National Republican., 1873-10-01
BUILDING ASSOCIATIONS.

ing many small ucpOsltots arc ushinb
themselves, What shall l do with my
earnings1 Whilst every business man looked
upon the run" that was made on two Of our
savings banks as one which could only result
from q seusclcss panic, still thcro Is no qucs-
tlon so full Of vital Importance.
Some years ago German, but little ac-
quaintcd with the English language, went TO
savings bank TO Withdraw his deposits, but
neglected TO bring with him his deposit
book" The teller asked for bis book. Tho
German did not understand him. ~ want
your book, " said the teller; 'thc bank book"
The German mstook the words "bank book"
for bank broke, and 80 understanding, went
and reported the supposed information to his
friends and acguaintances, also depositors 10
the next day on tho bank, which, though
meeting tho demand fully on that occasion,
did 60 at such heavy sacrifice on Its securi-
ties and Investments that II resulted finally In
the entire failure Of the Institution and tho
ruin Of large number Of dcpositors, all OF
which was the result Of ignorance, blind
prejudice and suspicion without foundation.
The key to the secret Of Benjamin Frank
Inns advancement In life consisted In the fol-
lowing valuable sentiment; Labor with dill
gencc, live with frugality, and save with judg-
fnent." But before going further passing
glance at the origin and history OF mutual
building associations. From q writer upon
this subject we obtain the Information that
lished at Kircudbright, In tho south OF Scot
land, In 1915, under the immediate super
vision of the Earl of Selkirk, q gentleman Of
large fortune and liberal and enlightened
views, who Is said TO have devoted no little
time aud study to the pcrfcctlng OF this truly
noble and philanthropic scheme. They
thence gradually extended Into the manutac-
turing districts Of England; thence into
Wales; were afterwards established In Lon,
don, and soon became general throughout
Great Britain, until they reached the number
OF =, $50 associations about tho year 1S5l, with
an annual income Of four million pounds
sterling, according to the report Of the registrar
aud one Of them, the Bisbeck Permanent
Benefit Building Association Of London, In
| their tweuty-second annual report, shows
| that the association did q business OF S6S,
IS, 78O between tho years 1851 and 1861, and
last year their deposits and loans amounted
to 6,4SO, 455. So great has been its deposits
that the association has been Obliged to invest
a portion Of Its funds In foreign securities,
and hold to-day large amount Of United
States 8 per cent. bonds. Tho system was
arst introduced In this country In the ycal
1s40 by Cornish emigrauts In the coal mine,
OF Pennsylvania, aud was operated with grea'
success In that State, particularly In Phila'
dclphia, where over $50 associations are ir
successful operation upon tho English scria
They have tendency directly opposite Il
that OF the ordinary savings bank, and pos
sess four distinctive features which specially
commend thom to the working man "a wei
as small capitalists:
l. In that they arc perfectly democratic
admitting each Individual member to full
FREQ, and unrestrictod voice In tho creation
and management Of associations formed un
der II, and constant oversight OF Its opera
lions and affairs.
q In that il is entirely mutual aud equal lr
distributing its benefits, giving to all It's mem
bcrs their equal portion OF profits and gains
3. In that 1t Ia much more liberal In Its re
turn Of profits and gains than any othcl
known plsn Of saving aud accuniulatlng fron
small sums Of money having-owing 70 tho
entirely mutual characteristic preferred elias
10 share the profits, no heavy sinking fun,
TO create and hold In reserve against contin
gencies hardly within the bounds Of posi-
binty, and no necessity for expensive banking
houses and clerk hire.
4. In that II is the only plan by which tn
working man can become his own capitalist
and craate q source Of wealth from which h
! can supply all reasonable demands, withou
the aid or interference VI the outside capital
ist. In short system ''of the people by th,
people, and for tho people," One that, will
tsgrity brought to bear In Its management
cannot fail Of permanent benefit and profit
| able results. .. ....!. 40 -..
To the uninitiated the system appears com
plicatod and difiicult TO understand, but
will be found upon examination, when ono
In simple arithmetic, andls peculiarly adapte,
10 tho wants and minds Of tho class Of peopl
u was originally Intended 70 tcne1t, who's
Interests are It's sole aim and end, possessing
In every way superior advantages over al
other systcms and plans, having Tor their oh
ject the assistance and advancement Of tn
%ap ssre Sh9 Sa Rls ! wy S!lll5Sw i9 Swsaith " tabor
The name by which this now popular nu,
rapidly spreading system OF co-oPcrativ'
banking Is known, VIZ: building associations
conveys no Idea whatever Of Its nature o.
persons to suppose q society for the buildinl
Of houses, buying and selling the same Il
partnership and dividing the profits result
ing from combination Of capital cmploye,
, In this way. This, however, Is not neces
sary part Of the mutual system of saving AM
borrowing money. Asavings fund and loal
association loans money TO member, an
the borrower may build or buy, trade or spec
ulatc at his pleasure. The association mercl
loans or advances the money, the loan bcinj
received by pledge Of tho stock loaned upo
and a deed OF trust upon approved real CO
tate as security for the loan. In England
was formerly the practice TO build houses 70
members, and hence the title building" ha
remained ever since 10 msdirect from th
true nature and character OF the association
II represented besides, the profits arising fror
the capital of a savings fund and loan asso
citation does not come from building, buying
or selling real estate on the part Of the asso
citation; Il accrucs from interest and the pre-
mum on bonus paid by borrowing member
| fnr fhn of h, ahpannah and
departure from tho spirit OF this system wi
destroy harmony and produce an inequalit.
In the ultimate result.
, The system is purely cooperative, and cor
sists In q partnership In the profits Of none
as moncy-makcr, cquitably distributed 1
proportion to tho seyeralties OF capital fui
nishcd by tho individual members OF an asso
citation. The three chief objects attainabl
are: first, the doing away with Intermediates
second, economy In expenses, and third, III
advantages consequent upon a union OF man.
small capitals into one grand whole. Tn
ordinary savings bank Is not, and cannot be
lco-operativc when intermediates In the shap
Of class Of stockholders step in between III
deposition and the profits earned by the join
capital formed by stock and deposits, which
with necessarily heavy expenses, claim all tn
gain above certain stipulated sum of inter
est agreed to be paid the depositor. The mu
tual system Is arranged with the express in
| tcutiOn VI uNOiulnb tnc hcuNy uIuln On III
profits and the expense Of miamanagemcn
absolutely necessary under any other System
The end Is accomplished by restricting tn
membership TO one class of depositors, VIII
deposit fixed amount on certain fixed ant
regularly recurring periods Of time Of pay
ment for each contribution or installmcn
towards the capital that 10 70 cooperate, II
producing profit
Tho capital Is divided into shares, eacl
equal and fixed In intermediate and ultimate
value, and by this arrangement accommoda
tion Ia afforded TO persons OF different de-
grces Of ability to contribute without destroy.
Ing the harmony Of tho fixed amounts and
periods Of payments, so that one share In a
given issue or series of stock Is always q
counterpart In value Of all the other shares
In the same issue or series. Thus, when the
value Of one share In o particular series Of
shares Is adjusted, all the other shares Of that
| series are found to be Of like value. Aud 1t
| Is only necessary, then, upon au adjustment
| of accounts 10 find the equitable value Of one
share, and multiply this by the whole number
| Of shares held by q stockholder, to show the
exact condition and value Of his interest in
the enterprise.
A process so simple aud easy of accom-
plishment, owing to the 1xed amounts ant
times of payments, that one or two compe,
tent persons can correctly keep the accounts
| of the largest association, so that great econ