Pawtucket tribune. (Pawtucket, R.I.) 1890-189?, 1893-03-08
Report of Massachusetts
Commissioners.
RECEIPTS OVER S8,OOO,OOO.
Average Of One Out Of Five Depositors
is Borrower.

Noners or savings banks mas submitted 10
the house of Representatives its annual re-
port, relating to cooperative banks scollat-
eral loan companies and mortgage loan
and investment companies. The report deals
with lis cooperative banks with assets Of
GA ,620, ,276; two collateral loan companies,
1854, ,034; two mortgage loan companies,
81 ,939,2
The Franklin Cooperative bank has
been wound up during the year, and its as
sets distributed. The full amount paid in
by its members has been returned TO them,
and in addition good percentage of profits.
A change In the form of annual returns
required of the banks has enabled us to
give statistics regarding the practical
working of the banks, and to show the ac-
tual operations and results OF the busi-
ness for the year. During the year
IA banks have had shares mature,
The Waltham Cooperative bank retired
shares at the expiration of 1872 months, or
two mouths previous to their maturity,
and the bank at the head OF the foregoing
list should have declared its shares matured
four months earlier than it did.
Treating the shares of the two banks re.
ferred to as maturing at the end Of l34 and
142 months, respectively, and IL shows the
average life of the several series to be 1877
months, the same as the average since the
maturing of shares was begun by the
banks.
The Shares Matured
Qncludng those retired by the Waltham
bank) amounted to 997 In number and to
Sol ,043 In value; 1888 of the shares were
pledged for loans on real estate, the amount
Of such loans liquidated by the maturity
Of shares being $35, 900; lis shares were
pledged as security for loans on shares
amounting to Sl0320.
The 997 shares were held by 267 men,
bers, an average Of less than "a shares to
each; OF these members 68 were borrowers
aud 20l held unpledged shares.
The loans on real estate were IS In num-
Der, an average OF about $500 each, and
the loans on shares were IS In number, an
average OF nearly $500.
The entire amount OF dues paid In on the
shares and returned to the holders thereof,
either IN cash or as credits on loans, was
$l35,02 while the accured profits so re-
turned amounted to s66,020.
Taking the average life OF the shares
matured during the year, II shows that In
u loan Of $1,000 the borrower would have
paid on an average
S8S5 In Dues.
while the average maturity value Of five
shares (the number required to be pledged
for a loan of the amount stated is sl0l5;
the difference of $3.50 shows the profits. or
dividends, the borrower would receive as
an offset against the interest and pre-
miums paid on the sum borrowed
During the year the sum Of 81 ,5S5 500
has been paid into the banks as monthly
dues.
Within the same time 70, ,9s2 shares have
been voluntarily withdrawn, and the hold
ers have had returned TO them all the dues
they had paid in on the shares, say 81 ,16l,-
439, together with $203, ,2i5 In profits, less
$29, ,494, which was retained by the banks
as withdrawal profits"
Members to the number of 204 holding
1855 shares, owing to their inability to
neglect to keep up the regular payments Of
dues or interest for period of six months
or more, have had their shares forfeited;
these parties have also had returned to
them all the dues they had paid, say s19,-
$50 and also s2697 In profits less the for
feiture profits of $573 retained by the bank.
During the same period 1883 shares have
been retained, and the holders thereof
have received back all the dues paid them,
$376, ,250 and also all the profits credited to
such shares, say $ll4,507, no part Of the
cases.
A Comparison OF the Assets
with those of 1891 shows the largest In
crease yet reported in any year, namely,
t2,745, ,146; OF this increase 81 302, ,233 is in
loans on real estate and S7S, 1921 In loans on
shares. Out of 81, 4S4 members, the pres
ent number belonging to cooperative
banks, 1874 are borrowers, making an
average of about one In five. The number
Of real estate loans Is yS07 aud the amount
invested in mortgages of real estate 3d..
Oa3, ,402, an average of Sl335 10 each loan.
Real estate by foreclosure held by CO.
operative banks at the close of busi-
ness Oct 81, issO. amounted to........,. .s49,ss3
Ia 1891 IL had grown to................... ,557
In ls92 II had reached the s1m Of. ....... 9S,i
This statement shows an increase Of Is s
per cent. during the year 1892, or $50, ,924
1t also shows that real estate by fore.
closure has very nearly doubled in two
years IL is a cause of great regret that
the proportion OF the same TO total assets
is two-thirds OF ! per cent This result
Is far from encouraging, aud the Causes
which lie at the root Of IL ought to bs seri.
ously considered by all concerned In the
management OF these institutions.
A cooperative bank real estate mortgage
ought to be one OF the very best securities
for money loaned, and, II the valuation Of
the property were conservatively made, IL
would he. The fact that the principal OF
the mortgage is being reduced month by
month by the payment OF dues makes the
security more ample as time goes on, and,
II 1t becomes necessary to foreclose such
amortgage, the amount due thereon ought
20 be realized at the sale without difficulty.
Under these circumstances there could he
no reason for co operative banks TO hold so
large an amount Of foreclesed real estate
The fact that so large proportion VI
foreclosed property Is added year by year
TO the assets Of these banks indicate that
Too Little Judgment ls Exercised
In the valuation Of property offered as Sc
curity for loans; and the risk Of over.valu-
ation Is increased when bank seeks loans
on real estate situated at distance from
the place OF its organization. The prac-
tice Is strongly TO be condemned. II the
material for the formation Of a co-opera-
tive bank does not exist in community,
II ought not 70 be formed co operative
association is not a bank, and II needs ma
terial upon which to loan its money as well
n members to take shares and furnish
funds Both are essential requisites for
the successful working % the institution.
The prevailing principle of the co opera
tive system being mutual help no hank