at lower rates than speculative companies, but the seed has fallen upon stony ground. The Postmaster General has 10,000 offices open at which he conducts annuity and insurance business. He pays his officers for every contract they secure. He distributes leaflets from house to house. He fills savings bank books with advertisements, and has invented attractive placards, but the results are not encouraging. Arrangements have been made under which, through the agency of provident and friendly societies, the payment in advance of the first year's premium, which is usually required, is dispensed with. Moreover, the members of friendly societies are allowed to pay their premiums in weekly, monthly, or quarterly instalments from the commencement, receiving at once their contracts, which take effect from the date of issue. Now, I venture to think the Post Office has done, the House will admit, all or very nearly all that it can, and this is no doubt largely owing to the great interest in the question taken by Mr. Algernon Turnor, the Financial Secretary. But we find this amazing fact, that during the last five years the 38,000,000 of people in the United Kingdom only purchased 562 deferred annuities of the total value of £11,500, or, say, 1 deferred annuity a year among 240,000 people, while in the same period only 2,810 insurances have been effected. It cannot much be wondered at that a case was made out in 1885 for the appointment of a Select Committee on "National Provident Insurance against Pauperism." Although the reference to the Committee was wide, the inquiry was really confined to Canon Blackley's scheme for the compulsory insurance of all persons of both sexes and of every class by the prepayment, between the ages of 18–21, of £10 or thereabouts into a national Friendly or Provident Society, which would pay 8s. per week sick pay and 4s. per week super- animation pay after 70 years of age. As the Report ran— The admirable motives, labours, and results which form the history of the higher order of Friendly Societies caused the Committee to treat with great respect the strong objections brought against the scheme by the affiliated orders. and in the result the Committee did not recommend the adoption of the scheme. But I feel sure the House will still join in recognising— The disinterested patience and energy with which Canon Blackley laboured to remove the causes which tended to drive the poor into the workhouses. I have mentioned the callous indifference of the people to avail themselves of the Post Office old-age pay. But I find that there is even less partiality for the annuities of the industrial assurance companies—four having ceased working in 1889—which returned to the Board of Trade their out-goings in annuities in 1889 at only £56, although it is only right to add that two of these industrial companies did general business with 91 other companies, and these paid altogether three-quarters of a million in annuities. The provident societies alone returned £28,000 under the general head, but no single annuity in the industrial branch. A similar state of things exists in regard to that great society whose annual report has been published during the past few days—the Prudential. Last year that society issued about 100,000 policies of under £100 each for the payment of a certain sum of money to persons attaining the age of 60 or some other definite age. I am informed by the officers of the society that there is no inclination whatever among the industrial classes to avail themselves of the system of deferred annuities. When the House realises this state of affairs, coupled with the failure of the great majority of the industrial classes to join a substantial Friendly Society, there can be little surprise that in 1889 there were 992,338 persons upon the poor rate in the United Kingdom at an average total cost of over £10 a year a head, or £10,202,000 sterling spent in actual relief of the poor out of public funds, which were certainly supplemented by at least an equal, and probably a much larger, amount raised by private philanthropy. The old-age matter is the most difficult one of all to impress upon the public mind. The great desire is for funeral parade and the "panoply of woe," in the checking of which the well-to-do should set a general example of simplicity as the Duke of Westminster and so many are doing. The common answer of persons is that they will not live to 60. They forget that on the showing of Sir Spencer Wells, medical and sanitary sciences have in the past 30 years saved 1,146 lives annually to each million, or 30,000 lives a year to England and Wales. It is thus found that out of a million males born 365,000 live beyond 60 years of age and then have an expectation of life of 13 years; while out of a million women 422,800 live beyond 60 for an average period of 14¼ years. According to the census of 1881 there would appear to be out of the 25,000,000 persons in England and Wales 1,916,265 over 60 years of age. Of those, according to the instructive and melancholy returns just issued at the instance of the hon. Member for Morpeth (Mr. Burt), there are, excluding all lunatics, vagrants, and persons in receipt of relief constructively by reason of relief being given to wives or children, 286,867 old people—the crippled and superannuated veterans of industry—upon the poor rates, of whom 68,124 are in the workhouse. That, I say, is the position so pathetically described by one of the humbler witnesses before the recent Committee. He was an aged cabdriver, said the Member for Wigtownshire in his Report, and his experience of the workhouse had been frequent and painful, and, as the old man put it, "whenever he came out in the morning he had the workhouse before him." Now, I have endeavoured, and I hope I have succeeded, however imperfectly, in showing the House four notable facts:—First, that although there are many admirable Friendly Societies, and not least of all the Mid Gloucester Working Men's Conservative Association Benefit Society, promoted and managed by my hon. Friend the Member for the Stroud Division, they are, for some reason or other, insufficiently supported; secondly, that the funds of the Friendly Societies do not allow of their giving any pension benefits in old age; thirdly, that the old-age pay-offered by the Post Office is insufficiently utilized; and, fourthly, that an excessive proportion of old men and women who are past work—and the cry is more and more for young blood—are driven for their maintenance to the parish and to charity. In this there is nothing dishonourable; but, with a keen sense of shame which does them credit, they dread the workhouse beyond anything, and believe that it reflects on their descendants. If the House will bear with me a few moments longer I will speak of the possible remedy. I have mentioned Canon Blackley's well-intentioned scheme. It was thoroughly examined by a Select Committee and dismissed. I do not intend, therefore, to revive it, even if I were willing to do so, which I am not. There is the new German law of insurance against old age and infirmity. It is very complex, but has been admirably summarised for Parliament by Mr. Esme Howard, of Her Majesty's Diplomatic Service. In a sentence, Mr Howard describes it as "a great structure of socio-political legislation for purposes of national insurance, and as containing the most important and extensive scheme of insurance everyet devised by any Government." The object of the German law is to secure to every working man or servant, male or female, throughout the Empire, a sufficient yearly income to release him or her from the necessity of being entirely dependent upon others—firstly, in case of confirmed infirmity; and, secondly, on reaching the 70th year—by insurances effected with the Government by three parties in equal portions—the beneficiary, his or her employer, and the State jointly. I dismiss this scheme, too, as impracticable in the United Kingdom, chiefly for the reason of its compulsory character. I believe it would be quite impossible to force a compulsory scheme of insurance on the people of this country. We can lead the British people to do anything reasonable, but cannot drive them. What, then, hon. Members may ask, do I venture to suggest for the consideration of the House? It may well be said that it is not worth while to lay bare the very patent national sore of poverty well known to every one, caused either by thriftlessness or by improvident thrift, if I have no remedy to submit for consideration. I am not in this difficulty, however, but I place any suggestion before the House with hesitation, because I know full well that attention will probably be directed less to the evil than to the detail of the suggested means of counteracting it. But I am quite willing to adopt anything whatever in its place that may seem better calculated to meet the end in view, or likely to prove more acceptable. The aim is to induce the industrial and domestic classes, male and female, to insure for sickness and for old age and to take care that their savings shall be fully protected, not only against fraud, but also against incompetence. I would work, then, through the already-established and admirable Friendly Societies, and give the members such increased protection as experience may show them to need, while avoiding interference with the absolute independence and spirit of self-help which is the life of the Friendly Society movement. I would help them with funds to make their financial position absolutely secure and unimpeachable; I would prevent the ignorant, helpless, and unwary falling a prey to the unscrupulous sharks of society, and would meet, encourage, and assist the efforts of Friendly and Benefit Societies which prove themselves to be well managed, economical, and conducted on lines of sound finance. This, I think, may be done without much difficulty, not by the German grant of one-third the contributions, which may be perhaps too much, but by a capitation contribution of, say, 5s. or 10s. per head per annum, to be invested for the superannuation of the members. I am by no means alone in this suggestion, although I may be the first to suggest it in the House of Commons, and it may strike some hon. Members as abruptly novel. Shortly before I came into the House I received a letter from a gentleman well-known for his wide views on social questions—Mr. Wyndham Portal. His views run parallel with my own and he justifies such a grant upon two grounds—(1) because friendly societies maintain a portion of their members in permanent sickness who would otherwise have to be maintained by the community, and (2) because it would encourage thrift among those who urgently need encouragement. I say a system such as that I am advocating would not be a twentieth part as costly as the £10 per head the 1,000,000 paupers now cost; and it would improve the national character by raising its head high above the level of hopeless poverty and workhouse degradation. By such means I venture to think that greater confidence in the utility of provision for sickness and old age would arise in the mass of the people. One thing more I would suggest, and that is that every boy and girl should have thoroughly instilled into them, as a part of compulsory education, the principles of sound insurance. The Committee of 1887, indeed, declared— That it is highly desirable that the Legislature, which had made education compulsory, should cause instruction in sound principles of thrift and insurance to form part of that education. As yet I do not think that my right hon. Friend the Vice-President of the Committee of Council on Education has done anything in this direction. But I trust he will not longer delay. In conclusion, I should like to submit that the encouragement of more general voluntary provision for sickness and old age among the masses of the people urgently demands the consideration of the Government. It can be given by the means I suggest. It can be given by the extension, in every practicable way, of the privileges now enjoyed by Friendly Societies as to the profitable investment of their funds, their exemption from income-tax, by extending to them every facility for obtaining sound financial advice and assistance, by, perhaps, relieving their arrear calls from postage, as suggested by my noble Friend the Member for South Bucks. Such support to the grand Friendly Society organisation of the United Kingdom would, I think, be a worthy national work and productive of infinite benefit, not alone to the present, but to many a succeeding generation. Now, Mr. Speaker it only remains for me to thank the House for the kindness and courtesy with which it has listened to me. I can only hope that one effect of this Debate will be to direct attention to the most urgent need of encouraging thrift and of making provision for sickness and old age among the masses of the people, and that it will be admitted, that in dilating upon this I have not been unnecessarily occupying the time of the House. I beg to propose the Resolution which stands in my name.

Motion made, and Question proposed, That, in the opinion of this House, the encouragement of more general voluntary provision for sickness and old age should engage the attention of Her Majesty's Government, and that the sound principles of provident insurance should be included in the subjects prescribed by the Education Code for instruction in elementary schools."—(Mr. Howard Vincent.)

*(5.11.) SIR R. PAGET (Somerset, Wells)

I rise to second the Motion, and I desire to express the satisfaction with which I have listened to the able and comprehensive review by my hon. and gallant Friend, of an intricate and interesting subject—the questions connected with Friendly Societies. Speaking generally, I am disposed to agree with the conclusions at which my hon. Friend has arrived. I will content myself with a few words in support of the principle contained in the Motion which stands in my name on the Paper, and which is as follows— That, with the view of inducing Friendly and Provident Societies to place themselves in a position of financial security, some contribution might reasonably be afforded by the (State to such societies as are able, after actuarial valuation, to obtain a certificate from a public auditor that their resources are adequate to secure to all their members the whole of the benefits offered by their existing regulations. I think that something may be done in simplification of the existing law, and making things still more plain to the working classes, because if ever there is a case in which the law ought to be popularised it surely is in connection with the subject of thrift in all its branches. There is room, too, for improvement in the manner in which the annual information is furnished to this House, for it requires an expert to find his way over the details as presented in the Blue Books. I base my Motion on the great advantages that would directly flow if societies which are now unsound were stimulated to become sound; and another view which I have in my mind is to encourage the habit of making some provision for old age. I think the State may reasonably be invited to contribute to societies which are now in a sound financial state. We may differ here on political questions, but this is a matter about which we may all be agreed. Several Committees of this House have in their Reports pointed to the great advantages to be derived from the encouragement of thrift. The Committee of 1882 drew distinct attention to the necessity of dealing with this question, and of "encouraging in every possible way the habit of making some provision for old age." I think we shall all agree that the social condition of our working classes is a matter of State concern. Few questions are more intimately connected with the welfare of our working classes. It is nothing short of a disgrace to England, which is the richest country in the world, that so many of its citizens should end their days in a workhouse. Many of these poor people, however, do not find their way there through any misconduct or lack of thrift, or drunkenness or recklessness, but owing to their having trusted to the broken reed of rotten Friendly Societies. To that class of people we ought to extend our sympathy, and the House should do all it possibly can to obviate such direful calamities as these. This question of Friendly Societies ought to be dealt with, and the House ought to summon up courage to deal with this whole problem of thrift. Personally, this is to me no new question, as I have for some years past been much impressed with the necessity of something being done. It has been my fortune to enter upon this question at meetings of Friendly Societies; and the proposals I have made have invariably met with considerable approval. Perhaps, it is too much to expect that the approval of the House will be given to the suggestions the first time the subject is discussed here; and I am quite prepared to admit that it is for me to prove my case. I am aware that the principle laid down by my hon. Friend is in direct opposition to the present guiding principle, that in this matter the societies must bear their own burdens, and ought not to ask for State aid at all. I should modify this by adding until all other remedies have been exhausted. The question is, whether there is a sufficiently strong expediency to justify the House for taking the course they are asked to do. It is not enough to say that the people have the remedy in their own hands; for a case in point is the interference of the State in educational matters, and making education compulsory, whether the parents wished it or not. The scheme we suggest, however, is not a compulsory one. The present proposal is essentially different from the German law on the subject; for under the German scheme it is compulsory, whereas there is no compulsion in the present proposal. It may be said that this proposition is socialistic, and that, if the door is once opened, there is no knowing where the Government will be allowed to stop. But Socialism is already among us in its most unadulterated form in the Poor Law. That law is not an encouragement to thrift; it is rather a discouragement; and if we wish to foster the spirit of thrift, I think the State will have to make some pecuniary sacrifice. It would enable numbers of the working classes to avoid the most hateful necessities, that of ultimately drifting to the poor house. But we may be asked—" Why do you single out the Friendly Societies? Why, out of the various methods of thrift, do you single out-one?" I think there is an answer to that. No doubt every form of society for the promotion of thrift which is based on sound principles is worthy of support and encouragement. But there is strong reason for a special effort on behalf of Friendly Societies. Any man who is a member of a Friendly Society has already given substantial guarantee that he is a person of thrifty habits, and to help him would be helping a man who is helping himself. The result of this State subsidy would be to encourage Friendly Societies to become financially sound. A further result would be to afford a strong inducement to working men to become members of Friendly Societies that they were assured were financially sound. They would no longer have fear of those breaks-down which have been so frequent. The fact that the State gave contributions for old age and annuities would be guarantee of the soundness of the society because it would be concluded that they would not be forthcoming from the State were the society other than sound. By adopting this course it seems to me that you remove an obstacle to a great number of the working classes becoming members of these societies, for naturally they now hold back when they hear all around of financial shipwreck and disaster among them. The effect on sound societies would be that it would enable them to do what they are nearly all willing to do, namely, provide old age benefits. Questionable or weaker societies would be fully aware of this, and they would be encouraged and stimulated to specia efforts in order to reach a position of financial soundness. As to the societies which are financially unsound, the effect of my suggestion, if adopted, would be to hasten their decay; and I think it would be a blessing were these dangerous and false beacons, which have lured many an honest and saving man to his destruction, swept away. It is the fact that the legal right to the title "Registered Friendly Society" is often misleading; this registry enables unsound societies to act as false beacons. Let me deal for a moment with another class of objectors—the laissez faire, "why cannot you let it alone." They found themselves largely on the words of John Stuart Mill: Laissez faire, in short, should be the general principle. Every departure from it, unless required by some great good, is a certain evil. I entirely agree with him. This would be a certain evil unless it were to be followed by a certain great good. Is it not a great good to stimulate your Friendly Societies in that way? Is it not a great good to encourage this thrift? Is it not a great good to avert these horrible shipwrecks and failures which have unfortunately proved only too frequent? The question seems hardly to require argument, and I contend that the condition of "great good," laid down by John Stuart Mill, is more than satisfied, and if it is, I think laissez faire has no right to remain an obstacle in dealing with this important matter. Another reason is this: the State has already shown by legislation from time to time that it does regard this matter with great attention and anxiety. The position of the Post Office Savings' Bank annuities is proof of this. My horn Friend has shown the miserable success which has attended the purchase of annuities from the Post Office—the total number of these payable after the age of 60 being 568 since the establishment of the Savings' Bank Department. Obviously the system has broken down, though from no fault of the Post Office. From the annual Reports of the Postmaster General it will be seen that a series of experiments have been made, and everything possible has been done to facilitate this work, and, so far as lies in the power of the Post Office Authorities, every inducement that the law allows them to put forth has been held out to make this legislation effective. The reason of the failure is, however, not far to seek. The first cause of failure is the absence of personal solicitation or canvassing, which could not be adopted by the Post Office officials. Other societies pay their agents a direct commission for members obtained through personal solicitation. Again, the ordinary poor person is not prepared to look to the remote contingency of his being sixty years of age, when he would enjoy a life annuity. He is more likely to be touched by the more probable contingency of sickness. The consequence is that the first society he joins is one giving sick pay. It is impossible that, under any circumstances, the State could undertake to give sick pay. It is obvious, therefore, that people who prefer to stick to one society and who first join a society giving sick pay would not think of going to the Post Office. Again, there may possibly be something in the preference which people have for societies which exist at their doors. These societies have a local name, the people are familiar with the personnel of the staff, members of which are probably among their personal friends. They are not so interested in the Post Office, which they have a general idea is managed by gentlemen in London, and their general preference is for a local society rather than one which is not so strictly local. The great question is how can we facilitate this branch of Post Office Savings' Bank work as old age pay? The suggestion of a practical character which I make, I hope will meet with the approval of Her Majesty's Government. I find, in looking at the instructions to the Post Office officials, a circular dated 1884, stating that officials and postmasters would be allowed commission for all proposals of insurances and annuities submitted by them, the contracts connected with which were taken up, the warrants for the commission to be forwarded immediately the contracts were entered into. The rates of commission were sums varying from 1s. to 4s. in respect of sums exceeding. £10 up to £100. There the principle was established of rewarding by commission officers of the Post Office who are successful in obtaining contracts for insurance. On inquiry I find that is no source of expense to the State. What I want to direct the attention of the Government to is this: Why should not some such arrangement be made for payment of commissions to others than the Post Office officials? Why-should not the Treasury pay the sound Friendly Societies, by way of commission, for each contract or policy of Post Office insurance or annuity obtained by them for any member of their societies? Why should not this payment be made? It is one of the mildest and most modest of recommendations, and possesses this advantage: that it would, require no expenditure of State funds. I believe it would require nothing more than a simple stroke of the pen on the part of the Chancellor of the Exchequer. It would not even require legislation; a Treasury Minute would do it at once, giving the necessary authority to pay commission. In this way, without any cost to the State, the Government might do a good deal, and, in so doing, they might enlist the active sympathy of the managers of the Friendly Societies. For my part, I have arrived at the conclusion that we shall never get what we want in the shape of an extended application of provident habits unless, and until, we can induce the great Provident Societies to work with the State in endeavouring to bring about such a result. If the managers of these societies could only be made to see that it would be to the advantage of those institutions to concur in such an arrangement, a great and beneficial movement might be the consequence. May I here remind the Chancellor of the Exchequer of the mystic value of a certain five shillings per cent. with which he was able to grease the wheels and afford successful help to one of the greatest financial undertakings of the age, in connection with his great Conversion Scheme? Here, however, is a plan, which in its simple inception, does not require even that mystic five shillings per cent. But I am bound to say that, although I would seriously urge on the Chancellor of the Exchequer that this proposal might be made effective at once, and without difficulty, the payment of the commission should, of course, be confined to societies that are financially sound. Beyond this, I would say that, if it were necessary in order thoroughly to enlist the managers of the great Provident Societies in the prosecution of this plan, and to get them to avail themselves of the simple machinery of the Post Office, which is now comparatively idle, I would not stop a commission which, as I have said, would cost nothing, but would even be prepared to increase that commission if necessary. I must apologise for having ventured to address the House at such great length; but my excuse is that I feel very deeply on this question. I feel that it is one on which the time has come when everything points to the need for action, and that too much time has been allowed to slip away without doing anything. I do not think that what I ask is unreasonable. I ask for no State monopoly or prohibition, for nothing that is not entirely voluntary. My proposition involves no restraint of liberty—no compulsory regulation or interference with the working of any existing society. The soundest societies would benefit considerably; those that are less sound, and that have small margins to make up, would be stimulated to more active exertion. The time is favourable, wages-are good, and the doctrine of superannuation is spreading day by day. We see it in the compulsory superannuation of the whole of our police. There is a Committee now sitting upstairs for the purpose of investigating the payment of compulsory superannuation of some kind to the whole of our elementary teachers—a movement which is entirely in harmony with the spirit of the times. The Chancellor of the Exchequer may complain that the proposal is of an uncertain character, because no amount is specified. I admit that I am not prepared to specify any amount, but, as I have said, the demand on the Exchequer would at first be very small, and, if it were proved that we had arrived at a beneficial and satisfactory arrangement, there is no tax which I, for one, would more gladly contribute my quota to than one which would tend to effect what I so heartily desire, namely, the introduction of a sound and general system of provident assurance. I may add that the Friendly Societies would hardly be likely to place obstacles in the way of an arrangement which they themselves acknowledge to be the keystone of old age annuities, which is all that is wanting to complete the edifice on which they have so long been engaged. It seems tome that some such system is necessary, and that, therefore, it is reasonable. In conclusion, I desire to thank the House for having listened to me with so much attention, and I now most humbly and heartily commend my suggestion to its favourable consideration.

*(5.48.) MR. BROADHURST (Nottingham, W.)

One of the remarkable features of this Debate, as far as it has yet gone, has been the unexpected development of strong socialistic tendencies on the part of the hon. Gentlemen who have moved and seconded this Motion. Perhaps none of us have ever been much surprised at the bold suggestions that have come from the hon. Gentleman the Member for Central Sheffield (Mr. Howard Vincent). That hon. Member has more than once favoured the House with very remarkable suggestions in connection with trade and commerce, and to-night we have hardly been astonished at the new development into which he has embarked in his proposal for subsidising the great Friendly Societies. But, Sir, when an even older Member of the House, and one equally honoured by us—a county Representative, a Chairman of Quarter Sessions, a gentleman to whom we have looked to lead and guide us in the sound principles appertaining to national affairs and constitutional questions—comes forward and at once throws himself at the feet of the highest order of Socialism, there seems to be something debasing in the process; and I think it will be equally surprising, not only to the hon. Gentleman's friends, but also to his constituents, when they have read his extraordinary declaration.


They are well used to it.


The hon. Member's constituents may be used to some surprises, but hardly, I should think, of the direction and character of that we have had to-night.


I beg the hon. Member's pardon; my constituents are used to precisely the same suggestions as I have had the honour to make to-night.


Very well, Sir; but if the hon. Gentleman's constituents are used to such things, we, in this House, have not been used to them. There was one other characteristic displayed in the speech of the hon. Member, to which I listened with equal surprise. The hon. Gentleman charged the right hon. Gentleman the Chancellor of the Exchequer with "nobbling." He charged the right hon. Gentleman with having nobbled the Financial Authorities by bribing them into the acceptance of his great financial scheme, and he recommended the right hon. Gentleman to try his hand in a similar line of business with regard to the management of the Friendly Societies. I should like to know whether the hon. Member for Central Sheffield has consulted those who are most concerned in the proposals he has made to-night, as to whether they look on those proposals with favour or whether they do not?


I beg to say that I have consulted a great many of them.


He says he has consulted a great many of them; but do they approve of State endowment?


A great many of them do.


The annual gathering of one of the greatest Orders of the Friendly Societies will shortly take place, advantage may then be taken of the opportunity to obtain the views and opinions of that Order upon this question. If I may venture to offer an opinion on the matter, I would say that the proposal which has to-night been submitted by the hon. Member for Central Sheffield will not be looked on with favour by the members of that body; but that on the (contrary those proposals will be opposed very strongly, and in all probability by a very large majority. If you are going to endow these Friendly Societies with a regular subscription from the Government, it will follow that the Government must of necessity have agents and Representatives on the Boards of Management of those Societies, and not only that—because the Boards of Management are not the only persons who discuss financial matters—but the Government will also have to insist on having a Representative in every lodge and branch of each of the great Orders of Friendly Societies. I think the hon. Member was rather uufortunate in mentioning specific societies as being particularly sound. I do not object to the description of those he mentioned. On the contrary, I believe the great Orders of Oddfellows, Foresters, and Shepherds are in a good, sound state financially. But the only misfortune in mentioning those societies was that the hon. Member left out of account other societies equally great and equally sound, such as the Hearts of Oak and the Wesleyan General Assurance Society. Now, I do not and cannot support the hon. Member to-night in his extraordinary proposal until we have had the opinion of these great societies as to the policy suggested; because, in my opinion, they will not approve of it. With regard to the number of Post Office annuities, I understand that the hon. Member has mistaken the number, which is upwards of 1,000 instead of 500.


I said 562 in the last five years.


I am informed by my right hon. Friend the Member for Newcastle that the number of annuitants is 1,115. The subject of Post Office Insurance is very little known among working men. There is no systematic advertisement. No doubt, there are notices lying about on the counters of post offices; but no effort is made to make the system well known and to attract the attention of a large number of people. In 1881–2–3 I was in constant consultation with the late Mr. Fawcett, when that gentleman was giving his great mind to this subject; and one of the suggestions which I made to Mr. Fawcett was that there should be as short an abstract as possible made out, with just the main features of the scheme printed in large type, and that employers and proprietors of works should be invited to place these notices in the most prominent part of their works, so that every opportunity should be given to the people to thoroughly master the proposal. I believe that by those means we would secure a much greater number of insurances being taken out. I do think that the limitation of deposit in any one year should be raised beyond £30, and this would have been done on more than one occasion had it not been for the rather unwarranted and unworthy opposition of the banking interest on both sides of the House. Now, the hon. Member who seconded the Motion spoke with great warmth of the degradation of becoming a State pauper in old age. There is degradation, but I think that it attaches not to the people themselves, but to the nation which has received the labour of the man, and perhaps of his wife, for 50 or 60 years, in the creation of wealth and prosperity to the nation at a remuneration which makes it absolutely impossible for these people to provide against want in old age, whether by the Post Office system or by State-aided Friendly Societies. The lamentable side of pauperism is patent to all, but I maintain it is in no sense dishonouring to a man who has laboured on the land perhaps for 60 or 70 years for 10s. or 12s. or 14s. a week to resort to the workhouse in his declining years. I can conceive dishonour in receiving a State pension when no adequate service has been rendered to the nation in return for the pension. What we want to see is that the labourer should be given greater prospects of prosperity, better wages for sustenance in youth, and larger opportunities for provision in old age. I am glad to be a witness of the anxiety of the hon. Member for Sheffield and the hon. Member for Somerset to aid in that great work. But if we are going to endow Friendly Societies with a Treasury grant, why not endow Co-operative Societies, who are, above all others, people who help themselves? Now, since the hon. Members for Sheffield and Somerset have undertaken to champion the Socialist movement we ought to give them all the assistance in our power; but if this is a right thing to do, why not aid Trades Unions also? You cannot possibly stop at your village Friendly Societies and at your great Orders of Oddfellows and Foresters. You must go to the Trades Unions. I would like to ask the Chancellor of the Exchequer what he thinks about these endowments; we shall be glad to hear what he has to say to the Motion of his two bold and daring followers, and to the speeches in which it has been moved and seconded, which have been wider and larger than the Motion itself. In so far as working men can be induced to take special care as to the direction in which they shall invest their small savings, such a desire to instruct will, of course, have the consent and approval of everybody. But the question is full of difficulty. Down to the class of working men who get 30s. or £2 a week, the great majority can advise themselves as to where and how they shall invest; but then we come down to the floating masses of our great cities and the agricultural labourers, and there it is not a question of where it is best to invest. That is not the difficulty; the question is where are they to obtain that which they ought to invest. If the hon. Members for Sheffield and Somerset will ask the House to devise means whereby the labouring classes can obtain money to invest, they would lead us far deeper, as some persons would say, into the slough of Socialism; or, as others would perhaps, say, far higher into the realms of desirable realisation. We are all desirous that the people should be taught thrift—the rich as well as the poor. None stand in greater need of elementary lessons in economy than the well-to-do, but the working classes are by force compelled to study domestic economy. The difficulties of superannuation are enormous. The wage-earner of 15s. a week is not less desirous to provide against want in old age than any other person, but the pressing necessities of the day make it impossible for him voluntarily to contract that out of his terribly restricted means he shall lay aside something against his attaining the age of 60 years—an age which comparatively few hard working men ever attain [Cries of "Oh!"], comparatively few. Take my own trade. The average life in that trade is 36 or 37 years. I have known men in the trade live to be 80, but they are talked of from the one end of the country to the other, as though no one had ever attained the age before. Our average age is 36 or 37. I am speaking from memory, but I believe that is correct. No doubt life is prolonged now by better sanitary appliances, as well as by other means which formerly did not exist. Every boat, railway, omnibus, and tramway, every means of cheap transit from place to place, is a life-saving appliance for the working classes. That, together with the education which is being so broadly scattered among the people, no doubt leads to a prolongation of life. For the reasons I have stated I cannot support the Motion, and much less can I support the views expressed in the speeches of the hon. Member for Sheffield (Mr. Howard Vincent) and the hon. Member for Somerset (Sir R. Paget).

*(6.15) SIR H. MAXWELL

I believe, Sir, that from all the many subjects which the enviable versatility of the hon. Member for Sheffield enables him to take into his consideration, he could not have selected one of greater interest or wider importance. We have only to consider the enormous numbers of persons whose interests are involved in the different societies and companies dealing with the savings of the working classes of this Country, to be convinced that in inviting the Legislature to interfere further with those societies my hon. Friend is asking us to do something which ought to be considered very carefully indeed before we take action. Keeping this proviso in view, I am bound to say I see very little in the terms of my hon. Friend's Motion to object to. In fact, had it not been for the proposals contained in the latter part of his speech, I think Her Majesty's Government would have found very little difficulty in assenting to the Resolution. But the speech of my hon. Friend went a great deal beyond the four corners of his Resolution, and I am afraid if we agree to the Resolution we should be regarded as endorsing some of the far-reaching proposals he has made. There were one or two things in the earlier part of my hon. Friend's speech to which I must refer. In the first place, he began with a somewhat equivocal invitation to myself that in my reply I should deal with his speech rather as an individual than as a Member of the Government. I am afraid I have not got the Janus-like qualities with which he credits me. It is impossible for me to stand here with two faces—one for peace towards my hon. Friend's Resolution, and another of war towards his proposals when they come before the Treasury. I think my hon. Friend has not given sufficient credit to the Legislature for what it has done and is doing in the interests of Friendly Societies. In what I am about to say I believe I shall express the mind of the Government on this subject. I must, before going further, congratulate my hon. Friend on having obtained such an insight into this question in what he described as a very limited time. A great many people discuss the question of insurance and the affairs of Friendly Societies with, I am afraid, a very superficial knowledge of the subject. My hon. Friend says that, in some respects, the Registry of Friendly Societies is not satisfactory. Possibly that is the case, as the Act constituting that registry was passed in 1875, and the 16 years which have elapsed since then have been sufficient to show certain imperfections in the office. From time to time it has been necessary to increase the staff in order to enable it to overtake the rapidly increasing and most complicated business with which it has to deal. On the whole, I think very few members or managers of Friendly Societies will be found to echo my hon. Friend's words when he says that "as a means of information to Friendly Societies and their officers, that office is almost worthless." The amount of information obtained by anyone visiting that office depends very much on the state of information in which he goes there. I know that a great many of the questions that are asked about Friendly Societies betray a lamentable degree of ignorance of the first principles of such societies, and it is therefore not a matter of surprise if many gentlemen who go to the office, imperfectly informed as to the nature of the subject, ask questions which it is almost impossible for any human being to answer. Of course I do not believe my hon. Friend-would ask questions of that character. In addition to the charge of £8,000 or £9,000 a year for this office there is still a heavy charge, owing to a system, which has now been discontinued, by which the Government guaranteed a certain rate of interest to Friendly Societies. There was, till lately, a heavy annual deficiency to be met by money voted by this House, arising from the action of the Legislature in guaranteeing a preferential rate of interest upon funds invested by Savings Banks and Friendly Societies with the National Debt Commisioners. That annual deficiency has now disappeared, in consequence of my right hon. Friend the Chancellor of the Excheqner having exercised his statutory powers, and paid up the capital deficiency in the Fund. To this extent, therefore, the Legislature has shown considerable consideration to the institutions dealing with the insurance of the working classes One of the principal duties of the Friendly Societies' office is found in the 10th section of the Act of 1875, which lays down that the Chief Registrar is, from time to time, to circulate such information as is of general use, or, as he believes, will be of use to members of Friendly Societies; and one of the most useful functions of his office is the sending out to every society whose rules are registered a form of Return reminding societies of their obligation to value their assets; and in the speeches made to-night, I am surprised that this point has so far escaped the attention of hon. Members. I mean the supreme importance of this valuation. It is a point that too often escapes the attention of members of these societies, and of those who are interested in their welfare. Some years ago the Chief Registrar, under the authority of the Treasury, circulated to every Friendly Society whose rules were registered, a memorandum on the value of Friendly Societies; and I will read one sentence from that memorandum— It is too often supposed that a society which has funds on hand is solvent. If the funds at the end of one year are larger than they were the year before, it is too often supposed that the society is prosperous. The solvency of a Friendly Society "— I ask the attention of every hon. Member who may discuss this point with his constituents— The solvency of a Friendly Society depends, not on the money it has in hand, but whether the existing funds, together with the contributions bound to be paid by its members are enough to balance the amount of benefits members have a right to receive under the rules. The main object of valuation is to find an answer to this question. If the money on hand is not enough to secure the benefit the member expects to realise, what is the use of his paying in? This duty, as I have said, is too much neglected. I give an instance of a single county. In Northampton there are 2 registered societies, and no fewer than 100 are in default with their Annual Returns, and there is no legislative means of compelling them to furnish these. So vital may this subject of valuation be held, that if I had the framing of this Resolution, moved by my hon. and gallant Friend, I should have asked the House to agree in an expression of regret that so many societies have failed to realise the necessity of a valuation of their assets, and to express the opinion that this failure deserves the consideration of the Government. I think that, perhaps, would be of more real use to societies in general, and would meet with their consent more readily, than some of the proposals that have been made. In addition to what the Registrar does for Friendly Societies there is, of course, the machinery set up by the Post Office, and which, I regret to say, has, as yet, been very little taken advantage of. We have had some of the figures quoted to-night. There seems to be some doubt about the Annual Return for last year; but from the commencement of this business in April, 1865 to December 31, 1889, the total insured for amount to annuities only £30,038, and insurances for death payments £10,161, and I need not point out that compared with the vast figures dealt with in the Returns of Friendly Societies and Industrial Insurance Societies, this is a trifling and most unsatisfactory result. Why the Post Office is not more generally made use of there are many reasons given. My hon. Friend the Member for the Wells Division of Somerset (Sir Richard Paget) has proposed that the Post Office should compete with other Provident Societies by employing canvassers or collectors. He has pointed out that the Postmaster General has in some sort sanctioned this and encouraged the action of Post Office officials in this respect by paying commission for annuities obtained, and he has proposed that the Post Office should extend this system and subsidise the agents of Friendly Societies, for the same purpose. Well, I do not think that would be satisfactory; I hardly think it is a practical proposal. But what I want to ask him and my hon. and gallant Friend is this: why should not they act—why should not they every Member of this House act—as agents of the Post Office in this respect? It is the fate of every Member of Parliament every year to address thousands of his fellow countrymen, and I cannot conceive a more useful object to which to apply a great deal of this oratory than explaining to the people the machinery which actually exists for giving them cheap insurance with perfect security. It has been said that the Post Office scheme is not generally known, and I believe that is very true. I believe there is a great deal in the suggestion just made by the hon. Member for Nottingham (Mr. Broadhurst), that employers of labour should take means for acquainting those in their employ with the facilities for insurance, the advantages and the cheapness of the Post Office system. Very few persons in discussing matters in relation to Friendly Societies seem to be aware of the different classes of societies and their different degrees of merit included under the term. There is a certain amount of confusion in the minds of the public on the subject, and for that confusion in a great measure the Act of 1875 is responsible, because it includes certain societies and associations which are only nominally Friendly Societies, but which are brought within some of the provisions of that Act. There are, as my hon. and gallant Friend has pointed out registered Friendly Societies, but there are also a large number of societies of which there is no account whatever given, for they are unregistered societies. My hon. and gallant Friend has spoken of them as mushroom concerns, but they are not necessarily mushroom concerns; some of the best conducted, some of the oldest established, some that show the best results have never registered themselves, but I admit there are among them concerns based upon unsound Tables that have short and disastrous careers. But what I wish hon. Members to remember is this—that the main difference in the classification of Friendly Societies is the difference between Friendly Societies proper and Collecting Societies, and the reason why Collecting Societies must always be a more expensive form of investing than Friendly Societies is that the latter are managed by members for members, and Collecting Societies or Industrial Assurance Societies are managed by managers for managers. In Collecting Societies and Industrial Assurance Companies the cost of management is rarely less—I remember only one instance in which it is less—than 40 percent. of the premium income. Therefore, it follows that for every shilling a man in vests, very nearly sixpence of it goes towards cost of management and salaries of managers. Is that to be stopped by legislation? I do not see how you can stop it. I do not see any reason why you should intefere with the discretion of investors. It may be necessary—nay, it was acknowledged to be be necessary by the Select Committee—to make some of the regulations more stringent; but you cannot interfere to stop people from putting their money into a concern if they choose to do so. What it is our duty to do is, as far as possible, to diffuse information on the subject, and to see that the provisions for making the Annual Returns of practical valuation are carried out. Collecting Societies, I may point out, as a means of education in thrift, are absolutely valueless. It is true that every member has a vote at the general meeting, and nominally a voice in the election of managers, but practically affairs are so managed, and distances are so great, that all an ordinary member knows of the vast staff of such as, for instance, the Royal Liver Society, of which most of us have heard, is the weekly visit of the collector to take away his subscription. By way of illustration, let me remind the House of what took place in the administration of this very society. I have just mentioned "The Royal Liver." The House will recollect that Mr. Lyulph Stanley was appointed to conduct an inquiry into the affairs of this society. He did so, and some of the revelations in the course of that inquiry attracted a considerable amount of public attention and indignation in Liverpool. It appeared that the managers received exorbitant fees, and that the two secretaries had been drawing £6,000 a year each in salaries. Now while Rule 64 of the society laid down that the annual meeting should be held in Liverpool, that rule was set aside by a special general meeting of the society held at Bristol, and the rule being thus repealed there remained no obligation upon the managers to hold an annual meeting in Liverpool, where the Head Office was situated, and they have never done so since. This incident shows how little control members of a Collecting Society have over the affairs of their society, and if that is the case with Collecting Societies, still more is it the case with Industrial Assurance Companies which are brought under sections of the Friendly Societies Act, although they are in no sense Friendly Societies. They have no members, they have a board of directors and shareholders, they are joint stock concerns, registered as Assurance Companies at the Board of Trade, and the large body of policy holders have no voice in the management of affairs. Some hon. Members may remember the marvellous figures shown in the returns of the Prudential Assurance Society, an admirably managed concern; anyone who listened to the evidence of the manager given before the Select Committee, must have been impressed with the ability of this gentleman, and the wonderful success of the business. I have not a word to say against the management; what I am concerned with is this, to show the people of this country what an expensive means of investment they are adopting in preferring the Prudential, and institutions such as this, to the Post Office Insurance branch. The Prudential is conducted at a lower cost of management than any other of these Insurance Societies; thus, in 1887, its cost of management was 41.47 per cent. as compared with that of the Yorkshire Provident, the cost of management of which was 90.39 per cent., the premium income of the latter being £3,420, while the remuneration of its managers amounted to £3,089. The figures show that the Prudential had in 1837 8,000,000 of polices in existence in the Industrial branch alone of the value of £66,000,000, its premium income being £3,350,000. Last year the number of policies exceeded 9,000,000. The history of this concern is very remarkable, as it shows what vast sums are drawn from the pockets of those who are supposed to be least able to bear it. The hon. Member who last spoke said that the question with the working classes was not so much how to invest their savings as how to get money to save; but I think the figures I am about to quote show that the working classes are deeply interested in the question as to what is the best mode of investing their savings. About 40 years ago the Prudential started with 135 shareholders, with a nominal capital of £10,000, of which only £2,500 was paid up. A few years ago, in 1882, the nominal capital was increased to£200,000 by bonus additions paid to shareholders out of profits and reinvested in new shares. When the manager of the Prudential was asked before the Select Committee why the nominal capital was thus increased, he said it did not look well to be paying 100 per cent. on a nominal capital of £10,000, it looked better to pay 5 per cent. on £200,000. Now, hon. Members will remember that the only payments ever made by these shareholders amounted to £2,500, and that has now been increased to the value of £200,000, on which the company pays 5 per cent. Not only this, but the company is able to declare quinquennial bonuses, and the amount on this account at the last quinquennial period of 1886 amounted to £399,600—far the greater portion of this being in the industrial branch. Against the 9,000,000 policies of the industrial branch, the ordinary branch shows only 240,000. Upon what is this enormous income built up? Upon the premiums paid on the 9,000,000 policies extant, the average payment on each of which amounts to 1½d. a week, of which 25 per cent. goes to the collectors. This, I think, will show the hon. Member (Mr. Broadhurst) that it is important that the working classes should be careful of the way in which they invest their savings. Now, compare the terms offered by this excellent institution, this admirably managed institution, with those offered by the Post Office. The Post Office for 1d. a week at the age of 23 insures a man for £10, while the Prudential for the same sum at the same age insures only £7 12s. For 6d. a week the Post Office insures £70, while the Prudential only insures £45 12s. The Post Office, at the age of 23, insures £100 for the yearly premium of £1 18s. 6d., while the Prudential insures the same sum for a yearly premium of £2 12s. These facts should be known. If hon. Members, instead of coming to the House and making very unpracticable proposals about subsidising Friendly Societies, or paying capitation grants which Friendly Societies are the last to want, and those who know most about them are most earnest in deprecating—if, I say, hon. Members would exert themselves to make these facts known among their countrymen, they would be doing valuable service for the working classes. I have said that in some respects it seems to us that a case has been made out for legislative interference by the result of the inquiry by Select Committee, and we have, at the present moment, a Bill prepared, though not yet introduced, based on the recommendations of that Committee in so far as they deal with Collecting Societies and Insurance Societies; but I must be allowed to express my regret that the hon. Baronet (Sir R. Paget) takes such an unfortunate view of subsidising Friendly Societies. These societies do not want this. I have been for the last 5 or 6 years in constant communication with managers and officials of the Affiliated Orders, and I know they certainly do not want it, and I should not be surprised if at the next Congress there is a strong expression of opinion, possibly an indignant expression, against it. Did not my hon. and gallant Friend at the outset of his speech declare that he was most careful not to propose anything that would interfere with the independence of Friendly Societies? Would not a subsidy interfere with that independence? I think it would be difficult to persuade the House that if the Government feel justified in giving a subsidy, it was not also incumbent upon them to assume some responsibility. State aid means State control and responsibility, and the effect upon the insuring public, upon the working classes who make use of these societies, would be—that the Government had undertaken a guarantee of that which there is no power on earth to guarantee. I should not be in order in discussing a Resolution which stands further down on the Paper in the name of the hon. Baronet, but I may refer to it, for he has practically discussed it in his speech. My hon Friend says: That with the view of inducing Friendly and Provident Societies to place themselves in a position of financial security, some contribution might reasonably be afforded by the State to such societies as are able, after actuarial valuation, to obtain a certificate from a public auditor that their resources are adequate to secure to all their members the whole of the benefit offered by their existing regulatins. I can hardly follow the hon. Baronet. Does he know of any public auditor who is competent to undertake the actuarial valuation of the resources of a society? It is no part of the duty of an auditor, it must be the duty of an actuary, and even he finds himself much puzzled. I never have yet found an actuary ready to state when a society is absolutely solvent. A society may appear absolutely solvent, but an epidemic or other cause may sweep away the basis of that solvency. Would the State subsidy cease when the society lapsed from solvency into insolvency? The circumstances are such as to make it impossible for the State or any private individual to guarantee the sum required. It must depend on the rate at which new members are enrolled and the age at which they are enrolled. How can we guarantee that? It is impossible to do it. It would be a great benefit conferred on the people of this country if we took pains to instruct them, instead of calling on the Government to subsidise the societies; and if we would acquaint ourselves with the circumstances and character of the different societies and institutions, in order that we may be able to give them some guidance in the matter. One portion of the Resolution I have the greatest sympathy with, because it carries out in the form suggested by the Select Committee of 1889 a proposal made on my own Motion— That the sound principles of provident insurance should he included in the subjects prescribed by the Education Code for instruction in elementary schools. It has been said in the Debate to-night that the reason why people will not make better use of the existing means of insurance for annuity and superannuation is partly that they are ignorant of the advantage of it, and partly that they cannot be got to take an interest in what is only a possibility. Death they look upon as a certainty that must come to all men, sickness as a probability which comes too often to every man, but old age as a distant possibility which may or may not come to any man. Well, in that respect the people of this country have been spoken of as if they were in a state of invincible ignorance. I would ask, with reference to the last paragraph of the Resolution, whether there is such a thing as invincible ignorance. At the beginning of this century it was looked upon as a natural thing that a large proportion of the people of this country should be neither able to read or write. Large masses of the people were looked upon as invincibly ignorant. What has been done? We have made education compulsory. No child can now grow up ignorant of reading and writing. It is perhaps too much to expect that in the course of years no child will grow up ignorant of the sound principles of insurance, but I believe it is possible to do a great deal to equip children in the public schools with that degree of knowledge which will enable them to form a sounder judgment, not only of the advantages of insurance, but of all the dangers which beset them, so that they may make proper provision for themselves. I do hope that one result of this discussion will be that some provision may be made, that some Tables may be prepared, or possibly a handbook on the elementary principles of insurance may be approved by my right hon. Friend the Vice President of the Committee of Council (Sir W. Hart Dyke), which may form part of the instruction in elementary schools. I feel quite certain that the House must have taken an interest in the statement made by my hon. Friend. It will be read throughout the country, not only by members of Friendly Societies, but by those who have leisure, and who are anxious to help the working classes to better means than they now possess. I think my hon. Friend may rest assured that the Government will never regard this matter with indifference, nor refrain from encouraging the laudable efforts of the working classes to make provident assurance and to secure themselves in some degree against what is the common lot of humanity—sickness and death.

*(7.7.) MR. HUNTER (Aberdeen, N)

In listening to the speeches of the Mover and Seconder of the Motion, I was bound to draw a broad line of distinction between the sentiments which animated them and the proposals which they put before the House. With the sentiments they have expressed and the objects they have in view, I am in entire sympathy; but I agree with the hon. Gentleman who has just sat down that the particular proposals which they have advocated are unsatisfactory and impracticable. The hon. Gentleman (Colonel Howard Vincent) talked in a loose sort of way of the State contributing 5s. or 10s. a year in respect of each member of certain Friendly Societies, in order to provide pensions for their old age. But the sum that would be produced in this way would be infinitesimally small. In the case of a man 40 years of age, and who continued to make subscriptions till he reached the age of 65 years of age, it would yield him a few pence per week. The hon. Member will see the total insufficiency of his suggestion if he remembers that under the Scotch Police Superannuation Scheme the House last year provided a sum of £10 per year per man, in addition to the subscription of 2½ per cent. of his means by every member of the Force. The House will perceive, therefore, that these somewhat crude suggestions are utterly insufficient to meet the necessities of the case. The hon. Member made some remarks on the German scheme, but did not indicate the weakest point of that scheme. The weakest point of the German scheme is that the pension does not begin till a man has reached the age of 70 years, and that the total amount of pensions varies from 2s. to 3s. 8d. Any one acquainted with the expenditure of the working men of this country must see that pensions in the German scale would be totally inadequate here. I rejoice to hear the sentiments expressed by Gentlemen opposite. It shows that where the House sets itself practically to deal with this question, it will be found not to be a Party question, but will secure the earnest consideration of Gentlemen of both sides of the House. The weakness of a working man's position compared with that of a man of property is want of security for the future. His wages are sufficient to keep him in more or less comfort, but they are not sufficient to enable him to make provision for the future. He has to provide for the contingency of sickness, and, in the Railway Friendly Societies, the payment necessary for that purpose is generally 7d. a week. Then there is the provision for death, for permanent disablement, and for old age. It is perfectly true that only a very small proportion of those men who start life at 20 arrive at the age of 65, but that is no more an argument why the wise should not make provision for that contingency, than the fact that very few houses are burned is a reason why we should not insure against fire. Is it possible for a working man to provide against these contingencies? I hold that it is absolutely impossible out of his own resources. In order to provide a pension of 10s. a week at the age of 65, it requires a subscription of 8d. a week for 40 years, beginning at the age of 20. This, together with the provision for sickness and death, comes to a figure totally beyond the power of the working man to pay. There is, I think, one way only in which this great question can be solved; and that is in some such fashion as has been adopted in the German Empire. One essential condition of a system of insurance for the working classes is absolute security; and no private company can guarantee that. Another essential condition' is that the association should be ubiquitous. Friendly Societies are generally societies for a very small district, while the characteristic of our working classes is mobility. They must shift about in order to get work, and they require an association which will touch them in every part of the country. Another element is steadiness of contribution. The secret of the success of the existing societies is, that only a few of those who subscribe persistently maintain their subscriptions, and so ultimately get the benefit. How is that persistency and steadiness to be maintained? Speaking to my constituents on the subject of thrift, I suggested a scheme of voluntary insurance. The most intelligent and the ablest of the working men of Aberdeen objected to a voluntary system as of no use. To be of value a system must be compulsory. Otherwise it would be impossible to get a series of weekly payments continued over a period of 40 years. The cost of collections, which under the present system must be very great, might be reduced to a figure comparatively trifling by adopting the method in use in Germany. The practical difficulty of collection is met there in the simplest manner by the issue of cards of 47 squares, one of which is stamped every week by a man's employer. The only expense in that system is the cost of the cards and the stamps. Another very important question is the amount of premium. I believe half of the working men of this country earn less than £52 a year; and out of that sum it is impossible for him to pay to a sick fund and an insurance fund. Large contributions must be made from the State—large in respect of their proportion to the premium, but not large in respect of the total sum ultimately payable by the State. Taking the case of Scotland, I believe that to provide for insurance, for orphans, for permanent disablement, and for old age beginning at 65, varying from 5s. to 10s., the cost to the taxpayer would ultimately be substantially less than the cost of the poor rate at the present time, while the poor rate must almost, if not entirely, disappear. I hope the Government will study the question, and I believe it will be found possible to establish such a scheme as I have indicated. The difficulty will, of course, be the interim period. On account of the high premiums that must be paid for those over 20 years of age, how that is to be solved is a question which will tax the resources of the Chancellor of the Exchequer. I was glad to hear the remark of the hon. Member (Sir R. Paget) that there is no money he would more willingly part with than money to enable provision to be made for the old age of the working classes. In that the hon. Baronet, I believe, expressed the real sentiments of men of property throughout the country; and when the Government are supported by men of such sentiments, I believe they will find no difficulty in introducing a practical and useful scheme.

(7.22.) MR. HOLLOWAY (Gloucestershire, Stroud)

I rise to give my best support to the Motion of the hon. Member for Sheffield. As I have had considerable experience in establishing and assisting in the management of Benefit Societies, I think I can explain to the House exactly what is required to bring about an enormous improvement in the usefulness of such societies throughout the country, and in doing this I wish if to be distinctly understood that I do not desire to say a single word against the Chief Registrar, nor against any of his assistants. I am very much afraid that the greater part of their labour is wasted and thrown away upon the working men throughout the country, whom it does not deter from joining and investing their money to unsound and untrustworthy societies. Our Reports of the Registrar are very interesting to this extent: they show us that there is an almost universal desire amongst working men to belong to some kind of Benefit Society, and they show us that thousands of societies which working men join are utterly unsound and worthless. But they do not show us upon what principle Benefit Societies could be founded to secure absolute safety to those who invest in them. That is the chief defect of the present system, and I venture to submit that the time has come when a costly public Department should give the people the benefit of great experience by formulating a set of standard rules, upon the very best and soundest principles, and should recommend those model rules for adoption to all who night apply for them. No others should receive the stamp of registration. I think it is a melancholy state of things which this Report of the Chief Registrar proclaims to the world. Here, we are told—no doubt after most elaborate calculations—that the two largest and most popular Benefit Societies in the Kingdom are insolvent with a deficiency of over £3,000,000 sterling. The exact figures are:—The Oddfellows have a deficiency of £769,335, whilst the Foresters have the enormous deficiency of £2,632,482, a total between them of £3,401,817. And when it is considered that there are thousands of smaller societies throughout the country in a still worse-condition than these, the case for a sweeping reform of the present system becomes a very strong one. Now, the Registrar in pointing to those great deficiences clearly indicates the two principal causes which have produced them: first, the contributions from members of those societies have not been equal to the benefits received by them; and, second, the absurd principle of a uniform rate of contribution at all ages of life. Those are the two principal causes of these enormous deficiencies, and at first sight the remedy would seem to be either to increase the contribution from members or to decrease the future benefits to be received; but that is easier said than done. Take, for example, the case of the Foresters, with 3,245 courts or branches; 553 courts have a surplus, and it would be a cruel injustice to ask them to contribute extra payments towards the deficiencies of the 2,692 courts that have been so recklessly mismanaged. Indeed, it would require a scale of contributions from members much beyond their ability to pay to wipe out so great a deficiency, as it would have to be not only sufficient to place the society on a safe basis for the future, but contemplate an extra payment in addition, to wipe out the present deficiency. I am afraid that any such increased contribution would prevent new members from joining, and thus increase the difficulty, for we all know that it is the infusion of young blood that keeps many of the old' societies alive. Now, I think it is very generally admitted that in all cases of commercial industry where there is insolvency, the wisest plan is to wind up the business, pay what dividend is possible, and, if necessary, reform the concern upon a sound basis. I have always given that advice to insolvent societies, and in several instances I have valued every member's share in the assets of the society and started it again upon a new career of sound prosperity. That is the proper remedy which the Registrar should recommend to every Benefit Society which, upon an actuarial valuation, shows a deficiency. I do not mean that the funds of the insolvent societies should be paid over to the members to be spent and, perhaps, wasted, but that each man's share should be ascertained and placed to his individual credit in the books of the society as a savings bank investment, to accumulate at interest as an annuity fund for his old age. This is permissible under the section of the Friendly Societies Act of 1875, and having done that you have only to arrange a scale of contributions amply sufficient to provide all future benefit, and you will have placed the members of that society upon a new career of ever increasing prosperity. Let me make this principle of individual ownership of the accumulating funds clearly understood. All Benefit Societies may be classed under one or the other of two descriptions. They are either what are termed dividing societies, which divide their funds annually, or at fixed periods of three, five, or seven years, as the case may be, or they are what are termed permanent societies, which never divide their funds, but allow them to accumulate as corporate property. And it is a remarkable fact that the dividing societies, although they are utterly unreliable in time of need, are by far the most popular, and are to be found in almost every village and workshop throughout the country. I suppose we may account for this preference upon the principle that working men like to have their share in the purse which they have helped to fill. The scheme which is in operation in my constituency, and which has already been referred to by the hon. Member for Sheffield, combines the two systems under one set of rules. The funds which remain in hand at the end of every year, after having provided for sickness and the cost of management, are equally divided amongst the members. They are not actually paid over to them as in the old dividing societies, to be wasted in feasting and rejoicing, but each member's share is placed to his individual credit, just as a saving bank investment to accumulate at interest for his benefit in old age or at death, so that under one contribution equitably arranged members provide for sickness, old age, and death, and as long as they live they enjoy an ever-increasing prosperity. The greatest difficulties in the old societies is the annuity question; but upon my plan every member creates an annuity fund, and if he lives to old age it becomes a substantial one. Of course, an equal division of the annual surplus between the members of all ages, necessitates a scale of contribution to cover the extra cost of sickness arising from increasing age, but with the Statistics at our command, that is the simplest thing in the world. In the Stroud Society the ordinary contribution for a single share, to ensure 10s. a week during sickness, is a penny a day for all ages up to 30 years, as there is no appreciable increase of sickness up to that age, but from 30 years upwards there is a steady average increase; and to place old and young members upon an exact equality the cost of this sickness must be provided for. This is accomplished by increasing the contribution a half-penny per month every year beyond 30. Thus members up to 30 pay 2s. 4d. per month; at 31 they pay 2s. 4½d. per month; and at 35 2s. 6½d.; at 40 2s. 9d. and so on up to the age of 65, when all their accumulations come back to them as an annuity fund. In every Sick Benefit Society there must of necessity be an annual surplus for disposal, inasmuch as the contributions should always be sufficient to cover any extra strain upon them arising from an epidemic or any kind of excessive sickness, and the equitable distribution of this surplus is the pith of the whole matter. If you give it to be spent in feasting, as is commonly the practice in the dividing societies, it is wasted. If you accumulate it as corporate property, in the old-fashioned way, members of 30 or 40, or even 50 years standing have no more interest in it than the young member who joined only a few months ago. But if you apply it as a savings bank investment in each member's own right, you start them on a career of ever-increasing prosperity, you give them a most valuable, practical lesson in thrift, and secure them against poverty in their old age. There is another very great advantage in this system of individual ownership in the funds of Benefit Societies. The society is always solvent. The liabilities cannot by any possibility exceed its assets. The savings bank account of each member represents his full claim upon the society, and when it is withdrawn, through death or any other cause, it has no effect whatever upon the other members. No actuary is ever required, as every member knows his exact position, and receives a certificate at the end of every year stating the exact amount that is due to him. I do not know how far I may be allowed to refer to the Stroud scheme, but its success may be described as miraculous. In 16 years' operation in my constituency it has absorbed almost the entire manhood of the district. Our original penny a day members have now £35 15s. 4d. each standing to their credit in the books of the society, which is some pounds more than their total contributions to the society, during the whole period of the membership; so that they have enjoyed sick pay when ill, free medical attendance at all times, and every benefit for something less than nothing. All their money remains intact in their own right, and is rapidly increasing every year. Compare this with the miserable £10 or £12 payable at death only, by the old fashioned permanent societies to members of 30, 40, or 50 years' standing, and the popularity of the new system may be understood. I have simply given some particulars of the Stroud scheme, to show that there is an easy and most perfect remedy for what I think is generally admitted to be a great national evil; and if this Motion is adopted and an inquiry held, I venture to predict a complete revolution in the principles of existing societies on the lines which I have sketched, that will confer enormous advantage upon the working classes.


Under all the circumstances, I will now ask leave to withdraw my Motion. I think the discussion that has taken place will have done considerable good, and I believe that Her Majesty's Government will, at any rate, take into consideration that part of my proposal which embodies the educational recommendation of the Select Committee, and I hope they will also consider the other recommendations of that Committee.


Before the question is disposed of, I should like to say a few words on the subject. I regard the question as one of great importance, and I do not like to allow it to be disposed of without venturing, even at the risk of detaining the House for a few moments, to offer one or two remarks upon it. I may say that I entirely agree in the sentiments expressed by the Mover and Seconder of the Resolution, yet I must confess that, according to my view of the matter, the adoption of this Resolution would be both inexpedient and impracticable. I must express my own conviction that the leading Friendly Societies would resent State aid in any form. They hold that they are quite capable of managing their own affairs; and, although there have been some defects in the management of certain Friendly Societies, yet, on the whole, it is shown that the leading societies are admirably managed. Reference has been made to two of the leading Friendly Societies of England, and I may say, with regard to those two societies, I know that when on a former occasion State aid has been suggested, they have resented any such intervention. Those societies are fully alive to the defects which characterise the management of friendly institutions of this kind, and are endeavouring in their own way to remedy those defects. I hold in my hand the 109th Report of the Kingston-on-Hull District of the Ancient Order of Foresters, a society which is numerically the strongest in the United Kingdom, and that Report shows that particular attention is being paid to the question of solvency. It says— We cannot bat express our regret that only one Court in the district shows a surplus of assets over liabilities. I venture to think that it is most important that these large societies should not in any way——

Notice taken, that 40 Members were not present; House counted, and 40 Members not being present,

House adjourned at ten minutes before Eight o'clock till To-morrow.