MAJORITY REPORT.

Qk

that 65 per cent. of the total number of Societies in England
comprise only 2 per cent. of the total number of insured persons,
while 2} per cent. of the Societies include 76 per cent. of the
insured persons. (Kinnear, Q. 23,553.)
204. Approved Societies are not, as a rule, organised on any
territorial basis, and while a certain number are restricted to
persons engaged in particular occupations or group together those
who share a common point of view, such as those which impose
a temperance or a particular religious test, the Societies comprising
 the great majority of the insured persons are open to receive as
members any such persons without regard to residence or occupation
 or any similar test.

CERTAIN CRITICISMS OF THE SOCIETY SYSTEM.

205. We have received evidence criticising the Approved
Society system on a variety of grounds. Our attention has been
directed to the extra work in accounting, auditing and in the
general supervision necessitated by the existence of nearly 8,000
separate financial and valuation units. For instance, witnesses
appearing on behalf of the Central Departments informed us that
administrative saving would be effected by reducing the number
of separate units (see Kinnear, Q. 638-643 and Leishman,
Q. 1790-1791). Again Mr. Middleton, the Acting Chief Auditor,
in replying to a question as to the work falling upon the auditors,
said : ‘‘ The fewer the units the less work, because every unit
entails a kind of a nucleus or irreducible minimum of routine
which could be absolutely dispensed with if its real transactions
were merged into the transactions of another existing unit.”
““ We might put it that 20 separate units of 250 members each
would occupy two men for 30 days: that gives 60 man-days.
A 5,000 membership group would occupy the two men for about
12 days : that gives us 24 man-days as against 60.” (Q. 23,256,
23 959)

206. These criticisms relate, of course, to the cost of central
administration which is not borne by the insured persons. As
regards the cost to the insured members themselves, Mr. Alban
Gordon expressed the view (App. XIII, 6) that ‘‘ economically
 the excessive number of small Societies with their
multiplication of establishment charges cannot fail to be an
expensive method of administration.” On the other hand we
have no evidence that larger Societies are administered at a
lower expense per head to their members than smaller Societies.
The primary point in this connexion is not the size of the Society
but its constitucion and the agencies through which, under that
constitution, its operations are conducted. Regulations fix the
maximum amount per head that may be spent on expenses of
administration, and so far as savings within this limit provide
a criterion of relative cost, the general body of small Societies