The Lambertville record. [volume] (Lambertville, N.J.) 1872-1968, 1879-06-11
ABoU1 auILDrNo SOCIETIES.


z ---~
The History or The Ledger Loan and Build.
ing Association, published yesterday. Is thar
Of many other societies III philadolphia
though from the fact that most of those now
existing issue = series I Of stock, and, there
fore, may continue business perpetually. ii Is
not easy to trace their transactions and show
tue results. Abuilding and loan association
which wonld bs more. precisely described AZ 4
"mutual saving fund and loan association. >
is founded upon very simple plan of ot,. on
GRAFTON. though III practice It's transactions
are rather complex.
If number of men shonid agres = ,,nt H.,
in common safe, one dollar n month cach
until each had accumulated so0O thev waYId
establish the simplest form nf this mut,,al
saving fund, from which an intricate business
has grown up, although it ALWAYS remains
simple to those who understand the unaerlv.
ing principles. II is manifest that. in the
case cited abaxe. there would be no p,.,s1t
earned for the members. but an actual loss of
interest from idle capital. and vet such so.
cety would doubtless be of benefit to some
men, ON account of the obligation. by apree-
ment, to put away regularisayipgs. wbatey-
er profits can be realized from the money that
accommodates monthly in the safe being so
put into the common treasury to the credit
of the individual members. will reduce the
amount each is obligated to pay in order to
make 5000, or, in other words, will reduce
the number OF monthly payments from 200 to
a less number. This will be of such manifest
advantage that an attempt is made to thus
utilize the accommodating funds with as little
risk of loss as possible. Each member will
be entitled to 5000 at the termination of the
Society, and one way Of making use of the
money is to lend o, Advance each accumula.
ton of $500 10 one of the members. rennir-.
ing him to pay interest thereon for the time
he has the use Of the money In advance Of its
being due, 4f
The only fairway of determining who shall
have precedence in getting loans or advances
in a mutual society is by giving the money to
the one who is willing to nav into the COM
mon treasury the largest sum for the nriyil
eye. Hence arises the sale of money for pre.
NUNS The member who bids twenty ner
cent. premium may be supposed TO nav the
society in cash $40 MS a premium and then Ia
receive $500 but in practice he receives $160
(the net amount of the transactio.n, and tllis
turning of ,s.premium into :. discount /, has
led to the most mischievous and erroneous
views of the business of a building society. =
Let it be. understood tLat the borrower N ef.
feet pays the premium out of his nocket and
then gets the full loan. and those who con.
template borrowing will more olearlv see yhy
they should pay interest ON the gross loan and
why they cannot afford to paw very high pre-
miums.
We have here developed from the original
germ all the essential features Of Building
aud Loan Association. There was originally
a simple saving of money. Now there are
several sources of profit which serve TO reduce
the number of months required before the
savings, with profits, amount to 5000. These
sources of profit are interest. paid monthly !:
premiums, fines and a share of the profits
earned by withdrawal shares. The interest.
i,o;,,, raid ,,o,thlr u ,.o,,,dt,, ,,,,Ss,,,4aa