Evening star. [volume] (Washington, D.C.) 1854-1972, 1867-09-11
BUILDING AND LOAN ASSOCIATIONS,

A day or TWO since we gave, ID answefto the |
,ruutry OF a CORES pondent, some ex PLANTATION |
of the manner OF conducting Building Ascot
ations according TO the plan IN use In this
country The English plan is somewhat diff
terent 1t has beeR objected 20 the method OF
ssUiro the funds at a premium, that members
in pressing need OF money are brought into
ompetitiop, and for the sake Of meeting pres.
emf emergency will submit to ex,ravagant de.
auctions, regardless OF the result and to obvi-
ate this dificui,y. societies in England loan
out the funds at a fixed rate Of interest, vary.
Ing according to the rm agreed upon FOR the
duration of the society; priority OF advances
being determined by rotation of membership
or OF al piicaton. or By ballot. Building So
cieties in England embrace two classes of
mt mbers,-those who enter them simply for
the purpose of saving certain sum OF money
at interest by the payment of month"; or quar-
terIy contributions; and those who wish to
borrow money to invest In real estate. They
are based upon two kinds Of constitution. the
temporary principle, by which the society is
calculated to exist only for given period. be-
yond which, however, If the plan and rules be
not properly adjusted, it's duration may be
considerably extended; and the permanent
principle, by which the society itself
may continue to exist for an indefinite
limited to a stated term of years. By the latter
method the capital of the societyis continually
flowing in and out, increasing or decreasing
according to the varying number of sharehold-
ers from time to time fulfilling their several
cy clas of payments. The societies first estab.
lished Were upon the temporary principles; the
number OF shares, as we'll as the duration o.
the society, being annualIy restricted 1t was,
however, ascertained that this did not suit all
parties, and that the benefit was chiefly con-
fined to those who were prepared to take
shares, and begin their periodical payments at
the commencement OF the society; those who
might become members after a year or two
would, of course, be obliged to purchase shares
by paying up the past subscriptions either to
the society or one Of its original members.
This Difficulty occasioned the introduction OF
the permanent feature by which an indi.
yidual Is enabled to enter thus society at any
time, without being subject to back payments,
and precisely on the same footing as its oriai
nal members. Another advantage claimed nv
the advocates OF permanent societies Is that
the borrower has the privilege OF CHOOSING
the period over which he will spread his re-
payments or subscriptions. either seven. ten.
twelve, or fourteen years; and that he can
therefore, make his arrangements with
much greater precision, according
to his anticipated income and
various other circumstances of which ha
alone can form correct Judgment. The per.
manent building societies OF England NAV be
called the English savings banks. There are
forty OF them in Liverpool against two savings
banks commonly sc-called. Permanent socie
ties, from the nature of the case, must, in the
long rum at least, conform to the real interest
otborrowers as we'll as offenders, and hence are
not SO easily and rapidly started, on truIv
permanent plan Persons whose object is
simply to get house On the easiest terms, are of
course, not slow TO perceive the great differ
ence In the inducements offered them and tn
Jake minimum share with that view il they
can be assured that loans will soon be forth
coming. But loans, to be forth coming, presup
pose depositers, or investors, IN due propor
ton, and the moderate movement of this class
necessarily checks the rush of the other In.
DEED, II is found necessary sometimes for the
ASSOCIATION TO borrow capital from outside in
order to move On with activity and satisfaction
to Its members. On the whole. however. de.
pendence must be mainly placed on the ration.
al calculations of steady, frugal people, such
as actually keep and accumulate money in the
savings banks, willing and expecting to do
each his part, and patiently to co Operate With
the rest In establishing the Common fund in
stead OF merely profiting by an Immediate and
clear advance from the Association.
We take, to illustrate the operation of q per.
manent society. the plan of the BROOKLYN As
ISOLATION, which is modelled upon the marured
system now adopted In En- gland, having the
advantage OF the services Of secretary who
has bad long experience in these institutions
in Liverpool The shares are of the ass umed
value OF $500 each, and on each share sub-3
scribed for an entrance fee of 81 is required.
and weekly payment OF the same amount,
Shares may be Withdrawn or transferred. and
with them any profits accrued, on sixty days'
notice and payment Of 81 on each share: but q
snare Goes not participate in profits until the
second annual dividend after il was issued
Interest at q per cent. is allowed on all shares
PAID up annually or semi-annualIy in ad.
vance a reserve fund Of IS, 600 against losses
is also main tanned out Of the first years pro-
fits on all shares, or II these prove insuf Gent
out Of the general profits. For Default In paw.
ment OF weekly dues, fine of fl We cents is i'm.
posed for the first week. increasing, by five
cents weekly, to twenty five cents, which is
continued weekly until the fines equal the
dues before paid, when the share becomes for
feited, and the holder ceases to be member
Of the Association. 5F- aa ..
Shareholders may be either depositors, or
borrowers merely, or both; that is, on receiy-
ing the allotment of loan, they may, II they
please, withdraw their shares and be
relieved from the payment OF weekly
dues, and also receive back the payments al
ready made, but will NO longer participate In
profits. When a loan il offered, all members
have the privilege Of competing therefore by
sealed bids of premium, (Which 1t is proposed
70 limit to per cent? stating also what
amount is required. and the member to whom
1t is awarded must pay entrance fees for such
number OF shares as the loan exceeds in
amount the par value Of shares already held
by Dim, and also deposit of $40 on each share
towards the repayment of the loan. The pre
MUM bid is also paid, or deducted from tina
loan IN advance. In case Of plurality OF
bidders al the highest rate, the loan is award.
ed between them by lot. The purchase to bs
made must be surveyed and appro we'd BY the
proper officers OF the Association, and a first
mortgage thereon executed to the Association.
ali expenses, insurance and taxes TO be pune.
tuaily paid BY the borrower, under penalties.
The loan must be taken and payments made
within three months after the award, or Il win
be resold, and the dsfaulting member CHARGED
with the loss, II any. Thencefor ward rspav.
ments must be made monthly, az follows On a
hve years loan, SOLO per share, (sseO;) ten
years, $3.50; fifteen years, Sa3s. The fines Tor
default are, for the first month, so ceats per
share c1.t h,yN as,..a