The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1877-01-26
tFor the Press.l
Philadelphia Building Associations.

as one of the peculiar features of that interest.
ing city, the large numbers of small comfort
aole dwelling houses with which large portions
OF the city and its suburbs seemed to be coy-
cred. They are built mostly of brick or native
s'one' three stories in height, in blocks Of
from four to twenty houses each, cost ng from
$1,000 to $4,000 each These houses OF modest
pretensions, but of great convenience aud COM
fort, are generally occupied by those Industrial
classes whose skill as mechanics aud operatives
have made Philadelphia so large manufactur-
ing city, and in population the second on the
continent. Why is it this question is often
asked, that Philadelphia SO different in this
respect from other large cities has so large a
portion OF its population who are the owners of
the houses they occupy, thus giving to its occu-
pants the advantages of permanent homesP
The answer to this question is to be found
partly in the operations of the building socie-
ties which are so numerous in that city, there
being about one thousand of those institutions
in successful operation there had some in
terest to obtain some information respecting
that association and was enabled, through
members of the same and their published
books and reports, to do so fully. These asso-
ciatops have been productive of the most
satisfactory results in that city, and other parts
OF the country where they have been estab-
ilshed, aud have largely improved the condition
OF the class OF people for whose special benefit
they were designed. And If the scheme has
proved success in Philadelphia there is no
reason why they cannot produce the same re-
suits elsewhere. Philadelphia BY its associa-
ton with the name of franklin, seemed 70 be
a very appropriate place by which the lessons
lnculcated in the maxims of that eminent man
hnd their practical ISOLATION in the success of
the building associations
The difference between the building associa-
ton and the ordinary savings bank is that in
the savings bank system, the depositor has no
voice IN IT'S management. They are ruled by
an entire different class of men. The man
ayers take entire charge of the accumulated
funds, ana invest them as they deem safe and
best A large reserve fund is kept up TO pro-
tect against losses by bad Investments, this re-
duces the profit to The average depostor.
10 the bollding associations each member is
shareholder, and proportionate to his shares
has full voice in the management of the
ASSOCIATION, 1t is entirely mutual in its bene-
fits, dividing the profits yearly among all its
members. 1t is productive of larger profits and
gains than any other known plan of saving,
having no preferred class to share its profits.
no sinking fund to hold in reserve, and no
necessity for expensive banking houses and
CLERK hire. Its accumulations are loaned TO
lis members, on real estate mortgages with
=
had), and there is therefore no losses from in
secure investments. A general law of the
state OF Pennsylvania authorizes the formation
OF these associations. Any persons can organ
lze unoer this law, elect the necessary officers
and commence operations. The associations
are OF two kinds, terminating aud nOn-termi-
mating. The terminating associations admit
no new members after a certain time, and when
the shares have reached the value of $500 the
association terminates, and the assets are
divided In, tha
terminating associations, each years members
form class by themselves and terminate as
before, and as new members are admitted they
take the place of the terminating class and
thus the association is kept in operation as
long as is deemed expedient.
The monthly payment on shares is 81 on
each. The assets or capital which the associa-
ton loans is derived from the monthly INSTALL
ments or dues paid in by its members. This as
" accumuates each month is loaned TO the
members who will pay the highest premium.
The interest charged on loans is six per cent.
payable monthly. This premium aud interest
are the Chief sources OF profit to the association
Parties obtaining loans are obliged TO subscribe
tor shares in the association and pledge them as
collateral together with a mortgage of the
property on which the loan is made. Other
sources of profit are fines for non-payment of
interest etc. All these accumulations of profit
are loaned each month; when the shares reach
the value of 5000, that is, when the mouthly
payments and the profits on the same have
reached sum so that it would give value Of
$500 TO each share then the association termiu-
inmates or that series of shares terminates, and
The aSsets are divided amongst its members.
A borrowing member who has had a loan of
$1,000 on shares and giving a mortgage on the
house which be has purchased, has this mort
gage discharged. The non-borrowiDg members
are paid in cash. The period of time at which
the shares will reach the value OF $500 depends
apon the profits that are made ordinarily the
time is for 10 10 ~ wears, giving years profit
on the investment of 10 to 10 per cent.
The practical operation of obtaining loans to
purchase house by a borrowing member is
shown by the following example. A member
wishes a loan of 5000 He must own or sub
scribs for six shares of stock at $500 a share,
amounting to $780, The discount or premium,
which he pays for the loan would be about %
per cent, which would give him $500 for which
be mortgages the property to the association
he IS required to pay S72 interest, and his
monthly payment on his shares amount to S72,
total Sl44 year. At the end of ten years and
sen months which is the lowest rate of profits
which any well managed association would be
likely to make the shares terminate and bis
shares become of the value of $500 each This
debt is paid aud he owns his home, he has
paid Sl44 year during the time rent and in
terest Gan any other system of savings COM
pare with this?
Another evidence of the peculiar strength of
the system and the security of its loans exists
in the facts that the margin on its securities is
constantly increasing; for the payment of the
monthly dues is in fact payment on account
of the borrowed money; and by each payment
of dues the amount of the loan is decreased
and the value of the securities constantly
Increasing. So that what was good security
at first becomes stronger and better every
month.
The expenses of carrying on the work Of a
building association are paratvely light.
S40O year would cover the annual expense
account of most associations.
Provisions are made for the withdrawal of
membership Those who from various causes
are obliged to give up their shares are allowed
the value of them, which generally amounts to
fair Investment on the amount paid in.
Many other interesting details of the man
agemeDt and working operations of these asso-
Citations might be given If space would allow,
but think that what have written will give
a sufficient insight into the systems whics has
proved success in Philadelphia and other
places where they have been established.
Application has been made TO the Legislature
OF Massachusetts for the passage OF a general
law authorizing the formation Of such associa-
tons in that state. Would it not be well for
the Legislature of this State to pass similar
measure, so that if any parties in this State wish
to form such associations at any time they can
have the opportunity to do so? H.