Last week I delved into the peculiar history of two Lakeport chapters of competing benefit societies in the 1880s: the Order of Chosen Friends (OCF) and the Independent Order of Chosen Friends (IOCF). Although operating under the guise of a fraternity reminiscent of the Freemasons and Odd Fellows, the real goal of these orders was to provide injury and death insurance to its members. If there is any doubt to this claim, simply perusing one of their promotional pamphlets removes all doubt. According to the pamphlets, as a member of one of these orders you expected to be paid one to three thousand dollars in the event you were injured, reached the ripe age of 75 or died (the payout differed depending on your level of membership).
Of course, this was not a free service. Each month members had to pay an “Assessment” which included a $1.00 charge plus an additional fee — the amount of which depended on your membership level, but never reached more than a few dozen cents. The local chapter (or council) in Lakeport was called Bertha Council No. 110 and averaged 35-45 members each year. Each month Lakeport’s council sent the state “Grand Council” a check for $50-$60 in assessment dues for all of its members. With dozens of councils in the state of California sending assessment payments each month, thousands of dollars was making its way into the Grand Council’s coffers on a regular basis.
When you couple piles of money on hand with a complete lack of oversight, you are asking for trouble. In 1884 both the OCF and the IOCF were rocked by embezzlement scandals that threatened to undermine the very foundation of their existence. After all, if people couldn’t trust their money to be properly handled, they would simply take their business elsewhere.
The PR nightmare caused by these scandals forced the two orders to take a long look at their policies and procedures. But before they could do this, like any business, the OCF and the IOCF entered damage control mode. One of them took their first steps down the path of dissolution, the other towards a brighter future. For both, however, the rest of the 1880s would feature a near-constant stream of lawsuits instigated by members of the orders or their families who claimed they did not receive their rightful compensation following an accident or death.
Perhaps suffering from a lack of stability that a nation-wide order provided, the IOCF floundered and, after the general conference of 1886, the officers in that order voted to change the name of the order from the IOCF to the United Friends of the Pacific Coast. A single document with the letter-head featuring this new name found in the chest of documents donated to the museum shows that the Lakeport council of the IOCF was still active at the time of this rebranding.
Taking far less drastic measures, the OCF simply changed some of its rituals and aspects of its insurance policy. This seemed to do the trick because the OCF safely waded its way through the scandal of 1884 and by the end of that decade boasted a membership in the tens of thousands across the United States. Nearly 20% of these people resided in California. Membership in Bertha Council No. 110 remained relatively consistent throughout the 1880s, and although the latest documents in the chest only date to around 1890, there is no reason to believe that the council did not continue further into that decade.
Unfortunately for the newly-rebranded IOCF — excuse me, the United Friends of the Pacific Coast — their fortunes were far less favorable than the OCF and by the end of the 1880s they seem to have gone defunct. Following years of lawsuits and cries of foul play, the California State Senate and Assembly held official hearings on the status of insurance/benefit societies. During these hearings in 1890 and 1891, officials from dozens of benefit societies — including the OCF and the Odd Fellows — were called to give testimony on the specifics of their insurance policies. In the end, the OCF and a handful of other societies were given favorable marks. Not so for the United Friends of the Pacific Coast. In fact, the UFPC was included on a list of short-lived benefit societies that were found to have defrauded their members. Taking time to wax poetic, the author of the Appendix to the Journals of the Senate and Assembly for the session of 1890-91 summed up the opinion of the Bureau of Labor Statistics regarding the UFPC and other sham societies as follows:
“They sprung into existence full of the seeds of death, spluttered like a midge in the sunshine, and then vanished.”
Even though the OCF in California walked away unscathed from these hearings, they didn’t survive far into the 20th century. You see, health insurance (from the perspective of the carrier) is nothing more than a gamble on the health of an investment. In the case of health insurance, those investments are people. Insurance companies necessarily fear natural disasters because the simultaneous death or injury of a large number of people could potentially bankrupt them.
This concern was as true in 1900 as it is today. Following a series of devastating floods in New York state in 1890, councils of the OCF throughout America were concerned to learn how many of those who had died were members of their order. In an official circular sent to all councils, the Grand Recorder of the OCF assured its members that only a few victims belonged to the order and so the ultimate pay-out was not as severe as was initially feared. Ten years later when a hurricane utterly destroyed the southern Texas city of Galveston, the OCF was not nearly as lucky. This disaster is thought to have precipitated the ultimate demise of the Order, which had to pay roughly $60,000 in insurance claims in one fell swoop.
Although somewhat short-lived, the IOCF and the OCF served an important role in the lives of several dozen Lake County citizens. Before the museums were donated that wooden chest, virtually nothing was known about these local councils. With the flipping of a lid, though, new light was cast into a dark corner of Lake County history. Next week I will continue to explore the role of similar societies when I look at the history of Freemasons and the Odd Fellows in our area.
Tony Pierucci is curator of Lake County museums
