St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1891-08-24
AN ECONOMIC VIEW.
The Safety and Enormous Bene-
fits Conferred by Building and
Loan Societies.

! The Safety and Enormous Bene-
fits Conferred by Building and
Loan Societies.
In forming a correct notion Of the
/ economic value of Building and Loan
! societies, it is important to obtain some
idea of the present accumulated capital,
the mum Der of members and the amount
/ of savings they will pay into these 5000
/ associations during year. While thiS
cannot be done with accuracy, we have
enough data from which to make eStl-
mates that are approximately correct
! From the reports of the commission
/ erS Of savings banks OF Massachusetts,
/ we learn that the @ cooperative banks
! in operation Oct 81. 1889. had total as
/ sets OF s.. l06, Isl, an average to each
/ bank of $40, 40; the average IN Penn
! sylYania was S1S,359: the average III
/ New jersey, so, 1852; an examination of
/ the reports OF 80 associations in Missouri
| shows an average of $4,000.
| A general average upon these four
: states gives US S75,909 for each of the
5000. and a total accumulated capital
of 1856, 454, 600. In like manner, taking
New Jersey and Pennsylvania as the
basis of our estimate, we fud the aver
age number of members for each asSO-
citation to be 235 and total of l 40, 600.
r
The average membership in Mass achu-
sets IS 400.
The yearly receipts for each aSsOcia-
ton in Pennsylvania are given at S34,-
] 1902. in Massachusetts it amounts to
So, 900. in New jersey it is somewhat
less. II we take $4,000 as the average.
we have total receipt of SlS0,000,00 a
year These figures are conservative,
but the amounts are surprising to one
who has not given attention to these as
sOciati0ns.
OF their economic value in PennSyl-
Yania there may be quoted:
First-From the report of the Seere-
tary Of internal affairs for 1S19-S0; the
secretary says:
Hundreds of these associations have been
/ conducted from their inception to their
termination. without the loss of a dollar.
[ From their inception up to the present time.
! il is estimated that under their operation
$1,000 comfortable houses have been erected
! in Philadelphia alone and that they have en-
abled 5000 hOuSeholders to pay off mort
cages that probably would otherwise have
! been fOTeclOsed. They have been the means
! of making $1,000 owners OF real estate and
4 $4,000 taxpayers. thus giving Philadelphia
/ the pre-eminent title Of being the city of
( homes
! SecOnd-From the report of Albert A.
/ BOlles. chief of the bureau of industrial
/ statistics, under date Of May, 1890; he
/ says:
In Philadelphia more people own their
] homes ana eniOv a greater degree of com
/ fort and independence, and possess a more
) heaIthful conservatism than the people of
any other city; Il house owner and a tax
payer Is a conservative citizen; he viii never
I become infected with the spirit of anarchy
/ one Of the best proofs OF this in recent years
( is when so much agitation and disquieUde
/ existed IN many place. Philadelphia has
! been as peaceful as country village. The
/ existence Of SO many house owners there is
( due in no small degree 10 the influence and
methods Of building and loan associations.
The advantages claimed for them are:
/ EirSt-Ihat as an institution for saw
/ ingS." no scheme has yet been devised
and tested by experience which COM
bines safety of funds. good rates of in
/ terest. cheapnesS of management and
successful operation in small eOmmuni-
/ ties. as well as large, in so great de-
/ gree.
Four facts in the scheme upon which
/ they are conducted conspire TO insure
/ the safety Of the savings paid to them,
! viz:
First-The funds are loaned only
upon the first mortgage upon real eS-
tate, or the stOck0f the associations, the
/ withdrawal value OF which exceeds the
/ the security is perfect.
Sec0nd-'Ihe real estate loaned upon
/ is located at the same place OF vicinity
as the association making the loan, and
[ the committee having the investment in
charge can easily ascertain the market
! value of the real estate, if it is not al
ready known to them. The committee
as shareholders in the ASSOCIATION are
I financially interested in the safety of the
( security to be taken. They receive no
fees or percentage in case they accept
an offered security which they would
lose by rejecting it. All the ordinary
motives that cOnSpire to bias mems
Judgment under such circumstances
| unite to influence them to accept only
safe security.
Third-A loan is made only to a men,
Der of the association. and he is the
holder Of shares Of stock in the assOcia-
! ton tie matured value of which will
at least equal the amount of his loan.
( and which shares are assigned to the
association as a further collateral Sc
( curity for his loan. Upon these shares
! ne continues making weekly or monthly
payments in addition to his interest.
thereby increasing the safety of the
I security from month to month. Hence
/ there is little danger that an investment,
| Sdte When made, VIII ever become Un-
( safe: while, if from error of judgment
or otherwise. a security is accepted that
! is not 'gilt-edged, " it will grow better
from month to month while the Dor
rover continues his payments of dues
and interest. The borrower IS usually
seeking to build or pay for a home, and
| the moral risk IS first-class.
FOurth-The money received at or be-
fore the stated meetings is loaned at
! the meetings. or soon thereafter. to Dor
rowers. or paid to Withdrawing cred
tOrs. and there is never large sum of
money in the hands of the treasurer, or
other officer. that he can steal if so III
cIiled. Any possible loss from such a
cause can be amply protected by his
bond unless there 5 great carelessness;
! but, if that Occur5. and toe treasurer
becomes defadlter. ii can 9niy lie for
snail sum rs compared with the ac-
: cumulated capital, ard the loss, when
! distributed among all who have to bear
! it, viii be only 4 slncI percentage.
DIFFERENCES OF OPINION.