Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1888-07-06
EVERY MAN HIS OWN LANDLORD.
A Subject ofvalue to Every Householder
in Moderate Circu stances.

of which persons of moderate means are
enabled to become the owners of their
houses at about the same outlay as rent
ing would otherwise cost them These
building associations are comparatively |
new in New York, Notwithstanding that
they originated in England about 80 years
ago, and have been 80 successful that |
they have spread all over the world Eng |
land has 2000 incorporated associations,
with 100000 members, and assets aggre-
eating 500, 600, 600 Australia has associa-
tions with a capital of at least S25 900, 600.
Philadelphia was the first city in this
country to adopt the cooperative building
plan, and the miles of streets lined with
neat, frame cottages that form the out
skirts of the city are the result. 1t is esti
mated that over $4,000 houses are owned
by workingmen in Philadelphia, and that
600 building and loan associations are in
existence there to-day. From Philadel-
phia these associations have spread to
every State in the Union. They are very |
popular in The West. Chicago and Butfa-
10 have each $50 associations; Pittsburg |
has $50; Cincinnati 200; Rochester has &c.
and nearly every small town in the vicin-
ity of the large cities has from one to
dozen of these associations The total |
| number in the United Stetes Is estimated !
at 81 90, with membership of 80 900, and
an dRkT eRdle CdplJdl Vi SfOU,UUOUUU.
The first organization in this vicinity
was that of the South Brooklyn assoca-
| ton in April, 1886. 1t has now nearly
| 100000 loaned to its members, and its
shares command premium of SIS each.
| There are about half a dozen associations
| in Brooklyn, and Is in this city. The first
of these was the Harlem association,
which is one of the most prosperous in
the country. 1t was organized III Febru-
airy, 1887, and in 20 weeks the limit OF
embership-600-wa reached, and 5000
| shares of stock were taken up. 1t now
| has S9l 600 loaned on bond and mortgage
at ) per cent, and has made profit i'll
premiums and interest of over $4,000.
| These associations are all formed on the
same general plan They are Incorporated
| under the law of 1851, and are free frOmthe
| corporation tax clause applying to savings
banks. The membership is limited to 600,
and member can take any number of
| shares from 9 to Co. The paid up value of
each share is $3.50, and is paid in by sub
| scriptlon of % cents per share weekly.
| When u sum sufficient to warrant a loan
| has been received, a meeting is called, and
the president offers one share OF $3.50 to
| the highest bidder The member willing
to pay the highest premium gets the share,
| and as many more at the same rate rs he
desires. the premium that is bid is
| usually added to the amount needed to
build or purchase the bouse. Thus man
wishing to build Il house costing $1,000 in
| cash, and bidding a premium of $50 per
share, would require l6 shares, or $4,000,
or which he would give a mortgage on
the property, He would not be required
to pay any cash down, but would pay his
| weekly subscription of p cents share
| Oh the Ii shares, or 81 week, making S2US
per year He would also pay 5 per cent
interest on the mortgage, or 500 year.
This would make total yearly payment
of S40S, and would pay off the mortgage in
II little less than 10 years. But this time
and the total amount paid are considerably
reduced by the profits made by the pay
ment of the premiums. When the assets
OF the association are sufficient to pay $3.50
for eacn share of stock-which is usually
in seven or eight years-the series is closed
mp. The members who have received
loans are released, and have their property
free and clear, and the others are paid $3.50
cash for each share.
| Although the members of these associa-
tions are on the same footing, there are
practically two classes-the lenders and
the borrowers. In the beginning all are
lenders until several thousand dollars
are raised then the ones willing to pay
the most for the use OF the money Dor
row. The higher the premiums are, the
better for the members, who merely take
shares rs an Investment, rs thay virtually
obtain from to 10 per cent for their mon
ey. This high rate of interest is not such
a hardship for the borrower rs appears at
ZION as rentals are in desirable localities,
ana rs the borrower obtains the money
without having any security, and in lew
years becomes the owner Of the property,
II Is decidedly TO his advantage. The as
sOciatiOns have a clause providing tor the
withdrawal of members at any time. All
OF the money paid in is returned, and after
the end of the thnd year from 20 TO 60 per
cent OF the profits is paid This enables a
member who becomes financially embar-
rassed, to obtain money and not forfeit
what he has paid III as Is the case in the
tUntlne ins urance plan. A borrower how
ever, Is fined when he allows hIs payment
OF interest on mortgage to became over
, one month in arrears. When he is three
months behind, he is liable to have the
mortgage foreclosed, but even then what
he loses would not exceed the rent that he
would have paid during he same interval.
Several instances III this city have occurr-
? ed where houses have been built by loans
3 IRON these associations and before they
we've occupied, rentals have been offered
a that exceed the interest on the mortgages.
They were accepted, and in a few Years
the houses will have paid for themselves,
besides leaving margin for the shrewd
borrower
Loans on property are usually made
with one-thnd equity. That is, the lend
1 er Will advance only two-thrds of the val
lie. man with moderate income will
$ wait long time before he saves up the
: amount necessary to buy or build with.
Then his property will be saddled with a
mortgage that Will be a burden year after
, year. without any prospect of a release.
Even suppose that he had kind friend
. who would lend him the amount he want
3 ed for 10 years without demanding the
equity, the advantage of borrowing from
the association is clearly shown. If the
friend were to lend him $3.50 at per
cent interest, his interest would amount
to Sl27.50 per year, or 81 ,275 in 10 years,
and he would still owe the amount Dor
rowed. Ii he were TO borrow the same
amount from the association. and pay a
, premium of $50 per share, he would pay
the same amount and be under no obliga-
ton to his friend A loan from an asso-
citation at $50 per share costs Just per
cent interest. provided that the associa-
ton winds up in 10 years. II 1t closes in
less time, the amount will be proportion.
ately de creased.
AS an investment a building associa IN
is better than a bank. They give higher
interest, and better security. For instance,
IL man saving 81 a week takes four
shares in an association, he will get 81 900
in the end, He will have paid 10 years as-