The proper functioning of a present-day economic system is dependent upon money and prices. This is particularly the case when a large part of the economy is based on private enterprise.

For many years economic text-books have stated the three functions of money to be (1) a means of payment, (2) a store of value and (3) a unit of account. The third function will not be considered in this paper, although a study of the controversy that has occurred recently about the correct principles of accountancy at times when prices change substantially will convince the reader that this function is important.

Whilst all three functions of money have been recognized for many years, the emphasis given to each has changed radically from time to time. Prior to 1930 almost all the emphasis was given to money as a means of payment. This led to an approach to the subject which has been called the transactions-velocity approach.

How are the Friendlies faring? This catch-phrase was born soon after the take-over of Approved Societies in 1948 and was bandied about in Friendly Society circles for the next two or three years. It is perhaps a pity that the question had not been asked 10 or 15 years earlier. Be that as it may, the answer to-day is fairly clear.

That the Friendly Society movement as a social institution of the country is fast declining is, I think, undeniable. The Registrar's Statistical Summaries show that the total number of Registered Branches and Societies, excluding collecting societies, declined from 19,429 in 1939 to 15,226 in 1950. This apparently alarming fall, 20 % in 11 years, is not, however, quite so bad as it looks—of the total wastage of 4203 Societies, 2590 relates to Branches of the Affiliated Orders and reflects various policies of centralization, amalgamation and reorganization; actually many of the Branches which have been deleted from the Register still exist as agencies instead of autonomous units. In the same way, of the balance of 1613 wastages among Societies without Branches, a fair number will have been due to the amalgamation or absorption of different Societies.