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a deficiency amounting to £96,474 ($469,491), leaving an actual deficiency in the insurance funds to the amount of £18,703 ($91,018). This deficiency is the result of several years' growth, being approximately £14,000 ($68,131) in 1890 and £45,000 ($218,993) in 1900. An investigation as to the cause of this deficiency was in progress in the latter part of 1907, but the results are not at hand. It was generally conceded, however, that the lives of annuitants were prolonged beyond the periods used in the computation of the rates in force. In this connection the departmental committee above mentioned recommended that in the future funds be invested in the most remunerative parliamentary securities available at the time of investment, and that in the surrender of policies deductions should be made in an amount adequate to meet the expenses of the various transactions involved, which had not been the case in the past.

STATISTICS OF OPERATIONS.

The operations of this system of insurance were naturally somewhat affected by the reduction of rates in 1896, this reduction taking effect February 1 of that year. An increase in the number of policies of various classes issued was an immediate result of this reduction, but the effect has not continued. A general view of the transactions had in this connection throughout a period of 12 years, beginning with 1897, is afforded by the following table:

ANNUITY AND LIFE INSURANCE BUSINESS DONE THROUGH POST-OFFICE SAVINGS

BANKS, 1897 TO 1908.

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1897 1898 1899 1900 1901 1902. 1903. 1904. 1905. 1906. 1907 1908..

2,051 $273, 677 $3,681, 181 $1,909, 055 207 $19,510 $117,341 $53, 517 849 $233,675 $99, 466 321 $48. 908 2,065 271,322 3,651, 598 2,106,031 164 17,646 116,193 52, 023 731 207, 089 104,931 311 56, 807 2,031 263, 005 3, 501,053 2, 299, 577 147 15,013 114,932 57,868 827 212, 778 104,995 312 51,891 2, 258 242,804 3,543, 503 2, 449, 295 137 13, 247 96, 610 62, 880 677 172,819 107,963 364 75. 051 1,764 205, 697 2,735, 747) 2,566, 451 142 14,921 114,995 68,983 920 215, 566 110, 212 380 63, 226 1, 679 208, 242 2,719, 254 2,668,063 139 14, 468 105, 915 83, 568 722 168, 605 112, 148 389 71, 275 1,763 213, 995 2,715, 415 2,783, 171 157 16,663 119,176 71, 484 592 152,871 112, 236 387 63,878 1,768 199, 527 2,533, 198 2,893, 144 128 12, 127 102, 250 78, 677 517 139,323 112, 080 465 82, 137 1,840 221, 367 2,789, 502 2,990,007 158 15, 592 118,193 82, 500 741 180, 114 113, 759 449 75,883 1,797 210, 432 2,650, 155 3,092, 622 132 14, 239 113, 143 100, 430 641 136,525 115.837 406 71, 216 1,685 184,635 2, 293, 995 3, 174, 617 157 14,064 107,321 94,868492 121, 234 113,983 420 76, 662 1,812 199,784 2, 498, 685 3, 226, 674 137 12,458 95,014 106,927 421 104,800 112, 275 413

89, 295

It is evident that the total of business transacted is of slight amount, and that it appears to be diminishing rather than increasing, though there is no uniform upward or downward movement. Immediate annuities, i. e., those on which return payments begin at once, are much more frequently purchased than deferred annuities, though the purchase of the latter form has been urged upon the public as a sort of provision for old-age pay. Two reasons exist which suggest that the disparity between the numbers of the two classes will increase rather than diminish; first, the fact that weekly payments under the compensation act may be commuted by the payment of a lump sum to be computed on the basis of the cost of a purchase of an annuity through the channels of the post-office savings bank, and while the investment is not directed it is optional with the judge or other arbitrator to direct such investment; and, secondly, the enactment in 1908 of the old-age pension law, which provides for old-age pay without the necessity of prior payments by or on behalf of the beneficiary. It seems not unlikely, too, that this same law will affect the taking out of life insurance policies, since the aged widow would be entitled to old age pay, without reference to any insurance procured by her husband. Such at least is the opinion expressed by the officers of a number of friendly societies, who replied to inquiries made by the Government while the old-age pension bill was under consideration, that there was already an expression of opinion that it was not worth while to provide by outlay for what would soon be available by the action of law. It is too soon, however, to speak from experience, and the opinions of the friendly society officials may have been somewhat affected by their feeling that the new law would conflict with the interests of their organizations.

The following tables show the transactions more in detail for the business of deferred annuities and life insurances for the year 1907. Data as to immediate annuities were not included in the source used.

FINANCIAL STATEMENT OF STATE LIFE INSURANCES AND DEFERRED ANNUITIES,

FOR THE YEAR ENDING DEC. 31, 1907.
(Source: Government Annuities and Insurances, Apr. 6, 1908.)

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Annuities.... $127.402 $58, 301 $5, 124 $190.887 $13, 467 $51, 244 $24, 227 $99, 973 $1,976
Insurances...
113,964 48,001

161, 905 8,848 68, 426 18, 317 58, 343 4,838 $3,193

$190,887

161,965

Total.. 241, 426 106,302

5, 124 | 352,852 | 22, 315 119, 670

42,544 158, 316 6,814 3,193 352,852

PROPOSED REFORMS.

The enactment of the workmen's compensation act of 1906 gave rise to the question whether, in view of the large additional liability imposed by the act, facilities for insurance against the risks created by it should not be provided by the post-office. A committee was therefore appointed March 1, 1907, to take this subject into consideration. In view of the slight use made of the general insurance provisions, already discussed, the postmaster-general added the following as indicating the scope of their deliberations: “And further, to consider whether it is desirable that steps should be taken to encourage the use of the present life insurance system of the postoffice; and, if so, what steps.” The committees were able to make no recommendations on the first subject, but a report on the second was made in May, 1908, in which they reviewed the history of this form of insurance and made a number of recommendations looking toward an extension of its use. One of these was for the raising of the maximum amount of life insurance obtainable through the post-office from £100 ($486.65) to £300 ($1,459.95). A second related to the payment of premiums, which, under the existing law, were deducted annually from the insurer's savings bank account. The recommendation was to the effect that premiums should be accepted in quarterly installments in order to meet in a measure the custom of weekly collections made by the agents of companies or societies providing other forms of insurance. Some changes in the tables of premiums were also recommended, so as to provide for endowment policies and for life policies to be paid up in a fixed term of years. Investment in more profitable securities than the consols to which investments are restricted under the law and a more thorough advertising of the scheme were the remaining principal recommendations. The law provides for a commission of from 1s. to 4s. (24 to 97 cents) payable to any employee of the post-office who procures an accepted applicant for insurance, but it was said that there was a general feeling that activity in securing business was not favorably regarded by the higher officials. It was urged that this impression be corrected, and such employees be encouraged to secure as many applicants as possible. Arrangements with friendly societies were suggested for insuring their members, especially in the case of small societies which are not able to offer death benefits in excess of burial money. The law provides that members of these societies may pay their premiums through them by arrangement with the postmastergeneral and the societies themselves. It does not appear that any of these recommendations has as yet been adopted.

From reliable but unofficial sources come accounts of a proposal by the Government (1909) to arrange for a national scheme of state insurance against sickness, invalidity, etc., probably including medical benefits, and the maintenance of sanatoriums for consumptives. Invitations were extended to the leaders of the friendly-society movement inviting the assistance of these societies in the formulation of practicable proposals for their cooperation in dealing with the forms of insurance under consideration. The replies to this invitation have shown opposing views. Thus the Loyal Order of Ancient Shepherds (Ashton Unity), at its annual conference, representing 230,000 members, welcomed the action as in no way detrimental to the interests of friendly societies, or interfering with their self-governed activities, but on the contrary as making provision for the classes who could not subscribe to voluntary agencies, and tending to the great benefit of the societies themselves. On the other hand, the Manchester Unity of Odd Fellows, with a membership more than three times as great, at its annual conference, debated the proposition at length but refused by a large majority to cooperate with the Government, on the ground that “national state assurance would strike a blow at the principles of individualism and self-help.” An opponent to the resolution reminded the directors that in the order they were themselves acting in a collective capacity, and that individualism could not be consistently supported as against the proposed action. The resolution was to the effect that the conference was entirely opposed to any scheme of compulsory state insurance against sickness for persons eligible for membership in voluntary thrift agencies, but that the board of directors might assist in preparing a scheme to provide for those whose state of health debarred them from membership in such societies.

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OLD-AGE PENSIONS,

HISTORY.

'i'he subject of old-age pensions is one that has been under parliamentary consideration for above fifteen years, and for a period of almost equal duration it had attracted a large measure of public attention. A royal commission on the aged poor was appointed in 1893, which after two years of deliberation reported that they were "unable to recommend the adoption of any of the schemes as yet suggested.” A new committee was appointed in 1896 "to consider any schemes that may be submitted to them for encouraging the industrial population, by state aid or otherwise, to make provision for old age.". The cost and probable financial result of the schemes were to be considered, as well as their effect on the habits of the people and their influence on the prosperity of the existing friendly societies.

There was constant reference to the existing forms of relief, not only by private institutions and organizations, but also under the working of the Poor Laws, which, since the middle of the sixteenth century, had been directed to the subject of the care of the indigent. From a direction simply for the collection of voluntary alms, the first law shortly passed to one "for the punishment of vagabonds and for the relief of the poor and impotent” by means of funds procured finally by taxation. The forms of legislation adopted from time to time allowed for various methods of relief-outdoor, workhouse, and wage subsidies—without attaining the desired ends of meeting actual needs and discouraging and reducing pauperism. The present Poor Law dates practically from a reform movement of about 1830, since which time a very considerable reduction in the numbers of the so-called pauper population has taken place under the operation of the revised laws, (from 45.8 per 1,000 of population in 1868 to 28.5 in 1878, 28.1 in 1888, 23.5 in 1898, and 22.7 in 1907).(a) A minority report from the royal commission of 1893 expressed the opinion that the question of old-age pensions had not been adequately considered, and suggested that, if subsequent consideration of the subject was thought desirable, it should be by a smaller body, “specially adapted to deal in a purely judicial spirit with both its social and financial aspects."

The committee of 1896 took up the matter of pensions, more than a hundred schemes coming before it, but it was decided that schemes based on compulsion as contrasted with encouragement, as well as schemes requiring no contribution by the pensioners themselves, were, by the terms of its appointment, excluded from consideration. None of the schemes submitted was approved, as it was concluded "that there was not one of them, whatever its particular merits, which would not ultimately injure rather than serve the best interests of the industrial population.” A member of the committee had presented a draft of a scheme early in the inquiry, and this was worked on as being at any rate less objectionable than any other plan submitted. This provided for the aid of persons of 65 years of age or above who were in possession of an assured income of not less than 2s.6d. ($0.61) and not more than 5s. ($1.22) per week, thus relegating to the poor funds all who had not, independently of the proposed assistance, at least a measure of support. It was not until 1899, therefore, when several bills were introduced into Parliament, and a "select committee on aged deserving poor” was appointed, that the idea of old-age pensions as finally adopted received serious official consideration. This committee, while recognizing the difficulties, financial and social, that had so impressed the earlier committees, and also commending the growth of thrift which had been favorably commented on by them, were of the opinion that a different system from any yet in operation was needed to provide for a large class of respectable, hard-working people, who at the end of a long and meritorious life, from misfortune or other cause entirely beyond their control, are without other provision for their declining years than the workhouse or inadequate outdoor relief. They therefore made a thorough inquiry into proposed schemes for a pension system, and, while their report was not acted favorably upon, their conclusions were practically the basis for the act of 1908.

a Tables prepared in connection with the question of old-age pensions, 1907.

67725°—VOL 2-11-13

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