Phillipsburg herald. [volume] (Phillipsburg, Kan.) 1882-1905, 1888-01-20
The Building and Loan AssOoia-
ton.

The Building and Loan AssOcia-
ton.
Those who have not given much
thought to the subject may be benefit
ted by the following history and ex-
planatiOn.
The Building Association was design
ed 70 meet the wants OF men whose
little earnings can be only slowly raised
To an effective bulk In its essential
plan and nature it is the same all over
The world. The idea which first gave
rise. 10 these associations, and which Sc
cures TO them their popularity, Is that
Of enabling persons belonging 10 Il class
/ whose earnings are small, and with
whom the 81 ,Wness Of accumulation dis
courages the effort, TO become, by q
/ process of gradual and compulsory saw
ing, at the end of a certain period, the
owners OF homes
The operation of the scheme may be
easily understood by suppOsing that a
I hundred men who are able to save tYe
dollars out Of their monthly earnings
agree to put their money together on
fixed days of each month until the
amount thus saved shall be sufficient 10
pay each $1,000 in cash. 1t is clear
that II ali are prompt in their pay ments
&
a. the end OF 200 months This period
| will Ue shortened if, after each month
J IL collection OF $500 is made, that sum
/ is at once put out at interest upon some
/ sale investment with the addition of the
interest, and such premiums as may
acc ue to the fund. Thus far we have
simply u cooperative savings fund, the
stated payments being periodical aud
/ compulsory.
But the persons who started these as
suclaJiUns had an object beyond the
mere SAVING of money they de lreds
Through il, to acquire houses. homes.
IL was found that il might be made the
means OF securing, to some Of the mem
bers, the money TO detray the expenses
Of building, they paying reasonable
/ interest upon the amount loaned Them d.
In Jhi, way the money which belong
ed TO all would assist the individual,
and he, whilst he continued to pay his
monthly iustallments, would, in pay ing
interest on that loaned 10 him, in TACT
be paving a part To himself. Thus he
would get his home = number OF years
before MS monthly payments OF i've dol
lars could be expected to amount TO a
sum sufficient 10 pay Tor IT. and YET
those small payments being kept up
by him, would, III time, equal the So %
he had borrowed, and ne would have
his nome free, virtually paying tor II IL
miscellaneous uI i've dollars monthly, and
1.-The interest on the money loaned 10 HIM
Those who had paid III cash Install
menLs aud had not borrowed out any
would have the Z ash invested together
with the accumulated Interest anC
premiums, making very PrOnIaOIS
realization,
such a bargain could not be obtain
ed auyWh ere else and il stands 10 Tea
son that more than one member should
endeavOr 10 be able to pay 50 era dually
for MS ONE. Hence whenever ther'
is a sum OF money ready for invest
meut. there will probably be a number
Of applicants, an d II Will be an easy
matter TO deter mine TO whom To give
the loan. IL Will be worth more u
some tnan TO others and this difference
will probably be capable Of expression
in dollars AID cents. / he loan there
/ / lore is let 10 the one who offers The
highest premium Tor the preference
Thus producing LWO sources Ot profit
? interest On The loans TO It's members anC
premiums fer the preference Of The
loans.
The payment Of the monthly dues OF
shares t0U cents LOT each share) ant
interest 70 IL per cent. per annum on
the money borrowed 90 cents pei
MONTH making a totai OF 81 10 on eacL
} sh re borrowed, aud II maintained IOi
; eight ears Will cancel the debt. IRt
shares having reached par value art
taken IN full payment for the loan, anC
the mortgage Is released.
Illustration showing cost Of loan o
I S75U cash:
Number shares loaned 10, par value. --- $1,000 o
Amount OF premium paid, 70 per cent ~
Cash received by borrower .-------S 40 U
This loan would cost per month. II 8
Total cost for the years......- ..,...-SllO4 U
From the SI1U4 10 deduct $780, th'
amount received, and the balance o
S354 represents the cost Of the loan u
The borrower.
This, in addition to the cOnvenienc
r Of making small monthly pay menLs
makes the interest 10 yer than by au
other method, therefore ID most deslra
be way vi borrowing, and yet LhOs
t " no deposit dues on shares receive tull
{ 20 per cent per annum on the amour
. deposited, making Il mutual benenG Z
both the lender and borrower.
Another meeting will be held soon
. OF which a notice will be published II
? due time, TO consider this subject L.