FRATERNAL SOCIETIES IN AMER ICA. A fraternal society is defined as a cor poration or voluntary association organized and carried on for the sole benefit of its mem bers and their beneficiaries. It has no capital stock and is not operated for profit. Every such society must have a representative form of government, and is supposed to operate on the lodge system, with a ritualistic form of work for the meetings of the lodges or other des ignated subordinate bodies. It has power to adopt its own constitution, by-laws, rules and regulations for the orderly conduct of its af fairs, and in general terms may manage its internal interests as it may deem best. Al though the American fraternities have the same basis as the friendly societies (q.v.) of England and Scotland, they are a purely Amer ican institution, organized without reference to, and at the outset of their career, in entire ignorance of the fact that the same system was in successful operation elsewhere. At the present time the laws governing the frater nal system are in a state of transition, and as the fraternal societies are the creatures of, and governed by the laws of, the different States, any change in those laws will necessarily change or modify the system as at present operated.
There are two representative bodies, claim ing to act for, and represent a large constitu ency among the fraternal associations. The National Fraternal Congress, organized in 1886, represents the larger number of leading soci eties. From its official reports it appears to aim at eventually securing the adoption of a uniform law throughout the United States and Canada, defining as fraternal society, as above expressed, with the addition, that every soci ety shall pay a death benefit on the death of a member, and may pay disability payments, re sulting froin accident, disease or old age. Dur ing the years 1900 and 1901 the Congress made a vigorous effort to secure the passage of a uni form bill in the legislatures in all the leading States, restricting the benefits, coupled with a provision requiring all the newer organizations to charge adequate rates, but allowing the older societies to continue their low rate assessment system. This action was bitterly opposed by the minority of the Congress and by a still larger number of other associations that were not affiliated with the Congress. The result of
this opposition was the defeat of the proposed law in every State where a contest was made.
The outside societies that participated in this contest, feeling the need of a union for mutual protection thereafter, immediately after the contest was ended met together and in March 1901 organized the Associated Frater nities of America, with the avowed object of opposing any further changes in the laws of the different States until public sentiment was ripe for the adoption of a uniform law on the basis of the largest liberty to each society in the matter of benefits, provided adeqtfate rates are charged therefor. This dissension among the fraternal societies induced the convention of the insurance commissioners of the differ ent States to formulate a proposed law for the government of fraternal societies, containing many new and startling features.
All the early fraternal associations collected their contributions from their members by means of assessments, the rate of which, except in two instances, was graded according to age at entry, and each member was required to pay such a number of assessments each ,month as might be needed to meet the death losses. As these older organizations Advanced in years, their death losses necessarily increased in num ber, and with increased death losses the num ber of assessments each month also increased. During this period many new societies were organized on the same system and while young naturally had a low death rate and a low mortality cost per member. Being much cheaper they naturally attracted members from their predecessors until they were displaced in popular favor by other new creations on the same plan. Whatever differences of opinion may now exist among fraternalists as to the need of the sys tems at the present time, they all agree that the old assessment system has been a failure, and should be superseded by rates based on the rec ognized mortality tables. The newer organi zations profited by the experience of the older societies, and generally started with higher rates, and this fact has made it much easier for them to provide for their deficiencies. A large num ber of the younger organizations are, and for some years have been, charging adequate rates, and the protection they furnish is as safe as the insurance supplied by any insurance company.