The Portland daily press., 1876-04-12
Building and Loan Associations.
Something to take the Place of Savings
Banls-The Merits of the Associations
i'm Pennsyivania-The Experiment i'm
Richmond, Maine-IHOvv IL Works, etc.
RICHMOND, April 10, 1876.


To the Editor of the Press:
In compliance with your request 1 take this
opportunity to give your readers brief &C
count of the institution known by the name of
Building and Loan Associations" These as
sociatIons were first introduced into this coun-
try in 1881 in the village of frankfort near
Philadelphia. They seemed to so nearly meet
the wants and necessities of the laboring classes
that during the succeeding twenty years, with
out the aid of any law, but by voluntary associ-
alton and union, under crude ard informal
rules, without the force of law, they had spread
over the city and county OF Philadelphia, and
it is estimated accumulated about $10,0O0,0OO
In 1850 they were recognized by the Leg;sla-
ture, but no law was passed which enabled
them to enforce their peculiar contracts until
1859. Since the latter date they have been es-
tablshed upon firm basis in the ''City of
Brotherly Love-" until they can count upon six
hundred societies in successful operation, ag-
gregating an invested capital of over 100000
900. Nearly one million dollars are now paid
into their treasures every month. They have
made Philadelphia city of houses, not IN
blocks nor lots, but in single houses for indi-
Vldual use and occupation.
This system prevails in many of the Western
and Southern states, and with marked success
wherever introduced and confined to the class
OF business which, as has been demonstrated,
can be carried on to the mutual advantage of
both borrowers and lenders of money.
The first and only association of the kind
ever started in New England, and managed by
the m rulac which oh laJo
the Peoples Loan and Building Association"
of Richmond, Maine. which was chartered by
the Maine Legislature in February 1875, and
has but recently, March goth, closed its first
years business. The first annual report of
that association shows that the business can be
made as successful under Yankee management
as elsewhere, and thrusts the question home to
every city and town in Maine: The benefcence
OF these societies having been proved again
and again, and their theory being practically
and successfully demonstrated in our midst.
why should we longer do without them?
The method of operating is extremely SIM
pie, calculated to avoid heavy expences and to
protect and preserve the rights of all its mem
bers To become a member one has to sub
scribe for certain number of shares of the
stock, say five for instance, upon which he is
required to pay one dollar per month upon
each share into the Secretary of the meeting
on certain evening provided by the bylaw S
and these payments are continued until each
share of stock becomes Of the value of 5000,
when that sum is paid each shareholder for
each share of stock--apd to avoid the termiua-
ton of all the stock at one time and thus end
the society, the stock is issued in series, new
series starting annually or semi-auuually, and
terminating in like order. This makes the as
ISOLATION perpetual. Each member is provided
with "pass book" containing the charter and
bylaws of the association, and IN which is en-
tered each payment or deposit, and entities
MIN to attend all the meetings of the stock.
holders and directors
line business is under the management of
board OF directors, who are elected by the
stockholders, each stakeholder throwing one
vote regardless of the number of shares held
by hin-the poor man with his one share hay.
ing the same voice as the rich man with his
hundred shares. The directors hold over three
years, one third of the board being elected an
nually. They hold regular monthly meetings
az oouuO Son'ohiOHe piaCe, Wueu duu WueT6 tne
stockholders may attend and pay their month.
ly installments, and witness all the business
transacted by the society.
The money being collected, is offered by the
President to the highest bidder-each membe
who can furnish the necessary security being
entitled to bid on loan not exceeding two
hundred dollars for each share of stock held by
him. Bidding usually commences say by A Al
about 70 per cent. premium, and if other bid
ders are present, the premium offered will be
| as nigh as 30 per cent. A. being the highest
| bidder, announces that he wants loan 90, say
nve shares, or one thousand dollar loan, fol
which he offers 30 per cent. premium. That il
to say, he desires to give his note for $1,000 AM
receive therefor that amount less IS per cent
Just as bank discounts note for $1,000 fo
three or six months. In this case. what il
called the premium amounts to $3.50, and TIL