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At Short Notice

btate Insurance


btate Insurance ITS EFFECT ON FRIENDLY SOCIETIES. (By J. H. WALLJNGFORD, P.D.S.C.R., Bangor A.O.F.) Amongst the questions likely to receive early consideration at the hands of Parlia- ment will be the scheme of State Insurance against Sickness and Invalidity, a draft of which has already been prepared but has not yet been made public. This scheme will be of paramount interest to the working classes, and, speaking in no party sense, it would be diiiicult to over-rate the far-reaching and beneficent character of the Chancellor's proposals. What are the facts ? There are in this country some 16,000,000 workers over sixteen years of age, of whom about 6,000,000 are members of Friendly Societies, so that the formidable number of ten millions remains outside the aid of these institutions. And it may safely be assumed that it is in the interests primarily of this great mass of humanity that Mr. Lloyd George has devised his scheme, in formulat- ing his proposals, which are already printed, but not made public, the Chancellor paid the ¡ leading Friendly Societies the compliment of inviting certain of their leaders to confer with him, so as to obviate the possibility of any ininry being done to these Societies. Several interviews took place, and although those who took part are pledged to secrecy, it is not difficult to draw the inference from their subsequent speeches on the subject that the Government scheme is regarded as satisfactory from the Friendly Society stand- point. There exists, however, amongst the rank and file an apprehension, which is shared by certain influential leaders of the Friendly Society movement, lest the Chancellor's scheme may prove detrimental to voluntary thrift organisations. Indeed, some go so far as to speak loudly of confiscation," oblivious of the elementary fact that no Gov- ernment wouid dare, even from motives of self interest—to put it no higher than that, —to confiscate the funde: of our great Friendly Societies, which are, in the words of the Chancellor himself, the finest in the world." it must be obvious to the Chancellor's critics that there are in this country many thousands of worthy and deserving persons who, from various causes—such as the age- limit, unsound constitutions, defective eye sight, and so forth-are ineligible to become members of Friend!y Societies. In addition, account must be had of those—and they are numerous,—who have been unab!e to keep up the payment of their contributions, and have consequently been lapsed by their Societies. Again, there are thousands of persons who. from similar causes have never been in a position to join Friendly Societies. In proposing to make suitable State pro- vision for these persons, it is to be regretted that the Chancellor should be met with the crv of confiscation," and be suspected of designs upon the independence of volun- tary thrift Societies. Whilst reiterating his determination to safeguard the interests of the Friendly Societies, Mr. Lloyd George recognises that no State scheme of Insurance can succeed unless it contains an element of compulsion." The voluntary system has long been in existence, and has proved a partial success-and a partial success only, as is evidenced by the fact that in addition to those already referred to as being unable from various causes to participate in the benefits of Friendly Societies, there are many thousands who, whilst in a position to do so, have neglected to make suitable, if any, pro- vision for themselves against periods of sick- ness. The element of ccmpulsion spoken of by the Chancellor, indispensable though it be, is nevertheless being strenuously op- posed in certain quarters of great influence in the Friendly Society world. For example, Mr. T. Barnes, the Grand Master of the Man- chester Unity, speaking at the National Con- ference of Friendly Societies, at Heading, last month, expressed his deliberate hos- tility to a compulsory system of State In- surance," being of opinion that they had gone far enough on the lines of continued in- terference with personal liberty. He abhorred, as an Englishman, the interfering with the action and motive of our people. To establish a system of Compulsory State In- surance meant that they were going to debar many even from having the right of virtue they were going to make them walk in lead- ing strings. Fie personally protested against any such procedure." The right of virtue spoken of by Mr. Barnes will be left untouched, whilst under the scheme it is going to be a virtue to render State aid to those who are unable to purchase it through the medium of Friendly Societies. That is all In contrast to the attitude of Mr. Barnes on this question is that of Mr. J. Lister Stead, Secretary of the Ancient Order of For- esters, who abo spoke on the same occasion. Mr. Stead's words, although necessarily guarded, cannot fail to carry weight, inas- much as he was one of those chosen to re- present the Friendly Societies at the inter- views with the Chancellor. And what does Mr. Stead say ? If it were possible," he remarked, for the brethren to see the shorthand notes of the interviews between the Chancellor of the Exchequer and the Committee, he ventured to say they would agree-and he thought they ought to give them credit for it- that they had endeavoured, as far as they possibly could, to RAISE EVERY POSSIBLE OBJECTION m the matter, and had taken all possible steps to protect their interests. A good result had been obtained by the interviews which had taken place. They certainly had changed the mind of the Chancellor on one or two important points, and the result would be shown when the scheme was sub- mitted to Parliament. bí- at This statement is strengthened by a com- munication which the writer received from Mr. Stead a week or two ago, in answer to a request for information on a point raised in an article on State Insurance, which appeared in an influential weeklv paper. This is a copy of Mr. Stead's letter;— Ancient Order of Foresters, Central Office, Burton-on-Trent, November 2nd, 1910. Dear Sir and Bro.,—In reply to your letter of yesterday, the article (which I read) was based on speculation, and had no authority. It is impossible for me to say anything more at the present juncture, but I have been alive to the importance of protecting the interests of our Order. Yours very truly, "J. LISTER STEAD, Co Secretary of the Order." Instead "of weakening friendly Societies, the Government scheme is likely to materially strengthen them. As a rule, persons join Friendly 9 Societies ;from purely personal motives. They enter, in a business-like way, into a contract to subscribe, periodically, certain specified sums for certain stipulated benefits. And they naturally expect that so long as they carry out their portion of the contract, the Society will also carry out its part. But circumstances not infrequently occur which render it impossible for the Socie- ties to discharge the original contract. As is well known, Branches of Registered Friendly Societies are compelled-to submit to quinquennial valuations at the hands of properly-qualified Actuaries of their assets and liabilities. Like the laws cf the Medec; and Persians, actuarial laws are immutable, and—inexorable They muzt be obeyed. And the result of obedience often involves financial "reforms" which constitute real hardships to the members, and more especi- ally to the older members, of the Societies. To contribute for twenty, thirty, or forty years without drawing but a few occasional small sums in sick benefits, and to find in the hour of need the benefits considerably reduced, and the period during which the maximum benefits are payable cut down to the extent of 50 per cent., is no uncommon experience in Branches of our great Friendly Societies The reforms which entail these reductions are effected, it is true, in the interests of what is euphemistically; called "permanent solvency," but their conse- quences are none the less bitter on that account. Despite the gigantic accumulated capital of our great Friendly Societies, this is a common experience in many Branches. The ordinary member has neither the in- clination nor the ability to enter into an analysis of causes-he can only regretfully survey the effects of the reforms which are stated to be imperative in the interests of permanent financial stability." He ma\ marvel at the total of the accummulated funds of his Order, but-he mustn't touch them This state of affairs will doubtless be al tered as the result of State Insurance, by which Friendly Societies will become subsidised. Contemporaneously with the payment of State subsidies, too, will be a demand for increased efficiency in the management of these organisations—in the appointment of competent auditors, the- mere satisfactory and profitable investment of funds, and a general oversight of the whole structure in the interests of each and all of its parts. Whilst it is not proposed under the scheme to interfere with the autonomy of Branches, it is inconceivable that contracts entered into by State-sub sidised organisations will be held less sacred than the payment of the salaries of Civil Servants or of Cabinet Ministers Will not this prove a boon and a blessing r One is entitled to think that it will j On the question of non-interference in the management of Friendly Societies, Mr. Lloyd George is most explicit. During the last Election—on Thursday, January 20th of this year, to be precise--the Chancellor addressed a political meeting in Bangor, when the writer grasped the opportunity of submitting to the right honourable gentleman the follow- lowing (itiestion Are the great Friendly Societies to be merged in a universal scheme of State In- surance against Sickness, in which all thinus will be ordered and directed by State off:- cials armed with autocratic powers, or will the Societies be allowed, whilst receiving the proposed subsidy from the State, to manage their own affairs in their own way through their branches ? The Chancellor, after stating that the scheme was more or less based on what had been done in Germany, and that they (the Government), having provided for those who had attained the age of 70, remarked that they were going to deal with the period before a man r< aci ed that age. A man," said Mr. Lloyd George, mav break down on the road long before he reaches seventy, Something in the brain may snap, for which he is not responsible he breal<s down, and there is nothing in front of him but dire poverty, which he and his children must face. For that contingency the Government in- tended providing £ 4,600,000." Coming to the question given above, the Chancellor proceeded :•—" The question is, How do we stand in reference to the Friendly Societies ? The first thing 1 had to consider when I came to prepare the scheme, was the position of the Friendly Societies in this country. You have the finest Friendly Societies in the world and any scheme of insurance which would interfere with them would be disastrous t(I the community. I decided that no scheme would be desirable which would inter- fere with the Friendly Societies or their right of self-government." When Mr. Lloyd George was leaving the meeting the writer had a short conversation with him. g w, Mr. Lloyd George," remarked the writer, if I interpret aright your reply to my ques- tion, it means that any scheme of State In surance introduced by the Government will IN NO WAY INTERFERE with the right of Friendly Societies to manage their own affairs in their own way, as hither- to, through their different branches ? iít Mr. Lloyd George Exactlv." And, sir," continued the writer, that the £ A,000,000 is to be adnimistered through the Friendly Societies entirely ? Mr. Lloyd George Yes the only stipu- lation being that the money is devoted to the purposes for which it is intended. We are not going to interfere with you in the least. You are to go on exactly as now, and I am glad you asked the question." This conversation, as well as the whole of the Chancellor's remarks on the subject, were contributed to the Foresters' Miscellany, and duly appeared in the March issue. The writer thought it prudent to submit these for the Chancellor's perusal, and has received from his Scretary, in returning the same, the following letter :— Treasury Chambers, r:' Whitehall, S.W., 10th October, 1910. Dear Sir,—I am desired bv the Chan- cellor of the Exchequer to acknowledge the receipt of your letter of the 24th ultimo, for which I am to express his thanks. 'I he enclosures to your letter are re- turned herewith, as you request. t.- OJ Yours faithfully, R. C. HAWTREY."

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