National Republican. (Washington City (D.C.)) 1872-1888, 1873-10-11
BUILDING ASSOCIATIONS.


"A II would rcquire TOO much time and
space to go back into the early history OF tho
different plans upon which building associa-
tions have been worked, and which have
long since been abandoned, such as what was
known as " Building Clubs, Land Associa-
tions," &c, having for their object the build
ing Of homes for member, we will cndcavor
to give description Of the two plans upon
which building associations, or more prop
erly known, cooperative savings loan asso-
Citations, are worked. The original plan
adopted by the flrst associations and carried
out TO great extent at the present time, and
upon which the associations In Washington
city arc worked, with the exception OF one,
"Thc Territorial Savings, Loan, and Build
ing Association" Is called the
TEkNISATISG PLAS.
Under this plan the payments on each share
commence with the fret meeting Of the par
ticular association, and each share, no matter
when IL is issued, is made to date back to the
time Of the first payiLent OF dues so that
any person joining the association months or
years after the date Of the fret issue Of shares
Is required to make good by back payments
an amount equal TO the accumulated aud
adjusted value of the stock at the time of
becoming a shareholder. by this plan each
share Is ut all times equal In value, and 10
theory they all proceed steadily on to tho
promised ultimate result, the membership
and association terminating at one aud the
same time. This Is the simplest ne II was the
earliest form Of the scheme, but IL has been
found after long experience 10 DO opeu to
two serious objections, aud has been aban-
doned entirely In England and In the State
Of PENNSYLVANIA. Boz
1. Each year makes II more costly and
difficult for new member to enter. For ex-
ample, an association has been running
eighteen months, n person wishing to enter
would have to pay eighteen months back
dues, and In addition the adjusted value Of
the stock.
.. Practice proves that the plan Is seldom
II ever carried out to the agreed point OF ter
mination. The difficulty consists In the fact
that after the third or fourth year the accu-
mulating capital increases beyond the de-
mand for It. By this time nearly all the
members who desire II have been supplied
with loans, and persons who would become
members and borrowers cannot do so, owing
| to the heavy back payments required. Tho
result 10 q dead lock, and 1t becomes actually
necessary to enter into some plan by which
the nou-borrowing members are required TO
retire from the association, taking their accu-
mulated capital and such portion Of the
IfOutr US may w ukIttu uDVu. ENtiy ICi-
son at all familiar with building associations
understands the difficulties Of winding up"
such Us buying Of the minimum and 'going
In the hat" The certain and natural result
Of plan based upon one issue Of stock COM
pels the members TO go into liquidating
process before the desired result eau DO
reached.
The simple and easy remedy for the trou.
BILE Is the serial issue Of stock, and Ia known
as the
PERMANENT rLAS." ..-
In the mode OF issuing shares II requires the
same monthly payment OF dues, and Is re.
strictcd In the amount Of stock TO DO issued,
and which Is issued at different periods OF
time. Each series dates back only to the
period at which IL was issued, so that while
all the shares are at all times equal with each
other, the shares Of each particular series
The peculiarly Of fixed dates and amounts
arc not interfered with In tho least by this
plan; II applies to, each series, and continues
through the entire existence OF each separate
issue. Each series Of stock runs Its course
independently, and docs not Interfere with
others issued before or after it--a partner
ship In which all the partners agree to wind
up the series OF which they are members Us
soon as their capital has reached fixed sum
other partners to continue the business, who,
by reason Of later entrance into the busi-
ness, have not reached the point OF departure.
And these also In turn retire when their capl-
tai reaches the fixed value, leaving still others
who entered later than themselves TO follow
on.
The process goes on as long rs there are
persons ready to take up shares In each sue
ceeding series as 1t Is issued. This, then, con-
stitutes the permanent feature Of the plan.
The induccment to invest Is threefold;
I. There Is never more than two months
back dues to pay when stock Is issued In
quarterly series.
9. Money Is always In active demand. as
the borrower does not have to incur the
heavy expense Of profits to be paid In add.
ton to back dues, as In the terminating
plan"
3. Whenever a member wishes TO withdraw
his capital before the particular series OF
which he Is q member reaches Its full value q
fair and equitable share Of the profits are
paid. All the advantages Of a savings bank
are secured, with from two to three times the
amount OF interest for the use Of the money
which was temporarily Invested In tho part
nership by the withdrawing member.
In the next article we will treat Of the sew.
eral sources Of pront, bonus or premium, In
terest and fines.