Daily American telegraph., 1852-03-17
AMERICAN TELEGRAPH.
Communicated
Building Associations.

MESsRs. EDITORS: In reference to the article
on this subject quoted by your correspondent
from tho journal of Commerce." and number
OF others on the same topic which have appeared
in that paper since, it seems strange that there
should be so much misconception and founder
ing on matter which, as understood among US,
is susceptible of such plain and easy demonstra-
ton, The following propositions. at least are
presumed to make the matter fully as clear as
the reasoninas Of "A Calculator" in tho +" Jour
nal:"
l. Building associations" rs constituted in
this latitude, do not promise $500 for monthly
Investment of SO during ninsty-two consecutive
months, or 8-12 years--that is, $500 as re-
turn for $279; but they promise and do realize
$500 for 81 (equal to $500 for $4) paid for
about ninety-two consecutive months, or BE
years-thnt is, return of $500 for S33; and
that on the commonest principles Of capital and
interest compounded from month to month.
But the object of building or mutual loan $3.50
Citations is notlucrative investments, or the reali-
zaton of inordinate gains to the speculator at tho
expense of the laboring man. On the contrary,
it s to take him out of the hands of the capitalist
and make him his own banker and landlord
Those who invest for the former purpose will
find that they view the matter enormously, and
the result will disappoint them in their calcula-
tions of excessive gain. For, it being necessary
for the successful operation of the association and
its close in the shortest time that all the shares
Ito very small remnant) should be bought out
by the holders at the highest possible premium,
their object of accumulating gains without buy
ing out is, therefore, in direct opposition to the
interest of the association, and consequently
their own. Out Of 1000 shares the holders Of
but 10 can realize the full value of the stock of
$500 for $92, at the close of the association; all
others must submit to q greater or smaller dis
count in interest and premium, as all but those
10 must buy or take out their shares before the
close of the association.
The object of building or mutual loan associa-
tions is to enable the man of small means, and
generally without banking credit to obtain the
great benefit of the advance of q capital for
moderate and legal interest, and the easiest
terms of repayment, wherewith to acquire
house and homestead, establish increase
business, &C., ca accomplish any other purpose
to his advantage, and the furtherance of his in
dependence and comfort in life For be it known,
that not on real property only, but, when his
monthly savings have helped to swell the value
of his stock, on the value and security of that
stock itself, advances in money can be made.
Now, what is the operation Of effecting this
object? Experience aud calculation show that,
in the ordinary course, these associations run
out in not quite eight years-say, at furthest
seven years and eight months, or ninety-tw
months. Suppose, then, the entreme case of a
party taking m advance out of tho very first
months contributions at Calculator" average
premium Of S75 pr share of 5000: he would
receive cash : Sl25 90
And would refund to the society
in regular contributions for