The society grew. It established a store for the sale of food, firing,
clothes, and other necessaries. In a few years the members set on foot
the Co-operative Corn-mill. They increased the capital by the issue of
one-pound shares, and began to make and sell clothes and shoes. They
also sold drapery. But the principal trade consisted in the purchase and
sale of provisions--butchers' meat, groceries, flour, and such-like.
Notwithstanding the great distress during the period of the cotton
famine, the society continued to prosper. From the first, it set apart a
portion of its funds for educational purposes, and established a
news-room, and a library, which now contains over six thousand volumes.

The society continued to increase until it possessed eleven branches for
the sale of goods and stores in or near Rochdale, besides the original
office in Toad Lane. At the end of 1866, it had 6,246 members, and a
capital of ВЈ99,908. Its income for goods sold and cash received during
the year was ВЈ249,122; and the gross profit ВЈ31,931.

But this was not all. Two and a half per cent. was appropriated from the
net profits to support the news-rooms and library; and there are now
eleven news and reading rooms at different places in or near the town
where the society carries on its business; the sum devoted to this
object amounting to over seven hundred pounds per annum. The members
play at chess and draughts, and use the stereoscopic views, microscopes,
and telescopes placed in the libraries. No special arrangements have
been made to promote temperance; but the news-rooms and library exercise
a powerful and beneficial influence in promoting sobriety. It has been
said that the society has done more to remove drunkenness from Rochdale
than all that the advocates of temperance have been able to effect.

The example of the Rochdale Pioneers has exercised a powerful influence
on working-men throughout the northern counties of England. There is
scarcely a town or village but has a co-operative institution of one
kind or another. These societies have promoted habits of saving, of
thrift, and of temperance. They have given the people an interest in
money matters, and enabled them to lay out their earnings to the best
advantage. They have also given the working people some knowledge of
business; for the whole of their concerns are managed by committees
selected at the general meetings of the members.

One of the most flourishing co-operative societies is that established
at Over Darwen. The society has erected a row of handsome buildings in
the centre of the town. The shops for the sale of provisions, groceries,
clothing, and other necessaries, occupy the lower story. Over the shops
are the library, reading rooms, and class rooms, which are open to the
members and their families. The third story consists of a large public
hall, which is used for lectures, concerts, and dances. There are six
branches of the society established in different parts of the town. A
large amount of business is done, and the profits are very considerable.
These are divided amongst the members, in proportion to the purchases
made by them. The profits are for the most part re-invested in
joint-stock paper-mills, cotton-mills, and collieries, in the
neighbourhood of Darwen. One of the most praiseworthy features of the
society is the provision made for the free education of the members and
their families. Two and a half per cent. of the profits are appropriated
for the purpose. While inspecting the institution a few months ago, we
were informed that the Science classes were so efficiently conducted,
that one of the pupils had just obtained a Government Scholarship of
fifty pounds a year, for three years, including free instruction at the
School of Mines, Jermyn Street, London, with a free use of the
laboratories during that period. There are also two other co-operative
institutions in the same place; and we were informed that the working
people of Darwen are, for the most part, hard-working, sober, and
thrifty.

The example has also spread into Scotland and the south of England. At
Northampton, a co-operative society exists for the purpose of buying and
selling leather, and also for the manufacture of boots and shoes. At
Padiham and other places in Lancashire, co-operative cotton-mills have
been established. The Manchester and Salford Equitable Co-operative
Society "combine the securities and facilities of a bank with the
profits of a trade." But the business by which they mostly thrive, is by
the purchase and sale of food, provisions, groceries, draperies, and
other articles, with the exception of intoxicating liquors.

The sole secret of their success consists in "ready money." They give no
credit. Everything is done for cash; the profit of the trade being
divided amongst the members. Every business man knows that cash payment
is the soundest method of conducting business. The Rochdale Pioneers
having discovered the secret, have spread it amongst their class. In
their "advice to members of this and other societies," they say: "Look
well after money matters. Buy your goods as much as possible in the
first markets; or if you have the produce of your industry to sell,
contrive, if possible, to sell it in the last. Never depart from the
principle of buying and selling for ready money. Beware of long
reckonings." In short, the co-operative societies became tradesmen on a
large scale; and, besides the pureness of the food sold, their profit
consisted in the discount for cash payments, which was divided amongst
the members.

Land and Building Societies constitute another form of co-operation.
These are chiefly supported by the minor middle-class men, but also to a
considerable extent by the skilled and thrifty working-class men. By
their means portions of land are bought, and dwelling-houses are built.
By means of a building society, a person who desires to possess a house
enters the society as a member, and instead of paying his rent to the
landlord, pays his subscriptions and interest to a committee of his
friends; and in course of time, when his subscriptions are paid up, the
house is purchased, and conveyed to him by the society. The
building-society is thus a savings bank, where money accumulates for a
certain purpose. But even those who do not purchase a house, receive a
dividend and bonus on their shares, which sometimes amounts to a
considerable sum.

The accumulation of property has the effect which it always has upon
thrifty men; it makes them steady, sober, and diligent. It weans them
from revolutionary notions, and makes them conservative. When workmen,
by their industry and frugality, have secured their own independence,
they will cease to regard the sight of others' well-being as a wrong
inflicted on themselves; and it will no longer be possible to make
political capital out of their imaginary woes.

It has been said that Freehold Land Societies, which were established
for political objects, had the effect of weaning men from political
reform. They were first started in Birmingham, for the purpose of
enabling men to buy land, and divide it into forty-shilling freeholds,
so that the owners might become electors and vote against the corn-laws.
The corn-laws have been done away with; but the holders of freehold land
still exist, though many of them have ceased to be politicians. "Mr.
Arthur Ryland informs me," said Mr. Holyoake, in a recent paper on
Building Societies, "that in Birmingham, numbers of persons under the
influence of these societies have forsaken patriotism for profits. And I
know both co-operators and Chartists who were loud-mouthed for social
and political reform, who now care no more for it than a Whig
government; and decline to attend a public meeting on a fine night,
while they would crawl like the serpent in Eden, through a gutter in a
storm, after a good security. They have tasted land, and the gravel has
got into their souls."

"Yet to many others," he adds, "these societies have taught a healthy
frugality they never else would have known; and enabled many an
industrious son to take to his home his poor old father--who expected
and dreaded to die in the workhouse--and set him down to smoke his pipe
in the sunshine in the garden, of which the land and the house belonged
to his child."[1]

[Footnote 1: Paper read at York Meeting of the National Society for
Promoting Social Science, 26th Sept. 1864.]

The Leeds Permanent Building Society, which has furnished healthy
tenements for about two hundred families, sets forth the following
recommendations of the influence which it has exercised amongst the
working classes of that town: "It is truly cheering to hear the members
themselves, at occasional meetings tell how, from small savings hitherto
deemed too little for active application, they began to invest in the
society: then to build or buy; then to advance in life, and come to
competence, from extending their savings in this manner.... The
provident habits and knowledge thus induced are most beneficial to the
members. And the result is, that the careless become thoughtful, and, on
saving, become orderly, respectable, propertied, and in every way better
citizens, neighbours, and more worthy and comfortable. The employment of
money in this useful direction encourages trade, advances prices and
wages, comforts the working classes, and at the same time provides the
means of home enjoyments, without which such advances would be
comparatively useless, and certainly uncertain."[1]

[Footnote 1: Letter of Mr. John Holmes, in Reports of Paris Universal
Exhibition, 1867 vol. vi., p. 240.]

There are also exceptional towns and villages in Lancashire where large
sums of money have been saved by the operatives for buying or building
comfortable cottage dwellings. Last year Padiham saved about fifteen
thousand pounds for this purpose, although its population is only about
8,000. Burnley has also been very successful. The Building Society there
has 6,600 investors, who saved last year ВЈ160,000 or an average of
twenty-four pounds for each investor. The members consist principally of
mill operatives, miners, mechanics, engineers, carpenters, stonemasons,
and labourers. They also include women, both married and unmarried. Our
informant states that "great numbers of the working classes have
purchased houses in which to live. They have likewise bought houses as a
means of investment. The building society has assisted in hundreds of
these cases, by advancing money on mortgage,--such mortgages being
repaid by easy instalments."

Building Societies are, on the whole, among the most excellent methods
of illustrating the advantages of Thrift. They induce men to save money
for the purpose of buying their own homes; in which, so long as they
live, they possess the best of all securities.




CHAPTER VII.

ECONOMY IN LIFE ASSURANCE.


"Do not, for one repulse, forego the purpose
That you resolved to effect."--_Shakespeare_.

"We are helpers, fellow-creatures,
Of the right against the wrong."--_E. Barrett_.

"Life was not given us to be all used up in the pursuit of what we must
leave behind us when we die."--_Joseph May_.

"Le bonheur ou le malheur de la vielillesse n'est souvent que l'extrait
de notre vie passГ©e." (The blessedness or misery of old age is often but
the extract of our past life.) _De Maistre_.


Two other methods of co-operative saving remain to be mentioned. The
first is by Life Assurance, which enables widows and children to be
provided for at the death of the assured; and the second is by Friendly
Societies, which enable working men to provide themselves with relief in
sickness, and their widows and orphans with a small sum at their death.
The first method is practised by the middle and upper classes; and the
second by the working classes.

It might possibly take a long time to save enough money to provide for
those who are dependent upon us; and there is always the temptation to
encroach upon the funds set apart for death, which--as most people
suppose--may be a far-distant event. So that saving bit by bit, from
week to week, cannot always be relied upon.

The person who joins an assurance society is in a different position.
His annual or quarterly saving becomes at once a portion of a general
fund, sufficient to realize the intention of the assured. At the moment
that he makes his first payment, his object is attained. Though he die
on the day after his premium has been paid, his widow and children will
receive the entire amount of his assurance.

This system, while it secures a provision to his survivors, at the same
time incites a man to the moral obligation of exorcising foresight and
prudence, since through its means these virtues may be practised, and
their ultimate reward secured. Not the least of the advantages attending
life assurance is the serenity of mind which attends the provident man
when lying on a bed of sickness, or when he is in prospect of death,--so
unlike that painful anxiety for the future welfare of a family, which
adds poignancy to bodily suffering, and retards or defeats the power of
medicine. The poet Burns, in writing to a friend a few days before his
death, said that he was "still the victim of affliction. Alas! Clark, I
begin to fear the worst. Burns' poor widow, and half a dozen of his dear
little ones helpless orphans;--there, I am weak as a woman's tear.
Enough of this,--_'tis half my disease_!"

Life assurance may be described as a joint-stock plan for securing
widows, and children from want. It is an arrangement by means of which a
large number of persons agree to lay by certain small sums called
"premiums," yearly, to accumulate at interest, as in a savings bank,
against the contingency of the assurer's death,--when the amount of the
sum subscribed for is forthwith handed over to his survivors. By this
means, persons possessed of but little capital, though enjoying regular
wages or salaries, however small, may at once form a fund for the
benefit of their family at death.

We often hear of men who have been diligent and useful members of
society, dying and leaving their wives and families in absolute poverty.
They have lived in respectable style, paid high rents for their houses,
dressed well, kept up good visiting acquaintance, were seen at most
places of amusement, and brought up their children with certain ideas of
social position and respectability; but death has stricken them down,
and what is the situation of their families? Has the father provided for
their future? From twenty to twenty-five pounds a year, paid into an
Assurance Society, would have secured their widows and orphans against
absolute want. Have they performed this duty? No--they have done nothing
of the kind; it turns out that the family have been living up to their
means, if not beyond them, and the issue is, that they are thrown
suddenly bankrupt upon the world.

Conduct such as this is not only thoughtless and improvident, but
heartless and cruel in the last degree. To bring a family into the
world, give them refined tastes, and accustom them to comforts, the loss
of which is misery, and then to leave the family to the workhouse, the
prison, or the street--to the alms of relatives, or to the charity of
the public,--is nothing short of a crime done against society, as well
as against the unfortunate individuals who are the immediate sufferers.

It will be admitted, that the number of men who can lay by a sufficient
store of capital for the benefit of their families, is, in these times
of intense competition, comparatively small. Perhaps the claims of an
increasing family absorb nearly all their gains, and they find that the
sum which they can put away in the bank is so small, that it is not put
away at all. They become reckless of ever attaining so apparently
hopeless an object as that of an accumulation of savings, for the
benefit of their families at death.

Take the case of a married man with a family. He has begun business, and
thinks that if his life were spared, he might in course of years be able
to lay by sufficient savings to provide for his wife and family at his
death. But life is most uncertain, and he knows that at any moment he
may be taken away,--leaving those he holds most dear comparatively
destitute. At thirty he determines to join a sound life office. He
insures for five hundred pounds, payable to his survivors at his death,
and pays from twelve to thirteen pounds yearly. From the moment on which
he pays that amount, the five hundred pounds are secured for his family,
although he died the very next day.

Now, if he had deposited this twelve or thirteen pounds yearly in a
bank, or employed it at interest, it would have taken about twenty years
before his savings would have amounted to five hundred pounds. But by
the simple and beautiful expedient of life assurance, these twenty-six
years of the best part of his life are, on this account at least,
secured against anxiety and care. The anticipation of future evil no
longer robs him of present enjoyment. By means of his annual fixed
payment--which decreases according to the profits of the society--he is
secure of leaving a fixed sum at his death for the benefit of his
family.

In this way, life assurance may be regarded in the light of a contract,
by which the inequalities of life are to a certain extent averaged and
compensated, so that those who die soon--or rather their
families--become sharers in the good fortune of those who live beyond
the average term of life. And even should the assurer himself live
beyond the period at which his savings would have accumulated to more
than the sum insured, he will not be disposed to repine, if he takes
into account his exemption from corroding solicitude during so many
years of his life.

The reasons which induce a man to insure his house and stock of goods
against the accident of fire, ought to be still more imperative in
inducing him to insure his life against the accident of disease and the
contingency of sudden death. What is worldly prudence in the one case,
is something more in the other; it has superadded to it the duty of
providing for the future maintenance of a possibly widowed wife, and
orphaned children; and no man can justly stand excused who neglects so
great and binding an obligation. Is it an obligation on the part of a
husband and father to provide daily bread for his wife and children
during his life? Then it is equally an obligation on his part to provide
means for their adequate support in event of his death. The duty is so
obvious, the means of performing it are so simple, and are now so easily
placed within the reach of all men,--the arrangement is so eminently
practical, rational, benevolent, and just,--it is, moreover, so
calculated to increase every wise and prudent man's sense of
self-respect, and to encourage him in the performance of all proper
social duties,--that we cannot conceive of any possible objection that
can be urged against it; and it is only to be regretted that the
practice is not far more general and customary than it is, amongst all
classes of the community.[1]

[Footnote 1: It may be mentioned that the total amount assured in
existing British offices, mostly by the middle classes, is about three
hundred and fifty millions sterling; and that the annual premiums
payable amount to not less than eleven millions sterling. And yet no
more than one person in twenty of the persons belonging to the classes
to whom Life Assurance is especially applicable, have yet availed
themselves of its benefits.]

The Friendly or Benefit Societies of the working classes are also
Co-operative Societies under another form. They cultivate the habit of
prudent self-reliance amongst the people, and are consequently worthy of
every encouragement. It is certainly a striking fact that some four
millions of working men should have organized themselves into voluntary
associations for the purpose of mutual support in time of sickness and
distress. These societies are the outgrowth in a great measure of the
English love of self-government and social independence,--in
illustration of which it maybe stated, that whereas in France only one
person in seventy-six is found belonging to a benefit society, and in
Belgium one in sixty-four, the proportion in England is found to be one
in nine. The English societies are said to have in hand funds amounting
to more than eleven millions sterling; and they distribute relief
amongst their members, provided by voluntary contributions out of their
weekly earnings, amounting to above two millions yearly.

Although the working classes of France and Belgium do not belong to
benefit societies to anything like the same extent, it must be stated,
in their justification, that they are amongst the most thrifty and
prudent people in the world. They invest their savings principally in
land and in the public funds. The French and Belgians have a positive
hunger for land. They save everything that they can for the purpose of
acquiring more. And with respect to their investments in the public
funds, it may be mentioned, as a well-known fact, that it was the French
peasantry who, by investing their savings in the National Defence Loan,
liberated French soil from the tread of their German conquerors.[1]

[Footnote 1: At the present time one individual out of every eight in
the population of France has a share in the National Debt, the average
amount held being 170 francs. The participants in the debt approach
closely to the number of freeholders, or rather distinct freeholdings,
which amount to 5,550,000, according to the last return. France
certainly furnishes a singular exception to those countries of Central
and Western Europe, where "the rich are getting more rich and the poor
ever more poor." In France wealth becomes more and more distributed
among the bulk of the population.]

English benefit societies, notwithstanding their great uses and
benefits, have numerous defects. There are faults in the details of
their organization and management, whilst many of them are financially
unsound. Like other institutions in their early stages, they have been
tentative and in a great measure empirical,--more especially as regards
their rates of contribution and allowances for sick relief. The rates
have in many cases been fixed too low, in proportion to the benefits
allowed; and hence the "box" is often declared to be closed, after the
money subscribed has been expended. The society then comes to an end,
and the older members have to go without relief for the rest of their
lives. But life assurance societies themselves have had to undergo the
same discipline of failure, and the operation of "winding up" has not
unfrequently thrown discredit upon these middle-class associations.

To quote the words of the Registrar of Friendly Societies, in a recent
report: "Though the information thus far obtained is not very
encouraging as to the general system of management; on the whole,
perhaps, the results of the investments of the poor are not worse than
those which noblemen, members of Parliament, merchants, professed
financiers, and speculators have contrived to attain in their management
of railways, joint-stock banks, and enterprises of all kinds."

The workmen's societies originated for the most part in a common want,
felt by persons of small means, unable to accumulate any considerable
store of savings to provide against destitution in the event of
disablement by disease or accident. At the beginning of life, persons
earning their bread by daily labour are able to save money with
difficulty. Unavoidable expenses absorb their limited means and press
heavily on their income. When unable to work, any little store they may
have accumulated is soon spent, and if they have a family to maintain,
there is then no choice before them but destitution, begging, or
recourse to the poor-rates. In their desire to avoid either of these
alternatives, they have contrived the expedient of the benefit society.
By combining and putting a large number of small contributions together,
they have found it practicable thus to provide a fund sufficiently large
to meet their ordinary requirements during sickness.

The means by which this is accomplished are very simple. Each member
contributes to a common fund at the rate of from fourpence to sixpence a
week, and out of this fund the stipulated allowance is paid. Most
benefit societies have also a Widows' and Orphans' Fund, raised in like
manner, out of which a sum is paid to the survivors of members at their
death. It will be obvious that such organizations, however faulty they
may be in detail, cannot fail to exercise a beneficial influence upon
society at large. The fact that one of such associations, the Manchester
Unity of Odd Fellows, numbers about half a million of members; possesses
a funded capital amounting to ВЈ3,706,366; and distributes in sick relief
and payments of sums at death above ВЈ300,000 a year, illustrates in a
striking light their beneficial action upon the classes for whom and by
whom they have been established. By their means, working men are enabled
to secure the results of economy at a comparatively small cost. For,
mutual assurance is economy in its most economical form; and merely
presents another illustration of that power of co-operation which is
working out such extraordinary results in all departments of society,
and is in fact but another name for Civilization.

Many persons object to Friendly Societies because they are conducted at
public-houses; because many of them are got up by the keepers of
public-houses in order to obtain custom from the members; and because,
in their fortnightly meetings to pay their subscriptions, they acquire
the pernicious habit of drinking, and thus waste quite as much as they
save. The Friendly Societies doubtless rely very much on the social
element. The public-house is everybody's house. The members can there
meet together, talk together, and drink together. It is extremely
probable that had they trusted solely to the sense of duty--the duty of
insuring against sickness--and merely required the members to pay their
weekly contributions to a collector, very few societies of the kind
would have remained in existence. In a large number of cases, there is
practically no choice between the society that meets at a public-house,
and none at all.

It so happens that the world cannot be conducted on superfine
principles. To most men, and especially to the men we are speaking of,
it is a rough, working world, conducted on common principles, such as
will wear. To some it may seem vulgar to associate beer, tobacco, or
feasting with the pure and simple duty of effecting an insurance against
disablement by sickness; but the world we live in is vulgar, and we must
take it as we find it, and try to make the best of it. It must be
admitted that the tendencies to pure good in man are very weak, and need
much helping. But the expedient, vulgar though it be, of attracting him
through his appetite for meat and drink to perform a duty to himself and
neighbours, is by no means confined to societies of working men. There
is scarcely a London charity or institution but has its annual dinner
for the purpose of attracting subscribers. Are we to condemn the
eighteenpenny annual dinner of the poor man, but excuse the guinea one
of the rich?

A vigorous effort was made by Mr. Akroyd of Halifax, in 1856, to
establish a Provident Sick Society and Penny Savings Bank for the
working men in the West Riding of Yorkshire. An organization was set on
foot with these objects; and though the Penny Bank proved a complete
success, the Provident Society proved a complete failure. Mr. Akroyd
thus explains the causes of the failure: "We found the ground
preoccupied," he says, "by Friendly Societies, especially by the Odd
Fellows, Druids, Foresters, etc.; and against their principles of
self-government, mutual check against fraud, and _brotherhood_, no new
and independent society can compete. Our rates were also of necessity
much higher than theirs, and this was perhaps one of the chief causes of
our failure."

Low rates of contribution have been the principal cause of the failure
of Friendly Societies.[1] It was of course natural that the members,
being persons of limited means, should endeavour to secure the objects
of their organization at the lowest cost. They therefore fixed their
rates as low as possible; and, as the results proved, they in most cases
fixed them _too_ low. So long as the societies consisted, for the most
part, of young, healthy men, and the average amount of sickness remained
low, the payments made seemed ample. The funds accumulated, and many
flattered themselves that their societies were in a prosperous state,
when they contained the sure elements of decay. For, as the members grew
older, their average liability to sickness was regularly increasing. The
effects of increased age upon the solvency of benefit clubs soon
becoming known, young men avoided the older societies, and preferred
setting up organizations of their own. The consequence was, that the old
men began to draw upon their reserves at the same time that the regular
contributions fell off; and when, as was frequently the case, a few
constantly ailing members kept pressing upon the society, the funds were
at length exhausted, "the box" was declared to be closed, and the
society was broken up. The real injustice was done to the younger men
who remained in the society. After paying their contributions for many
years, they found, when sickness at length fell upon them, that the
funds had been exhausted, by expenditure for superannuation and other
allowances, which were not provided for by the rules of the society.

[Footnote 1: The Registrar of Friendly Societies, in his report for
1859, states that from 1793 to 1858, the number of societies enrolled
and certified had been 28,550, of which 6,850 had ceased to exist. The
causes of failure in most cases were reported to be, inadequacy of the
rates of contribution, the granting of pensions as well as sick pay, and
no increase of young members. The dissolution of a society, however, is
frequently effected with a view of remodelling it, and starting afresh
under better regulations, and with rates of premium such as increased
knowledge has shown to be necessary for the risks which they have to
incur.]

Even the best of the Benefit Societies have been slow to learn the
essential importance of adequate rates of contribution, to enable them
to fulfil their obligations and ensure their continued usefulness as
well as solvency. The defect of most of them consists in their trying to
do too much with too little means. The benefits paid out are too high
for the rates of contribution paid in. Those who come first are served,
but those who come late too often find an empty box. Not only have the
rates of payment been generally fixed too low, but there has been little
or no discrimination in the selection of members. Men advanced in years
and of fragile health are often admitted on the same terms as the young
and the healthy, the only difference being in the rate of entry money.
Even young lodges, which start with inadequate rates, instead of growing
stronger, gradually grow weaker; and in the event of a few constantly
ailing members falling upon the funds, they soon become exhausted, and
the lodge becomes bankrupt and is broken up. Such has been the history
of thousands of Friendly Societies, doing good and serving a useful
purpose in their time, but short-lived, ephemeral, and to many of their
members disappointing, and even deceptive.

Attempts have been recently made--more especially by the officers of the
Manchester Unity of Odd Fellows--to improve the financial condition of
their society. Perhaps the best proof of the desire that exists on the
part of the leading minds in the Unity to bring the organization into a
state of financial soundness, is to be found in the fact that the Board
of Management have authorized the publication of the best of all data
for future guidance,--namely, the actual sickness experience of the
Order. An elaborate series of tables has accordingly been prepared and
published for their information by Mr. Ratcliffe, the corresponding
secretary, at an expense of about ВЈ3,500. In the preface to the last
edition it is stated that "this sum has not been abstracted from the
funds set apart for relief during sickness, for assurances at death, or
for providing for necessitous widows and orphans, but from the
management funds of the lodges--funds which, being generally raised by
direct levy on the members, are not therefore readily expended without
careful consideration on the part of those most interested in the
character and welfare of their cherished institution."

We believe that time and experience will enable the leaders of Friendly
Societies generally to improve them, and introduce new ameliorations.
The best institutions are things of slow growth, and are shaped by
experience, which includes failures as well as successes; and finally,
they require age to strengthen them and root them in habit. The rudest
society established by working men for mutual help in sickness,
independent of help from private charity or the poor-rates, is grounded
on a right spirit, and is deserving of every encouragement. It furnishes
a foundation on which to build up something better. It teaches
self-reliance, and thus cultivates amongst the humblest classes habits
of provident economy.

Friendly Societies began their operations before there was any science
of vital statistics to guide them; and if they have made mistakes in
mutual assurance, they have not stood alone. Looking at the difficulties
they have had to encounter, they are entitled to be judged charitably.
Good advice given them in a kindly spirit will not fail to produce good
results. The defects which are mixed up with them are to be regarded as
but the transient integument which will most probably fall away as the
flower ripens and the fruit matures.




CHAPTER VIII.

SAVINGS BANKS.


"I wish I could write all across the sky, in letters of gold, the one
word SAVINGS BANK."--_Rev. Win. Marsh_.

"The only true secret of assisting the poor is to make them agents in
bettering their own condition."--_Archbishop Sumner_.

"Qui Г  vingt ne sait, Г  trente ne peut, Г  quarante n'a,--jamais ne
saura, ne pourra, n'aura."--_French Proverb_.

"Go to the ant, thou sluggard; consider her ways, and be wise: which
having no guide, overseer, or ruler, provideth her meat in the summer,
and gathereth her food in the harvest."--_Proverbs_ vi. 6.


It is said that there is a skeleton in every household. The skeleton is
locked up--put away in a cupboard--- and rarely seen. Only the people
inside the house know of its existence. But the skeleton, nevertheless,
cannot long be concealed. It comes to light in some way or another. The
most common skeleton is Poverty. Poverty, says Douglas Jerrold, is the
great secret, kept at any pains by one-half the world from the other
half. When there is nothing laid by--nothing saved to relieve sickness
when it comes--nothing to alleviate the wants of old age,--this is the
skeleton hid away in many a cupboard.

In a country such as this, where business is often brought to a
standstill by over-trading and over-speculation, many masters, clerks,
and workpeople are thrown out of employment. They must wait until better
times come round. But in the meantime, how are they to live? If they
have accumulated no savings, and have nothing laid by, they are
comparatively destitute.

Even the Co-operative Cotton-mills, or Co-operative Banks, which are
nothing more than Joint-stock Companies, Limited,[1] may become
bankrupt. They may not be able, as was the case during the cotton
famine, to compete with large capitalists in the purchase of cotton, or
in the production of cotton twist. Co-operative companies established
for the purpose of manufacturing, are probably of too speculative a
character to afford much lasting benefit to the working classes; and it
seems that by far the safer course for them to pursue, in times such as
the present, is by means of simple, direct saving. There may be less
chance of gain, but there is less risk of loss. What is laid by is not
locked up and contingent for its productiveness upon times and trade,
but is steadily accumulating, and is always ready at hand for use when
the pinch of adversity occurs.

[Footnote 1: "The new cotton factories which have been called
co-operative, and which, under that name, have brought together large
numbers of shareholders of the wage classes, are all now in reality
common joint-stock companies, with limited liability. The so-called
co-operative shareholders in the leading establishments decided, as I am
informed, by large majorities, that the workers should only be paid
wages in the ordinary manner, and should not divide profits. The wages
being for piecework, it was held that the payment was in accordance with
communistic principle, 'each according to his capacity, each according
to his work.' The common spinner had had no share in the work of the
general direction, nor had he evinced any of the capacity of thrift or
foresight of the capitalist, and why should he share profits as if he
had? The wage class, in their capacity of shareholders, decided that it
was an unjust claim upon their profits, and kept them undivided to
themselves."--_Edwin Chadwick, C.B._]

Mr. Bright stated in the House of Commons, in 1860,[2] that the income
of the working classes was "understated at three hundred and twelve
millions a year." Looking at the increase of wages which has taken place
during the last fifteen years, their income must now amount to at least
four hundred millions.

[Footnote 2: Speech on the Representation of the People Bill.]

Surely, out of this large fund of earnings, the working classes might
easily save from thirty to forty millions yearly. At all events, they
might save such an amount as, if properly used and duly economized,
could not fail to establish large numbers of them in circumstances of
comfort and even of comparative wealth.

The instances which we have already cited of persons in the humbler
ranks of life having by prudential forethought accumulated a
considerable store of savings for the benefit of their families, and as
a stay for their old age, need not by any means be the comparatively
exceptional cases that they are now. What one well-regulated person is
able to do, others, influenced by similar self-reliant motives, and
practising like sobriety and frugality, might with equal ease and in one
way or another accomplish. A man who has more money about him than he
requires for current purposes, is tempted to spend it. To use the common
phrase, it is apt to "burn a hole in his pocket." He may be easily
entrapped into company; and where his home provides but small comfort,
the public-house, with its bright fire, is always ready to welcome him.

It often happens that workmen lose their employment in "bad times."
Mercantile concerns become bankrupt, clerks are paid off, and servants
are dismissed when their masters can no longer employ them. If the
disemployed people have been in the habit of regularly consuming all
their salaries and wages, without laying anything by, their case is
about the most pitiable that can be imagined. But if they have saved
something, at home or in the savings bank, they will be enabled to break
their fall. They will obtain some breathing-time, before they again fall
into employment. Suppose they have as much as ten pounds saved. It may
seem a very little sum, yet in distress it amounts to much. It may even
prove a man's passport to future independence.

With ten pounds a workman might remove from one district to another
where employment is more abundant. With ten pounds, he might emigrate to
Canada or the United States, where his labour might be in request.
Without this little store of savings, he might be rooted to his native
spot, like a limpet to the rock. If a married man with a family, his ten
pounds would save his home from wreckage, and his household from
destitution. His ten pounds would keep the wolf from the door until
better times came round. Ten pounds would keep many a servant-girl from
ruin, give her time to recruit her health, perhaps wasted by hard work,
and enable her to look about for a suitable place, instead of rushing
into the first that offered.

We do not value money for its own sake, and we should be the last to
encourage a miserly desire to hoard amongst any class; but we cannot
help recognizing in money the means of life, the means of comfort, the
means of maintaining an honest independence. We would therefore
recommend every young man and every young woman to begin life by
learning to save; to lay up for the future a certain portion of every
week's earnings, be it little or much; to avoid consuming every week or
every year the earnings of that week or year; and we counsel them to do
this, as they would avoid the horrors of dependence, destitution, or
beggary. We would have men and women of every class able to help
themselves--relying upon their own resources--upon their own savings;
for it is a true saying that "a penny in the purse is better than a
friend at court." The first penny saved is a step in the world. The fact
of its being saved and laid by, indicates self-denial, forethought,
prudence, wisdom. It may be the germ of future happiness. It may be the
beginning of independence.

Cobbett was accustomed to scoff at the "bubble" of Savings Banks,
alleging that it was an insult to people to tell them that they had
anything to save. Yet the extent to which savings banks _have_ been
used, even by the humblest classes, proves that he was as much mistaken
in this as he was in many of the views which he maintained. There are
thousands of persons who would probably never have thought of laying by
a penny, but for the facility of the savings bank: it would have seemed
so useless to try. The small hoard in the cupboard was too ready at
hand, and would have become dissipated before it accumulated to any
amount; but no sooner was a place of deposit provided, where sums as
small as a shilling could be put away, than people hastened to take
advantage of it.

The first savings bank was started by Miss Priscilla Wakefield, in the
parish of Tottenham, Middlesex, towards the close of last century,--her
object being mainly to stimulate the frugality of poor children. The
experiment proved so successful that in 1799 the Rev. Joseph Smith, of
Wendon, commenced a plan of receiving small sums from his parishioners
during summer, and returning them at Christmas, with the addition of
one-third as a stimulus to prudence and forethought. Miss Wakefield, in
her turn, followed Mr. Smith's example, and in 1804 extended the plan of
her charitable bank, so as to include adult labourers, female servants,
and others. A similar institution was formed at Bath, in 1808, by
several ladies of that city; and about the same time Mr. Whitbread
proposed to Parliament the formation of a national institution, "in the
nature of a bank, for the use and advantage of the labouring classes
alone;" but nothing came of his proposal.

It was not until the Rev. Henry Duncan, the minister of Ruthwell, a poor
parish in Dumfriesshire, took up the subject, that the savings-bank
system may be said to have become fairly inaugurated. The inhabitants of
that parish were mostly poor cottagers, whose average wages did not
amount to more than eight shillings a week. There were no manufactures
in the district, nor any means of subsistence for the population, except
what was derived from the land under cultivation; and the landowners
were for the most part non-resident. It seemed a very unlikely place in
which to establish a bank for savings, where the poor people were
already obliged to strain every nerve to earn a bare living, to provide
the means of educating their children (for, however small his income,
the Scottish peasant almost invariably contrives to save something
wherewith to send his children to school), and to pay their little
contributions to the friendly society of the parish. Nevertheless, the
minister resolved, as a help to his spiritual instructions, to try the
experiment.

Not many labouring men may apprehend the deep arguments of the religious
teacher, but the least intelligent can appreciate a bit of practical
advice that tells on the well-being of his household as well as on the
labourer's own daily comfort and self-respect. Dr. Duncan knew that,
even in the poorest family, there were odds and ends of income apt to be
frittered away in unnecessary expenditure. He saw some thrifty cottagers
using the expedient of a cow, or a pig, or a bit of garden-ground, as a
savings bank,--finding their return of interest in the shape of butter
and milk, winter's bacon, or garden produce; and it occurred to him that
there were other villagers, single men and young women, for whom some
analogous mode of storing away their summer's savings might be provided,
and a fair rate of interest returned upon their little investments.

Hence originated the parish savings bank of Ruthwell, the first
self-supporting institution of the kind established in this country.
That the minister was not wrong in his anticipations, was proved by the
fact that, in the course of four years, the funds of his savings bank
amounted to nearly a thousand pounds. And if poor villagers out of eight
shillings a week, and female labourers and servants out of much less,
could lay aside this sum,--what might not mechanics, artizans, miners,
and iron-workers accomplish, who earn from thirty to fifty shillings a
week all the year round?

The example set by Dr. Duncan was followed in many towns and districts
in England and Scotland. In every instance the model of the Ruthwell
parish bank was followed; and the self-sustaining principle was adopted.
The savings banks thus instituted, were not eleemosynary institutions,
nor dependent upon anybody's charity or patronage; but their success
rested entirely with the depositors themselves. They encouraged the
industrious classes to rely upon their own resources, to exercise
forethought and economy in the conduct of life, to cherish self-respect
and self-dependence, and to provide for their comfort and maintenance in
old age, by the careful use of the products of their industry, instead
of having to rely for aid upon the thankless dole of a begrudged
poor-rate.

The establishment of savings banks with these objects, at length began
to be recognized as a matter of national concern; and in 1817 an Act was
passed which served to increase their number and extend their
usefulness. Various measures have since been adopted with the object of
increasing their efficiency and security. But notwithstanding the great
good which these institutions have accomplished, it is still obvious
that the better-paid classes of workpeople avail themselves of them to
only a very limited extent. A very small portion of the four hundred
millions estimated to be annually earned by the working classes finds
its way to the savings bank, while at least twenty times the amount is
spent annually at the beershop and the public-house.

It is not the highly-paid class of working men and women who invest
money in the savings banks; but those who earn comparatively moderate
incomes. Thus the most numerous class of depositors in the Manchester
and Salford Savings Bank is that of domestic servants. After them rank
clerks, shopmen, porters, and miners. Only about a third part of the
deposits belong to the operatives, artizans, and mechanics. It is the
same in manufacturing districts generally. A few years since, it was
found that of the numerous female depositors at Dundee, only one was a
factory worker: the rest were for the most part servants.

There is another fact that is remarkable. The habit of saving does not
so much prevail in those counties where wages are the highest, as in
those counties where wages are the lowest. Previous to the era of Post
Office Savings Banks, the inhabitants of Wilts and Dorset--where wages
are about the lowest in England--deposited more money in the savings
banks, per head of the population, than they did in Lancashire and
Yorkshire, where wages are about the highest in England. Taking
Yorkshire itself, and dividing it into manufacturing and
agricultural,--the manufacturing inhabitants of the West Riding of York
invested about twenty-five shillings per head of the population in the
savings banks; whilst the agricultural population of the East Riding
invested about three times that amount.

Private soldiers are paid much less wages per week than the lowest-paid
workmen, and yet they put more money in the savings banks than workmen
who are paid from thirty to forty shillings a week. Soldiers are
generally supposed to be a particularly thoughtless class. Indeed, they
are sometimes held up to odium as reckless and dissolute; but the
Military Savings Bank Returns refute the vilification, and prove that
the British soldier is as sober, well-disciplined, and frugal, as we
already know him to be brave. Most people forget that the soldier must
be obedient, sober, and honest. If he is a drunkard, he is punished; if
he is dishonest, he is drummed out of the regiment.

Wonderful is the magic of Drill! Drill means discipline, training,
education. The first drill of every people is military. It has been the
first education of nations. The duty of obedience is thus taught on a
large scale,--submission to authority; united action under a common
head. These soldiers,--who are ready to march steadily against vollied
fire, against belching cannon, up fortress heights, or to beat their
heads against bristling bayonets, as they did at Badajos,--were once
tailors, shoemakers, mechanics, delvers, weavers, and ploughmen; with
mouths gaping, shoulders stooping, feet straggling, arms and hands like
great fins hanging by their sides; but now their gait is firm and
martial, their figures are erect, and they march along, to the sound of
music, with a tread that makes the earth shake. Such is the wonderful
power of drill.