Evening star. [volume] (Washington, D.C.) 1854-1972, 1874-05-25
EVENING STAR.
LETTERS PROM TuE PEOPLE


Ire buttdtns Association Question.
EpfTOk STAR. In yOar SATURDAYS issue ap-
pesrs editorial on balding sSsocis,ioas
which ought not. in view OF the conf a sd state
OF the pubic mind I'm regard 20 these iastita-
tons, To pass without comment. The sSsamp-
ton therein that, under the PAhst decision, the
eorr wers' were preparing @ repu iiste their
Just dshts, H. 9 reflection upon the acton OF the
Equity Court that affirmed IL. ami also implies
that the Judiciary in the Welch case changed
POSITION ~ 90 the principles that were an
nonnced ss governing its action in the fret IN
stsnce. ProsAbly, As financial Institutions.
building associations could receive no ere .ter
INJURY than that which would be inn icied we're
TIE opinion 20 obtain that each case wOald be
decided upon Its individual m srtts' In our
courts. The mDddle would be vastly tn.ensiaet
BY each subseq uent case ~ lt n ould arise nier
the jurisdiction OF different lad viduAls. To CO.
tsohsh pubilc confidence In associations OF IN az
sort, IL Is essential 60 have CERTAIN pr,neInle.
clearly set forth 80 being applicable thereto-
principles that the average mind may csmpre-
bend.
AS I understand the matter each NJ tAe
above mentioned decisions are right in princi-
pie. The gist OF the conclusions An the Pabst
csse affirmed that, IN associations where "a
act OF borrowing virtually cancels the stock o
the borrower, the association, on settlement o
the loan, may charge legal interest on the IN
stalments retained. In the welch case. a. "a
stock OF the borrower Is not Cancelled. bat par
tic Ntes m PROFITS, the matter j. ssf-E astins,
terest.
am aware tia IN d iscu ssions about building
associations. much stress T. laid upon the word
advances" and that the word "loans" i re-
pudiated. To render The theory herein con-
tained consistent, it h necessary 20 make some
vital changes In the character OF the tpstitu-
lions. In the nrst place no settlement OF al
yances should be permitted except upon the
basis OF the discount on witch the advance vas
secured. aud IN The second place there should
he 10 limitation under par OF such discount.
FOR instance, the par value OF = shsre OF
stock be $40. aud the discount OF the purch aser
be 800, when the settlement A. made the dis
count should be the basis OF such settlement:
and, in the above supposed case, the discou nj
should not lie limited except by c0mpefi ton,
it IL hardly necessary 70 reply TO the insnua-
tons that are constantly male a. 10 the motives
OF the "bOrrOsers-" IL their honesty l. 20 be
generally questioned, aud the fact OF their re-
lation 70 building association IL 20 be dis
played as badge OF infamy, a. furnishes a rea-
son why such associations should not be per
United to exist. As understand IL. however,
the demand on their part IL simply for the
adoption OF some principle that shall protect
them from losses incurred through the misman-
sgemeDt Of the fraudulent transactions of build
ing associations and their officers, aud render
definite the real obligations they have assume Al
toward such associations In purchas an .'ad-
vance" When the Judiciary shall DO this Il
will merit the confidence of both "bOrrOEer'
and LENDER" and render the Establishment o.
equitable cooperative Associations q possibility.
No. 2s.