The Red Cloud chief., 1885-05-15

OF tho Red Cloud Homestead Bull
ding and Loan Association.

The uniform success OF cooperative
building associations elsewhere, hal
suggested the desirability Of such an
organization in Red Cloud, and the Red
Cloud Building Homestead and Loan
Association has been incorporated for
the purpose Of enabling penons oI
small incomes TO accumulate and In.
vest their money upon easy terms "a
build or purchase homes.
In organizing this association, the
| projectors have adopted the most gen
| eral plan Of such societies. The stock
Is divided into shares Of one hundred
dollars. To be paid in monthly install.
ments OF fifty cents per share, and the
money SO received s loaned to men,
bere as fast n the amount on hand
equals the sum Of enc hundred dollars
or more, to be used in building, pur-
chasing o.: removing membranes
upon homes. No member car borrow
70 exceed the amount Of his shares
and must give security upon his real
estate and his shares in the Association.
Loans are awarded . o the highes,
bidder. e, the member who will
pay the highest premium is awarded
priority in making MS loan. Borrow
ing members continue TO paw their in
stallments OF their stock and pay in
terest on tGeir loans at the rate Of ten
per cent per annUm, monthly.
The money received "a interest and
premiums Is loaned on; in the same
manner, and when ..all the members
in a series have received loans equal
10 the amount OF their stock. and when
the money in the treasurer equals the
amount Of unpledged stock, the sto *
becomes worth par. pays the loans, all
payments cease, and the mortgages
are cancelled.
II the only receipts Of the organiza-
ton were the installments on the stock
this condition would only be reached
when the share holder had paid the full
sum of one hundred dollars. but the
receipt of interest and premiums very
materially shortens a period, and It
is reached in other sOcities infrom sev.
en- TO nine years. Ii is believed In this
city. where both rent and interest rule
high, thauwe may safely figure on the
shorter period.
Let us suppose the case of q man
living in q house costing $3.50 TO build
for which he is paying $l2 per month.
Suppose he takes ten shares in the
Building Association and il compelled
to bid 25 per cent. premium in order
to obtain a loan. he would receive $3.50
with which he builds a house. He
would then have ito pay on his ten
shares IS per month, interest On lOah
S. 80 per month; total 1888 which
would give him his home al the end OF
seven years. II the premium is high
er, the increased profits shortens the
period Of payment, and the person
who does not pay above the average
premium in his series, does not. in fact
pay any premium. he only pays the
interest upon it. This will be readily
understood when it is considered that
each member pays the premium to
himself and all the other members,
and when all the members have paid
it il the same "a If none had paid. To
show that the party payin & the prem
ium of even 25 per cent. Is not paying
an excessive rate of interest. let Us sup
pose that the person named in the IL
l~ustration had borrowed $50 on seven
years time at 10 per cent. interest.
Al the end Of seven years she would have
Princiual then due 20
Total SI,yI0
As a member Of the association under the
first Illustration. he would pay. at Sis.p
per month si6o Sper year. amounting In
seven Years