Herald and tribune. [volume] (Jonesborough, Tenn.) 1869-current, 1872-01-25
How Building and Loan Associa-
tionS are ODerated.


Knoxville Chronicle of the 21st., anC
ask a careful reading by all who may Sc,
it. 1t seems to us that an institution O
this kind, or one similar might be set OIL
foot here and result In great advantage t.
the place and people. As we endorse the
sentiment of the article, we would be glao
to have the views Of some of our enter
prising citizens upon this subject:
1--WE nave received a copy of the con-
stitution, bylaws and charter of a build
ing and loan association in Pennsylvania
which we have examined with some care.
As the subject of such an organization is
just now engaging the attention of a mum
Der of our citizens. We propose to give a
brief outline of its general features.
The object of such an association is the
mutual benefit of the corporators as mem
bers of a mutual saving fund society by
the accumulation ola fund by weekly
payments of dues and interest and from
other receipts sufficient to loan to each
and every member wanting money, or
loan a specified sum at a specified interest.
The sum generally ixe! upon is two hun
drcd dollars, loaned out on bidding, at the
highest premium provided it is not less
than ten per cent, and the premium to be
deducted out of the loan, when advanced.
Let us give a practical illustration of
the workings of such an association. Sup
pose one hundred mechanics organize into
such a body, each taking two shares of
stock. They begin by e~lecting officers, a
President, Secretary, Treasurer and ten
Directors. Each member pays an initia-
ton fee of say fifty cents on each share.
which would wive a fund of one hundred
dollars to begin with. They next agree
to pay on each share a monthly due of one
dollar, which would give them from this
source a monthly revenue of two hundred
dollars. For failure to attend meetings
or pay dues, small fines are assessed. On
the basis above given, at the end Of the
first month the association has three hun
dred dollars, enough to begin a Loan
Suppose the loans are fixed at two hun
bred dollars. The association puts up
this sum to loan to the highest bidder for
one year on security, to be approved by
the board of directors.
1t is bid off say at ten per cent. The
borrower pays his premium i'll advance
and gets the nett proceeds, one hundred
and eighty dollars, for which he gives his
mortgage or other security. The balance
on hand is loaned until the end of the
second month. when the second monthly
dues collected gives the association a fund
of three hundred and twenty dollars, or
perhaps by new additions enough to make
s 49, h,r1.ol 1uo ol1no 1oapg .
These loans are again bid off. the premi-
um deducted and added to the fund &C
cumulating for the third month. We
have given enough now to see the theory
of these mutual saving funds. If we ex-
anime it we see the tax to each member is
small. He begins by paying one dollar,
or more, according to the number of
shares he wishes to take.
The burden upon him is light, lie does
not feel it, and yet at the end of a year,
by a tax of twenty-five dollars which he
pays out in driblets, he finds himself the
owner of valuable stock, certain to appre-
ciate every year, until the premiums will
swell to a fund to be divided and certain
to amount to more than his loan, for which
he has given security.
The interest is high, it is said, yes but
the borrower is paying it to himself. He
gets his share of the premium paid on ev-
cry loan, and the higher it is bid off the
better for him.
If he can afford to pay the highest per
cent. he can wait until those most in need
get their loans when he can be accommo-
dated. The protection against failures
o.l l,.Io,,aet, - h. o,ra " fIa oJo,,c
sion of members and by the selection of
good officers who will see that the loans
are amply secured. These officers are
paid a little for their troubles, and must
be stockholders. Guard against combina-
tions by limiting the number of shares
each member can take to five or ten.-
Each one will govern himself in taking
shares by the amount he can afford to pay
each month in dues.
These associations are numerous in
some of the States, and so far as we know,
have been successful. They are beneficial
for mechanics, clerks or men of moderate
in any vocation.
The principle upon which they are
based is that they are an inducement to
men to save their earnings and to mutu-
ally aid each othGr, not only by loans, but
by 4 division among themselves of the in
terest that would under other circumstan-
ces go to the banks and brokers'.
The Association in Pennsylvania from
whose printed charter and laws we CLEAN
the above facts, send us also their first an
nual statement of their treasurer. 1t is a
proof of the great benefits of such organiza-
tions.
The number of shares reported at the
end of the year is 759. Their initiation
fee was twenty-five cents and their month
" dues one dollar on each share. The
.otal receipts from dues, fines, interest,
&C., the first year was SIG, 791,49. The
of loans was 100 and the net a
mount paid on them, S~I5,072,25. The
ash in the treasury at the end of the year
vas Sl,19S. Total expenses. including
and the extra expenses of pur-
books, seals, furniture, printing
avs. procuring charter, &c.. incident to
he first year was $500. (The expenses
iced not exceed 5000, annually. The
lssets at the end of the year were $685.
;21 GS.
1t requires but a little reckoning to
how that the above is a fine exhibit and
to prove a very profitable invest
We have all the papers necessary
O explain the plan for such an association.
nd would be glad to show them to any
persons interested. We would be espe-
tally glad to see our working men and
Ioung men organize to give each other
aid in this way, confident that they
would find it a profitable enterprise, and
hat several such associations would ma
odd IN the nroS,oritv Of ofr CITY -