National Republican. (Washington City (D.C.)) 1872-1888, 1886-03-27

Among those who only know building
associations In the abstract, or being inter
ested in them have no opportunities of In
vestigating their inner workings, some
disquiet has been caused by the recent
Developments In the Georgetown societies.
A reporter for the NATIONAL REPUBLICAN,
was detailed to ascertain some of the
causes that are apparent to an expert for
the unhealthy condition OF some OF these
West Washington institutions, and wherein
they differed from others that are In full
tide Of prosperity.
III building association receives decent
management II cannot help but succeed"
said John j. Edison in response to the re-
porters query, "Any financial institution
founded on ever so good a basis will lose
money II lgnorantly managed and neglected,
and the result is the same to the stOckhold-
crs as II the loss was caused by dishonesty.
There must be practical men, possessing
the requisite judgment and ability rs Off
GERS and directors, and those who are no.
tional and theoretical should be avoided.
IL won't do to experiment when handling
other peoples money. Operate with rules
that have grown out Of and are based upon
experience. Extreme caution should be
used In adopting new ones.n
"What is the cause of the prevalent
trouble In some quartersp"
~ understand that IN one association In
Georgetown-one that is In troubles
per cent. was paid on Withdrawals and
800 year paid In expenses, while the
profits were far short Of what would war
rant such a rate Of interest on expenditure,
so, Of course, the capital was impaired. II
the officers and finance committee under
stood and performed their duties with
fidelity, such incxcusable mistakes and en-
barrassing results could not occur.
"a competent finance committee, suit
ably well paid for their services, with eX-
acting duties required, Is one OF the very
best provisions, In my opinion, q building
association or any financial institution can
adopt. In the Equitable we give our finance
committee adequate monthly compensation
for their services and responsibilities. Their
duties are itemiZed and printed. An exam
ination and report must be made monthly.
The report cannot be signed or the commit.
tee receive their compensation until they
have made their examination In full, report
prepared, and ready TO submit to the
monthly meeting of the board. The conse-
quence is the report is always ready. This
causes all the accounts, papers, and files to
be kept up, in order, and correct, which is
always more satisfactory to the officers and
directors, and keeps the affairs of the asso-
citation in a sound, healthy condition.
tions is that their officers have their regular
private business to attend to, upon which
they depend for their living and success,
and us they are apt to only attend to the bus
iness of the association as they feel able, at
odd hours, &C., the result is that OCCASION
ally trouble or embarrassment follows"
sin what respect do the associations
differ, other than In eXtentP'
"The First Cooperative Of Georgetownis
cooperative building association, as its
name implies. 1t was organized about
three years ago, and has been prosperous,
growing association, and shows evidence of
good management. The Equitable has
been organized little over six years. We
have issued 10000 shares, and our full
quota allowed by our constitution is now
all taken up. We have made about 800
loans to our shareholders to pay for their
property, amounting to over 81 200 900. and
have foreclosed but one mortgage, and have
never lost dollar. Our receipts have been
over 81, 1000 in the seventy-fve months
since we commenced business. The average
amount paid or saved on stock by the share
holders Is s. per month, or 26 cents day.
The lowest Is $3.50 month, or cents a
day, and the highest is $40 a month, or $50
a day.
"1housands OF people save In this regu-
lar, systematic way and become thrifty, as
the figures have given you clearly demon
strate, who would not do so by less exact
ing method
s'How EXTENSIVE is THE BUSINESS HEREg"
"There are, estimate, $1,000 shareholders
in building associations In Washington,
whose monthly payments amount to from
$115,000 to $l30,000. In our association the
monthly receipts average SAL, 900.
In England, where building associations
first commenced In 1909, there are about
1900 successful associations. Their assets
amount to nearly 00,000,000, and their
annual receipts are about half that amount
/ give these figures not only to show you
the great interests involved, but that this
method Of saving and loaning money among
people OF moderate means and Income must
possess real practical merit and produces
good results to them or they would not con-
tinue so long to exist, grow, and attain such
high degree of success. The effect OF these
associations is to make good citizens and
members OF society, and In these and other
ways having tendency to elevate the mem
bership In their position and condition in the
world.
"The question of interest allowed on vol
untary Withdrawals before shares mature
is very important consideration In sue
cessfully conducting building association.
In my opinion no association can safely pay
over per cent interest per annum on vol
untary Withdrawals and carry out the true
lOT Which,
organized, viz: to advance or loan money
to its members at or near the ruling rate
of interest, to secure and pay for houses
&c, and to encourage regular monthly saw
ipgs Of small amounts upon which aSteady'
sure, and fair rate Of profit shall be realized
by the stockholders A building associa-
tion keeps all its funds advanced to the
|, shareholders and actively invested, and
therefore can guarantee 4 per cent. net
nnpn voluntary Withdrawals and the full
earnings upon shares held until maturity.
This enables It to have an active reserve
fund for the protection of the shareholders
by providing against any contingency that
may occur.
II do not think there is savings insttu-
tion In the country, unless In the fur west,
that pays over per cent. All national
banks, savings banks, fire and life insurance
companies, &C., have and are required by
law to hold q certain and sufficient amount
OF reserve and surplus funds forproper pro-
lection. Building associations should not
be an exception and ignore the wisdom and
safety of such course,h
"What has been your experiences"
81 have been connected with building as,
sociations for seventeen years. ! have been
secretary Of four associations besides the
Equitable-the old Franklin the six Per
Cent, the Jefferson and the Arlington.
All were successful and closed satisfacto
rily. The Six Per Cent ran six years aud the
Others ten years each. George IL. b. White
of the Metropolitan Bank, was treasurer OF
the Six Per Cent, Charles b. Bailey, secre
tGry Of the gas company, was treasurer OF
the Franklin and Jefferson, and David Rit
tenhouse, teller at Riggs & Co.'s. Bank, aud
ii, ii. Twombly, boOkkeeper at government
printing office, served terms as treasurers Of
the Arlington. / find my experience In those
~. ~. 10