Wairarapa Daily Times. [ESTABLISHED 1878] WEDNESDAY, SEPT. 14, 1892. SMALL FINANCIAL BODIES.

Wairarapa Daily Times, Volume XIII, Issue 4218, 14 September 1892, Page 2

Wairarapa Daily Times. [ESTABLISHED 1878]

WEDNESDAY, SEPT. 14, 1892. SMALL FINANCIAL BODIES.

BEING THE EXTENDED TITLE OF THE WAiRiRAPi JDailt, with which it is IDENTICAL.

We have been favoured by the Registrar of Friendly Societies with a cupy of bis Valuation Report, of the position of the Oddfellows' Lodges in the Wellington district, for tbe period ending on tho 81st December, 1891. The worth of this report is not to be gauged either by its brief compass or by the oircumslanoe that it is limited to a statement of the affairs of one

Society in particular, Its tables, together with its review of the position of individual lodges, we may leave to, those who are immediately concerned with them; but the general remarks with wbich Mr Mason prefaces his summary of results are of much wider

interest, Whiletheyexhibita thorough grasp of the statistics relating to tbe well-being of jfe'riendly Societies in general, and testify to tbe thoroughness with which the Registrar does his important work, they offer some

sound reflections which are worth noting in a country where mutual providence of one kind or another is becoming increasingly popular and attracting largo numbers of the population, We mako no apology, there' fore, for inviting our readers' attention to a subject, which concerns many of them very nearly, even though it may seem commonplace by the Bide of the political diatribe to which some journals address themselves continuously. The Registrar aims at reminding

members of Friendly Societies thai all is not gold that glitters. He points out—and there is a lesson here fot the enthusiastic advocates of the vari-

ous Lifo Assurance Companies—that tho early prosperity of a Society is, if not exactly delusive, at all events no necessary token of sound financing. Tho teaching is trite, but not tho less overlooked, He proceeds to tell us, with much show of reason, that it may be a mistake to suppose that New Zealand ia wore favourably circumstanced than England in respeotof eickness and mortality. Dealing first with sicknetK, he reminds us

that it is affected by two distinci classes of causes, the one class inde-

pendent of the action of any corporate body-embracing such conditions as climate, employment, density of population—the other class distinctly within control-as, for example, medical supervision or the variation of rules. It would be, Mr Mason

thinks, in the highest degree unsafe for societies to pi oeeed on theassump(ton that a low rate of sickness will be maintained in New Zealand with ad-

vancing years. With reference to mortality statistics'in the Colony, it is shrewdly shown that a low rate of mortality, so far from indicating a low rate of sickness, has upon the whole the converse effect. Since the percentage of survivors is continually increasing, there is a relatively greater number of members at risk in respect of sickness ; and even if a society saves at

present on its death claims, it may look forward to the likelihood of an extra expenditure on sick pay. We think these observations are just; and they lead on to the conclusion that the quinquennial valuation required by the law is absolutely imperative in the interests of every cili-

Zen who fancies that lie is making a lair provision for his time of need. The neglect of valuation in the case of a benefit society would be as reckless as the omission of stocktaking on the part of a trader, A re-adjustment of rates ie clearly required from time to time; and managers who are content if they canpublish balance-sheets that show an increase of accumulated capital are either deluding the members of the society or are themselves ihe victims of an imperfect apprehension of facts. In either event, there is the position known as a fool's paradise. Among the essential conditions, then, antecedent to the possible stability of any corporation claiming to confer definite pecuniary benefit on its members, we must place such points as these:—That the members' contributions are based upon scientifically probable assumptions; that there are no disbursements other than those

distinctly contemplated in the calcula'ion of premiums; and that the membership of the society is large enough to give -expectation of an

average experience in sickness and mortality. If any one of these conditions should be absent (to say nothing about judicious investment) disaster in tho long run may he predicted for the socioiy. Wo know of certain deep disappointment in the past which have ovortaken the subscribers to benefit funds that were incompetently financed, or based upon unscientific calculations. For example, about fifteen years ago then was tribulation in the Anglican Synod of Cliristchurch over the collapse of a fund designed to provide pensions for superannuated or invalided clergymen, For a term of years premiums Imd been cheerfully paid in, considerable accumulations were announced, and all went merrily. Then the lay secretary of tho fund embezzled a large sum, and the investigations which followed disclosed to those who understood the subject at all, that, independently of any malversation, tho scheme was doomed to burst, that with the falling-in of another clnim or two tho liabilities would bear an impossible ratio to the assets—and the subscribing clerics were thankful to receive back tho money-that they had paid in, fearer home there is, we believe, a somewhat similar scheme in full swing, and we shall be agreeably surprised to be told that it is based upon any actuarial calculations. iVhilo, therefore, those houses of cards are being raised higher and higher, we would exhort tbe guiloless builders to turn their attention to the acute observations of a writer like the Kegistrar of Friendly Societies, and mend their financial ways. MuMis] mutandis, what is true of the wellknown provident societies is equally applicable to tho effort of any corporate body to provide a contingent benefit in return for present payments made by its constituents. We commend Mr Mason's pamphlet, then, to the consideration of compualively irresponsible bodies such as Synods. It ib popularly considered that tbe 11 legislation" effected by ministers of religion in conference assembled is !pretty harmless; but when it enters upon tho domain of finance it is capable, we foar, of becoming actively harmful, since—like the will-o'-the-wisp -it may land its victims in a slough at last,