considerable difficulties in making the necessary arrangements for treatment benefits, and, as a result, different standards of benefit are being granted by different Societies throughout the country. Few Societies are entirely local, and, as most may have members anywhere, the provision of treatment services implies an obligation to provide the treatment in areas where the Society not infrequently has not got adequate machinery for the task. The marked increase in the amount of money devoted to treatment benefits is accentuating the necessity for the administration of these benefits being co-ordinated through one local committee in each area." (Kinnear, Q. 23,543.)

228. We recognise that so long as any particular forms of treatment are provided only as additional benefits by certain Societies which elect to give them, and so long as different Societies allocate widely different amounts per head of membership for the provision of any benefit, the administration must remain in the hands. of the Societies, at any rate, in so far as the consideration of claims for benefit is concerned. For, under these conditions, it will be clear that there will be a varying standard as between Societies, not merely so far as concerns the scale on which they may be able to assist their members, but also in regard to the scope of the treatment in respect of which help may be granted. On the other hand, if it should be possible to eliminate completely such divergences by taking any treatment benefit out of the category of additional benefits and transforming it into a statutory benefit, the whole of the administration would, of course, pass from the hands of the Societies into those of the local bodies responsible for the administration of medical benefit. In the circumstances that confront us this is a matter for the future, but we think that even under present conditions where a treatment benefit (e.g., dental benefit), is provided only as an additional benefit, but has nevertheless in fact been so widely adopted that it has been made available for a large proportion of all the insured persons in every part of the country, it would be an advantage that the negotiations with the profession by whom the service is to be provided, so far as regards the terms and conditions of service, should, as in the case of the medical service, be undertaken by the Central Government Departments. Further, we think that the supervision of the service should rest with those Departments either directly or through the agency of the local bodies responsible for the administration of medical benefit. Such an advance to uniformity would, we think, further imply that a greater attempt should be made than in the past to secure that the same benefit shall have a more or less uniform content as between different Societies.

MINIMUM MEMBERSHIP OF APPROVED SOCIETIES.

229. We have received in evidence various suggestions as to the desirability of requiring a minimum membership as a condition

of continued approval of Societies. While some witnesses have expressed the view that it is neither practicable nor desirable to impose any such minimum limit, others have suggested a limit varying from 500 (Independent Order of Rechabites, Q. 61786179) to 100,000 (National Conference of Industrial Assurance Approved Societies, Q. 4990). We have been informed that some of the defects in administration which are manifested from time to time are attributable in certain cases to smallness of membership, and in particular to the fact that it may not be possible, within the amount available for expenditure on administration, to secure the services of competent officers (Kinnear, Q. 537,589). On the other hand we are assured that the efficiency of a Society does not vary in direct proportion to its membership, and that there are small Societies whose administration is entirely satisfactory as well as large Societies where this is far from being the case (Kinnear, Q. 23,562, 23,587). We are also informed that from the point of view of actuarial soundness and financial stability, a large membership is not essential (Kinnear, Q. 535; Leishman, Q. 1892). Moreover, we feel that the present widespread system of local administration through small units has the advantage of providing a closer touch between the individual insured person and his Society, and enables a very large number (estimated to be as high as 100,000) of working men and women to gain some experience of public work and social administration, with results which cannot fail to be for the general good. It is, moreover, in the Societies of this type that the tradition of voluntary and public spirited service is often best maintained. The disappearance of this tradition could not, in our opinion, be viewed otherwise than with regret.

230. We feel, therefore, that it would be inexpedient to place any arbitrary restriction on the size of Societies without regard to the quality of their administration and their effectiveness as selfcontained insurance units. At the same time we think that there should be adequate provision for dealing with Societies whose administration is deficient in any respect. This is, however, not a matter which can be confined to small Societies, and we shall return to it later in relation to Approved Societies in general.

CONTROL BY MEMBERS.

231. The next point of criticism of the Approved Society system as it now exists is that, although one of the main reasons advanced in support of the adoption of the system was that it would place the management and control of National Health Insurance business in the hands of the insured persons themselves, yet in actual practice this has not been the result, so far, at any rate, as many millions of insured persons are concerned. We have had ample evidence (National Conference of Industrial Assurance Approved Societies, Q. 4568-4743) that in some of the

largest Societies associated with Industrial Assurance Companies there is no effective means whereby the members could exercise control over the affairs of the Societies, whilst in many other Societies where the rules do contain provision for enabling such control to be exercised, the vast majority of members, mainly, no doubt, by reason of indifference or apathy, do not avail themselves of their opportunities and evince little or no interest in the affairs of their Societies. We, therefore, think it worth while to examine at some length this question of control by members and to consider what standard should be aimed at and could reasonably be expected.

232. The Act, as has already been indicated, makes express provision that the constitution of every Approved Society must provide for its affairs being subject to the absolute control of its members." The Act, that is to say, insists on the opportunity of control, but even an Act of Parliament could hardly insist on this control being exercised. We cannot share the surprise which is sometimes provoked by contemplation of the apathy of insured persons in these matters. The world makes so many claims on everyone that the number of things in which any of us can be keenly interested constitutes only a small fraction of those in which, as public-spirited citizens, we ought to be interested. Though we may conspire to conceal it, the truth seems to be that those who have time to be both actively and intelligently interested in all the things that affect them, individually or as citizens, are exceptional. Nor is this peculiar to any class of the community. The placidity of a County Council election, the harmony of the necessary quorum at an ordinary shareholders' meeting, the unreasoned faith of the simple man in his Bank or his Life Assurance Company, alike bear testimony to the fact that in such matters" men are unwise and curiously planned,' and that most of us are content not to be too keenly interested even in matters which may directly affect us. There can be but few who, surveying their scanty and superficial knowledge of the facts underlying current controversy, can truthfully declare that they have maintained that degree of interest in public affairs. which good citizenship postulates.

233. Applying these considerations to the apathy of insured persons, the situation surely is one which, however regrettable, is not merely wholly natural, but is in fact paralleled in nearly every department of the public life of the community. To expect that the great bulk of insured persons should display an active interest in the administration of the Act is to court disappointment. To put it no higher, it is not an attractive field of study, and it is probably asking too much of insured persons to suggest that they should attend meetings to discuss, for example, the propriety of the claims for sickness benefit which some of their fellows, unknown to them personally, are making, or the intricacies of particular regulations which, for the time being, have become of special interest to the Society.

234. It is, therefore, not surprising that those who are not drawn to the older Societies by their interest in other matters should be content to leave their insurance affairs in the hands of Societies which make the minimum demands on their time and attention. Nor is there any great harm-and there may be some advantage in the existence of such Societies, provided they are efficiently and economically managed, and that their constitution furnishes effective means for the control of the Society's affairs by the members should occasion arise. On this last point there is clearly room for improvement, and we recommend that in connexion with the general review of the rules of Societies, to which we refer later in this Chapter, any Society whose present rules are found not to provide an effective means by which the members can exercise control, if they desire to do so, should be required to amend its constitution in this respect.

235. One last point on the real social significance of selfgovernment. The question as it arises in connexion with Health Insurance is sometimes spoken of in terms of insured persons looking after their own affairs. This is, we think, to misconceive the point. It may be doubted whether those members, whose zeal in the administration of their Societies is rooted in a desire to look after their own affairs, will in fact approach the task in the right spirit. Rather will these tend to be valetudinarians. It is truer to regard the administration of a Society as offering an opportunity for public service in the interests of others, and it is safe to say that the great bulk of those who are engaged in the administration of those Societies with older traditions behind them are not in fact consciously. looking after their own affairs. They are there because they desire to find some useful work which they can do for their fellows. Democracy is a means and not an end in itself, and it is not, therefore, to be condemned for relative shortcomings, so long as it is in some measure an efficient means to that greater end for which it is designed. If it be permissible in these days to quote an eminent Victorian, it should be remembered that the business of life is an essential part of the practical education of a people." The fact that there are other channels by which a similar training in administration and affairs may be obtained cannot, except by the intolerant, be urged as a reason for despising the contribution which voluntary Friendly Societies make to our public life. All things do not appeal to all men, and diversity of opportunity in such education cannot but enrich the Commonwealth.

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SUPERVISION OF APPROVED SOCIETIES BY THE CENTRAL

DEPARTMENTS.

236. Under the Act of 1911 Societies, when once approved, were given almost complete autonomy, and although it appeared

to be implied throughout the Act that the Minister, as representing the Central Government, was to exercise some kind of general supervision over the administration of the Scheme, this was nowhere expressly stated and the powers assigned to him under the Act were extremely limited. Before any Society could secure approval, it was required to submit its proposed rules for the sanction of the Minister, but when once those rules had been approved, it was apparently contemplated that the Society should be left to go its own way, subject to two limitations only in the way of control by the Central Department.

237. In the first place, it was required to submit its accounts for audit by auditors appointed by the Treasury, whose duty it was to see that any expenditure out of its State funds had been properly incurred in accordance with the provisions of the Act; and secondly, the power was given to the Minister to withdraw approval in the event of the Society failing to comply with any of the provisions of the Act. Outside the ordinary daily routine work of administration, it is true that the Insurance Commissioners, as they then were, exercised certain powers as the ultimate court of appeal in the case of disputes between a member and his Society. It is also true that periodically after valuation the consent of the Central Department was required to a scheme of additional benefits, or a scheme for making good a deficiency, as the case might be. But undoubtedly a perusal of the Act of 1911 conveys the impression that a minimum of control had been left with the Department concerned, and that it was intended that Societies should be masters in their own house. It was soon recognised that such powers of control as were vested in the Department were too limited, and in the Act of 1913 provision was made enabling the Insurance Commissioners to withdraw approval from a Society on account of maladministration of its affairs, where it appeared expedient in the interest of the members of the Society to do so. A further measure of control was given under the Act of 1918, which applied to officers of Approved Societies certain penal provisions of the Friendly Societies Acts providing for the infliction of penalties on individual officers of Societies guilty of negligence in carrying out their statutory duties.

238. We were informed in evidence given on behalf of the Ministry of Health (Kinnear 567-570, 23,496-23,516) that even with these extensions the powers of supervision vested in the Minister are insufficient to enable him to take effective steps to secure and maintain in all cases the high standard of efficiency in the administration of Societies which is considered essential, and that circumstances arise from time to time pointing to the desirability of a further strengthening of his powers of control. Bearing in mind that we are here concerned with the administration of a scheme, which is financed by contributions compulsorily collected from the insured persons and their em