The Red Cloud chief., 1889-03-22
lLpiN SOCIETIES.

4 Practical Treatiss - the NsthoAs -
Thess Aa~ooesa&i0os.
Each member for each share OF stock
Of which he - the owner pays 70 the
association a stipulated sum-weekly.
semi-monthly or monthly. Each mem
bcr's contribution 10 small. but when
al are put together they make . con
siderable sum. This sum il immedi-
stely loaned TO one or more Of the
members who can give the required
security. and becomes productive At
once. The borrower, thence!Orth, pays
not only the dues shove referred 70
but. in addition. interes; and premium
on the money borrowed. Should any
shareholder fail to make his regular
payments at the appointed time he is
fined such sum as makes prOmptitude
q profitable virtue.
The premium 10 one OF the main
stays and at the same time one Of the
dangers connected with the system.
Dan at the same time and theee is not
money enough for all. the question
arises rs 10 who shall! get it. This is
usually settled by IN open auction. in
which zach wOuld-be borrower has the
same chance. The member bidding
the highest premium secures the loan.
1t will be readily seen that il the bOr-
rover. in addition to the ordinary five
per cent. pays a premium which makes
his loan cost him the equivalent Of
eight. ten, twelve or even q higher per
cent. per annum. he is apt to get dis
cOuraced and cease paying and leave
the property on the hands Of the asso-
citation. And since these associations
not live without borrowing MEN,
bers. the whole affair will have u be
wound up.
Conservative associations discourage
high premiums %preierring TO make the
total cost OF the loan about seven or
eight per cent.
The question naturally arises: Where
is the benefit TO the bureau in paying
seven or eight per cent in q building
association when on good security he
get money from q savings bank a&
five per cent. A partial answer Is
this: In an association he Is permit
ted TO pay on account OF the principal
OF his debt a small sum-Oned dollar for
each 500 OF debt-each month. In
fact the very month he bOrrOws he be-
gins to reduce his principal. Again.
savings banks will loan only fifty per
cent OF the value; these assOcia-
tiOns can and do loan seventy-five.
eighty. and even ninety per cent.
OF the value. This is safe under
this system because the principal
is constantly diminishing. Another
source OF profit is fines for failures TO
pay promptly. This is a feature that
may be. and in some instances. is very
much abused. The true function OF a
to make misfortune almost criminal.
The idea underlying the whole system
is cooperation. Not combination of
part for benefit OF that part, but all for
the benefit Of all. Good authorities
place the range Of fines at the rate Of
from two and one-half per cent. TO
twenty per cent. per month. the out
side figure being allowed only under
exceptional conditions.
Still another source OF profit arises
from Withdrawals; that is. members
leaving the association before the
shares have reached their full value.
Here again the practice is various.
Some associations pay back all the
principal paid in and all the profit
then lost with "A mental reservation
they pay principal and affixed per cent.
Of the profits. When the payments Of
principal and the accumulation amount
TO the paid up value OF the stock. then
this paid up value is given back to peach
member and that division of the assO-
citation is closed up.-C. +. Southland,
in n. Y. Star.