Слике страница
PDF
ePub

year, or who may not be born until after the death of the father; but it is believed that these, as well as the 2 1-2 years deducted, will be counterbalanced by the cases in which there are no children, or where the children have attained the age of 21, before the marriage of the widow."

Assuming, then, that all the officers of the Army contribute during 4 years 10 per cent. of their pay proper, and 5 per cent. thereafter; that the surplus funds can be invested in stock yielding 4 per cent. interest; (* the greatest to be depended on, if security of investment and unavoidable delays be considered;) that the number of annuities granted to widows or orphans annually will be 9; and that they will be continued on an average 20 years; the following table will exhibit the state of the fund for every successive year.

This table has been calculated on the presumption, that the payments of the annuities are all made at the end of every year, and that the first year's subscription is allowed to accumulate its whole interest, before any demand is made upon it.†

(A)

Statement of the operation of a proposed fund for the payment of an annuity of $200 each to the widows or children of officers-nine in number, during their natural lives, predicated on an assessment of 10 per cent. per annum on the pay proper of all officers for the first four years, and 5 per cent. thereafter.

[blocks in formation]

*See Report of 1828.

This assumption, as well as all the others which this Report contains, is

taken as favorable as possible to the Provident Society.

The result of this calculation shews, that the fund increases for fourteen years with a diminished increment; that at the end of the fifteenth, the capital remaining, to which the contribution of $ 17,100 is to be added, viz: $202,098, is less than the corresponding capital of the year before, by $1,089, and now, that, as the contribution for each year, added to the interest of the capital for that year, is less than the demand for annuities, the fund must diminish until it becomes extinct. This, by continuing the table, it is found to do in the 32d year, when it will not only be exhausted, but in debt to the amount of about $6,000.

Thus it appears, that the maximum contribution of the officers of the Army, is unable to provide the mere pittance of $200 per annum, for widows and orphans alone.

SECOND. To secure an annuity for life of a certain amount to officers who shall resign after a certain period of service.

The annuity generally proposed is half pay, and the period of service 25 years: a greater term would not be useful to the officers, a less would burden too much the Provident fund.

It may be safely assumed, that after 25 years' service the individidual will be a captain, and probably a field officer. Supposing, however, four captains to resign for every two field officers, the average half pay will be about $300, which will be adopted in the following calculations.

In order to ascertain the probable duration of the annuity, it must be recollected, that the average age at which cadets graduate at the Military Academy is 22 years. The average age

at resignation will therefore be 47 years. Taking the table of lives already given, where 45 years give 18 3-4, and 50 years 17 years, as the probable continuance of life, the intermediate number 47, will give about 18 years, which will consequently be the probable duration of the annuity.

The investment is supposed to be made on the same terms, and the tables below to be constructed on the same principles, as in the previous case.

For table B, see next page.

This table shews the following results, viz: That the fund to the end of the 18th year has continued to increase; but, that if the annuities be increased by the annual increment for the 19th year, it begins to diminish. Consequently-5 annuitants, at $300 per annum each, can just be supported, if the average duration of their lives be taken at 18 years; but should the average be increased to 19 years by any circumstance, or should any unforseen deficiency occur in the annual contributions, or mismanagement of the fund, the capital will commence to decrease, and must be exhausted at the end of a certain term of years.

(B)

Statement of the operation of a proposed half pay fund for 5 officers, to receive $300 per annum each, on retiring after 25 years' service, predicated on an assessment of 10 per cent. on the pay proper of all officers for the first four years, and 5 per cent. thereafter.

[blocks in formation]

If, now, we calculate the result, supposing 6 officers on half pay, at $300 each per annum, it will be seen, that the first table A, calculated for 9 persons at $200 per annum, must correspond exactly with one for 6 persons at $300 per annum. The difference is, that the annuities, in the first case, are for 20 years, and in the second for 18 years. For 18 years, therefore, the tables will be the same.-(See table A.)

The conclusion, from inspection, will be as before, that the fund commences to diminish in the 15th year, and must, from the principle mentioned in that calculation, viz: that the demand for annuities, is greater than the annual contribution, added to the interest of the surplus capital; diminish, and finally become extinct. This will take place in the 37th year, as will be seen by continuing the table; the difference between the terms of extinction in the two cases, being referable to the difference of the 18 and 20 years.

Five, then, can be just supported, and six cannot. Let us now compare the numbers with the probable number of those who would retire on half pay.

From a simple inspection of the Army Register, we all find that there are at least 30 officers, a majority of whom are

[graphic]

above the rank of major, who are now, (in 1833) and at least 50, who, in the course of four years, (and it cannot be expected that the fund will go into operation before that time,) entitled to retire on the terms proposed. Of these 80, it is fair to conclude that at least, or 10 persons, would gladly avail themselves of the opportunity offered to enter on other pursuits, with the certainty of half pay for the remainder of their lives. The conclusion is evident. If 6 exhaust the fund in 37 years, when the majority of annuities is for captains, how soon will 10 exhaust it, when we continue for several years to support exclusively officers above that rank.

A writer in the Military and Naval Magazine, in an article of the No. for July, 1833, entitled "Hints for a Military and Naval Provident Society," has put forth a scheme, which is fair enough at the first glance to a superficial reader, but which leads to results which will perhaps startle the proposer of it. His plan briefly is, to accumulate first, by subscriptions in both services of one month's pay proper, and after that, of one week's pay proper, (or the 1-4th of the preceding,) a fund, which, at the end of five years, shall amount to $ 175,000. We shall now quote from the article.

"The regular interest of this sum, together with the amount of annual subscriptions, would enable the Society to pay forever thereafter, to the families of those entitled to the benefits of the institution, the following rates of annuities.

per annum.

To the widows or children of General Officers of the Army, and
Post Captains of 5 years and upwards,

To the widows or children of Post Captains under 5 years, Colo-
nels and Lieutenant Colonels,

To the widows or children of all other commissioned officers,
To the widows or children of all warrant officers,

$ 1,000

750

500

300

Supposing the average yearly deaths to be one in fifty, as we have stated it, at the commencement of the sixth year there is to be paid of these annuities:

[blocks in formation]

Making an aggregate of $ 20,650, and leaving a balance of interest and annual subscriptions of $7,350 to be added to the next year's capital."

The great and fundamental error of the whole calculation is this, that the author of "Hints" has entirely forgotten that these annuities are double for the second year what they are for the first, treble for the third, and so on, according to the number of years from the beginning, until the annuitants begin to die. The table below will shew him the true result of his plan. We

shall allow him the benefit of 6 per cent. interest in the investment of the fund, as he has so taken it, although in our other calculations we have adopted only 4 per cent. in accordance with the Report previously referred to.

(C)

Statement exhibiting the operation of the annuity fund, as proposed by the author of Hints for a Military and Naval Provident Society No. Military and Naval Magazine.

Yrs. beginning Annuities

July

Capital at Amount of Balance af

Interest

ter pay

on

Yearly
Contribu-

of each

for each

ment of

[blocks in formation]
[blocks in formation]
[blocks in formation]
[blocks in formation]

It appears from this, that in the 8th year from the first action on the subject, or the 3d from the first payment of annuities, the fund diminishes continually; that it is exhausted in the 5th year from the first payment, with a deficit of $ 12,935; and that, in only two years more, the fund is in debt to the amount of $ 109,817!

THIRD. To provide an annuity for disbanded officers.

The best reply to this proposition, is found in an article of the November No. of the Military and Naval Magazine, for 1833, signed "Covington," whose remarks upon the whole subject appear to be very judicious.* His observation on the point before us is, "that, as to this class, a sufficient objection is found in the fact, that a single act of legislation might create more pensioners than it would leave contributors," which objections we consider, with him, to be fully sufficient.

Your committee have thus shewn, (as they conceive,) that the three plans-First, To secure an annuity, for life, to the widows or children of deceased officers: Second, To secure a like annuity of half pay to officers, who shall retire after 25 years of service: and, Third, To secure an annuity to disbanded officers-are each separately and individually impracticable; and, consequently, that any idea of uniting all, or any two of them, in one project, cannot be entertained for a moment.

Apparently, the only practicable way, and certainly the most advantageous one, of accomplishing the end proposed is, not

To the same writer we must express ourselves much indebted, for the republication in that No. of the Report we have so frequently referred to.

« ПретходнаНастави »