Gallipolis journal. [volume] (Gallipolis, Ohio) 1837-1919, 1869-05-13
BUILDING ASSOCIATIONS.
Their Practical Workings.
wILLTHEY PAY AS AN INVESTMENTS


Saturday evening, to inaugurate the
movement A committee, consisting
of Messrs NJ. GERMAN, ROBERT CocH-
RANE and WILLIAM MuLL1SEux, was
appointed to procure acertifcate of in
corporation. As soon as that is re-
ceived, another meeting will be called
for organization.
These Associations are springing up
all over the State, and wherever they
have been properly managed, have
proven eminently successful, consider
ed simply in pecuniary point OF view.
We trust the movement here will re-
ceive the assistance and cooperation Of
all classes. AS there is here, as well
as elsewhere, doubtless much anxiety
to thoroughly understand the question
Ito learn something definite in regard
to the practical workings ofthese or
ganizations-we copy the following ex-
pose from the Chillicothe Register, to-
wit:
THEIR OBJECT.
The ostensible object of such .socie-
ties is the accumulation of fund for
each of the members thereof through
the weekly contribution by them of
small sums of money, which are made
productive by being advanced in GER
tain amounts to the individual members
of the societies, which adyancements
are made in the shape of permanent
loan-the principal of which, as such,
is never repaid.
All these societies combine two lead
ing features, viz; Hoarding savings
and making profits by compounding
interest on the same, on substantially
the same principle as savings banks and
life insurance companies, by means of
the following simple process: A num-
Der of persons enter into a mutual
agreement to subscribe and pay into
a common fund, by regular instalment;
say twenty-five cents per week on each
share of stock that he may hold; and
to pay this sum weekly until the fund
shall have accumulated so as to divide
$500, or any other given amount, to
each share. When this point arrives,
the members draw their money, do
with it as they please, and the partner
ship ceases.
To secure punctuality, each mem
Der neglecting his weekly payments is
subjected to fine--the money accu-
minated in this manner also going to
hasten the time when the money will
be divided among the members.
THE CHIEF METHOD.
The chief method, however, by
which the period of distribution is has
tened and the common fund made pro-
ductive, is by authorizing any member
to make composition sale of his in
terest in the ultimate distribution~hich
is to take place. That is: in consider
alton of certain sum, cash in hand, a
member returns his stock to the asso-
citation, releases it from all further
claim, and gives security that he will
pay his weekly dues on the amount of
stock he formerly owned, and also 6
per cent. interest on the money receiv-
ed--these sums to be paid until the dis
solution of the company, to effect
which requires, on an average, about
seven years. In other words: when
member accepts what is termed loan,
he, in EFFECT, is selling his stock, the
amount he receives for it being regulat-
ed by the ordinary laws of demand
and supply.
ILLUSTRATION.
In order to explain this point more
clearly, we will give the nsodus operan-
di: Let us suppose one of our COM
panies to be fully organized, all the
stock taken, and first weekly install
ment and initiation fee paid in. This
would put in the treasury, on the first
night of meeting, over thousand dol
lars. Other business being transact
ed, the Secretary, or Treasurer, or who
ever the duty falls upon, announces
that he has money to redeem FIVE or six
shares (the shares being $500 each),
and asks who wants to dispose of his
stock. Several answer that they do.
What will you take for your stock? is
asked of one member Anxious to get |
all he can, he will probably reply that
he will sell at par, 5000 Another
member, wanting money, says that he
will take $3.50 for his share; another
one, wanting money badly, may say
he will take $3.50 for his; still another
may take less; and so on, until the low
est offer is made, which may be $3.50
--or more, or less-whereupon the
Secretary takes in the mans stock,
pays the money he agreed to receive
for it, gets his security that the dues
and interest will be paid, and then pro-
ceeds to buy in other shares.
This is what the matter amounts to,
when brought down to actual fact.
The money is not given to those who
pay the highest rate of interest, for
there is but one rate of interest-6 per
cent. In disposing of the money, 9TH
er terms may be used-that is: That
it is sold to the one who gives the high,
est premium, but the above statement
shows what it all ends in.
The sale of his stock to the associa-
ton by member does not affect his
relation to it in other respects, and he
remains subject to all its regulations
liable to attend its meetings and to do
any duties which might devolve upon
any other member.
WILL 1T PAYS 1T BENEFICIAL?
The question now arises, will it pay
a man to become member? Is a
membership beneficial to him?
Let us look at the figures?
The association being fully organ
lied, and the first instalments paid in, .
the competition to secure money COM {
Tbo T. ~ /,