Twentieth Century, July 26, 1894, 7-8.
BY W. H. VAN ORNUM.
A form of co-operation which is older, and has had a larger degree of development in England and America than any other in existence, is that which is appropriately known as the friendly societies in which the members co-operate together to defray funeral expenses and for mutual protection against the calamities of sickness, accident and death. Among these are included the Odd Fellows, the Foresters, the Ancient Order of Romans, the Ancient Order of Shepherds, the British Order of Free Gardeners, the Catholic Benefit Societies, the United Order of Comical Fellows, the Ancient Order of Britons, the United Order of Workmen, the Rechabites, the Independent Order of Mechanics, the Engineers and Firemen’s Friendly Society, the Order of Alfreds, the Order of Druids, the Knights of Pythias, and many others, besides a great number of variations such as twelve kinds of Odd Fellows, etc. Among these may also be classed the various temperance orders, which apply the principle of mutual help to curb the appetites; or, in the larger statement of it, the application of co-operation to the making of individual character.
Many of these orders date back more than three hundred years; and it is in them that life insurance had its real origin; although, independent of them, it was customary for private underwriters, during the sixteenth century, and for long afterward, to undertake special risks upon lives for short periods to cover contingencies of a temporary character. These were, however, only isolated cases and for special purposes. The general need for life insurance was first felt by the poor who sought a provision against the distress which might fall upon the survivors should their breadwinners be suddenly snatched away. It was in the friendly societies that plans were first developed for the systematic satisfaction of this want. The greatest difficulty they had to encounter was, the fact that no data existed on which calculations could be based of rates of mortality, or accident; nor did anyone know just what observations were necessary in order to obtain such data. Their experience tables must be made; and there was no way to make them but by the slow record of their own history with its successes and its failures. But, at the very time when it was most important to observe and record closely all the facts relating to the experience of those societies, in order to form the basis for life insurance, it is certain that their leaders did not appreciate that importance. It is probable that they regarded their societies as little capable of improvement, not realizing that the condition of their very existence, for any considerable time, depended upon reaching a basis of assessments which would closely cover the risks and expenses. That these societies, practically doing what we now know as a life insurance business, eaHy preceded life insurance as a business, may be inferred from the works of Daniel Defoe, whose “Essay of Projects” was published in 1698, in which he extolls the virtues of the friendly societies; and, in his later works, advocated the compulsory establishment of societies for mutual assurance, and for relief in seasons of distress. At the same time he was loud in his condemnation of the business of life insurance. If Defoe can be considered in any way a reflection of the popular estimation of the two at the time, then it is certain that the societies had obtained an earlier foothold than the insurance companies.
In 1723 the first act of Parliament was passed dealing with those societies. At that time they had begun to assume considerable importance and attract attention. Previous to this, their growth had been wholly in spite of the law; for, being unrecognized by the law, they were outside its protection and consequently a prey to all who were disposed to plunder them. The partial removal of those disabilities was a sort of negative assistance; but so far as any positive assistance went, in the granting of state aid in their promotion, that state aid, as it is always bound to do, was found to degrade and demoralize them. From then on they were taken up by resolute men; the principle of mutual self-help more fully developed; and, as a result, the different orders which have since grown up were evolved, spreading over a considerable part of the civilized world. But it was not until about the middle of the eighteenth century that these orders attained anything like permanence; and even then, they were constantly represented by their enemies as being based upon no scientific principle. What was meant was, that the assessments bore no scientific relation to the risks and expenses; which was true, for reasons already given. But they were based upon a deeper and more scientific principle than that. Mutual helplessness of man to man is always scientific. It is always a success. This is co-operation, and co-operation has never been a failure. It has only been where men have failed to adhere to the real principles of co-operation that their schemes have failed; or they have been killed by causes outside of themselves, like the Ralashine cornmunity.
In the ritual and work of the various societies I am informed that they are largely modelled after the masonic order; and that many of them lay claim to great antiquity. The Druids, for instance, are said to go back to the building of the ark; the Free Gardeners to Paradise; the Odd Fellows to Adam; and the Foresters to
Like all other efforts on the part of the people to better their condition by their own efforts, this has met with the most violent denunciations from both the press and the pulpit. Especially was this true of the period from 1834 to 1851, nine years after they had won complete recognition from the English law, during which that violence was only equaled by their ignorance of the subject. To them was joined the voice of such lordly idiots as the Earl of Albemarle, who contemptuously warned the English workingmen against them, declaring that they were not a brotherhood, but a humbug.
Their recognition by law was only secured after a long and stubbornly contested fight maintained down to 1842. Small concessions were made under different acts of Parliament, but they were generally coupled with conditions which hampered instead of helped the societies. The whole history of English legislation on the subject is one continued series of blundering and meddlesome interference. It is probable that the only benefit such legislation ever conferred upon these orders was to accord them an equal standing before the law with other organizations. Until then they were made a prey of fraudulent men who were only bent upon carrying forward their corrupt schemes. Every possible means were resorted to by the schemers who were interested in continuing the abuses, so much so that several of the orders were nearly wrecked. From one to two hundred of the lodges of the Odd Fellows were closed for want of funds; pamphlets and scurrilous songs were published reflecting on the order; but it was a wholesome process for purging away undesirable material and methods. When it was done the orders were stronger than ever; and they have since been extended into almost all parts of the civilized world. They contained within them that which in time triumphed and brought order out of confusion: the principle of mutual self-help. Better business methods came with a better knowledge of the special requirements and the experience tables on which they could base their calculations. From 1842 to 1857 the friendly societies were improved, strengthened and extended all over
It will be needless to go into statistics showing the extent of the development of friendly societies in this and other countries. Statistics would convey a very inadequate idea of it at best, even if they were access- able, which they are not. To say the least, they furnish a large proportion of the life insurance, and most of the sick benefits in this country, and probably others. That they do this in a satisfactory way is evident from their constant growth and extension. They have demonstrated the practicability of co-operation to deal with the conditions which they are intended to meet. And that demonstration is all the more complete from the fact that they have had to construct their own experience tables out of their own experience, and often in spite, of fraudulent officers enjoying a practical immunity by law from punishment for their frauds.
Some will ask me what the necessity was for the expenditure of so much energy build up a co operative system of life insurance, when, under a true and adequate system of co-operation, life insurance will not be needed. I will answer: if the end was only to build up a system of life insurance, it was not necessary. Under a true co-operation there will be no room for life insurance, because there can remain no want or destitution. Private fortunes will give place to a common wealth, from which all can draw freely for the satisfaction of all wants. It is plain that under these conditions there can be no place for life insurance. But this is the smallest part of the achievement of these societies. They have proved that cooperation is able to answer the most difficult requirements of human association, and to soften the conditions which environ us. I think the time has arrived when it is destined to change those conditions, and utterly destroy capitalism, which is the author of those conditions.