I.—ll

4

33. That is what I mean. If this colony were to provide the interest upon a sum equivalent to the capital that would earn an amount sufficient to meet all deficiencies here, no State guarantee would be required 1 Let me put it in this way: Supposing four millions of money were wanted at 4 per cent., the interest would be £160,000 a year. If the country said, "We are going to set aside £160,000 a year " without the capital being provided to earn that money, it would practically be taking the place of principal and interest, would it not?— Yes. 34. If an annual amount equivalent to the estimated actuarial deficiency in a superannuation scheme were provided, would a State guarantee be necessary? —No, I do not see that it would. 35. So the whole question of an actuarial investigation into any of these schemes, from an actuary's point of view, comes back to making a fund sound entirely without a State guarantee? —Yes, regardless of a State guarantee. 36. In reality, from an actuary's point of view, a State guarantee counts for nothing?— For nothing whatever. 37. Do you know anything of the English railway superannuation schemes?—A few years ago I read a good deal and had a good deal of information in connection with the London and North-western Company, and many others. I have read reports on them, from the Cape especially. The Government actuary at the Cape has published a good deal about them, and I have read those reports particularly. 38. Do you recollect what the period which you calculated actuarially for the Education Committee would be when the superannuation fund for the teachers would show itself as either not progressing in the matter of accumulation of funds or declining? —I did not make any such calculation ; I declined to do it. Mf. Hogben did what was done in that way. 39. Mr. Hogben is not an actuary, of course?—He is not a practical actuary, of course because he has not practised as an actuary. 40. As an actuary you would not risk your reputation by saying what the position of a fund was going to be fifty years hence ?—No. 41. The London and North-western Railway Company's Superannuation Fund has, generally speaking, been reported by the actuaries as being unsound ?—I know that the last valuation was made by three leading London actuaries, and the fund was reported to be almost exactly solvent, having nothing to spare. But that was at a time when the administrators of the fund desired to increase the benefits, and the valuation made showed that the increase was not warranted. The administrators of the fund decided to waive actuarial valuation for twenty years, and to increase the benefits. 42. That was about how many years ago—twenty ?—lt must be about twenty, because they have just had their valuation made, I understand. [Note. —I find the valuation referred to was in 1893.—M. F.] 43. I sent the following telegram to the High Commissioner in London on the sth September. The questions were put to him seriatim, and the answers are seriatim : " Ascertain London Northwestern Railway Company—position of their superannuation fund. (1.) How long in existence ? " Answer: " First established, 1853." (2.) "How much paid in?" Answer: "£2,096,000." (3.) "How much paid out?" Answer: "£725,000." (4.) "Present position of fund?" Answer: "£1,371,000." (5.) "Total number of employees who have been superannuated?" Answer: "1,029." (6.) " Present number of employees drawing superannuation?" Answer: "522." (7.) "Is financial condition fund now considered by company solvent ?" (8.) "What was company's reason for not accepting actuaries' reports to recommendations ?" Answer: " Replies to (7) and (8) indefinite, but intimate that as financial condition has varied on each actuarial valuation it has been decided to make application for parliamentary powers in order to enable company to guarantee present scale of benefits." Now, I want to give similar information in regard to the Lancashire and Yorkshire Railway Company. " Ascertain from Lancashire and Yorkshire Railway Company position their superannuation fund. (1.) How long in existence ?" Answer :" Established, 1873." (2.) " How much paid in ?" Answer :" £618,000." (3.) " How much paid out ? " Answer : " £186,000." (4.) " Present position of fund ? " Answer : " £450,000." (5.) " Total number of employees who have been superannuated ? " Answer : " 417." (6.) " Present number of employees drawing superannuation?" Answer: "276." (7.) "Is financial condition fund now considered by company solvent ?" Answer: "Answered in affirmative." (8.) "What was company's reason for not accepting actuaries' reports and recommendations? " Answer :" No answer to this." What I want to ask is this : the time you refer to —when the London actuaries declared the position of the London and North-western Company's fund to be about solvent— would be, according to that, thirty-three years after the fund was established. Now, in the meantime, twenty years had passed by. If the actuaries had predicted insolvency for a fund of that sort, would you have anticipated that in fifty-three years it would have accumulated £1,371,000? —" If they had predicted insolvency " —which they did not, thirteen years ago 44. I understand they said it was about sound then? —Yes. 45. Would you say, in the face of the figures I have given—which are authentic—that the London and North-western Railway Company's fund is insolvent?— No. What I would deduce from that is this: the benefits having been increased twenty* years ago, the actuarial investigation now—the result of which is not stated in the High Commissioner's cables which you read—shows that there is a certain amount of deficiency on account of those extra benefits having been given, and that is the reason why they say the actuaries' reports varied from time to time and they do not wish to give publicity to the present actuarial report, if one has been made. That is what I should imagine, but I would not say the fund was insolvent. It may be so-much out, but if it were solvent thirteen years ago and the benefits were only slightly increased, it is not likely to be in a thoroughly insolvent condition now.

* Note.—l find on reference the benefits were increased ten years ago, in 1896.— M.F.