The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1889-11-21
EGGLESTON'S SCHEME.
Is the New Building Plan a
Waste Land Specu-
1ation?

There is no doubt that the Granite State
Improvement scheme, which was explain
ed, or attempted to be, by Mr., Eggle-
ston, at the meeting at the Avenue House
last Monday evening, has aroused the
widest interest among those who are in
terested in the building and loan associa-
tions with which this county teens. 1t
may be that the opposition manifested at
the meeting is prompted wholly by self
interest, but some disinterested people
who have studied the matter do not see
how the scheme can be successfully or
profitably putinto operation.
POINTS OF CONTRAST.
If man wants to build on this new
plan he makes application to the associa-
tion in which he holds shares for a loan,
and it is said that the scheme contem-
plates loan not only for building on q
lot which he owns, but also for the pur-
chase of the lot. In this latter respect it
differs essentially from the ordinary
building and loan scheme = which re-
quires that man shall own the lot on
which his dwelling, built with association
moneys, is to be erected. The mortgage
given back to the association for the loan
not only covers the building but the lot
as well-which of course adds to the
The new scheme, however, eontem
plates-or seems to-the advancing to tine
home seeker of all the moneys needed to
secure his home, and this is the special
inducement it holds out.
The second difference noted between
the two plans-in the manner of raising
funds to loan--is not so essential an one
as it seems. In the existing building and
loan association scheme, the money is
sold when the dues of the association
| aggregate enough to make loan.
The Granite State plan is, when loan
of $1,000, for instance, is asked, to have
the members subscribe $500 to exact from
| the borrower bonus of $500; and then to
raise the $500 balance on bond at a bank
| that is willing to make loans on such
security. A building and loan association
| would have to wait until the $500 cash
had been paid in to make loan of 81 900,
| so that under the new scheme-of raisiDg g
| only the $500 from members and the rest
| on bond-it is possible for the new con-
| cern to make four loans, while the exist
| ing concerns are raising the funds to
make one.
But then the building and loan associa-
tions are constantly securing loans at the
banks. The Second National Bank has a
large building and loan account. The
First National does something in that
direction; but not so much. The moneys
thus secured are ssoldn to the members
who desire to build So, again, it would
appear, the difference between the two
| plans does not seem to be essentially
marked.
HOW ABOUT SHAREHOLDERS?
A gentleman connected with a banking
institution in this city, and who has op-
Dortunities for gauging up the new enter
! prise with accuracy as to its financial
bearings, said, VIXEN talked with upon
the subject yesterday, that it seemed to
him that the new scheme is backed by
some speculative capitalists who are will
| ing to let their money go upon risks The
| mortgages given back to the bond de-
! partment of the new-plan organization to
secure the outside loan of 5000 would
probably protect the man who makes the
bond loan; but then, the critic who is
being quoted asked, what would become
OF the shareholders? They would have to
content themselves with second mort
gage, and sale under the first mortgage
to repay the bondholder would wipe them
| out.
My notion about it, said THE NEWS
| informant, lis that the scheme is one to
build up waste and meadow lands fol
| speculative purposes"