The Indianapolis journal., 1885-03-07
Afternoon Session.

The bill [H. r. 1891 to provide for building,
loan-fund and savings associations came up as q
special order.
Mr. Mcintosh called attention to a proviso in
section 4, which declares that forfeited money
shall be paid in because the whole subscription
is not paid in Mr.. Magee understood section
to mean that the money paid in to be held
as sort of security for the payment of install
ments but did not think q forfeiture would
work with set proceedings in a court of compe-
tent jurisdiction.
Mr.. Campbell of st. Joseph-This bill comes
under almost all objections to the usury bill; be-
Sides preferred stockholders may hold 90
per cent. of the stock. Then these corporations
may hold almost unlimited property. This
seems to be bciled-down vicious legislation.
Mr.. Hilligass-There is q similar law on our
statute books, commencing with section 3407 of
the code. This bill gives @ greater latitude than
the present law There can be no forfeiture ex-
cept by a borrower. The bill gives the associa-
ton the right to loan to outsiders, and does not
Interfere with the law as it now stands He
had known many men to ACQUIRE homes with the
aid of these associations by paying but little
more than rent would cost for fve six or seven
years There can be injustice growing out
of this bil but it would be productive of good.
Mr.. Dayis--I am very strongly in favor of the
building and loan association law. The bill is
not subject to the criticism made by the senator
from St. Joseph. These associations never
charge more interest than the law allows. But
there are such serious objections to this bill
changes TO which am opposed. The section
which proposes to make preferred stockholders
is all wrong. There also are objections to sec
ton 4.
Mr.. Overstreet-It is said the present law has
worked well and does much good Then tyhy
not leave it alone! This bill prescribes that no
premiums shall be deemed usurous. This is O
dangerous bill and ought not to pass.
Mr.. Winter-This bill is an insidious effort to
divert these associations from their legitimate
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harvest from outsiders. There is no usury
about it under the present law, but this bill
would allow usurious interest of the worst kind
AS now operated they may be called the poor
mans bank. Under this bill a small minority of
the stockholders would have the benefits, with
but few exceptions.
The bill was rejected by yeas Z, nays &C.
On motion by Mr. Mcclure the bill lH. r.
1871 il relation to the removal of distractions
from public highways was read the second
time and passed, under suspensnu of the con
stitutional rule, by yeas 81, nays o.
AMENDING THE SAVINGS ASSOCIATION LAWS.
The bill LEI. r. 1911 for the incorporation OF
building loan-fund and savings associations a
special order was read the third time.
Mr. Bailey-There has been no law upon our
statute books that has done SO much for the
welfare of the people as this law 1t encourages
people to save their earnings. In this city these
associations have become popular. Yhey have
built up hundreds of homes They are managed
economically. The percentage of losses is ex-
ceedingy small. There would be no danger of
making continuous association. These asso-
Citations have had an influence in lowering the
rate of interest. Loans to persons outside of the
association are not allowed under the present
law. Most of the Associations receive only 6
per cent, while the law allows them per cent.
Mr.. Campbell of St Joseph believe there is
no good in this bill except to organize loan asso-
Citations with a capital of $500, 900 to exact
from the people usurious interest. Under
this bill ten men can organize an association
with ST. 600 600 and loan it out to outside parties
at large interest. 1t might be the case that none
of the stockholders would want to borrow the
money of the association. believe there is no
reason why such privileges should be granted to
any association.
Mr.. Davis-I believe the question has been
fully discussed. Tho Supreme Court of Penn
sylvania has decided that taking premiums for
priority of loans is not ursury. 1t has been so
decided in Indiana The workings of these asso
Citations has been beneficial. The objection OK