Evening star. [volume] (Washington, D.C.) 1854-1972, 1884-10-11


sCRIPTIoN OF THE OLD AND THE NEW PLAN
THE BUILDING ASSOCIATION AS A SAVINGS IN
sTITUTIoN-HTsTORY OF SUCH ORGANIZATIONS
IN ENGLAND AND THIS COUNTRY.
1.-The term building association is misnomer"
said gentleman prominently identified with
the building associations Of the city to STAR
reporter. 'People sometimes want our assO-
citation to build houses for them, sTpposing
from the name that We are engaged in build
Ing operations The building association is
properly a Saving and loanng institution"
The building association originated in Eng
land, where the first one was established in
January. 1902 the object being to raise by
monthly subscription fuBd'or capital to be
laid out in building houses and to divide the
same among the members under, and subject
to. the rules and regulations OF the deed found
Ing the association known the Greenwich
Union Building society. Later. in 1915 the
Earl of Selkirk is credited with having founded an
advanced building society. Since that date build
ing societies have multiplied in the British isles
until every city and town almost has building
society. The English societies are regulated by
acts of parliament. The total number established
in England and Wales is estimated at between
5000 aud $3.50. of which more than 1000 are
now in existence The ROYAL commissioners who
inquired into the subject in 1872 estimated the
total assets Of the societies at SS5 600 0G0 and
their annual incomes at $50. 600 900. One society
at Manchester has an income of So $50 600 and
the receipts Of one IN London. in 1874. amounted
to over 80 600. 600 but by tar the larger por-
ton of this sum consisted of deposits paid to
the society as a banker.
THE FIRST AMERICAN BUILDING ASSOCIATION
The first building association in this country
was organized in Frankford. suburb of Phla-
~, rI,o,- 1901
with sGeh favor by the working classes that In
spite OF the crude construction of the rules of
the associations, due TO imperfect knowledge
which characterized these earlier associations
in the course of twenty years the associations
spread over all parts of the city and county of
Philadelphia The FrankfOrd association which
was banned the Oxford Provident Building as
ISOLATION. was successfully carried out in ten
Years and SIX months. and closed its affairs in
June. 1871. The members realized q fraction
over six per cent interest on the money in
vested. and large number succeeded in paying
for their houses. To building associations
Philadelphia is largely indebted forts honorable
title of The City of Homes" Prior to 1850 it
was estimated S15.000.0 go had been accumu-
lated by the Philadelphia associations and used
principally In building houses and paving for
homes In 1850 the first law was passed recog-
niZn9 and authorizing the associations. In 1859
other laws were enacted regulating their rights
and powers. Since that date they have steadily
1ucEeaSpu III numbers ana strength. In 1879
there were over GOO associated in Philadelphia
and its Suburbs organized with cap!tal of not
less than $4,000 600
TIE FIRST IN WASHINGTON.
The first building association in Washington
was organized in 1916. in South Washington
near the arsenal. the idea having been brought
from Philadelphia by some marines or soldiers.
Ulysses Ward was president and Craven Ashford
secretary. James Frazier, Charles B. Church
and other well-kn0wn men We're members of
this association. The directors used to meet
around in different houses and ID was CUSTOM
AIRY To have supper after each meeting. The
association vas organized on the Philadelphia
pian- with monthly payments OF Il on each
snare. and was very successful Since that day
Ilany associations have been organized in the
District McSsrs. G. II. T. White Th0s SoUcr-
Vile. Geo H. Plant. Daniel L. Clarke F. How
ard. John Joy Edison, ". II. WetzeI Charles b.
Church. Thos. Hyde. John F. Thompson. VIM
NIthait. Richard Thompson l.. II. Wine. John
h ElVadS. Ferdinand King. Geo Bauer Daniel
Donovan. Henry HOFFMAN ard many Others
whose names are identified with the business
interests OF the city have been prominent in
promoting the growth Of building associations
In several states. notably PENNSYLVANIA and
Massachusetts. laws have been passed pre-
scribnC the powers OF building associations
The need al such a law Is felt here but desuite
the neglect OF Congress the associations here
have thrVFd. and their growth has been very
rapid Tie absence Of law has however been
compensated for by decisions of the court under
which 80 aSSeelati0TlS can conduct their oDera-
tons with profit and safety. There are about
fttS-hye associations in the District now and if
j. estimated that their receipts aggregate aboIit
100000 per month These associations II is
estimated. have now invested % coo 600 in
buildings and real estate in the shane of loans
10 Their members buying homes and other nroy-
erty. The claim made for them that they have
contributed greatly to the general thrift bv
encouraging habits of saving. as well as to the
substantial growth of the city by aiding MEM
hers to tu!d or purchase homes is supported
by abundant testimony.
HOE BUILDING ASSOCIATIONS OPERATE
To the uniRitiated the building association is
deep mystery. Even many of those who for
years have intrusted their monthly savings to
such associations have but very imperfect no.
ton of their operations. The Distinguishing
features Of the building association are. regular
monthly deposits by shareholders. and thu. loan
lng OF money on long time To shareholders the
borroVeT5 having the privilege of PAVING back
the loan IL monthly instruments or in fuI These
features are common To all the associations but
1ley vary. however, in the nominal value Of the
STOCK. the method in v hich payments ar. made
the Interest allowed to Withdrawing stockhoid-
ers upon their deposits ana in other details.
THE old STYLE" ASSOCIATIONS
In the Old associations the plan was generally
the sane. The payment on each share per month
vas one dollar. The nominal value Of a share
was $3.50 In theory, the shareholders were
supposed to pay in one dollar per month for
each share until the association held 800 to the
credit OF that share, when the association would
wind al and pay OF the share. Some Of the
Shareholders would. however desire loans or
advances The association out Of the accumu-
lated fumes. would discount the claims that
such person would have upon the association
at maturity The rate Of discount cor the pre-
midIn To be paid for the loan. is determined by
the demand FOR the money. the funds OF the
association being put up at auction. II pre-
MUM OF so, or 10 per cent was accepted the
borrower would receive 300 less $50. OF $40
on every share upon which he obtained an adj
vance. For every share upon which an advance
was made he would afterwards have to
Day two dollars a month into the asso-
Cation until the association closed or
he had settled by returning the amount of the
advance OF this monthly payment OF two dol
lars. one dollar would be credited 10 the share
holders regular dues OF his stock and one dollar
L. Interest" The profits accruing to the as
socia;lon IN this way going into the common
fund would. according To the theory of tile
building association, bring the shares up to
their maturing value before the cXviration of
The " hundred months. and hence the life of
Tile ASSOCIATION would be shortened Practically
there would De a point reached ia the life OF the
association where no further advances could be
made. and according u the custom in this CITY
the association would begin I D use its accuInil-
hating funds to cancel stock nj its estimated