The record-union. [volume] (Sacramento, Calif.) 1891-1903, 1892-02-26


that no agents are employed and yet
there is a charge of fees to agents,
81, $40 49, Attorneys fees and appraisers
fees are charged with 81 $40 "a, and it is
generally supposed that these expenses
are paid by the borrowers. There has
been collected in interest 81, $50 Oh, and
paid out for interest S2.241 81, showing a
loss in this account of Sol so; whereas, in
terest is generally supposed to be one Of
the main sources OF income.
Prom the figures presented it is appar-
ent that whatever the methods may be
now those previous to July l, 1891, have
been simply the collection of dues from
unsuspecting investors and absorbing the
same in expense of management"
RENTERS Co-oPERATIvE INVESTMENT
COMPANY.
Incorporated in San Francisco No
vember ., 1890. This company shows
only total business OF 1866 s6 and is,
therefore, very conservative, or has not
endeavored to compete with more active
associations. This company has two
funds, viz: The operative fund and the
investment fund, and the latter shall at
all times be subject to inspection, whereas
the former is private. From the state
ment it appears that $3.50 so has been
taken from the investment fund for the
expenses of operating. > No
out, but it is possible, or rather probable,
that the operating fund OF this company
is getting what the expense fund in other
companies (Nationalsl gets, viz: All the
cream of the business"
FIDELITY SAVINGS AND LOAN AsSoCIA-
TION.
This association was incorporated in
Los Angeles January %, 1891, and conse-
quently had but five months business to
exhibit. The financial statement is
given, after which the report goes on to
say that lit IS fair to assume that the eX-
traordlnary expenses which have been
incurred were incidental to the inaugu-
rating of the business. Theamount paid to
agents Isl, 02l 90 is excessive.
w hateyer may become of the rest of
the business, the expense fund is well
provided for, and as usual the better part
of the business. The bylaws provide
that only holders Of unpledged shares
shall be allowed to vote, thus deDriying
all borrowing members usually the ma
jority-from any voice in the manage
ment of the association"
NATIONAL BUILDING AND LOAN Asso-
CITATION.
The report of this Los Angeles assoc,a-
ton for the six months ending Decembe
81, 1891, shows that during that period
81, 431 50 has been received, and the same
amount paid out. ''Whatever NAV be
the advantages this association offers to
its PATRONS say the Commissioners. "or
whatever may he its methods. the above
figures lquoting from the statement as
given indicate that it has cost 3I5, 947 81
to do business amounting 10 S67. 100 a.
or say p per cent, and this only for six
months. 1T appears that the manage
ment receives annually say $4,000, and
under such circumstances the question
arises, What is there left for the invest
ors?
at is evident that the public is being
deceived, and yet all moneys are doubt
less handled in perfect accord with the
bylaws, and all participants being share
holders they cannot perhaps complain.
as virtually they are doing their own
business, and their only defense is their
own ignorance of the national system.
The liabilities are Sill, $50 %, and the as
sets Sll0,230 9S. The deficiency of 81, 800
is made up of furniture and fixtures.
which cannot be deemed an asset. The
amount due from members of 81 SIS 20
may be very doubtful
There is also possibly percentage of
the SlO4,000 loans which may be bad: and
even admitting that The loans are ali
good this association has not sufficient
assets to meet its liabilities. The monthly
receipts are $40, 705, and so long as these
an
enterprise that absorbs % per cent in ex-
penses must, in the end, work an injury
upon those who are contributing and
the mystery yet remains unsolved how
such institutions can fulfill the promises
of great returns, which are so loudly and
effectively made to the public"
IMPERIAL SAVINGS AND LOAN COMPANY
OF Los ANGELES.
The report of this company was re-
ceived only after repeated requests and
much delay. The assets and liabilities
are the same in amount, $64,3l9 70.
From their report it appears that this
company is using about twice as much
borrowed money as it receives from
members, and that 81 100 of its assets con-
siSt of members accounts in arrears, of
which Sl,2i5 is for fines. Nearly one
fourth of its entire membership business
is delinquent, which is remarkable, since
it is generally believed that prompt pay
ment is an essential feature OF building
and loan associations.
ut appears that it has cost this COM
pany over $1,000 TO collect say SIG, 0G0 from
members and TO borrow $4,000, or say 30
per cent of the actual business of the
company. The bylaws provide for
an Auditing Committee, and there is a
provision for a surplus fund. Unlike
most Nationals, there is no provision in
IL
there appears to be Glass lI' stock. on
which payments are ten cents per share
per month, and it is possible that these
shares represent the amounts required
for expenses.
'The fines and withdrawal penalties are
more or less similar to other nationals.
and indicate similar methods, which APP
pear TO be unfair, in allowing unreason-
able expenses and yet promising to in
yestors greater returns than are obtain
able in the usual channels-two condi-
tions that are impossible"
ILLEGITIMATE AND MISLEADING.
In concluding their report the Bank Com
misSioners state that, while the so-called
Local building and loan associations
offer to their patrons the advantages of
cooperation and the benefits of economy
and thrift, the so-called nationals" al
though identical in purpose, seem to de-
prive their patrons of the very objects
for which these associations are organ
lied. The strictly National Building and
Loan Associations of California are or
ganiZed and conducted mainly for the
benefit of the managers, whose promises
to their patrons are very doubtful of full
fillment, and whose methods are illegiti-
mate, to say the least.
NOT COOPERATIVE.
The report goes on to say that IMAM
ayers OF any commercial enterprise are
of course, justly entitled to all they can
honestly make, but building and loan
associations, unlike ordinary companies,
are entirely mutual concerns, all partic-
ipants sharing in all benefits. 1t is here
that the nationals utterly fail; for
Notwithstanding their pretentious an
nouncements, their calm to be Coop
erative is entirely mythical Their
methods of advertising are misleading
and deceptive, for it is the custom to
cover their circulars with the names of
prominent and wealthy citizens who have
no connection whatever with the associa-
ton, but whose name st once inspires
confidence in the unsuspecting investor.