National Republican. (Washington City (D.C.)) 1872-1888, 1873-10-15

frHfnp ARTicLE.l
In treating Of tho sources oil profits, We
will consider the several Items forming tho
grand total Of gain separately In order to show
the peculiaritlcs Of each In its relation to the
general capital. There Is, In tho 0rst place,
the
PREMIUM on bonus.
This premium Is paid by the borrower for
the privilege Of having the present use Of a
sum Of money he would be compelled to walt
for several years In order to obtain from an
accumulation Of savings. This prsat L. de-
rived from the borrowing. members, whilst
the non-borrowing member simply con.
tributes his regular installmcnts 10 zach OF
his shares OF the capital and waits until they
reach the ultimate value by reason Of the
added profits. The question Ia often asked
how can A y afford TO pay 30, 20 or 50 per
cent, as the case may be, for the present use
OF the money advanced TO him, and In the
opinion OF many persons Ia looked upon rs
oppressive and unequal. The reason Is
simple enough.
Premium Il what tho borrower estimates
the value to himself beyond simple interest
OF an advance on the ultimate value Of his
shares. The immediate and continued use
OF the money borrowed enables him to gain
back this premium, and perhaps n considcra-
bic profit besides, by the time his stock has
reached Its ultimate value and the only df-
ference between the borrower and non-bor-
rover Ia simply choice between two why's
Of saving. The one waits until his money Is
saved before he uses Il in purchasing home
trade or business. The borrower obtains u
loan OH his future savings and agrees To
make good Its return, employing II In way
10 make II earn him the means Of making
good his agreement. II he pays more than
he ought TO II Is his own fault, and he must
suffer, as all do who mlscalculato In business
matters. i Is for every one to determine as
TO their ability to pay this premium.
The method of securing this premium upon
the gross plan, as followed by nearly every
association In the District Of Columbia, Is
created by an auction competition between
those desiring TO borrow the money. Other
modes were ut one time used, such 40 draw
Ing lots, secret bidding, &c, all which en-
Outraged system OF petty speculation, as
| the money often fell to those who were least
In want OF II, and who would sell TO mem
Der more In need Of the loan at higher pre-
MUM, and thereby pocket a profit that should
Of right go TO the general fund. II is there
fore agreed that the auction sale Ia the most
fair and open, less liable TO abuse, and free
from objection and suspicion. The price
Is regulated by tho demand, and the profit
goes into the general fund for mutual dis
tribution.
In following up this Item, we will now
show what Is gained from II to the general
profit account: On the gross plan, where tho
Inc premium deducted from The face Of theioon'
borrows - OOo IN Ten shares nj "a nor
cent uranium, lie von,d rcccivc Tho pct
ann oil / 300. and tbcrc wonId remain $500
This profit Is sold to u, say at 20 per cent.
Four hundred and eighty dollars on four
Inr another proat Of three hundred dollars to
the asaociatinn This ia AGAIN soid and an
other proflt realized. Tbis Illustrates the
process Of pro6t mon proilt accruinp from
premIums thus dedlctedrthat Il, repested At
cach stated mceting ri an active assnciation
The next source Of profIt Il derived from the
monthly compoundInS of Interest and the
premium upon Interest. The same principle
Of increasa will rcspect 10 prcminms aiso
applies 10 the item of interest paid upon
loans.
"A tho monthly denominations (consistinr
of dues unon stock, nremiums and Interest
upon IoNnsl arc loaned out Tho Total
amount of interest received from month to
month GRADUALLY Increases in proportion Ia
Tho Increase of Tho vested canitaI As inter.
| cst Ia rccciycf II ia LEANED agaIn with tho
General funJ Al the ns%t mceiing inicrcst
p inns eompounded mon Interest monthly,
| a,d in addi,Ion 10 hi formina r,r, 81 ~,
GENERA, cSnitaI /, Il aiso loaned M a prc.
mlum and tbis forms a auadrnnIc proat.
Take Tor a, nmnic ona DALAI mia in nm n
given meeting night ms interest. and IL Ia i'm.
medlately loaned out again, first at per
cent. interest. Each share of stock being
OF the ultimate or nominal value OF s2OO--or,
TO be more explicit: A, who borrowed on
ten shares, ultimate value, $4,000, and for
which he has paid premium OF $500, pays
G per cent. interest on the $4,000. so that his
account stands: Amount Of loan realized
u, 200; monthly dues upon ten shares, $40
monthly interest upon loan, 10 shares, slO
ID. As monthly payments, dues and Inter
! est, (s20.) arc loaned out again, say at n
per cent, leaving IS In tho treasury, "a o
which Is premium upon the resale OF A
dues, and the other half o premium upon tn
sale Of the interest by him on bis loan. TIL
Is again sold at the same meeting, and vi
have another profit Of $500; so that, withou
extending the Illustration any further, W
J find that we realize profit OF $500 fror
! the first payment OF interest on AS loan
and the same amount from the amount OF hi
dues sold In the general fund. And, a.
further Illustration OF the PROFITS from TIL
source, the 81, 200 loaned to A at per cent.
simple interest, would amount In five year
TO Sl,5OO and at interest compounds
monthly, sl,6lS,6o. SO that, without takinI
Into calculation tho premium upon the In
terest that Is sold with the general fund
every monthly meeting, no scheme was eve