The Pacific commercial advertiser. [volume] (Honolulu, Hawaiian Islands) 1885-1921, 1890-03-25

For example. the owner OF FIVE {
shares (par value $500 each, or 1
81. O00) can seek OF the association 1
$1,000 loan. The holder OF ten (
shares, $1,000; twenty shares COM /,
mands q $4,000 loan, etc. Ii
The loans made are paid back
again by the borrower to the asso
citation, by his monthly subscription
dues. The interest also is settled
monthly. For example: An owner
Of ten shares ithe matured or par
value OF which viii be $4,000 Dor
rows $4,000 of the association. Each
and every months payment OF his
subscription of 81 per share month
$50 for all) increases the value Of
his shares by just SO much. Every
dollar paid into the treasury on his
shares is direct debt on the part of
the association to him. When our
| borrowers ten shares shall have
reached par value, through his
monthly payments, aud through the
earnings Of the association, then
the association is owing him full
$4,000, which is just the amount of
his Indebtedness to the association |
this interest having been settled |
monthly. Then there is mutual |
cancellation of debts, the shares in |
volved being surrendered to the
association. in lieu of the associa
TONS releasing all claims upon him.
This transaction will then throw
him out of the association entirely,
unless he has other shares not in
volved in this transaction. There
fore, though the borrowers debt re-
mains one definite, fixed amount all
} the time, it Is practically decreasing
! month by month in the ever increas-
} | ing value OF his shares, which repre-
{ sents the corporations debt to him.
: To man, who has been obliged to,
! pay monthly rental for his home,
I'D and who, at the end OF ten years,
: finds himself no nearer to owning it,
j. than at the beginning, this system
q proves of exceeding value. That
t which was a monthly payment OF
8 rent before, now becomes monthly
] installment for his permanent pos
/ session of home. It would seem as
r if it would take very nearly two hun
q dred months, at the rate-of 81 per
J. share per month to pay up from for
Q matured share of $500. In point
g of fact it has proved again and
Y again that it really takes only about
IS one hundred and twenty months, or
II ten years, for stock to become at par
, value. This leads US to consider
l. the subjects of earnings and ex
y penses of such associations.
d The expenses are very light, being
10 only for such stationery, pass-boOks
Is ETC., as may be found necessary, and
It a small salary to the secretary. The
10 secretary is the only paid officer o.
q the institution. The president, treas
If urer, and directors render gratuitou'
IL services. The borrowers are re
st quired to pay all expenses connected
o. with their loans. In many associa
in tons, there is no Office rent to pay
All members are accommodating.
n, cooperative, or comparatively accom-
I'd modating.
" The earnings are chiefly from tw'
at sources. First. A moderate rate O
of interest per annum is charged upo
w all loans made. Second. The hig
ne premiums from borrowers, for tn
Is, privilege of obtaining the loans. Th
rs, premium is paid for the purpose @
of deciding who shall have the none
%. first. At the end of each month, q
On there may be number of applies
SO tions on hand from members fe
I'd loans, in order that there may be n
er partially shown to one over anothe
sll the funds in the treasury are au,
he toned off at the monthly meeting {
er the members to the highest bidde
ed He who needs the money most, as
es shown by the highest premium
or offered, gets the loan. Mr.. A., a
nd owner of ten shares, bids for $500
tn and secures the loan to himself {
is say premium of 20 per cent. Il
ut therefore receives but $1,000 j
til actual cash. However, he makes hl
IS, mortgage for and pays his MONTH
Dr. interest upon, the full $4,000. 4
sti first it would seem rs if this wei
ed greatly to his disadvantage, but it
,ss claimed that he, as member OF tt
lii Association, eventually receives tt
ur premium all back, through the ear
an ings of his shares. The high pr
is MUM goes into q common fund Il
,er the benefit of all for reinvestment {,
an another high premium) and thr
at constantly increases the value of b
in shares so that he is getting stead
and sure return. Paying only tt
ed moderate interest required woul
he necessitate about fifteen years to pa
of off his full loan of $4,000, where;
100 his premium of $500 and other hie
in premiums being loaned out agai
ex- aud interest compromising, will pc
to off his loan in about ten years.
we It has been found from experien,
it'll that loan from such an Associate
ra- as compared with a loan of san
in amount Of actual cash received fro
rly any Bank, at the same rate of int
est, and running the same full lengt
to of time, will always result to
in decided financial gain to the borrov
Id or from the Association, in spite
he the heavy premium he paid at Il
i've start. And it is favorable featu
st of the Association that member d
nu- string at any time to withdraw, CT
ur- do so, receiving back again all tn
The he has ever paid in upon his share
om together with fair proportion ,
their earnings, or interest.
Is It has been found that the averaa