Evening star. [volume] (Washington, D.C.) 1854-1972, 1874-04-25
Building Associations.

District Of Columbia in the case Of Psbst vs.. the
Economical Building Association has been the
subject of much discussion, especially among
our citizens favorable to building associations.
Many coDstrue the opinions the court as In
effect to abolish or materially impair the col
lection Of debts due to building associations.
This view does not seem to be fully justified, IL
we examine the opinion delivered by Judge
Wylie. and published IN TIE STAR Of last Wed
needay. The court declares that Eve discover
nothing, therefore, In the mature OF this associ-
alton which is unlawful that Is to say, there
Is nothing illegal in the scheme or plan Of the
association considered per Another portion
OF the opinion indicates that the decision seems
to be based upon the I" particular matter in
controversy ia the present case.' In reference
to the present case, IL may be said that the
building association clouded Its own title to q
recovery OF the debt by staff it to be "a losn,
and not an advance or &" purchase" as Ii really
Moreover, if the constitution OF the asso-
CATION Is correctly quoted by the court-snd
the constitution of q building as~ociaticn is
equivalent to the articles of agreement between
members Of a cOpartnership-it speaks of a
stockholders receiving portion of his stock
in advance" This, literally taken, is absurd,
and is intended to mean, as the court justly
observes, that stakeholder purchases and
receives an advance equal to the NOM
inal value OF his stock, which, in that
style Of building association, is 500 per
share Thus it appears that the difficulties of
this litigation were largely increased by the
careless use of language in its articles of agree
ment. But If there was any fog around the
very horizon of the case, il doel not appear to
have been completely dispelled by the courts
statement that Pabst, the party receiving the
advance, might have elected ''to continue his
connection with the society,"" and "ultimstay
lave the advances made To him repaid from the
profits Of the association at its elose.~ Now, as
the Economical Building Association L. very
near the close or winding up of its business,
which takes place whenever the last share of
stock shall have been cancelled by redemption
or by advance, II is evident he could hays m ade
money by continuing his connection with the
association, If ii really would have paid I'D the
nominal value Of his stock second time-that
is, from "the profits OF the association at its
close" But, unfortunately, that repayment of
an advance is not the theory OF a building as
ISOLATION, and such a prospective profit would
not be practically realized much short of the
time when sll things will be made right. under
the inspiring music of Gabriel's trumpet
As before Indicated this case appears to have
been decided upon special facts As presented in
this trial, rather than upon issue made upon
the legal validity of the general scheme or the
DRY of building associations. The case for the
Economical Building Association was ably
argued before Judges Olin, Macarthur, Hum
phreys and Wyiie. by MessTs. Cox and Davidge.
MIR. Dayidge maintained, and il would appear
successfully, that the terms upon which stock
holders receive money from building associa-
tons are not in their nature loans, but of an ad-
vance payment Of the nominal value of each
share OF stock which is obtained by purchase. I
MIR. Davidge cited important decisions OF the
English courts, and also of the Supreme Court /
of the United States, in which the distinction /
between borrower and lender, and buyer and 4
seller il fully set forth, and it is to the latter
class that cases arising out of building associa-
ton transactions must be referred, always, how
ever, limited by the peculiarities of the consti- 4
tuition or agreement under which each associa- !
ton conducts its business. Judge Wylie, in I
announcing the opinion OF the court, gave some !
valuable hints IN regard 70 excessive fines in .
building associations, ana directors and organ !
iZers OF such companies would do well to
take heed Of the admonitiOn. The only effect
OF excessive fines is 10 place the case of
building association in an unfavora5Ie atti- !
tude before a court and in the community /
The unequal division of profits among the |
stockholders is another matter that might be
examined with advantage. But on this point, .
As in many others, wide diversity of practice 1
exists, and the great error of courts and indi- /
Viduals IN forming an estimate OF the value OF /
building associations, is based chiefly on the /
idea that they are all alike. They have indeed, /
common object, but their modes of accom-
plishment are widely different both as to the re- |
payment OF the original advance and its cost to .
the purchaser, as wen a. in the ratio of profit
provided for him under the various forms of
constitut ion and agreement.
As the subject il important and involves +.
large Interests, we propose u continue its dis
cussion, with the hope that the greater good
may be evolved from much tn at is evil and op
lressire IN this class OF financial organizations.
DETECTIVE JoURNALIsM.-The average low
grade Washington correspondent is faithfully i
photographed in the following paragraph from
one Of ''Laertes' " late letters to the Gr1pAfc:
cit Is noticeable that the youths engaged in
these things k1oH nothing besides Of the great I
NE OF the Capital. They never give US sketche- .
of blooming giIlhood or r5vered WOmlnly char \
aeter, where so many examples are to be sesn. /
Martial generals EeEl ~ returned from the plains .
and boundaries are omitted in their budgets
IL Sir Garnet WOlseley had returned victorious
from Ashs ntee TO Washington instead OF Lon /
dOnJ these gentry would speedily have been
housing over his accounts instead Of his con /
quests. OF the many elaborate institutions at \
the capital which are al the while developing
something Of interest to science. government, or .
art, they are apparently unaware. The cur
Iency and taTih questions they know nothing I
about. When they approach any matters of 4
the State department they can only drop a little 4
dTiyel ana SANDER. And, while the people of /
the hresice, the church, the college, and the /
uelb arc 10 luc Capital As 10 Tue i
rising sun for light and beaming, their eyes and I
shot full OF dirty squIrt-watsr which /
the police reporters concealed there are eject
ing thrOHgh the nozzle OF their own depravity.1 !
The information comes from European fnan-
cial circles that the veto Of imitation will cause
increased investments in American securities
on that eide of the water. On the other hand,
initiation would indefinitely postpone the re-
sumption Of specie payment, act injuriOusly on
present Investments, and lead to the total ces-
satiOn OF further purchases OF American sscuri-
ties on European account.
Says the New York Tribune:
"Our business men have for months been
giVg rhary