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subsidies, gifts, etc., and indirect assistance through the dues of honorary members account for 16.22 per cent.

As regards expenditures, the greatest item is that for direct assistance in cases of ordinary sickness. The total of the first three items which represent this relief accounts for 55.11 per cent. of all expenditures. The item of expenditures for old-age pensions comes next in importance with 17.75 per cent. The most interesting information to be gained from these figures is that showing the extremely low cost of administration, 4.43 per cent. of total expenditures. Practically all the money that is raised is thus expended directly in one way or another for the relief of members or their families. From the standpoint of administration no form of organization has been found to be so effective as that of the voluntary organization of individuals for mutual assistance. Motives of honor prevent men from imposing upon their fellow members, and most of the work is willingly done without remuneration.

The extent of the relief afforded is shown by the fact that during this year relief was granted in 280,893 cases representing 4,346,619 days of sickness, an average of 15.47 days sickness per case and 5.16 days for each participating member.

A clearer apprehension of the character and work of mutual aid societies can be obtained by showing the results for the last year reduced to the basis of the individual society and member. It is thus found that the average membership of approved societies was 165 and of authorized societies 147, and the average amount of their invested capital $4,566.85 and $2,916.84 respectively. The average receipts of the first, excluding societies organized for old-age insurance only, of which there are a few, were $5,609.89 and of the second $6,488.20. The statement of average receipts and expenditures per member is of especial interest, for only in this way is it possible to determine what sick insurance means to the individual. The number of participating members, excluding children, who are under a special régime as regards dues and benefits, being 925,581, and the amount of their dues $2,673,885.03, the average dues paid by each was $2.88. The average dues of women was $2.32 and that of men $3.00. If those societies which are devoted

exclusively to the constitution of old-age pensions be omitted, the average contribution of men was $2.88, of women $2.07 and of both combined $2.76. In return for these payments each member received, on an average, assistance to the amount of $3.78, not including his participation in that portion of receipts that is covered into the fund for old-age pensions. Of this amount $1.21 was received in the way of cash benefits, $0.61 in the payment of salaries of physicians, $0.77 for medical supplies, $0.32 as aid to old members and pensioners and those suffering from an incurable disease, $0.10 to their widows and children, $0.20 for funeral expenses, $0.19 expenses of administration and $0.38 general expenses; or, deducting the last two items, a total of $3.21 in the way of actual assistance. Considering the fact that this sum is $0.45 more than that he paid in, it is evident that from the individual standpoint, membership in a mutual aid society offers substantial inducements.

III.

That portion of the activities of mutual aid societies that relates to the constitution of old-age pensions is of increasing importance. The method of providing for this kind of insurance is as follows. The societies determine what proportion of their funds on deposit with the caisse des dépôts et consignations shall be devoted to the purpose of acquiring old-age pensions. These sums are then set apart as a special fund, and to it are added certain subsidies granted by the government.

In order to encourage the development of old-age insurance, the government by the act of 1852 granted a subsidy of 10,000,000 francs as a permanent endowment, the interest on which should be used for the increase of pensions provided for by mutual aid societies. Since then the government has granted various other subsidies. In 1882 Parliament commenced the policy of granting a yearly lump sum for the purpose of aiding mutual aid societies to provide pensions for their old members. During each of the years 1882 to 1888 this sum was 160,000 francs. In 1889 the subsidy was increased to 400,000 francs, and each year since has been still further augmented, being 450,000 in 1890; 475,000 in 1891; 675,000 in 1892; and 775,000 in 1893. The interest on the original

endowment amounts to 510,000 francs. The amount of the government subsidy in 1893, therefore, amounted to 1,285,000 francs. The whole of this sum then bears interest at the rate of 472 per cent. With this fund the societies purchase annuities from the National Old-Age Insurance Bank, as their means permit, and designate the members to receive them, who must be at least 50 years old and have paid dues during 10 years. The cost of annuities has changed from time to time, owing to the change in rate of interest according to which policies were calculated. In order to purchase an annuity of $100 for a man 50 years of age, there was required during the years 1861 to 1873 $2,222, from 1873 to 1883 $2,000, from 1883 to 1886 $2,222, from 1886 to 1892 $2,500, and since January 1, 1892, $2,857 This is the rate for pensions where the capital is returned to the society upon the death of the pensioner, the

system almost invariably adopted by the societies. It is evident that/ under this plan, a society does not permanently alienate any of its capital. The serious objection to this system is that it makes the present members pay for the benefits to be derived by future members, and places the future of the society above that of the individual members.

The following table gives all the facts which are necessary to show the character and extent of the old-age insurance work of mutual aid societies since 1872.

THE PROVISION OF OLD-AGE INSURANCE BY MUTUAL AID SOCIETIES OF

France, 1872–1892.

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This table shows that there has been a steady growth in the fund devoted to the purchasing of old-age pensions, and consequently in the number of pensions given each year, and the number of pensioners carried on the rolls. On the whole, however, the showing can scarcely be called satisfactory. The increase is not in proportion to the increase in the number of societies. It is doubtful if there would have been any increase but for the fact that the societies are anxious to participate in the subsidies of the government, which are entirely devoted to the assistance of those societies having old-age pension funds. The growth of the pension fund is largely due to the assistance of the government and other benefactions. Of the $18,873,608.72 which in 1892 constituted this pension fund but $9,535,115.52 were derived from the contributions of members. The remainder was derived, $3,528,428.64 from subsidies of the government, $349,982.57 from gifts, and $5,462,880.20 from interest. From this sum should be deducted $2,797.80 refunded for one reason or another, leaving the total amount of the fund as stated.

That greater results have not been accomplished is due to the faulty system pursued. The method employed is one of exceeding crudeness. Each society as a whole has a certain interest in the fund for the purchase of annuities. From time to time it is able to purchase an annuity for one of its members. A few thus receive pensions, while the great majority receive nothing. There is no engagement entered into by the members of the societies by which they will receive a pension in proportion to the amount of their dues: indeed they may never receive a pension. It is also by no means certain that it is desirable to encourage societies to devote a portion of their funds to creating old-age pensions when to do so requires that they should diminish just so much their general funds, which are already insufficient adequately to provide for sick insurance. The preferable system would be that whereby a separate account is opened with each member. Each individual could thus make payment as he was able, and would be encouraged to do so by the knowledge that he would participate in the government subsidy in proportion to the extent of his own efforts,

In other words, there should be introduced the principle of individual instead of collective insurance. The scheme of reorganization of mutual aid societies now pending before Parliament, comprehends all of these changes, and it is expected that a great increase in the amount of old-age insurance will result from its adoption.

Reference has been made to the fact that mutual aid societies can insure their members collectively against death. Actually, but little is done in this way. In 1892, but 62 societies took out insurance for the year 1893, and this insurance related to but 13,577 members.

IV.

From the foregoing statement of results, it can be seen that the mutual aid societies have accomplished notable results in the way of providing for the insurance of the working classes against sickness, and somewhat less extensive results as regards old-age and life insurance. As has been intimated, however, the system as it now exists far from corresponds to the requirements of a scientifically organized insurance system. The fundamental error has been made in attempting to utilize funds not originally created for that purpose for a general system of insurance. Insurance against sickness, old age and death constitute quite distinct problems, and should be organized on quite distinct bases. The original purpose of the mutual aid society was that of merely binding together a certain number of persons into an organization by which they could assist each other in cases of sickness. Their plan of organization is well adapted to that end. Their utilization for other kinds of insurance has complicated matters greatly. The societies now perform two distinct functions, that of direct sick insurance, and that of serving as intermediaries for the provision of old-age and life insurance through the national insurance institutions.

The defects in the organization of her mutual aid societies is now generally recognized in France, and the subject of their reform has been under active consideration for a number of years. The result of this discussion is the formulation of a plan of reform that has every prospect of a speedy enactment. As the

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