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Counties.-New Jersey has adopted an act for the reorganization of the government of counties of 150,000. The act provides for a county supervisor and board of chosen freeholders, elected by the people. The county supervisor is the chief executive officer and may recommend to the board of chosen freeholders such measures as he deems necessary. It is his duty to see that the laws and ordinances of the county are enforced, to exercise constant supervision over the conduct of all subordinate officers, to examine into all complaints against them for violation or neglect of duty, and if any officer be found guilty of charges brought against him he may be suspended or removed by the county supervisor. The ordinances and resolutions of the board of chosen freeholders are presented to the county supervisor for approval, and if he disapproves, a two-thirds vote is necessary for passage. The board of chosen freeholders appoints a county physician, engineer, warden of penitentiary, warden of county jail, superintendent of almshouse, superintendent of each hospital, penitentiary physician, jail physicians and physicians for each hospital, and such other officers and agents for the transaction of county business as may be determined by resolution of the board. Members of the board receive a salary of $500 and the county supervisor a salary of $2,500.

In Ohio a state commission on fees of county officials has been established, consisting of the secretary of state, auditor and attorney general. It is required to prepare schedules of legal fees, and to report biennially to the legislature.'

ROBERT H. WHITTEN. New York State Library, Albany, N. Y. IN. J., 1900, ch. 89. $0., 1900, p. 40.

FRATERNAL INSURANCE IN THE UNITED

STATES.

There are in the neighborhood of six hundred fraternal beneficiary societies in the United States, with an aggregate membership of about five millions. Approximately onehalf of these societies maintain systems of benefits which are chiefly remedial, and which cannot properly be characterized as systems of insurance. During the year 1899, one of the largest orders providing this kind of benefits expended $3,119,125.47 in relief work. Yet the organization in question is not a fraternal “ insurance” society. It simply does relief work on a grand scale.

Very different in nature are the benefit systems and protective features of the other half of the fraternal system. The societies of this class may engage in relief work similar to that of the other class, but they attempt more and something fundamentally different. They bind themselves by contract to pay a certain sum of money as relief," “benefit,” or “protection," on the occurrence of certain events ; such as sickness, disability, death, etc. The important consideration in these cases is the fact that a specific sum of money is to be paid to some beneficiary as soon as certain designated contingencies have arisen. This sum of money is named in the certificate,"together with the name

” of the beneficiary, the amount of his periodical “contributions,” etc. In view of the fact that so many persons connected with fraternal societies object to the use of "old line" terms, it may be well to explain that the writer selected the title of this paper, “ Fraternal Insurance,'' after some deliberation. It is his intention to confine this discussion to what cies,

i 'The writer discusses the social functions of Fraternal Beneficiary Societies in a volume edited and published by the Committee of Fifty, entitled “ Social Substitutes for the Saloon." He also treats of the general features of the fraternal system in an article published in the American Journal of Sociology, for March, 1901.

is expressed in the title ; namely, to insurance carried on by fraternal societies. Here one is at once met by the objection that fraternal societies, as a class, do not engage in insurance business, and that they are far removed from the material motives of “speculative" insurance companies. The answer to these objections is apparent: Any organization which guarantees the payment of a definite sum of money, under certain circumstances, dependent upon the contingencies of human life, in return for certain contributions, does an insurance business. We may call the document relating to this arrangement a “certificate ;" the payments made periodically “contributions," "fees," "dues," etc.; the final payment, on the occurrence of the specified contingen

“ benefits ;' the whole is nevertheless an insurance contract, pure and simple, and the society issuing such a certificate is doing an insurance business, subject to all the laws and principles applicable to insurance in general. This last proposition, long accepted by a few fraternal societies and ignored or bitterly contested by many others, deserves especial emphasis.

The dual nature of fraternal societies has probably been partly responsible for the perpetuation of the fallacy that insurance is one thing and that fraternal insurance is another and a different thing. The fraternal societies falling within the scope of this essay-one-half of the total number-are both fraternities and insurance companies, the fraternal element sometimes overshadowing the beneficiary features, or vice versa. It is probable that the cohesive power of numerous societies doing an insurance business would fail were not the fraternal features so potent. In the preservation and extension of the field which the fraternal element has gained, and in the thorough reformation of defective “benefit systems” must lie the future development of the entire fraternal system.

Evidence to show the existence of defective schemes of fraternal insurance is not far to seek. In a circular issued

a

by one fraternal society the position is maintained that mortality experience cannot be reduced to law! Another attempts to prove that the addition of new members will always keep the average age of the entire membership down to a certain level, and that with additional effort the same can permanently be reduced. How to do this to follow the argument to its logical conclusion-without ultimately including the population of the world, and then making the populated globe larger, the author does not explain. Still another asserts that “the death of some members soon after joining the order does not weaken the association. The first death in the order is a case in point. Our deceased friend held a $3,000 contract and had paid only one assessment of $3. The amount placed in the reserve fund by reason of his death was, therefore, $897. This was loaned at 5 per cent, and brings in $44.85 per year. If he had lived, the most he could have paid in twelve assessments would have been $36 a year.

Yet the sum that his death added to the reserve fund is earning more than that, and in time will make good the amount paid to his beneficiaries." In spite of such gross fallacies this society is “gaining members rapidly” in one of our greatest commonwealths.

It would be a thankless task to rehearse the long tale of failures among fraternal societies. Besides, old line companies and other departments of the mercantile world have had their epidemics of financial ruin. Yet, excepting paper money crazes, history probably affords no parallel to the blind and persistent adhesion which so many people in all parts of the United States have shown to hopelessly unsound schemes of fraternal insurance. An examination of many such schemes leaves upon one the impression that their promoters thought of certain sums of money to be paid as benefits under certain conditions on the one hand ; and of certain contributions which it might be convenient to make, on the other ; without apparently reflecting upon a possible causal connection between the two. The history of such organizations is quite generally the same. A rapid increase in membership, possibly also a simultaneous reduction in the average age; a gradual increase in the death rate, accompanied by increasing difficulty in securing new members; an increase in assessments or rates and loss of members, or an attempt to slide along without raising assessments; and finally, financial failure. That some fraternal societies are thoroughly sound, financially, and that others have successfully advanced rates and maintained the integrity of their organizations does not affect this general statement. On the other hand, the very fact that an increase in contributions was found necessary in various societies is prima facie evidence that the original scheme was financially unsound.

A late and important failure illustrates this. " At the time of organization no attention was paid to mortality tables. As the members began to grow old and the dues increased it was found that the assessments had been fixed too low to meet the obligations. At various times since the institution of the order it has been found necessary to increase the assessments, but old members agreed to pay the increase because they had reached an age when insurance in a regular life company could no longer be obtained. Another inducement for continuing in spite of the larger assessments was the fact that they had so much money invested in the organization that they felt they could not afford to lose it."

The two following tables further illustrate the same type of organizations. The first column in each table gives the total membership and the second records the number of deaths per 1,000, during successive years:

I.

62,457–12.5
62,574–13.0
61,355–15.4
60,554–16.4
60,076-16.5

II.
126, 128-13.7.
131,031-13.2.
135,368-14.8.
132,674–16.1.
127,073-16.1.

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