Daily American telegraph. [volume] (Washington [D.C.]) 1851-1852, 1852-03-08
From the New York Tribune.1
RuiIdinR AssOcfatiOns.

The number OF these ASSOCIATIONS estaohshed,
OF in process of organization, in this city, we I'M
derstand to be about forty; and the number OF
members attached to each will not vary much
from FIVE hundred, making in all some twenty
thousand persons, mostly working men and heads
of families, combined or to be combined in these
organizations. 1t is hardly more than four years
since the first one was formed i'll this country
and most of those now in existence were COM
menced within few months.
The object of these associations is, by the COM
bination and accumulation of small capitals,
saved by economy from the earnings of their
members, to enable the latter, by the monthly
payment of sums not much exceeding their ordi-
nary house-rent, to become the owners of their
own houses. They are organized under an act
of the legislature specially framed for the pur-
pose. Each association is generally divided into
one thousand shares, and sum, say $500 or
$500. is fixed as the full value of each share
In most associations, we believe there is no lin
itation to the number of shares which an indi-
yidual may take. On each share he pays an en-
trance fee of one or two dollars, and monthly
instalment of So 80 or So. A time is fixed, va
rying in the prospectuses of the associations in
this city from six to eight years, when, by means
of these monthly instalments, with compound in
terest and premiums on loans, the shares will
have reached their full value; that is to say,
when the association will have in its hands sum
sufficient to pay upon each share remaining unre-
deemed the $500 or $500 proposed at the outset.
Then the object of the association will be gained,
and it will be dissolved.
The redemption Of shares is another term for
loans made to members who wish to borrow.
The association holds monthly meeting, when
the funds in the treasury are offered to be loaned
to the highest bidders The question is asked
Who will give the highest premium for the money
~ ~ thn
end of the concern? He who bids the most gets
it, and he receives the cash for his share or
shares, minus the premium at which it was struck
off to him. Thus, for share which will be worth
$500 at the dissolution of the society, he may
now receive $500, $500, or $500, according to
his bid in ready cash. This is, however, paid
over to him exclusively for the purpose of buying
a lot, or a house and lot, or of building a house
on lot previously leased or purchased. This
property he mortgages to the association to Sc.
cure the payment of his monthly dues, together
with tho interest upon the share or shares which
he has thus redeemed. The interest, reckoned
at six per cent upon the full value of the share,
not upon the sum which he has received for it, is
also paid monthly at the same time with the
dues. Thus, as it is Immediately loaned out
again, it is compounded every month"; which in
creases the rapidity Of the accumulation. When
borrower fails to pay, the association takes
possession of the property and rents it if possible,
devotng the rent to the payment Of the default
er's dues and interest, in which case it is finally
HIS Just as if he had himself paid regularly. Pro-
vision is also made for cases Of death or wish
to withdraw, in a manner to guard the interests
of the association without infringing the rights
or property of the individual members.
The working man who invests six or twelve
shillings from his weekly earnings in the shares
of building association, lays the foundation for
habit of foresight prudence and temperance,
which, in the long run, is of greater value to
himself and his family than the worth of the
share. The next benefit is, that, without adding
anything, or with but a small addition to what
he is used to pay for house-rent he is enabled to
become the owner of the tenement he inhabits.