The Somerset press. [volume] (Somerset, Ohio) 1873-1977, 1875-03-26

Better than Strikes.

The attention of economists has been
much drawn recently 10 a remarkable
movement, originated by the working
classes of this country, which contains
in it more seeds of Improvement and re-
form to these classes than anything ever
devised in the United States-we mean
the Cooperative Building and Loan As
sociations Of Philadelphia. These So
cieties continue the functions of savings
banks, the German peoples banks, and
American mortgage loan companies, and
have quietly sprung up among the
working people themselves. So impor-
tant have they become that they now
number some six hundred in Philadel-
phia alone. and embrace a capital of
S150,000,000 They have been extend
ed into many Of the Western States also;
but thus far, none have existed in New
York or the Eastern States. Under
them, in Philadelphia, thousands of Ia
borers and mechanics have been enabled
to purchase their own little houses, and
without paving more annually than they
would otherwise have done in rent
They are better Than savings banks or
life insurance companies, in that their
expenses are very light, their benefits are
entirely eqnal and mutual, their profits
are large, owing to the constant COM
pounding of interest and the lack of any
necessity Of a sinking fund, and because
each member has share in the direc-
ton. Under them the workingman be-
comes capitalist.
Only about one in hundred of these
associations has failed. Their plain is
to issue shares to all who apply, rich or
poor, on condition of paving a dollar a
l. E 4. r
eight and a half wears the S102 thus
paid in becomes 5000, the par value of
the shares. When this is attained, the
shareholder either receives the cash
value, or his mortgages cancelled to the
amount Of his shares. The result is at
tanned by lending the capital every
month al good premiums TO the highest
bidder, and upon undoubted security.
No one can borrow but shareholders,
and no money is lent except on security
of real estate.
They are thus, it Will be seen, mutual
saving, borrowing, and lending socie-
ties The profits are derived ~ from
the premium, deducted from any loan,
sometimes amounting to twenty-five or
even fifty per cent. of the loan, and (2)
from the interest on the loan paid
rears and neglects, and a small margin
of profit from the Withdrawals of stock.
All these profits are increased by the
monthly com pounding of interest on
them and upon the monthly dues. When
the accumulated dues and profits will
give to every shareholder $500 for each
share, the association may dissolve, or
it may go through its legal term of
twenty years. by beginning each year a
new "series" of memberships. A "ser-
les" will ordinarily terminate in abont
ten years, though some run to eleven or
twelve years, and some end in eight. If
series ends IN ten years, the average
annual profit is eight dollars on each
share, and the amount paid in has been
S120, ifthe shareholder has not been
borrower or fallen into arrears. He re-
ceives thus $50 profit for his S120. If
it closes in eight years, his profit is $120
for $50 paid IN.
But it is as borrowers on real estate
that the members have derived the
greatest advantages. Many instances
are given of men who have been day la
borers and journeymen all their lives,
and who are now worth $4,000 or S15,-
900, all made and saved in building as
sociatiors. Thus, suppose a mechanic
hires house worth $1,000 at $15 a
month, or $3.50 year. In ten years he
pays his landlord 81, 500, and at the end
is no better off. On the other hand
suppose the same man to take FIVE shares
of stock in an association, which costs
him $50 year, and to borrow, pledging
the house as security, at such a rate as
ito pay $40 more per annum in prem
iums and interest, making a total annual
payment of 5000 to the association. This
is only $40 per annum more than he
paid to the landlord under the other
supposition; and yet, at the end of ten
years the mortgage on the house Isl ,000)
is paid to the association, and he only
has the interest of $500. or $50 annual
| ly. to meet He becomes owner, with
but little more expense than if he were
tenant Thousands have attained TO
this result by this process.
The legitimate object of these asso-
Citations is exclusively to benefit the class
of persons living on daily wages or limi-
| ted salaries, such as laborers, clerks
mechanics and the like. This is done
by rapid turning over the capital, and
| the monthly compounding of interest
the receipts being continually lent and
| re-lent to members on real estate securi
ties There are many features of tht
plan, especially where there are severa
''series," which cannot be explained il
the brief limits of an article. We have
before us the report of one association
''the Artisans, where the total receipts
of the year were SS9, ,622. This loan,
amount to S68,S with profit of SO,
749. The mortgages held hv the asso
citation reach the value of 1927, 500 anC
their total property was S252, ,112. Ye
the total annual expenses had been onl,
eight hundred and seventy-three dol
lars.-[N. Y. Times.