INTEREST TABLE, AT £3, 6s. 8d. PER CENT. Principal. Per Principal. Per Per Year. £ s. d £ s. d. £ s. d. £ s. d. 0 0 0 0 0 1 £ s. d. £ s. d. 0 0 8 5 0 0 0 2 0 1 6 0 2 6 003- 0.3 0 0 0 30 36 0 0 4 040 0 20 5 0 36 0 0 41 5 0 It is of still greater importance that a person who thinks of depositing should have a distinct idea of the benefit he is to derive in the way of interest. The interest usually given in savings' banks is at the rate of £3, 6s. 8d. per cent.; the difference between this and £3, 16s. 04d., which the Commissioners of the National Debt allow, being, as already mentioned, reserved to pay expenses, &c. This being the interest allowed, any one may readily reckon how his money is to fructify, by supposing an addition of one-thirtieth being made to it at the end of every year. For instance, if he deposits fifteen shillings, and lets it lie for a year, he is then entitled to 15s. 6d. It is right that he should be fully aware that, in respect of interest, he is better off than the people of the middle and upper ranks who deposit in common banks; for not only does he get a higher per centage than is generally given by the banks, but he has the advantage of compound interest; that is to say, the interest due to him at the end of a year is silently, and without any trouble on his part, added to and considered as a part of the principal, on which interest is to be given in future. Thus, a common bank account and a savings' bank account, for the same sum, if left unattended to for a few years, would in the end come to a very different amount. In order that no one may be at a loss to calculate the interest he is to receive on a savings' bank deposit, we present the annexed table, which shows simple interest for a year on a variety of sums :The following table was formed to show what a certain weekly contribution paid into the Windsor and Eton Savings' Bank would amount to in a certain term of years, interest being at £3, 8s. 5d. per cent. It is a highly instructive table, well worthy of being carefully studied by every individual of the industrious orders: 0 17 0 14 0 46 10 0 027 1 11 0 51 15 0 57 0 0 0 2 10 1 14 6 4 046 62 5 0 67 10 0 0 4 7 88 10 0 0 99 0 0 100 0 0 104 5 0 109 10 0 114 15 0 120 0 0 0 9 15 0 10 0 0 10 10 0 11 5 0 12 0 12 15 13 10 0 15 15 0 16 10 0 18 0 0 0 0 70 76 0523 26 056 360 056368 0 59 396 0 61 6 4 068 0 6 11 073 0 7 6 0 7 10 3 13 0 3 16 6 400 4 36 470 4 10 6 4 14 0 8 14 17 6 08 4 500 A prejudice exists in the minds of many working people, and is perhaps affected by others, against savings' banks, on the ground that, when a man is known to save, he is the more liable to have his wages reduced by his master, or to want work when there is any thing like a general failure of employment. Surely, there can be little foundation in fact for this notion. It is a general wish amongst masters that their working people should save, and many endeavour to bring this about by instituting savings' banks, and acting as managers. It is felt by every master, that a workman who has saved a little, is likely to be a much more steady and respectable person than one who has not. Indeed, as it has been justly observed, a receipt from a savings' bank is one of the best certificates of character which a working man can show. Let it also be considered that, with a little capital in his possession, a workman stands in a much more independent position with regard to his master than he otherwise could do. We cannot doubt that in these considerations there is much It would be difficult to over-estimate the importance of a little private hoard to a working man. It not only proves a succour in the evil day, but it tends to improve his whole moral nature. Wealth has been the subject of many bitter remarks to both the poet and the philosopher; but it is after all a greater friend to virtue than to vice. Often a very small amount of it, acquired by honest industry, will supply a modest pride that supports, if it is not in itself, moral efficacy. Doing well in this small way suggests and leads to doing well in other ways. The saver may prove the stay of a declining parent or other friend; he can do a better duty to his children; he can contribute to philanthropic objects which interest and bring out his finest feelings. It may even happen that, from less to more, and with no sacrifice of peace of mind, he is enabled by saving to rise into a higher grade in society. One of the best of the immediate effects of saving is, that, once fairly begun, it proves a preservative from many extravagances and vices. Temptations may present them ore than a counterpoise to the visionary fear of hav-selves; but the mind reverts to the fondly regarded ges reduced, or employment withheld, in conse- little hoard in the savings' bank, and they are easily of a bank deposit. resisted. Hence, it is generally observed that, once a practice of saving has commenced, a great revolu- | bank. Sickness may come before the savings are contion takes place in the character. Irregularities and self-indulgences disappear, and steadiness, sobriety, and reflection take their place. These views are, we feel assured, accordant with general experience; but it may nevertheless be well to quote one testimony from a practical quarter in support of them. The following passages are from a tract, published early in 1842, respecting an auxiliary to the Govan Savings' Bank, in Kerr and Company's Nailery: siderable; or, if considerable, they may be melted away by a long-continued sickness; but, after the first weekly payment is made to a friendly society, the member is secure of succour, however long his illness may continue, besides, perhaps, other advantages. It is possible, on the other hand, that a difficulty may be experienced, in certain circumstances, in keeping up the weekly or other payments required to secure the benefits of friendly societies. Here, however, it may be said, there is no more than the usual uncertainty attached to all things. Assuredly, the arrangement of a rightly constituted friendly society furnishes a very considerable degree of security against some of the uncertainties of life. "Three years ago, nearly all the men in this work were seemingly constitutionally and hopelessly afflicted with a spark in the throat, and spent a very large portion of their wages on ardent spirits to quench it. As might have been expected under the circumstances, both their persons and dwellings presented standing proofs of their ruinous habits; and their employer was frequently annoyed by their suspension of labour to gratify their vitiated taste, at times when the hurried execution of orders rendered him most dependent upon them. However, by the exercise of a little kindly feel-wondered at, as no proper calculations for friendly ing towards them, matters began to assume a more pleasing aspect. By being regarded and spoken to in their sober intervals as rational and accountable beings, and having exhibited to them the advantages they were kely to derive from connecting themselves with the Total Abstinence Society and the Savings' Bank, one after another was cured of the long-existing malady, and not only took up a new position among his fellowworkers, as at once an advocate and an evidence of temperance and economy, but was enabled to provide himself and family with household comforts to which they had previously been strangers. With the view of cherishing such newly-formed habits, their employer afforded them the weekly opportunity of husbanding their spare earnings, by forming among them and conducting a little agency of the National Security Savings' Bank. The following summary of its transactions will show both the success of his labours, and the encouragement which the proprietors and managers of other public works are likely to enjoy in making similar efforts :-The nailery consists of three shops or hearths, each accommodating four workmen. Among the twelve persons employed in these shops, and two junior members of one of their families, there are nine open accounts; the number of deposits has been 351, and the amount deposited, including interest, £61, 15s. 10d. The number of repayments has been 31, and the amount repaid £36, 11s. 9d., so that the balance due at the 20th November 1841, upon the nine open accounts, is £25, 4s. Id., or about £2, 16s.-a small average, certainly, in comparison with that of some other trades, but presenting a pleasing contrast to the situation in which matters stood at the commencement of the agency, when scarcely one of the workmen could, on Wednesday or Thursday, muster a sixpence of his previous week's earnings. One observation must yet be made; they are now not only more independent and thamfortable, but stand much higher in the estimation of their employers." It is to be regretted, of this excellent class of institutions, that many of them are founded upon erroneous principles, or rather upon no principles at all; and it often happens, therefore, that those who trust to them are disappointed, the funds falling short before all claims are satisfied. This was at one time not to be societies existed; but such is no longer the case, for sound calculations are now attainable. Nevertheless, there is still a vast number of obscure friendly societies, proceeding altogether at random, and by which the industrious classes are induced to misspend large sums. We trust that what we have now to state will be of some service in promoting the establishment of sound societies, and putting an end to such as are of a different kind. THE FRIENDLY SOCIETY, Savings, instead of being stored up in a bank, to be there constantly at command, may be disposed by a working man in a well-constituted friendly society, as 4 means of ensuring for himself certain contingent and fixed benefits. Friendly societies generally embrace several objects, as the securing of a weekly sum during sickness, and a pension after a certain age. They are based on the principle of mutual insurance; that is to ay, members make payments, either at once or in mall periodical sums, and thus constitute a fund, out f which such as happen to fall sick or to survive a certain age are supplied, the uncertainty attached to all individual concerns being lost in the certainty which attends calculations involving great numbers. In some respects, and for some cases, joining a friendly society may be better than becoming a depositor in a savings' One great mistake in the formation of friendly societies, is to assume that each member should pay an equal sum, whatever his age may be. This is unjust; for the younger members have a less chance of becoming burdensome to the funds than the middle-aged; and, indeed, there is a rising scale of probability of sickness throughout all the years of a man's life. The Highland Society found that, between twenty and thirty, men are liable at an average to be half a week indisposed per annum. Between thirty and forty, the average was about two-thirds of a week. At forty-six, it became a full week; at fifty-seven, two weeks; at seventy, eleven weeks. The Society, from taking unsuitable grounds for their calculations, made out the probabilities of sickness too low. In the following table, three set of calculations are given, as to the proportion of sick out of one hundred at particular intervals of age : Ages. Mr Edwards' Highland English Table. 20 to 30, 1.14 1.54 1.72 2 30 40, 1:32 1.83 2:30 The difference in the three columns is here of little consequence. They at least agree in representing increase of years as attended by increased liability to sickness. Now, a right friendly society is bound to advert to this circumstance. To admit all ages at an equal payment, is clearly making the younger members pay for the elder, who should have entered at an earlier age, and been paying all along. Another great error in the constitution of benefit societies, is in making them for a year only. Many of the old friendly societies having ended in disappointment, in consequence of want of right calculations, or bad management, or peculation of the funds, the working-classes have contracted the notion that there is more safety in a yearly term. The immediate payments are also less than in a well-constituted friendly society. Yearly societies, as they are called, usually originate with some individual, often the keeper of a tavern, who advertises that a society will be formed in his house on a particular day. Applicants for admission pay one shilling as entry-money, which goes into the pocket of the originator of the scheme, by way of sanction of government, tables have been formed by : highly competent person, John Finlaison, Esq., Actuary of the National Debt, for the guidance of friendly societies; and these are easily to be had, so that it is quite inexcusable to proceed upon random and unauthenticated data. Before quoting any of these tables, we shall endeavour to explain how they are formed. We have an idea of a benefit society in its simplest form, if we suppose a hundred men, of exactly 33 years of age, to associate, and make such a payment at first as may be sure to afford each man that shall fall sich during the ensuing year one shilling a-day during the term of his sickness. Taking (for the sake of illustra tion) the Scottish tables, we find that, amongst such a body of men, there will be about 66 weeks of illness in the course of the year. This, multiplied by 7, gives the whole sum required, £23, 2s., or a little more than 48. 6d. each, which, less by a small sum for interest, w accordingly be the entry-money of each man. A society of individuals of different ages, each paying the sum which would in like manner be found proper to his age, would be quite as sound in principle as one on the above simple scheme. It is only a step further to equalise each man's annual payments over the whole period during which he undertakes to be a paying member. rent. The objects are generally threefold, namely, a fund for sickness and funeral expenses, a deposit fund, and a loan bank. Towards the first, there is perhaps a weekly payment of twopence, or more if necessary, together with the interest arising from the loan of money to the members. Towards the deposit fund, there is a payment ranging generally from sixpence to two shillings, the accumulations being received back when the society closes. The money deposited is employed in making loans to such of the members as desire such accommodation, within the amount of their several entire deposits for the year, one penny per pound per month being charged by way of interest. The surplus, if any, of the twopences and interest, after sick and funeral money, books, and other necessaries are paid, is divided amongst those members who may be clear of the books at the close of the society. Some such societies are formed by a spontaneous association of persons, who prefer renting a room for their meetings, and thus escape the temptations of a tavern ; but none of them avoid the errors of an equality of payments for all ages, and the yearly dissolution. The youth of fifteen, who is not liable to half a week's sickness per annum, pays as much as the man of fifty-seven, who is liable to two weeks. Should sickness befall any one towards the close of the year, he is left, when the society dissolves, quite unprovided for, because he can- We shall suppose that the superannuation allowance not enter another society in a state of sickness. Con- or pension is contemplated as commencing at 60 years sidered as a deposit for savings, the yearly society is of age. It is necessary to consult tables of mortality, strikingly inferior to the savings' bank, in as far as the in order to ascertain how many may be expected to depositor cannot take out money without paying an ex- reach that age, and how long each of these has a chance orbitant rate of interest. Finally, these societies are of surviving it. Having already treated of tables of generally under the care of obscure persons, who can mortality (see the article on LIFE-ASSURANCE, No. 46), give no security for the funds placed in their hands, we shall not say much on this subject. The table preand who in many instances become bankrupt or absented by the Highland Society, as proper for friend'y scond before the final reckoning. Yearly societies are, societies, is a mean of the Northampton, Carlisle, and indeed, in all points of view, a most objectionable class Swedish tables, and may be regarded as tolerably safe of institutions, to which working people would never for both life-assurance and annuity schemes. It shows resort but for their ignorance and unwariness, and the that, of 1005 persons of 21 years of age, no fewer than temptations held out to allure them. 528 reach the age of 60, 336 that of 70, and 127 that of 80; thus making it evident how absurd it is for a working man to think that he has an extremely small chance of growing old, so as to need a provision. A well-constituted friendly society involves the principle of payments appropriate to particular ages, as no other plan can be considered equitable. It stands forth before the working-classes as a permanent institution, like the life-assurance societies of the middle and upper classes, and necessarily requires its members to consider the connexion they form with it as an enduring one, because its grand aim is expressly to make provision at one period of life for contingencies which are to arise at another-youth, in short, to endow old age. By a yearly society, a man is left at last no better than he was at first, as far as that society is concerned; but the proper friendly society contemplates his enjoying a comfortable and independent old age from the results of his own well-bestowed earnings. It is also essential to the character of a proper benefit society, that individuals be not admitted indiscriminately. To take in a person in bad health or of broken constitution, is unjust to the rest who are healthy, because he is obviously more likely to be a speedy burden to the funds. Here, as in life-assurance societies, it is necessary to admit members only upon a showing that they are of sound constitution and in the enjoyment of good health. And it may be well to grant no benefits until after the member has been a year in the society. By these means, men are induced to enter when they are hale and well, instead of postponing the step until they have a pressing need for assistance, when their endeavour to get into a benefit society is little else than a fraud. Government has thought proper to interfere with its aid in the formation of friendly societies, though not compulsorily. An association of persons forming one, has the means of ascertaining the soundness of its principles, and also entitles itself to deposit funds in savings' banks, with the government security and liberal intest, by submitting the proposed rules to the barrister ited to certify them (at present John Tidd Pratt, to whom a fee of a guinea is payable. Under the Another point for consideration is the rate at which the funds of the society may be improved. In most cases, we believe, it is best for such societies to rest content with taking advantage of the privilege which they enjoy by act of parliament, of depositing their money in the funds or the savings' banks, in which case they obtain for it (considering the half-yearly payment of interest) about £3, 17s. 6d. yearly. Proceeding upon these or nearly similar grounds of calculation, Mr Finlaison formed the table which is given at the top of the next page, to show in one sum (and also in an equivalent monthly contribution, to cease at the age of 65), the value of an allowance of four shillings per week during sickness, from and after each age until 65; combined with an allowance or pension of two shillings per week, commencing payment at the age of 65; and further combined with a payment of four pounds whenever the death of the purchaser shall happen. We would here call particular attention to a point of view in which savings' banks and friendly societies might be regarded as favourable to each other. It will be observed that, for the sum of about thirteen pounds at the age of thirty-four, a man can insure himself against absolute want under all future contingencies except deficient employment. Now, at that age, a prudent and careful man, who has begun early to frequent the savings' bank, may without difficulty have saved thirteen pounds. Let him draw his thirteen pounds from the savings' bank, and place it with the friendly society, and he is all but an independent man for life. This is a course highly worthy of the attention of * See "Instructions for the Establishment of Friendly Socie ties." Printed by W. Clowes, London, for his Majesty's Stationery Office: 1835. domestic servants, who in the latter years of life are so often exposed to want.* The scheme of a right friendly society may be further illustrated by the actual arrangements of one of approved character, which happens to be well known to We allude to the Edinburgh School of Arts' Friendly Society, established about thirteen years ago. This society, although originating with certain of the members of and friends to the School of Arts (a species of mechanics' institution), and taking its name, is not otherwise connected with that institution, but is open to all persons, male and female, residing in Edinburgh. It has three separate funds or schemes-namely, a Sickness Fund, Deferred Annuity Fund, and a Life AsPirance Fund. One share of the sickness fund entitles the member during sickness to 10s. a-week for 52 weeks, Ts. 6d. a-week for other 52 weeks, and 5s. a-week for all future period of sickness until the age of 60 or 65, according to the age of superannuation fixed at entry; Friendly societies and savings' banks sometimes appear as rival institutions, and their respective merits are keenly canvassed. Both have certainly their peculiar advantages. There is much in the consciousness of having a small fund stored up, and in the power of employing it for any particular purpose at pleaFire; but it cannot be doubted that a reserve fund is a less efficient protection against contingencies, such as sickness, and death tself, than connexion with a sound friendly society. The difference is like that between taking one's risk of loss from fire, and naying in to an insurance office. "Whenever there is a contin cy, the cheapest way of providing against it is by uniting with ethers, so that each man may subject himself to a small deprivatan, in order that no man may be subjected to a great loss. He upon whom the contingency does not fall, does not get his money back again, nor does he get for it any visible or tangible benefit; but he obtains security against ruin, and consequent peace of rind. He upon whom the contingency does fall, gets, all that Those whom fortune has exempted from it have lost in hard Finey, and is thus enabled to sustain an event which would Cherwise overwhelm him. The individual depositor, not the contributor to a common fund, is really the speculator. If no sickness attacks him during his ars of strength and activity, and he dies before he is past labour, Le has been successful in his speculation; but if he fall sick at an early period, or if he live to old age, he is a great loser; for his vings, with their accumulations, will support him but a short ne in sickness; or even if he retain something in old age, after Faving provided for his occasional illness, the annuity which he an then purchase will be very inferior indeed to that which he uld have obtained, if he had entitled himself to the benefit of accumulated savings of all those who, having contributed for By years to a superannuation fund, had never reached an age require it."-Report of Committee on Friendly Societies, 1825. | and thereafter his contributions cease, and he enters to the enjoyment of the Deferred Annuity Fund, one share of which entitles the member to an annuity of £8 a-year, commencing at the age of 60 or 65, as fixed at his entry. One share of the Life Assurance Fund is a sum of £10 payable at the member's death. In this case, as in the others, the contributions cease at the age of 60 or 65. The rates are calculated from the Highland Society's sickness table, increased by 50 per cent., which in this case may be considered as sufficient (seeing that only sound healthy men are admitted), and a mortality.table compounded of the Northampton, Carlisle, and Swedish, assuming the rate of interest at 4 per cent. accumulated yearly; and the only charges for management are 2s. 6d. entry-money to each fund, and 1s. a-year payable by each member of each fund. The life-assurance fund of this society stands apart from the other two, and may be entered independently. Its table being the only one we are acquainted with, humbler classes, we extract it. It is to be observed which presents the advantages of life-assurance to the that females are admissible at one-sixth less charges. Half-a-crown of entry-money is charged. |