Spirit of Jefferson. [volume] (Charles Town, Va. [W. Va.]) 1844-1948, 1867-12-03
Building Associations.
iStdfc ErccutiCc COnnlinec.

Building Associations.
1t has been suggested to me that having
stated the general theory of these associa-
tioDs, few figures in illustration of their OPP
erations might aid those who are DESTROYS Of
more fully comPrehending them.
The association which has recently been
organized IN this place, having adopted what
Is termed the premium plan that is, as has
heretofore been explained, redeeming the
shares for the lowest amount the sharchold.
ers, competing for the funds, are willing to
take for them, l will coniue myself ex elusive
ly to an explanation OF that mode.
Let the fact be borne in mind that the
funds of the association ale intended to be
used in paying 10 the shareholders the amount
of the par value of their shares, which Cwhcu
it is desired) are taken up or redeemed in
G6rGnce at the lowest rate offered.
1t is known that the shares of The JcfFer-
son County Building Association" are $500
each. Suppose, then, a holder Of FIVE Of
these shares, which at par are worth 81 300
wishes to have them redeemed. He offers
them for $500 each or for 81 600 in all
Should there be no other shareholder Willing
to have his shares redeemed at Il lower rate
the association wonld, Of course. ACCEPT this
proposition. The discount in this case. or
Is 1t Is termed, prcniiuD' would be sirty dol
lars per share.
Now let us see what it will cost to pay of
this advance of s GOO on the terms pre-
scribed by the association.
shares Of $3.50 each at n discount or pre-
MUM Of $50 per share would be worth $ 900.
Interest ON same for years (at the end
Of which time it is estimated the as
sOclatIOn will be able TO redeem in
full its stock will be-. 1920
Add to this the amount paid in on )
shares Tor years, Or........ 1910
And you will have the snm of. $3.50
as the full amount paid for the use
of 81 600 for : years.
Now let US compare this result with the
cost Of the loan Of 81 600 for : years at sim
Interest on 81 900 at per cent, for
years :'''....... ..-..-.. s+2U
Add principal 81 600
And you have the sum of.
or 800 more than is paid on the as
soeiation plan
The benefits derived are as follows -
With the $1,000 advanced by the associa-
ton. the shareholder will be enabled to obtaiL
house Of his own equal IN ruime to one for
which, if he be renter, he will pay $50
per annum and he will save almost enough
in rent to pay back the advance made LY the
association. because, in seven years he will
have paid at $3.50 per year $1,000 in rent
The ST. 900 obtained from the association and
with which he will build his house, will cost
him as we have seea above. 1880 or only
$3.50 more than his rent. So that by using
the advantages Of this association he may
build himself house, secure himself home
at once with the $1,000 thus furnished him.
and pay for it with the addition of $3.50 to
the rent he will pay in seven years. Or in
other words with what he saves in the way
Of rent and $3.50 dollars. he can build him
self home, pay for it, and thereafter be free
from rent
An examination Of these calculations is in
*ited. If they contain errors would be
glad to have them pointed out. If they are
correct, they speak for themselves and will
be more satisfactory calculation of the sub
ject than any other that could give.
Very respectfully submitted,
WM. H. TRAvERs.