The Cecil Whig. [volume] (Elkton, Md.) 1841-current, 1872-12-28
Change of the By.Laws.-Twenty five

hundred dollars was sold by the Elkton
BUILDING Society, at its last meeting. at a
premium of 8 per cent. The low rate of
premium at which the funds have been
selling for several months past together
with the prospect of Il still further decline,
owing To the falling off in bidders. as the
slItres not borrowed on decrease. has begot
desire in the stockholders to remedy IA
defect which this state of affairs has made
manifest IN the BY Laws OF the Society,"
| rs they now exist, which is to SO amend
them as to allow stockholders who have
not procured leans on their stock, il share
in the profits of the Society if they wish to
Withdraw. While this policy will offer
Inducements to shareholders to realize
something handsome on their investment,
it will tenL to appreciate tho shares to a
much greater extent than loaning the funds
at the low premiums that have been real
lied for months past. In order to present
the matter in familiar manner to those
interested, we have made calculation
showing the advantage that will accrue to
the Society by offering liberal and some
thing like equitable share Of the earnings
of the Society to Withdrawing members.
AS the law of the Association now stands.
no more than the money paid in the form
of dues can be paid to Withdrawing share
holders. The very natural consequence is
that no shareholder will draw out. when
the profits of the Society have increased to
considerably more than half the dues paid
in.
BY amending the Laws as proposed.
withdrawing shareholders will be brought
in competition with borrowers; by giving
the preference to Withdrawals over all bids
from borrowers who offer premium under
a certain fixed per cent. The calculation
which follows is given as an ilustra, ion of
the principle here alluded to, without being
The relative proportions made use of are
very nearly correct, and will suffice to
illustrate the plan Of the proposed change,
aud the mutual benefits to be derived from
it.
Dues paid to Society on 10 shares in
years, 5000
Earnings of Society on same in 5
years. 400
Value of 10 shares at the end of 5
years, $1,000
Allow withdrawal member on 10
shares amount of dues paid in to.
Society. 5000
Also half earning on same 200
Which cancels 10 shares of Stock $500
Number of shares reduced to 900
The value of each share after reduc-
ton is. $1O1,O1
Stated thus 800. 900, divided by 900
shares, 1Ol.Ol
$500 sold by Society at 10 per cent.
premium will add to the capital
stock $3.50. 500, $50 90
500. $50 divided by 1000 shares, 100.SS
The value of each share
Now if we sell $500 at 10 per cent. pre-
MUM and appropriate the same amount to
cancel 10 shares of stock, the difference
may be stated thus 5000 ss; (the apprecia-
tun of each share by the sale of $500 at 10
per cert premium) deducted from $00l.0l
(the appreciation of each share by paying
off stockholders we have difference of Is
cents per share in favor of the latter plan.
50 that on the basis of this calculation it
is shown to be more profit able to the Asso-
citation to allow withdrawal members one
half the earnings of their stock than to sell
the funds of the Society at 10 per cent. pre-
minm.
Or in place of one-half the earnings.
should the Association substitute 10 per
cent. as the premium to Withdrawing stock
holders, the amount Of interest in five
years on 5000 dues paid in on 10 shares of
stock would be $50.
If the Bylaws Of the Society were so
amended as to allow Withdrawing members
precedence 10 borrowing members whose
bids were under 10, II, or 10 per cent. as
the Society might determine. it is appar
ent that such an arrangement would work
advantageously to the Society, with no
hardship or Injustice to future borrowing
members.