Wood River times. [volume] (Hailey, Idaho) 1882-1915, 1890-02-21
THE AMERICAN B. & l. A.
WHAT PARTIES COMPETENT TO
JUDGE SAY OF II.

JUDGE SAY OF II.
The Alleged Deficit was 10 be Expected
J 1t is Unavoidable In Bulldog aud
Loan Organizations, and the Bylaws
Recognize its Necessity - The On.
slaught Comes from Endowment and
Banking Institutions.
The Minneapolis Times of the 9th
inst contains nearly five columns it,
reference to the American Building
and Loan Association. The report Of
State Examiner Kenyon is frs,
"pu'led to pieces" Then follow u
couple Of columns of interviews with
other officials OF other and rival as
sociations of the American, who agree
in indorsing the plan of the latter.
Here are few of the interviews:
Colonel Hans Mattson, Secretary
Of State and President of the Sc.
curity Building aud Loan Associa.
ton, had read the report, and when
asked for his opinion concerning it,
said:
Of course the expenses of any
, new enterprise started without CAPT
tai are larger than the profits during
the first period of its existence
Every business man will readily un.
derstand that the business has first to
be worked up before money comes in.
Then in the case Of the building and
loan association the money has to be
loaned out and earn money, all Of
which takes time; but ut the same
ratio that the business increases the
ratio of expens-s decreases. 4 pre-
sumo that all insurance and other
companies based on the principles Of
installment payments, have been COM
PEELED to incur expenses the first year
u hundred per cent. even, above the
profits. and the second year so per
cent, and If the third year the ex.
penses can be brought down to any.
where near the profit, the concern
may consider itself fortunate.
1t is different with banks and other
enterprises that start in with big
capital at once. But if we take even
an ordinary newspaper enterprise,
though i, starts in with Il large CAPT.
tai, it would be no sign Of insolvency
looking toward the future-if the
expenses exceeded the profits the
FIRST few years Of its existence.
Secretary Byron Sutherland of the
Peoples Building and Loan Associa.
ton, said:
So far a. the 6 per cent. is con-
cerned by which the American is
charged as being in default, l do not
understand the Public Examiner to
charge this as deficit; what under.
stand him to say is that if the Am
erican Building and Loan Associa-
ton was called upon to pay all Of its
shareholders and pay all of its ex-
pe,,ses that it could not do it within
6 per cent. Of the amount; namely,
the sum of within $4,000. Now,
while this seems a, frs. glance to he
strange aud unusual, If one stops to
think for a moment, i, is not. There
is no institution which, from some
period in its early existence, would
not be on substantially the same con-
dition; it makes no difference whether
it is a peanut stand, bank, rail-
road company or building sni loan
association. A peanut stand might,
in a day or two, be able to pay out
its capital aud all of its expenses,
but if it WAS q bank or a railroad
company, it would more than likely
be years before it could pay out Of
the amount Of the capital invested,
and all of the expenses. Now, this
is true of building and loan asso-
citation to the same degree, and no
greater according to its size, than it
is true of other business enterprises
The building and loan association has
for its depos;tors it's shareholders, and
when they come to demand their
money, if they all come together to
demand every dollar that they had
put in the Institution, it could not pay
>e hn,
the amount Of such deficit at the end
of two years should he SO large OF
not as that shown in the case OF the
American attn not prepared to say
Secretary Neil Mcmillan of the In
terstate building and loan association
is much interested in the matter and
talked freely. He began with:
TIL. ~. oo~t n, Hba 81Qd nm