Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1891-09-24
LOCAL AGAINST NATIONAL.
The Difference Between Good and Bad
Building and Loan Associations.

w. 5. CARRIER, state examiner OF build
ing and loan association for the state Of
Nebrask a, in reporting upon national
associations seeking to do business in his
state, says:
GAS to these national associations
bringing in eastern capital, there is
nothing in it. 1t is safe to assert that
every dollar loaned on property in Ne
braska by Il national building and loan
association is collected from shareholders
in Nebraska 1t collects from one man
to loan to another and in the transfer
they nab 1873 per cent. for handling the
deal. In every instance | have had to
investigate their operations it is con-
clusively shown that they have taken out
much more in initiation fees, dues, loans,
fees, fines, interest and premium than is
disbursed in the state. They are parasite
cal, they take much and contribute moth
ing In one instance the books of bank
in an interior town of tue state showed
local receipts of NATIONAL association
to have been from $500 to $500 per month
for upwards OF three years. Not one
third OF that money has been, dsbursed
in loans in the locality. After about two
years from the beginning of operations,
interested parties began an investigation
Of the plan of the association and as re-
suit there is not twenty shares of its stock
left in the city today. The members got
out the best they could took little or
nothing and balanced their account witt,
experience.
''That the foregoing statements may
not be interpreted and applied to building
and loan associations IN general, ask
your further attention to few remarks
in reference to associations organized
locally and restricted in their operations
to single localities.
In happy contrast are the conclusions
reached, after prolonged investigation,
as to the merits of this class Of associa-
tions as compared with the Nationals
Associations organized in conformity
with the late act and combining their
operations to home localities will I'M
questionably result in great benefit to
communities, to home-seekers, non
monthly, wages and to small investors
To secure from the board authority to
operate, the plan must be a purely mutual |
one; there must be no constitutional or
bylaw provision for forfeiture OF a mem
ber's share in the assets Of the associa-
ton under any circumstances, after hav-
ing paid his dues for three months. II |
misfortune overtaEes the member and he |
gets in arrears, for period of not less
than three months nor more than twelve,
the amount paid into the association plus
some rate OF interest and minus fines i'm
posed shall be placed on the books of the
association to the credit Of the member
subject to his order. No greater rates OF |
fines shall be imposed for delinquent pay
ments than is approximately sufficient to
reimburse the association for the loss OF
income because of the dues, etc., of the
delinquent member not being promptly
furnished for investment for profit. II
the member be borrower whose indi-
vidual interests requiring the lifting OF
his debts before the maturity Of his
shares the organic laws of the association
must contain provisions for tie repayment
OF the loan, the crediting thereon Of the
withdrawal value Of his pledged shares
and the rebating of the unearned pre-
MUM bid for the loan.
I'm fact, it shall be the aim of the de-
partment to administer the law to the
end that all local associations within its
jurisdiction shall equitably provide for all
classes of members. Tie belief is too
prevalent that the benefits to be derived
from these associations do and should
accrue to the members who stay with it
to the maturity of their shares that the
member who withdraws before that time
should be compelled to surrender part
or the Whole of his or her pro rata share
OF the association assets. 1t will be the
effort of the department to exclude all
such features from the law Of associations
seeking authority to operate under the
law OF April last.
"The constitution and bylaws of build
ing and loan associations should be framed
to invite the savings deposit OF wage
workers with the assurance that they can
be Withdrawn within certain limits and
upon proper notice, and that the proper
ton OF profits earned by their capital
while in the association will be paid to
them upon withdrawal. In our larger
cities these associations should be in
operation upon scale and scope re-
sembling cooperative banks.
If carefully and economically man
aged and the interests OF the association
guarded by every member in his way,
there is no other means so secure and
profitable for the saving and Investment
of small fixed sums periodically, and GER
f.,,1x- tLaro ,c ~ Ia+fo, ,..ox.