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On the other hand, it cannot be disguised that these societies have in many instances given encouragement to that system of building what are called “ jerry-houses,' by which the poor have been the greatest sufferers. In large towns in Scotland such houses appear to be unknown, for stone is plentiful and cheap, and the people live in “ flats,' so that there is little inducement to build houses otherwise than of strong materials and of large dimensions. But in England the case is very different : bricks take the place of stone; even the mechanic and the labourer will not dwell in other than 'self-contained' houses; and the consequence is, that in the suburbs of such large towns as Liverpool and Manchester there are miles upon miles of what is called 'cottage property'-consisting of houses erected usually with reference to nothing save a large percentage. A man with no capital gets money from a building society; he may be a builder himself, or he contracts with some builder for the erection of houses in a rapidly-increasing neighbourhood. The houses are run up in a few weeks by inferior and badly-paid workmen, who use bad and cheap materials; they are soon tenanted; the speculation pays; but the tenants pay high rents for bad accommodation, and the houses will perhaps be in ruins before the death of the builder or proprietor. A Liverpool architect thus described the system in the Morning Chronicle' of 16th September last :
* Not long ago I made a valuation for a building society of five cottages, each consisting of two rooms and a kitchen. They were miserable places; the rooms were less than twelve feet square, with a staircase leading directly from the kitchen, or lower room, to the rooms above. They had no back-windows. There was but one privy for the five cottages. The joiners' work was of the most inferior and rude kind, and the timber was of the worst and commonest sort. These houses and the land on which they stood cost £400, and each house let for £8 per annum-thus yielding an interest of 10 per cent. They were seldom or never unlet, and the rents were collected weekly. I have known instances- not two or three, but I may say scores of instances—in which 15 per cent. has been cleared for cottage property of this inferior class. Even if such houses drop to pieces in twenty years, it is a first-rate investment. It is the poor who pay the highest prices for everything-houses not excepted. Middle-class houses are “scamped” in the same way. The walls are so thin that you can hear in one house the conversation of people in the next. The joists are not sufficiently thick or strong—the wood is “green;" and instead of sound Baltic or red American pine, which ought to be employed for the bearing timber, the jerry-builders invariably use the cheap, common yellow pine, which is not fit for the purpose. The workmanship is not quite so much scamped as in the houses of the poorer classes, but it is very far from being what it ought to be. These rows of nice new houses and bran-new streets may look pretty enough outside and in, but it is all show and no substance. Slop-work never lasts, and such houses will be old and rickety long before they have stood sixty years. To secure comfort in a house -to have a house honestly built-it ought to last for 200 years, with ordinary repairs from time to time. Very few such houses are built now for private occupation.'
If a man's chief motive for entering a building society were to obtain a house as a dwelling for himself, such erections would not be tolerated; but
this seldom appears to be the case. The greater portion of the members of the societies belong to a class who inhabit much better dwellings than those in which they invest their money. They look on the transaction generally as a mere business speculation : their interest is to get cheap houses and high rents; and all other questions, sanitary and the like, are made quite secondary. It is true that in many places the mode in which land is sold encourages such a state of things. In Liverpool, for example, a very large portion of the land on which the town is built belongs to the corporation, who sell it only on leases of seventy-five years, and no man has therefore an interest in erecting buildings calculated to last longer than that time. The immediate effect of such influences is, that the poorer part of the population live in houses with comparatively fewer comforts and comparatively higher rents than their richer neighbours. This is a point from which building societies have seldom been considered ; and the inattention to it is strikingly illustrative of the direction hitherto taken by the associative principle in this country. It is admitted on all hands that the dwellings of the working-classes, especially in our large towns, require improvement, and that they have been in too many instances constructed with little regard to the laws of health; while in these very towns we find societies framed specially to give working-men facilities for becoming houseowners which are actually increasing the number of such dwellings, instead of erecting them on improved principles, calculated to give additional comfort and to secure better health to their inmates. At the same time there exist other societies, the members of which do not belong to the working. classes, whose chief object is the erection of improved dwellings, and who look less to any interest for their money than to the improvement of the houses of the poor.
These things should be well considered by the wordy advocates of co-operation and the denouncers of class-oppression and capitalist tyranny.
The freehold land-societies resemble the building societies to a considerable extent. A large class of county votes exist in England and Wales that are unknown in either Ireland or Scotland. In an English or Welsh county the possession of a piece of freehold land of the annual value of 40s. and upwards entitles the possessor to a vote, even though he should be non-resident; and it is to increase the number of these votes for certain political purposes that these freehold land societies have been established. Their mode of working is simple :—The members pay so much per week, month, or other convenient term; and when a sufficient sum to purchase a large piece of land has been accumulated, the directors look out for a freehold estate suitable for the purpose and profitable as an investment, which is bought by some of them in trust for the rest. The land is divided into lots, each conferring a vote, and these are balloted for, or in some other way allotted to the members. As an investment, the chief advantage of the scheme is, that the members purchase land by retail at the wholesale price. Thus in some of the societies a piece of land which, if purchased by itself, would have cost 3s. 4d. per square yard, has been obtained for about one-third of that sum. The recent changes in the stamp-duty, and the proposal to have a better system of registering landed property, will prove of great value to these societies, as much of the cost of the land consisted in the expense of conveyance, and often in searches
into the validity of the title. It is perhaps unfortunate for such societies that they have hitherto aimed chiefly at manufacturing votes, and been associated with a political party for political purposes. The wider extension of the franchise, which appears inevitable, will doubtless deprive them of much of their political importance, and then their usefulness and unsurpassed security (for no investment can be so secure as that in land) will become more and more apparent. The extension and good honest management of such societies in connection with those for building, if less tainted with the spirit of realising a large percentage, would in a short time greatly promote the comfort, social happiness, and independence of the working-classes. If through these societies, by means of easy weekly payments, a freehold site for a garden and a house, and money sufficient for the erection of the latter, can be procured, what is there but the want of prudence, self-denial, and good management, to prevent many artizans from living in their own houses, digging in their own gardens, and doing that which Charles II. said was the best preservative of health-taking exercise every morning on their own land ?
Of loan societies we cannot speak so favourably. As hitherto conducted they have been hurtful to shareholders and loanholders. They have assumed two forms: the first somewhat resembles the building society, in so far that when a certain amount is collected by the subscriptions of the members, it is put up for sale, and knocked down to the bidder of the highest premium. Sometimes this premium is as high as 50 per cent., and the purchaser must apply the money in an unusually advantageous way to enable him to repay it by regular weekly or monthly instalments. In many cases when a poor man is hard pressed, or when a tradesman sees a profitable means of extending his business, the purchase of a loan in this way will prove of great service and ie; but in many other instances the reverse is the case : the money is spent at once; the loanholder finds he cannot pay regularly; fines accumulate to an enormous amount; and at last legal proceedings are taken, usually with great severity; and the effects of himself and his sureties are sold at a ruinous sacrifice, to pay an amount which, with premium, fines, and expenses, is perhaps double or treble that which he originally received. The second form is somewhat different. A society is established with a certain number of members and shares, and a certain capital. Loans are advanced on good security, repayable by instalments extending over about fifty weeks. Thus a person requiring money makes application for, we shall say, £100. Three householders become his securities for the repayment of the money. The sum he receives is £95, the difference being deducted for interest. He pays £2 per week for fifty weeks, and then the transaction ends. For the sum of £5, therefore, he purchases the use of £95 for the first week, of £93 for the second, and so on in sums diminishing weekly by £2 until the whole is repaid. The actual amount of interest which he ought to pay, if calculated weekly at 5 per cent. per annum, would be about £2, 3s. 6d., the difference, £2, 16s. 6d., being a kind of premium for the immediate advance; or, in other words, the interest he paid was at the rate of more than 11 per cent. per annum. But his repayments would enable the directors to advance other loans on the same terms, so that the interest accruing to the shareholders would be very high, and the investment be exceedingly profitable. But we have already shewn that the interest on investments is great or small in the inverse ratio of the security; and so in this case the interest is great, but the security is doubtful, and the result is that very few of these societies have been profitable. The loose system under which they were managed opened up opportunities for fraud, and many suffered severely by the defalcation of secretaries and other officers : the facilities afforded for procuring loans held out temptations to many to procure them and then abscond, leaving their sureties to bear the loss ; and often honest, well-meaning people have been obliged to contract one loan to repay another, until they found themselves in inextricable difficulties. Indeed the system of carrying on either a business or private affairs by means of such loans strongly resembles the system of wind - bills' in ordinary commerce, with the same result—that of bankruptcy—in almost every case. It is quite possible to place such societies on a better footing, and with good management and reasonable rules to make them what they ought to be--a help to the honest struggling man; but as at present constituted and managed, they ought to be avoided both by those who want money and those who have it to invest.
From a return dated 28th March 1851, applying to 200 loan societies in England and Wales, we learn that during the year 1850 the number of applications for loans was 87,563, of which 83,862 were granted: the money circulated during the year being £373,608, or a little more than £4, 10s. to each borrower. The sums remaining in borrowers' hands on 31st December amounted to nearly £150,000. The gross profits were £17,461, or less than 5 per cent. on the money circulated ; but from this must be deducted the expense of management, amounting to £6745, or more than one-third of the entire profits, leaving a clear gain on the operations of these 200 societies of about £10,000. Some idea of the mode in which the proceedings of these societies are conducted may
be gained from the fact, that the number of summonses issued against borrowers in 1850 was 2281, and of distress-warrants no fewer than 114. The amount for the recovery of which these summonses were issued was £2842, and the amount recovered £1969. Of the 200 societies, 44, or more than one-fifth, held their meetings in inns and public-houses.
Another great class of societies, more important than any to which we have alluded, embrace those in which provision is made against sickness and death. These originate from a different and a higher motive than the others that have been described. They are far less tainted with selfishness than societies that propose simply to afford a good return for money, invested; for no benefits can accrue from them unless by the occurrence of events which all men would probably avoid if they could, and to which even the best of us cannot look forward without apprehension and awe. The artist and the artizan, the professional man and the labourer; all, in fact, who are dependent on the sweat of their brow and—the term may be appropriately used—the sweat of their brain, are placed during sickness in a far different position from those whose income is derived from property. In the former case, sickness immediately stops the supplies, and death cuts them off altogether; but in the latter, the source of income is not affected by either of these events. A man may bequeath an estate to his children, but he cannot bequeath his own labour, his own busy brain, or his own skilful arm. To all working-men it is of the utmost importance that when sickness diminishes their income and increases their expenditure they may not be without some new resource in that day of need; and when death calls them hence, that their wives and families may not be left to a certain public or an uncertain private charity. To provide such resources it is imperative on all such men'to work while it is day, for the night cometh when no man can work.' It is a duty public as well as private; for no man is justified in placing himself and his children in a position calculated to make them burdensome to society, when the means of avoiding such an evil as well as such a degradation are within his reach.
Friendly societies have been established chiefly with the view of providing against sickness; but their history is a sad page in the record of humanity. With the best motives and the most laudable ends their promoters, chiefly working-men, erred grievously but not intentionally in their calculations, and the result was disappointment and loss. When we consider how irregular and uncertain sickness is, and what a vast amount of laborious and patient research, combined with the most minute calculations, is
necessary to arrive at even an approximation to the expected amount of sickness, we need not be surprised that men unaccustomed to such investigations should err, and that with economy in view they should err on the wrong side. There is no study that requires from its followers a greater amount of patience, of long-protracted inquiry, and of caution in stating results, than the science of statistics. It is very easy to collect a few facts, make a few calculations, and produce plausible results, but if these stand the test of experience it is owing purely to accident. When such attempts are made by schoolboys as mere lessons in arithmetic they are perhaps useful, but when applied to the actual business of life they become mockery, a delusion, and a snare.'
Though these friendly societies have existed in our country for more than a century, it is only recently that efficient steps have been taken to place them on a stable foundation. Many, we might perhaps say the majority, are still unsafe, and can never realise the expectations of their members. It is indeed very distressing to notice in the history of these societies the utter blindness continually manifested to the causes of their failure, and the reluctance with which their promoters and members listen to the warnings of experience or the advice of friends. Many parliamentary committees have considered the subject; but their able reports, and the valuable evidence that accompanied them, have done less service than might reasonably have been expected. One of those committees so far back as 1825 reported most unfavourably of the tables of sickness, &c. of the Highland Society, which were then usually taken as the guide for these societies. But no other table was given in its place, and the societies continued to adopt it in spite of warning and failure. In 1835 Mr Ansell published, under the superintendence of the Society for the Diffusion of Useful Knowledge, an excellent work on the subject, in which other tables, founded on experience as far as it could be collected, were given. But neither of these appears to have been safe; for in a pamphlet on the subject published this yearby F. G. Neison, Esq., the celebrated London actuary, it is shewn that the