The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1885-04-30

There are some who are inclined to give
a sort of cold shoulder to Building and
Loan Companies on the ground that they
are species of the shaving shop, and
that the money invested in them had
better be put into manufacturing indus
try which would give employment to idle
labor. If the aggregate Of the money
which finds its way in driblets into the
loan organizations, could be put into man
ufactures it would certainly add 10 the
business Of the community, and might
prove the seed Of a prosperous plant, but.
the question arises : Would not the major I
part of the small sums which are put into |
these saving institutions be squandered if !
there were no'such investments? And is
it probable, if not so invested, that they
would find their way into manufactures |
Take for instance, the company recently
organized here. A large proportion, if
not majority of the shares are held by
clerks. young mechanics and laborers.
From their scanty incomes they desire to
lay aside part. TO many the saving Of
even d dollar or two week, calls for
sacrifice, but with the prospect Of ulti-
mately securing a sum that will be OF
value to them, they are willing to undergo
the temporary inconvenience. If the OPP
portunity OF saving were not thus pre-
scented, the chances are that the money
would be spent unnecessarily, and at the
end of the month the owner would find
,,i+ 10
value received. But it is urged that the
man who borrows has to pay usury. Even
if this We're in all respects a fact, does it
advantage the borrower more to pay usury
to a bank, than to give the men of his own
class the advantage of the interest required
of him? If he can borrow on better
terms from a bank he will do so. And if
he has to pay higher rate than legal IN
terest isn't it better that the profits to the
lender be distributed to increase the saw
ings Of many than to fill the Golfers of
few? But let US inquire into the com
parative cost of loans obtained from build
ing funds, and ordinary loans. Say that
The interest cost Of loans from building
companies averages or even s per cent.
To suppose that an ordinary loan outside
OF building society at per cent, costs
less than a building loan at s per cent. is
likely to be an error. When an ordinary
loan, say of 50 ,000 becomes due, the bor-
rover is obliged to have that sum in hand
with which to settle the loan. How can
poor man possess himself of $4,000 to pay
off an ordinary loan? His only plan Is to
begin to save so much per week or month,
from the very first week he secures the
loan. BY this process of saving he accu-
mulates $4,000 say in five years. SO far
as he is concerned. he pays the loan to the
stocking or strong box in time, which
averages just one-haf of the time for
which he pays interest Oh $1,000. Conse-
quently if the loan is for five years, he
pays five years interest for money which
he has had the use Of for only an average
of two-and-a-half years. If the loan is at
the rate of per cent. per annum, he will
pay 5000 interest, or really u per cent,
per annum for the average time the
money is of service to him If he does
not hoard the money in small sums, he
VIII never Ieueeln lne mortgage. Iler6 IS
only one likely way and that is by the
driblet saving plan mentioned The
building society, where properly conducted
furnishes the weekly and monthly plan,
and allows profit on the saving, or dues
by the borrower deposited, in order to re-
iieve the poor man of actually paying 70
per cent, per annum when he imagines
he is only paying six. The building So
ciety is certainly a good place to save
money, and is very little if any harder on
the borrower than the ordinary loan insti-
buttons.