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404 THE LEADER. £No.470, March 26, 1859.
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there that a Mutual Society may not have...
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Note: This text has been automatically extracted via Optical Character Recognition (OCR) software. The text has not been manually corrected and should not be relied on to be an accurate representation of the item.
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Govermnent. To Such An Extent Is The L'U...
no one had cared . about when alive , was canonised into a sort of patron saint upon her death . There were talks of an outbreak on the occasion of the funeral , llowever , the day was very wet and miserable , and the body of the poor yoiing Princess was conveyed to the church of San Lorenzo in the quietest ninnner , and the affair passed off in silence .
404 The Leader. £No.470, March 26, 1859.
404 THE LEADER . £ No . 470 , March 26 , 1859 .
There That A Mutual Society May Not Have...
there that a Mutual Society may not have as protracted a duration as any of the others , asd yet be finally under the necessity of breaking up . In ordinary experience it is generally observed , that what is everyone ' s business is the business of no one , and ' the affairs of a proprietary body might , therefore , be fairly expected to be better managed , and if this observation be held to have any weight , it would follow that we need be no more sanguine as to the career of a Mutual Society , than as to that of a proprietary company .
It is not likely that any institution long established Avili ' relinquish business , unless it lias been playing a losing game ; and , notwithstanding the balance of more watchful management Iii favour of proprietary companies , from the great stake usually held in them by their directors , let us ask ¦ what has been the result of the experience of those referred to ? The proprietors of one company lose all their capital , and have also to pay 501 . a share in addition , in order to be released from tlieir liabilities . Another company has had to relinquish twothirds of an original proprietary paid-up capital of nearly 100 , 000 / . ; and no doubt the proprietors
MUTUAL ASSURANCE SOCIETIES , NP . II . LIABILITIES OF THEIR POLICY HOLDERS : To prevent any misunderstanding as to the object of the observations in our last issue , in regard to these institutions , ' we now beg to state that we entertain the highest opinion of their utility and public importance ; but the recent proceedings in the Vice-chancellor ' s Court in respect to the " Security Mutual , " have led us to draw attention to the present very unsatisfactory state of the law . We are in search of improvement , and a better legal position , for a class of societies calculated to benefit the prudential portions of the population more than anv other institutions of the ¦ country
which have a financial and commercial bearing on their interests It did not , therefore , come within the scope of our observations to eiiter into the history of the origin of the company thus pi-ominently brought out of obscurity into . an unenviable notbrietyw No doubt its management has been of the most ¦ ' culpable- description ,, or so disastrous results could neA-cr have been brought about . To go into the details , ' however , of so ephemeral , and it may be said , of a , scheme so infamously con r . dfucted , and thence to expose the discreditable behaviour of its promoters , would be of quite minor importance to an exposition of the existing very detective state of the law . To this latter view we mean , therefore , to chiefly confine our
observations . ¦ - . '¦ _¦•'' •'¦ The . order recently made by the Yice-Chaneellor Kindersley . is not in any way legally authorised or sanctioned on the ground that the Directors of the " Security Mutual Life Assurance / Society" 'have neglected or abused the trust assumed by them . . Malpractices on the part of the directors form no element in the legal liability declared of 30 / . for every 1 / . paid by the policy-holders in shape of i > rcim " uni . Ilad the directors been paragons of perfection , the policy-holders would still have been equally liable for any losses which might have happened in its affairs ; and it is a protection to innocent policy-holders , who have
practically no voice or authority in the direction of the affairs of such institutions , that is now sought for . One good purpose to be sei * ved by giving prominence to this remarkable case , will be to induce greater caution on the part of the public in connecting themselves with societies which offer no guarantee'lor the fulfilment of their * engagements . It must , however , not bo overlooked that the state of the law , now , so much regretted , is equally applicable to all kinds of Mutual Societies , and our . best institutions of this kind escape its ruinous consequences , wholly on account of the management being entrusted to competent u ^ d honourable men . Jt is known to all who have given special attention to this question , that it is , in the . se tunes of busy competition ,, all but an accident . whether a person in the provinces joins n weak or a strong company . Jt is notorious thnt some more mushroom companies lmvo continued to be represented in inuny of our largest manufacturing districts by men t or" thu highest respectability and leading positions , and any test beyond this of the stability of the company can scarcely bo expected to bo employed by intended assurers in the c ' ountry . Again , the ago of nn oHice , and its large I'cvenue , arc no guarantees ipr cither its stability or permanence , for within a very short time no less than five old lifb oflicos have boen compelled to transfer thoir business to other companies ) . One of tlieso had boon established more than hulf-u-contury , nnothornoarly forty yoarn , two others about thirty-four years each , nnd the fifth upwards of twenty yours , and this doon liot exhaust the Hat of old omcos about to merge into others . From thin stuto of things , an important lossqn to the assured in Mutual Soeioties i ^ to bo drawn , as to their legal responsibilities . It is quite true , that although none of tho ox-eomn » nios now referred to belong to tho mutual olass of institutions , ' . still , within the snino period several Mutual Societies have ( V 1 ho boon fbrood to seek amalgamation . Thd Mutual Societies wore certainly , hpw-« vor , not of the siuuo ago 5 but what guarantee is
suffered largely in all the other concerns to which we have alluded . We do not mean to assert that at the present moment there is any large and longestablished mutual company in an embarrassed condition ; but neither was it for many years known that any one of the proprietary companies now under consideration was in anything : but a thoroughly sound-state-.. Jt is , therefore , imperative on every prudent man to profit by past experience , and to see that , in the case of complications arising in the institution- ¦ . with ' which ..: he is himself connected , the legal eventualities are limited to at least the loss of his investments in it , and do not involve the'sacrifice of his whole-fortune .
be a hold and singularly intrepid person , who would atteriipt to found a new . company tinder this most stringent Act ; but , fortunately for the safety and justification of the existence of all reallv natural and beneficial laws , it Avas soon discovered that the artificial and ill-considered means taken to carry into effect the provisions of the 7 th and 8 th Viet ., cap . 110 , were not only abortive of the intentions of its promoters and most zealous advocates , but were actually in the highest , deirree productive of the most evil -consequences which ' the originators and supporters of the measure . were anxious to . avert . Whether an institution deals in money , or in the commodities which money ' represents , it . matters little , or in fact nothing ; there should be no distinction in consequence in the laws which reiiulate its transactions .
Of all undertakings , therefore ,, . which can be safely trusted with self-governing powers , a Mutual Assurance Society ought , without 'doubt , to . have primary and pre-eminent claims on the Government of the country . ' Institutions of this class conserve , perhaps , even to an objectionable extent , the existing order of things , and to this circumstance , perhaps , moi * e than to' . 'those of all others , is owing the fact that Mutual Societies have hitherto maintained their position in a commercial sense in so inferior a degree , and not progressed with the times .
Twenty years ago , a great political agitatorthe greatest and the most intellect 11 a 1 to which , perhaps , this empire lias ever given birth—it is told , saved one of our best mutual ' societies-from a severe crisis , if not from a . much worse state of affairs . A great authority had pronounced '' an error of alarming amount as having 'been made in the estimates of its assets and liabilities . What has taken place before in one , may happen ¦ again in other societies ; and although belter methods-arc now employed to determine the actual / imincini position of nearly all companies , still niii-ch obscurity and
uncertainty must even now exist , nnder the ? present tests employed , as to whether iiny particular institution is really solvent or not . The proper appreciation of the full value and import of technical knowledge on this subject is centred within so small a number of persons ; and as from the nature of the subject , it . must for a long time necessarily continue so , there is no hope -of now making its importance well understood by the . muss of the people really interested in the success of these Institutions . A great effort is , therefore , evidently needed to bring a sufficient ¦ pressure on the legislature to introduce such measures as are really demanded , to
place the assurance institutions of . the kingdom in that legal position , which , from their national importance' and political value , they arc . entitled to hold . The additional risk at fuelling to the plan of mutunl assurance has been admitted almost universally ; still a few old-fashioned people will bo found to cling not only to their nucetftoriiU patrimony , but their equally , valuable and remarkable stock of economical ideas on finance and commerce , nnd the unalterable attachment of our ivspecteu exponent Of the Post Magazine to the ivygrowh institutions of the day cannot bo ( hie wholly to that well-established lnw of natural progresi
whjqh insists on u sucecwHion of changes ji . s essential not Qiilv to a well-ordered nnd a benwiieinl state of things in tho physical , but nl < o in t \ io moral nnd legal world . Ifiinm were introduced into this hocuo of conflicts and of aspirations , perfect and free from nil misdirection , legal checks , nnd giiurnnleori kjr inn conduct would bo unnecessary , » n < l wluitaoi anight , therefore , be ' tho luws nfllwJiug Juiiu-biofk Companies for tho tima being , they coitl < nave no iniluehoo on tho conduct of niind . s so well con .-m-IMitlkvlll . V \ J ** l « » W V « i » v »» W * ' - . r--- "" t 1
, tutod . It is in overlooking no obvious * 11 principle , that our law-makors nnd law-giver * niiimlwt ho much incapacity for governing tliu body poiiut . NoHi'ly- all our jnstitutionn nwumu the . power nun enpnclty of perfection in moral attribute , im < i «^ - clure any otlior condition of these iw u deliberate violation of them . So thnt laws hihI I'liijctmeni * nvo hhkIo not to prevent and < M , untenic ! M * 111 ( l 11 declension , but to detect departing IWiiu m «" J perfection , and to punish that tumitiulu wiuiu arises out of n statu . of thiiign which ovve * « existence to tho absence of tho vwy conditionwhich ought to be non-uxintc-nt , <<> , | untily « w enactment ' s of tho lnw ou tho prineipk'H U" \ v iu'l present nindo . , ' ,. ,. „ At all times , whatovor mny bo tho precautions token , it will bo found that , nominee cumpiuiM
These disasters in Assurance institutions are by no means confined to , and characteristic of , the experience of recent years . Careful students of the subject wilt at once see that occasional failures arc inherent in the very nature of the adventure , whether the business be conducted on the purely mutual or the proprietary plan , and hence the necessity for a limited responsibility for policy-holders . On referring to the Essay by ^ Mr . Gale , on " Contingent and Eventual Losses , " it will be foiind that in the twenty years , 1816-35 , although -assurance companies were then but few in number , upwards of thirty schemes
broke down . There is a cheap periodical , which for more than fifteen yeai * s has been conducted with great spirit , thorough independence , and having the most beneficial influence on the conduct of the assurance companies themselves . We refer to the Post Magazine , published weekly , at a cost of one penny , and , although uniformly road with profit by those more immediately connected with the management of these companies , we fear that it is only seen by a very small portion of the quarter of a million persons assured in the various institutions of the Empire , Every policy-holder , whether his interest be large , or , small , should subscribe for
this publication . It will prove to be a good investment ; for from no other . source can ho hope to obtain the curliest , the best , and most accurate information regarding all the assurance institutions of every class . It is , of course , impossible for us to indorse all the opinions of its writers , but the abundance iand nocuracy of tho facts from "time to time furnished , are invaluable . In addition to the statement made by Mr ,. Gale , of the failure of societies prior to 188 G , wore it not to occupy too much space , wo could furnish a large list of others ; but those who are desirous of understanding tho cflfbot of recent legislation on a . ss \ ira , nco projects , cannot do better than consult the Post Magazine and its companion Almanac , on the results of tho
numerous and needy progeny of schemes conceived and launohod into-existence under tho gorminnting warmth of the 7 th and 8 th Viet ., cap . 110 . That Aot , tho favourite nursling oi \ tl } 0 loading actuaries , secretaries , and malingers of tho life institutions of tho pcrjod at which it became law , is at onco tho most singular and remarkable dooumont in tho Statute IJook , TUo evidence taken before tho Piirl } junbntnry Committee , and also tho Report of tho Cpmmifctoo itself , on tho roconuncntlntion of which tho bill was introduced , nhow that it was dcsira-blo , and it was tho wish and intention to cheek tho -growth of now institutions , niid honou the patent purpose of tho 7 th and 8 th Viet ,, oni ) . 110 , being to secure tho monopoly of trano . in life viiiks , it was thought thut ho must , indood ,
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Citation
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Leader (1850-1860), March 26, 1859, page 20, in the Nineteenth-Century Serials Edition (2008; 2018) ncse2.kdl.kcl.ac.uk/periodicals/l/issues/cld_26031859/page/20/
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