The Daily times. [volume] (Richmond, Va.) 1886-1889, 1889-02-20
BUILDING SOCIETIES.
SOME TELLING POINTS CONCERN
ING THEIR METHODS.

ih- BOOKS suggestions TOT the improve
mont Of Truly Good Institution.
Z \ gentleman who Is an expert accountan
and who has had ample opportunities 20
Studying the methods OF a large number O
Building and loan associations said, in con
vcrsauon concerning Tho Morning New.
article on The subject.
1t Is a fact that very few out Of tho %
buudlgg societies 10 this city have any meth
OF Of keeping their accounts by which Al
inspector could get at the state Of ihei
affairs without great delay and expense, cvei
q She books arc not faisiAci by the secretary
] have found some societies so lacking il
books that it would be almost impossible fol
% practical accountant TO determine the stat,
Of the loans made 10y the institution, an,
even the secretary conld not unravcl tn,
mystery, although he waspresont when every
7 Joan was made How, then, can q proper
+ disposition of premiums be made, or how can
interest be property adiustcdf In some soct
F cites there Is no loan book, or even loan
account, outside Of the individual debit q
+ tho stocbhoidor, and sometimes not even that.
HOW DEFALcAuoNs ARE COVERED.
by wise provision OF the inventor Of
theso societies. or by q line Of providcutial
circumstance, bookkeeping IS much more
perfect as a system than in any other busi-
mess J know of. for with a properly con
.uclel $50 of building society books 10 would
Be almost impossible for any one 20 taapcr
with the accounts without detection, even
wcrc the auditors not bookkecpers, but
alert and honest As my experiences goes
most of The auditors are selected by tho sec
retary and % hc is inclined % tx BIS accounts
ho seldom makes mistake I'M bis auditors
This Is the reason SO many transactions have
been overlooked and such developments. as
900 the case ol tie Columbia aud Of tho Cit
7cus'. have occurred
How are these deiacations covered and
+ how are the stockholders protociedi rs the
bonds 81 the officers It IS fact known to
tho directors OF such OF those societ- O., have
have bad dcfalcatons that secrotary's bond
is llso a bond OF straw in many cases, and
the directors have 20 patch up "a compromise
ana tle society carry the loss. II this is done
and the present stockholders have tho loss
distributed among themselves 10 d, perhaps
iau and equitable, bat when the boss is
carried 90 a suspense account or a bills re-
ceivabic account, as is dono IN some socle-
lies. and new stockholders come in and absorb
stock with this incubus, it is little ios. than
criminal and is certainly dishonest on the
part Of the directory In some cases it might
be possible for all or nearly oil OF the old
stockholders 70 have retired and tie burden
Tee thrown entirely on those not interested at
,lo time The dcialcation occurred
There are many questions that affect the
property Of building societies which might
got come under tAo state auditors authority
lud yet which could affect the society more
,lan any defa.can0n likely 20 occur. In the
division Of profits. for example, there are
rs many way. of computing profits and di.
giI.ng them among tie series and shares a.
there ore secretaries No two secretaries
i5urc alike lt Is probable that at tie Wind
ug mp If many societies there viii be SUR
plus or a shortage Of profits that viii entail
much trouble 60 secretaries and treaslers,
eur.ching lawyers and impovcri.hug the
stockholders AS the building society inter
ysts approach the time when shares should
mature 10 win undoubtedly produce a clamor
anl excitement beyond what the peaceful
and self satisfied directory now anticipate
SHOULD MAKE QUARTERLY STATEMENTS
"lt is wei TO look these matters sQucyely
10 the face, and, as these societies certainly /
furnish an advantage and cheap method Of
getting home, let them bo supported and
protected. 1t is a fact, that can DO demon
stratol by what has been done, that o man
can bug o home as Cheap as be can pay
rgnt. o. if no can pay rent ho can
ray Sc 60 himself aAd own bis own home
when be has paid his rent or dues for
live on eight years. IN well managed so.
,iety loan Of say, $1,000 should no. cost in f.
interest over per cent per nnnum without
commission. THIS fact has been demonstrated [
by actual transactions IN asociety nthis city +.
and is beyond question II the state auditor .
could have authority 70 require tho book, IN 4
au building societies 90 ho kept 10y the best .
inowu methods it would save money and .
timo ia inspection.
My opinion is that al societies should /
make quarterly statements under oae general .
system And The result Of an should be pub
AAol by the auditor. with each item Of H.
,talimuts, loans, interest fees, lnes, ex-
pcnscs, etc, under ono headline 50 that com
parsons could DO made 40 a glance, and Il
yearly statement be made tho same way.
Then e would be possible 70 weed out the
poor societies This system would DO away
WIKI The necessity for an examination In
many societies, as they would close up and
44uldate as soon as the condition OF the So
lc,y was exhibited Many moro would be
omQe.ied 90 roadiust thcl affairs, and many
others would BE- found sound and worthy Of
patronage
estate inspection should begin With their
last annual statement, say Jan. I, 1889 and
continue from that This would proven
fixing tho societies accounts If there are
amy that are u3, ia good Shape. Culess some
thing done soon % give confidence 10 tic
building society interest there 0il probably
10 fow more OF these doialcalons and then
j crisis which SSH wreck many good socio-
jos and destroy confidence in all Of these
poor mems savings banks. Chicago News
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