£ year, the society must be 1000, at the end of 2d year, 57; and the proportion of the expected number by the We have now to advert to THE RATE OF INTEREST, meaning the rate at which the yearly premiums may be expected to be improved. 1000, ditto, for 2 years, 942 12 0 And in order to discharge the 81 6 2 £4225 10 9 This, divided by 46, gives £91, 17s. 2d. as the sum (technically called premium) which each person would need to pay in at the foundation of the society. And this sum of £91, 17s. 2d. is the present value of a reversion of £100, at the age of 90, according to the Northampton Tables, and taking interest at 3 per cent. Supposing such a society to be constituted, and £4225, 10s. 9d. to be paid in by the 46 members, we shall see how its business would proceed until, at the close of seven years, death put a period to the account :The original contribution of L.4225, 10s. 9d. being put out to interest, at the end of the first year amounts to, From which deduct for the twelve lives which fail in the course of the year, Fund remaining at the commencement of the second year, £4352 5 2 1200 0 0 3152 5 2 Which, bearing one year's interest, will amount to, £3246 16 8 year, 1000 0 0 2246 16 8 This subject is one which does not admit of the same Which, bearing one year's interest, will amount to, £2314 8 2 EXAMPLE OF LIFE-ASSURANCE CALCULATION. According to the Northampton Tables, out of every 11,650 persons born alive, there will be 46 living at the age of 90. From these tables being ascertained to be unfavourable to life, this must be understood as not strictly the case, but it may be adopted for the sake of illustration. The same tables make it appear that, of the 46, 12 will die in the course of the first year, 10 during the second, 8 during the third, 7 during the fourth, 5 during the fifth, 3 during the sixth, and the last remaining life will fail in the course of the seventh year. It is a favourite mode of exemplifying life-assurance calculation, to suppose these 46 persons, aged 90, associating for the purpose of assuring £100 to each at death. They are supposed to proceed upon the principle of paying all that is required in one sum at first, thus forming a fund which is to answer all the demands which are to be made upon it. In this calculation the improvement of money has been assumed at 3 per cent. The object is to ascertain what sum, by way of present payment, each is to contribute to the fund, so that it may discharge £1200 the first year, £1000 the second, £800 the third, and so on, In order to discharge Practically, life-assurance is not effected upon lives so advanced as 90 years. It is common to confine business to ages under 60; and the great bulk of insurers are between 27 and 40, the time about which men in this country begin to feel the responsibilities of a family. But the calculations followed for the various ages are formed exactly in the above mode. All the persons of a particular age in a life-assurance society are considered as a distinct group insuring each other. Of those, for instance, at 30 years of age, it is calculated what proportion will die the first year, what the second, and so on; and from each the society looks for such a contribution, present or prospective, as may make up an aggregate sufficient, with the accumulation from compound interest, to pay the sum assured upon each life in that group. It is quite the same thing to the society, or, we shall say, to the general interest, whether the individual insurers pay the whole required contribution at once, or in a series of annual payments, which, as the plan convenient for the majority of people, is that generally adopted. FORMATION OF RATES. According to the principles of which we have given a slight outline, offices form scales of rates at which LIFE-ASSURANCE. they profess to do business. In these rates very con- policies. The scales of the various offices may be classed In most cases the charges for life-assurance are considerably within the verge of safety. Hence companies generally divide good profits, and societies realise large surplusages, which fall to be divided among the insurers, in the form of additions to the sums stated in their few examples, endeavouring, at the same time, to show Total Premi- L.1 147 L.1 18 1 L.2 2 0 L.2 7 3 L.2 14 5 L.3 4 6 L.3 19 8 L.4 19 0 L.129 7 9 1 12 10 1 17 6 2 2 11 291 500 131 8 8 Standard L. Assurance The high premiums borne by the stocks of the two above companies, form a tolerably fair evidence (notwithstanding their having also higher scales) that business can be profitably transacted at these rates. It may likewise be mentioned that the Edinburgh LifeAssurance Company, which presents a scale nearly the same in aggregate amount as the above (£133, 4s.), divides 6 per cent. upon its stock, the £10 shares of which stand at £14, 10s, in the market, The Scottish Provident was established in 1837: it has done a large amount of business, and its experience as yet tends to show that the rates are considerably within the verge of safety. The following is a selection of respectable offices in which somewhat higher rates are charged : Total Premiums between 20 and 60. L.3 11 9 L.4 8 0 L.5 10 3 L.141 12 6 320 311 0 350 3 14 11 142 10 4 146 3 3 2510 216 2 11 1 217 6 356 146 12 5 The Economic is a proprietary office, giving three- | (the commencement of the society) and 1820, were defourths of the surplusages or profits to the assured. It was established in 1823. In 1834 a bonus, amounting to 16 per cent. on the premiums paid, was declared; and in 1839 there was a second bonus, amounting to 31 per cent, on the premiums paid during the preceding five years. The Norwich Union, in 1816, gave a bonus of 20 per cent. on the amount of premiums deposited by the members insured previous to June 1815; a second bonus of 24 per cent. in 1823; and a third of 25 per cent. in 1830. The Guardian is a proprietary office, in which a proportion of profits not stated is given to the assured, Established in 1821, its first division of profits was made in 1828, and a second in 1835. At each period, the bonuses averaged rather more than 28 per cent. on the amount of the premiums paid thereon during the preceding seven years. The Scottish Widows' Fund and Scottish Equitable have both declared large surplusages. At the division of the first of these highly prosperous societies in 1825, the policies opened between 1815 clared entitled to 2 per cent. for each year of their cur- Total Premiums between 20 and 60. Globe Company, Amicable Society 25 L.5 6 4 L.151 5 2 154 16 6 350 155 8 6 527 There are a few offices which charge still higher rates. The aggregate premiums of the London Assurance and National (mixed offices), are respectively £157, 0s. 8d., and £158, 3s. The London Life (mutual) is the highest, the aggregate of the scale being £171, 18s. It is clear that, if business can be transacted by a company at a profit on a scale of rates amounting in the aggregate to £129, 7s. 9d. (as in the case of the Aberdeen Company), the last set of rates ought to give companies very large profits, and societies equally considerable additions to policies. The scale of the Globe is also that of the Rock and Atlas, proprietary offices granting a share of profits to the assured. In the Rock, where three-fourths of the profits are divided, policies opened in 1806 for £1000, at whatever age, were in 1842 £2001, 11s. In the Atlas, which has not announced to the public the share of profits extended to the assured, policies for £1000, opened in 1816, ranged in 1837 from £1338 to £1789, according to age. The high rates are defended on various grounds. A company making high charges, and consequently good profits, may be supposed to have more stability than one making moderate charges; while, of a society pursuing business on the same plan, it may be said that the overplus becomes a kind of bank deposit, to be ultimately realised by the depositor. With regard to companies, the defence may or may not be sound, according as business is managed discreetly or otherwise -and there certainly are offices of that nature, entitled to the most implicit confidence, although they present moderate scales. The defence is of greater force with regard to societies; but even there it is not free from 35 objections. The high-rate societies, proceeding upon the Northampton Tables, commit a constant injustice to young and middle-aged members in favour of the old. The needless amplitude of their funds tends to occasion a less careful use of them in conducting the concern: there is, for instance, a greater temptation to give large commission to persons, who, as it is said, bring business; a practice in no respect different in morality from that of butchers and grocers who bribe cooks and butlers to favour them with their masters' custom. But the greatest objection to a needlessly high scale is, that it must act as an obstruction to the first step in what is generally one of the most important moral acts of a lifetime the effecting of a life-assurance. We would here be understood to draw a broad distinction between an unsound low rate and one which is sufficient to satisfy a reasonable anxiety for security. Rates much below the first of the above three scales would be decidedly unsafe, taking all likely contingencies into account. On the other hand, it ought certainly to be possible to transact perfectly safe business upon a medium of that scale. Those who, for further caution, prefer the next scale, must be said to pay highly for it, if they resort to a company which gives no share of profits to the assured: if they become members of a society, large periodic additions to policies will be no more than their due. In order to convey still more distinct notions respecting rates of life-assurance, we subjoin a scale of those which are required, exclusive of expense for management, upon the Carlisle Tables, taking money variously at 4 and 3 per cent. : L.1 10 4 1 12 1 L.1 15 1 1 16 11 L.2 0 5 L.2 7 6 2 2 5 L.2 15 6 297 217 10 4 per cent., 31 per cent., The rates actually charged by the offices which we have cited, may easily be compared with these. It will be found that the additions made for management and the security of the concern, even to the 3 per cent. rate, are very considerable. The aggregate of the above ages at 3 per cent. is £18, 16s. 9d.; that of the same ages by the actual rate of the Aberdeen Company is £21, 4s. 11 d., or nearly 123 per cent. higher; that of the same ages by the Scottish Widows' Fund is £24, 7s. 11d., or 29 per cent. higher; while that of the London Amicable is £25, 11s., or above 354 per cent. higher. MORAL DUTY OF LIFE-ASSURANCE. On this subject we add some remarks from a paper in Chambers's Edinburgh Journal,' No. 373, First Series. They are conveyed in language which is apt to appear unmeasured to one who has not given the subject much consideration-but, we believe, only to him. 'Such being the equitable and beneficial principles on which mutual-assurance societies are established, it is clear that they present, to men in the enjoyment of income, but possessing little property, a most suitable and favourable means of providing, in a greater or less measure, for the endeared and helpless relatives who may survive them. That only about 80,000 persons in the United Kingdom [written in 1839] should have taken advantage of life-assurance, being but 1 in 62 of the supposed number of heads of families, surely affords a striking view of shall we call it the improvidence of mankind, or shall we not rather designate it as their culpable selfishness? For what is the predicament of that man who, for the gratification of his affections, surrounds himself with a wife and children, and peaceably lives in the enjoyment of these valued blessings, with the knowledge that, ere three moments at any time shall have passed, the cessation of his existence may throw wife and children together into a state of destitution? When the case is fully reflected upon, it must certainly appear as one of gross selfishness, notwithstanding that the world has not been accustomed to regard it in that light. It is unquestionably the duty of every man to pro vide, while he yet lives, for his own: we would say that it is not more his duty to provide for their daily bread during his life, than it is to provide, as far as he can, against their being left penniless in the event of his death. Indeed between these two duties there is no essential distinction, for life-assurance makes the one as much a matter of current expenditure as the other. One part of his income can be devoted by a head of a family to the necessities of the present; another may be stored up, by means of life-assurance, to provide against the future. And thus he may be said to do the whole of his duty towards his family, instead of, as is generally the case, only doing the half of it. It may be felt by many that, admitting this duty in full, income is nevertheless insufficient to enable them to spare even the small sum necessary as an annual premium for life-assurance. The necessities of the present are in their case so great, that they do not see how they can afford it. We believe there can be no obstacle which is apt to appear more real than this, where an income is at all limited; and yet it is easy to show that no obstacle could be more ideal. It will readily be acknowledged by everybody who has an income at all, that there must be some who have smaller incomes. Say, for instance, that any man has £400 per annum: he cannot doubt that there are some who have only £350. Now, if these persons live on £350, why may not he do so too, sparing the odd £50 as a deposit for life-assurance? In like manner, he who has £200 may live as men do who have only £175, and devote the remaining £25 to have a sum assured upon his life and so on. It may require an effort to accomplish this; but is not the object worthy of an effort? And can any man be held as honest, or any way good, who will not make such an effort, rather than be always liable to the risk of leaving in beggary the beings whom he most cherishes on earth, and for whose support he alone is responsible?' For a further account of modes of life-assurance, the reader is referred to the following number on THE SOCIAL ECONOMICS OF THE INDUSTRIOUS ORDERS, SOCIAL ECONOMICS OF THE INDUSTRIOUS ORDERS. Ir is surely a deplorable feature in the condition of a large portion of the working-classes in this country, that they have little or no provision made against the necessities which arise to themselves or their families in the event of sickness, a failure of employment, or death. With some this is not the case, but it is the case with many; and the result is, that these persons have never more than a thin partition separating them from the realms of want and dependence. The effect which this is calculated to have need not be largely insisted on, for want and dependence are universally allowed to be productive of many evils. What is there to be expected from the moral nature of one who is every now and then obliged, perhaps, to ask for gratuitous medicine and medical attendance-to take bread from a parish officer or the managers of a charitable subscription-to trust to the pity of neighbours whenever anything like an exigency arises in his family-in short, is, for the supply of a great part of his needs, a stipendiary upon his fellow-creatures? These things are evidently irreconcilable with true manly dignity, with political independence, and with an upright bearing in any of the relations of life. The destitution of such individuals is commiserated when it arises every humane person, who is himself above want, feels bound to contribute to its relief: the claim from suffering man to him who suffers in the smallest degree less, is irresistible. But while it is allowed that the need, when it does exist, must and ought to be relieved, all must likewise see that, in the effort to diminish one immediate and clamant evil, another of a serious nature is introduced. The working-man is morally deteriorated by ceasing to be self-dependent. Better, clearly, that this portion of the community were to place themselves, by efforts of their own, above all need for such degrading aid. But then the working-classes realise such small gains, that they can spare nothing for this purpose.' This may be said; but it is at the best only partially true. A great portion of the working-classes do most unquestionably, in ordinary times, realise enough to enable them to spare a little by way of provision for the future. Since many, most creditably to themselves, make such a provision, it may fairly be presumed that others, having the same wages, could do so also if they were willing. We may still more confidently presume that when some with comparatively small wages are able to save, those who are better off could save also. Now it often happens that the labourers of least skill, and who are least liberally remunerated, contribute as largely to savings' banks as their better-paid brethren. Where this is the case, and the circumstances of the men are otherwise equal, we cannot doubt that the latter class make a less economical disposal of their income. Clearly, they have only to imitate the frugal conduct of the small-wage class, in order to have ample means for making the provisions in question. On this subject, from various causes, many erroneous notions prevail. When practical men are consulted, we hear of an afflicting number of instances in which the higherwaged workmen are considered as securing little if any more comfort to their families than the other class, and perhaps not so much. We have heard masters of works declare that their men at 258. a week did not, as a class, maintain their households, or educate their children, so well as those who had little more than half the sum. In a return from the Savings' Bank of Dundee, it appeared that, while there was £1189 deposited by 108 male weavers, a class whose wages average 8s. weekly, and £425 by 36 hecklers, a class whose average wages are 12s., there was only £637 from 56 mechanics, No. 84. men whose wages range from 18s. to 30s. Such factsand we believe many of the like nature might be readily adduced-seem to prove that the working-classes have much more in their power for the promotion of their physical and moral wellbeing than is generally supposed. Admitting fully that many are ground to the dust by poverty, we cannot doubt that a far larger proportion have all but the will to take the proper means for preserving their social independence. We do not profess here to inquire into the primary causes of the unendowed condition of the workingclasses; but we can readily see various immediate ones -as intemperance, and bad management of resources. The tavern bill of the whole operative class in the United Kingdom must be an enormous one. Of above thirty-one millions of gallons of spirits prepared in one recent year, and for which twenty millions of pounds sterling would be received, we cannot assume less than two-thirds to have been consumed by the workingclasses. These classes probably expend in this way three times the whole cost of the religious establishment of the country. In Glasgow, there was lately a tavern or spirit-shop for every 14 families; and it was calculated that not fewer than 30,000 of the inhabitants go to bed drunk every Saturday night. In the parish of St David's in Dundee, while there were but 11 bakers' shops, there were 108 for the sale of liquors. In the parish of Lochwinnoch in Renfrewshire, three or four times more money is said to be spent in this way than is required for the support of religion and education. The value of ardent spirits consumed in the parish of Stevenston in Ayrshire, with a population of 3681, exceeded the landed rental by £3836. These are startling facts, telling, if they tell anything, that a large portion of the earnings of the working-classes is worse than thrown away. Now, though it is well, certainly, to compassionate and relieve the sufferings of all who need, we cannot but be equally sensible that it is proper to tell the plain truth, and say that for much of this suffering our countrymen have themselves to blame. There has been of late years a hollow kind of cajolery practised towards them, discreditable to all parties, and of a dangerous tendency. We dismiss this entirely, and conceive it to be both paying them a greater compliment and doing them a greater service, to tell them that the conduct of a large portion of their class is in many respects reprehensible, and to show them how it might be shaped somewhat better. We propose, therefore, in the present sheet to treat of various arrangements or institutions which have been devised for the benefit of the industrious orders, with a view to their maintaining their independence, or avoiding some of the greater evils which beset them. One of the most conspicuously valuable is THE SAVINGS' BANK. Previous to the commencement of the present century, such of the humbler classes as were given to saving had no proper place of deposit for their spare funds, which they were obliged, therefore, to keep in an unfructifying hoard in their own possession, exposed to the risk of loss, or had to consign to some neighbour, who, though deemed safe, might turn out to be much the reverse. At the same time, in the want of a proper place for the deposit of spare money, those who might save, but did not, lacked one important requisite to their doing so. About the beginning of this century, it occurred to some benevolent minds that an important benefit would be conferred on these classes if there were institutions of the character of banks, but on a modest scale, in which the poor could deposit the smallest 529 sums they could from time to time spare, certain of being able to draw them forth when they pleased, with accumulated interest. Savings' banks-so named from their main object-were accordingly established almost simultaneously in Britain, the United States, France, and other countries. They were generally conducted by associations of benevolent persons, who gave the security of their own credit for the accumulated sums, and held forth every temptation in the way of liberal interest, courtesy, and promptitude in management, to induce the working-classes to resort to them. For some years, this joint-stock but still private security was found to be sufficient for the purpose; but when it was understood that millions had found their way into savings' banks, it became apparent that something else was necessary in order to maintain the confidence which had at first been felt. The government was therefore induced to frame a variety of statutes (See article BANKS, No. 82) for the better regulation of savings' banks, and one in particular by which its own security was given for the safe keeping of the deposits. This was done under the guidance of the best intentions towards the industrious classes, who generally are depositors in savings' banks, and with as little interference as possible with private and local management. A substantial benefit was at the same time conferred, by the fixing of a rate of interest somewhat above the average of what could be expected in a country under the particular circumstances of the United Kingdom with regard to capital. By the above-mentioned acts (9 ̊ Geo. IV. chap. 92; 3 Will. IV. chap. 14; 5 and 6 Will. IV. chap. 57; and 7 and 8 Vict. chap. 83), it is directed that all the funds deposited in National Security Savings' Banks must be paid into the Bank of England on account of government, and that the money so invested shall bear interest at the rate of £3, 58. per cent. per annum, whatever may be the fluctuations in the value of the public funds during the term of investment. Depositors are thus afforded the best of all securities-namely, that of the whole British nation; while the National Savings Banks are enabled, after paying all charges upon their establishments, to give a considerably higher rate of interest than the ordinary banks, or even the greater part of private savings' banks, allow on deposits. The highest interest which the law allows the National Security Savings' Banks to pay to depositors is £3, 0s. 10d. per cent. per annum; the difference between this and the rate allowed on the money invested by them in government securities being reserved as a fund for the payment of the officials of the banks and other necessary expenses. The rate of interest which is at present paid by these banks is £2, 17s. 94d.; and whatever remains, after defraying all charges, is allowed to accumulate as a surplus fund. demand, the money lodged by him, if it do not amount to a considerable sum; and even in that case it will be returned on a few days' notice. The wisest and most effectual provisions are made for insuring the proper management of the affairs of these banks. Each must have a certain number of trustees and managers, whose services are performed gratuitously; then a treasurer, actuary, cashier, clerks, &c.—all of whom must give security, by bond, to such amount as the directors of the establishment may judge sufficient. No portion of the funds invested in government security can be withdrawn, except on the authority of an order signed by several of the trustees and managers. Detailed reports of the transactions of each bank must be periodically forwarded to the Commissioners for the Reduction of the National Debt, and also exhibited to the depositors at the bank office. Of course government can only be responsible for the amount actually deposited in the Bank of England; but the respectability of the local managers is sufficient guarantee for the safety of the funds in their passage between the depositor and the national exchequer. To remove from the public mind all doubt as to security, and to render the system of savings' banks still more efficient, we understand that it is the intention of the legislature shortly to sanction a new set of regulations, chiefly affecting the local management and direction. Under both the old and new systems, savings' banks have been highly successful in their object, and the money deposited in them reaches an amount which no one who regarded the habits of the working-classes thirty-five years ago could have anticipated. In 1840, the total sum was nearly £22,000,000; in 1844, upwards of £29,000,000; and at present, upwards of £32,000,000. In 1845, the number of depositors in England was 846,445; in Wales, 18,231; in Scotland, 81,170; and in Ireland, 95,348-making in all, 1,041,194. The amount of investments for the same year was £24,238,748 for England; £531,902 for Wales; £1,185,545 for Scotland; and £2,858,260 for Irelandmaking in all about twenty-nine millions. But this sum, large as it is, does not embrace the whole amount of business transacted by savings' banks. During the same year there were in England belonging to charitable societies, 10,171 deposits, amounting to £539,627; and to friendly societies, 8773 deposits, amounting to £1,151,891: in Scotland, 635 charitable society deposits, yielding £35,891, and 398 belonging to friendly societies, yielding £57,493: in Wales, 220 deposits belonging to charitable societies, yielding £13,582, and 465 to friendly societies, amounting to £72,608: in Ireland, 669 deposits belonging to charitable societies, worth £41,798, and 405 to friendly societies, equal £21,523. In other words, the amount deposited by individuals and charitable and friendly societies in National Security Savings' Banks at the end of the year ending 20th November 1845, was £32,661,924 – a vast amount certainly to be made up of such small and heterogeneous savings. The following table exhibits at a glance the elements of the investment : Deposits of from one shilling to thirty pounds may be received by these banks, but no individual depositor is allowed to lodge more than £30 in any one year, ending on the 20th November, nor more than £150 on the whole: when the sum amounts to £200, no interest is payable. Charitable and provident institutions may lodge funds to the amount of £100 in a single year, or £300 in all, principal and interest included; and friendly societies, whose rules have been duly certified by the acts of parliament relating thereto, are permitted to deposit the whole of their funds, whatever may be their amount. Compound interest is given on the Not exceeding £20, sums lodged, the interest being added to the principal at the end of each year in some banks, and the end of each half-year in others, and interest afterwards allowed on the whole. Any depositor may receive, on * Various rules are appointed by the legislature for the formation and management of savings' banks. An association of persons desirous of forming one in any place are enjoined first to frame a set of regulations for the management, and to submit these to the approval of a barrister appointed by government, without whose certificate they cannot enjoy a legal status, or any of the advantages which the legislature has thought proper to hold out for the encouragement of such institutions. Depositors. Exceeding.... 200, Individual Depositors, Charitable Societies, Friendly Societies, Number of Amount of Depositors. Investments. 597,631 £3,851,027 50, 267,609 8,247,304 100, 150, 200, Number of Accounts, with Commissioners for reduction Gross Total, |