Savannah morning news. [volume] (Savannah) 1868-1887, 1885-06-21
WAYS OF GETTING HOME
RISE AND GRO WITH OF LOAN
AND BUILDING ASSOCIATIONS.

tory-Premi on Money Borrowed
and Profits to Shareholders.
Every citizen must nave recognized the
steady, conservative growth OF Savannah
during the last decade, and particularly
during the latter half. The building line
has extended year by year. taxing in a
strip Of land here and another there, more
rapidly on the south side than elsewhere,
until literally a new city has grown mp
around what only "a few years ago were
the outskirts OF the older town. No better
instance can be produced Of savannah's
progress and prosperity. In a great
measure the credit belongs TO All institu-
ton whose influence Is, perhaps, not fully
appreciated.
II was about 30 wears ago when the
first Loan Association was organized.
The present improved associations only
date back about ID years. The frat as
eOCiatOn proposed mat the mem bers
should contribute a small amount each
month IN a general fund, which was 10 Doe
loaned on good security. Real estate WAS
accepted as security. and as result the
money was principally invested In city
lots and buildings The real estate bust
ness. which had been sluggish aud aim psi
al a stdndsull, was stimulated. The mar
ket became more active and assumed a
sound, healthy tone. Another similar
association was organized soon after
ward. These thrived, and since 1881 :
have been started, including OF the early
associations that wound up their FIRST
series and began anew.
BUILDING Up THE CITY.
Hundreds Of citizens have derived as
sistauce from them TO bulld comfortable
homes. Business men, mechanics, work
ingmen who rented but could not get
enough ahead TO build, joined these asso-
Citations. The loans on from one share aud
upwards enabled them TO buy or build
house. The monthly payment on these
loans was not very much in excess
OF what the landlord had been
paid Tor rent, and in four or
I'VE years the property was paid for and
there Was no more rent, no more pay
ments 10 the association. Hundreds OF
clerks, statesmen, young business men,
men Of all trades and professions ara To-
day, through the aid Of these Organiza-
lions, holding and paying for homes that
would otherwise never have been built.
Practically the associations are savings
banks. Energy, industry, thrift and
economy are encouraged.
In becoming property owner the cltl-
zen becomes more independent. Every
house that Is built not only adds that
much 10 the wealth Of the city, but en-
hances the value Of all other real estate.
Property in the heart Of the city Is
worth more because OF the streets
that have been built up
beyond the Park. A gentleman who is
well posted about real estate and loan
associations is authority for the state
ment that much the greater part OF the
improvements south Of Castor street is
due to the eight associations now work
ing. Ibe promptness with which the
ashes Of the cOnhagration of two wears
ago were cleared away and a small town
built on the site, was made possible by
the loan associations.
Another authority estimates that each
association lends 100000 during its ex-
1steDcc, which on an average is seven and
hai to eight years. At least one-h alt Of
this is invested in real estate. $2J, 900 a
year for each one, or $200.0 for the eight,
Is the minimum estimate. This sum rep
reseuts the lowest estimate OF the money
expended annually in lots and buildings
FEW FORECLOSURES.
To the shareholders these associations
prove good investments. Unfortunately
their workings have been hampered aud
the benefit Of Which they are capable has
been limited By an unwarranted assump-
lion that the terms are too hard and the risk
OF foreclosure too great This ungrOuuded
objection mas prejudiced some who never
1ully understood toe plan on which they
are conducted. Some have not fOreclosed
single share. Rarely, if ever. does the
number exceed one Ia twenty during the
life OF an association. The heaviest pre-
miums are charged at first, and as the
association grows older the premium de-
creases. The borrower IS given every
reasonable opportunity 20 meet his obli-
cations, because every reyersiOn is a loss
70 the association.
The eight associations now in operation
are the Savannah Mutual Loan, Southern
Mutual Loan, Merchants and Mechanics
Loan, Pulaski Loan, Jasper Mutual
Loan, Chatham Mutual Loan, Work
mans and Traders Loan, and Rail-
road Loan. There are certain general
features possessed by all in common.
The shares Of stock are 81 200, and the ex-
istence is limited 10 seven or eight years.
When there is competition for a loan il
goes to the member who will pay the
highest premium. Tue rate is often bid
up per cent, and the highest bidder
gets IL. When there is DO competition.
which happens during the last year or
two, the members who have not borrowed
have 10 draw. The money has 20 be loan
ed as fast as paid in or the association
would not prosper. When the business
- closed the surplus is divided among the
shareholders.
THE METHOD OF OPERATION.
To explain the method. suppose "a mem
Der Of the Savannah Mutual desires TO
borrow. The association is 81 months old.
and IL presumed 10 have - months longer
70 run, ~ years. The present rate Of
premium is 81 per cent. on one
share he would receive 81 0eO.
less 81 per cent. (i310) or $500.
From this s. 80 is deducted for recording
and for the papers. The net loan. there-
fore, Is 1921 80. During the 80 months he
has paid IN AZ s. "A month $3.50. II the as
s0cation winds up IN - months ne will
pay In that time, at $40 a month, $3.50.
which, with the $3.50 before paid in, makes
$3.50.
Fnty-two months 90 s. ..........S 26O
Thirty eight months at So. $50
S8tO 90 GO OC
Original oan,................... 62i 90
DiNftthtt- -t.ts.s .-tttt.ts.s. is %
Allow per cent. interest on
32l FOR two years ..-.......... 80 90 % OC
Total paid out ................ sd05 %
"A. borrows $500 from baps at per
cent. be Will pay at the end OF thirty