The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1876-02-03

loans. A certain man has held ten shares
four years and has paid dues amounting
to $3.50. He wishes to buy u house, val
ued at $4,000. He can get 1t for 81 500
down, and the rest may remain as ground
rent, or, in other words, on FIRST mort
gage to tho owner. He bids for $4,000 on
Bis ten shares. He offers liberal prem.
ium, but rs he is an old member he gets
an abatement on this; and, his security
being satisfactory, he gets his loan Of 81
900, less the premium, or 81 500 in money.
With this he buys the house, and installs
his family in it. He transfers his ten
shares TO the association, insures the house
for its benefit, and gives second mort
gage Of $4,000. Instead Of rent he now
pays each month his dues OF ten dollars,
the interest on both mortgages, the taxes,
water rates, etc., and, in all, his expenses
do not exceed the rent OF such house,
more than about ten per cent. In this man
ner he goes on paying dues and interest
each month. In Eve years his shares mature
The ten shares are declared TO be worth
$1,000, but instead Of the money he
receives release Of his mortgage, and his
debt is declared paid. The house is now
only subject to the ground rent. When
that is paid the house will be his. He
has paid $40 per month for one hundred
and eight months, and the interest on
$4,000 for FIVE years, or 81, $50 in all, and
the debt is extinguished. In other words
he mode $500 by the operation. To clear
away the ground rent, he buys more
shares. There being only that interest to
pay, no can afford TO carry twenty or
more shares, and very soon he borrows
the money on them, and the house Is his
own. This loan pays itself by the INSTALL
ments and profits, and in thiG easy and
simple manner he saves the total loss OF
the rent, has the use Of the house all the
time, and eventually owns it outright.
ANOTHER, A POOR MAN WISHES A SMALL
HOUSE.
He buys lot OF land on ground rent.
Hc finds contractor who will put up a
house on the land for 81 500 cash. Some
times the owner will do this. He then
buys ten shares, at one dollar each, OF
some association, and bids for $1,000 on
them. He offers premium Of 80 per
cent and he gets 81 400. His employer
advances him 500 to make up the price
OF the house, and becomes his bondsman
that the dues and interest shall be paid
(say) for three years. he has now, in
place OF house rent, to pay his dues, the
interest on the loan OF $1,000, the ground
rent taxes, water rates, insurance, and
his loan Of 500. Each year sees the
debt reduced, and in eight or nine years
it is declared paid. Another venture OF
the same kind clears away the ground
rent and the house is his.
This ground rent system is peculiar to
Philadelphia. Any person desiring TO
build on lot Of land can, instead OF buy.
ing it, hire it for all time. II, at any time
he wishes to pay for it, the price can~be
offered, and the owner cannot decline it.
The owner can never claim payment dur
ing the lease, SO long as the rent is regu-
larly paid.
IT SEEMS DIFFICULT OF BELIEF.
How can these building associations
make money so fast? They have several
sources Of income: First, the installments
paid in; next, the fines for neglect Of pay
ment. Then there is the profit de-
rived from the premiums. At a
stated meeting some borrower bids for
81 900. He is willing 70 pay 80 per cent
for tho immediate use OF the money. He
receives 500, and tho association re-
tains the $500. This is at once put up at
auction, and gains further profit Of 80
per cent, or 500. This money is again
loaned, and yields profit OF $97. Each
borrower in time gets his money, less the
premium, and the association makes n
triple profit Of SIT in one evening, and
the entire Sl,4l7 loaned out begins 10
draw interest from that day. Next 10
this must be noticed the compromising Of
interest upon interest every month. All
the dues, premiums, fines and interest re.
ceived each month are put together and
sold, and the gross sum draws interest at
once. One dollar paid in at the meeting
in the form OF new capital is in a few
minutes sold out and begins to draw in:
terest. 1t earns premium, and that is
again sold at premium, and that also
draws interest. Besides these are the
profits on Withdrawals. II two-year-
old share is worth $50, and can be bought
by the association for the dues paid in
and premium Of S., il is plain that the
association makes Sl2 by the purchase.
There is one share less to draw 5000 at
the end, and the final division will be
reached so much the sooner. This ex-
plains the eagerness these associations
display in buying up their own shares.
As large part Of the shareholders and
nOn-borrowers in any series withdraw
before the eight years term is up, the
profits on the Withdrawals increase the
general capital rapidly.
Philadelphia may point with pride to
her hundred thousand homes, but it is
not alone in these things that the chief
interest Of this subject lies. These asso-
Citations have done more than help the
people build houses, buy pianos, sewing
machines, land, or what not. Their
moral are greater than their material re-
suits. 1t Is not that they help to build
city that they may be chiefly recommend.
ed, but as savings banks, as inspirers OF
thrift, as liberal aids to industry, and as
strong deicnses against the stormy days
that come in every life. No signal ser.
vice can give even a probability Of these,
no cautionary flag flies before such storms,
and to many family these associations
have been q sure anchor with which TO