The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1894-04-13
EXTORT HIGH RATES
The Assembly Condemns
Foreign Building and
Loan Associations.
TO BE REGULATED BY LAW.
They Will Be Controlled by the
Banks and Insurance De-
partment.
10 BE REGULATED BY LAW.
Special to the Jersey City Neus.

committee which was appointed by Speaker
Holt early in the session to investigate the
so-called "Nationaln Loan Association, do
ing business in the State, made its report
yesterday afternoon. The committee was
appointed at the request of the Building and
Loan Associations of the State, which
claimed that the inducements offered and
the interest promised by these National As
sociations were too large to admit of a safe
and legitimate business.
Mr.. Eisele, who is an expert in such mat
tiers, was Chairman of the committee, and
the other members were Messrs. Duncan,
Zabriskie, Wilbur and Carroll.
The committee investigated the Republic
the Eastern Building and Loan Society OF Phila-
deIphia and the New JERSEY Building and Loan
Investment Company of Trenton These are
the findings:-
That they discriminate unjustlY against and
extort unusually high premiums fromfthe bor-
rower; appropriate a large amount OF money
number of months and then are unable to con-
tinue payments. thereby losing the amounts
already paid, but yet work in compliance with
the present law. Another objection urged
is that two of the three companies
above named, the Trenton company being
the exception, are composed or non-resi-
QeHt anu U -Gdx auA iuCOt POt ~
tors, organizing solely for their own profit, and
invest the money outside OF the State. aud
where they can get the highest rate or pre-
MUM and interest, which local associations
cannot do Another objection Is thai there is
NO accounting Of expenses and salaries. which,
it is thought, are larger than they ought TO be.
The committse recommends that legislation
be had putting ell associations on a uniform
basis, the same as savings and State banks, re-
guIating fines. forfeitures, premiums and me-
u rnCas Il the super, SUPERVISION 81 tbs BANKING and In.
surance Department. Action IL drawing the
bill was deferred uatil the meeting Of the
at its coming session in July.
THE TESTIMONY TAKEN.
George j. Kilgen. attorney for the Re-
public Savings and Loan Association, Office
No. s Exchange place, Jersey City, testified
before the committee that their plan of bust
ness was mutual and all profits were divided,
the officers all being wealthy men, who gave
their services without salary. Shares OF
stock were sold by agents, who received
sthe first months subscription" The local
treasurer received IL per cent. of the re-
| ceipts. Speaking for forfeitures. Mr.. Kilgen
| testified that if a borrower failed to pay af-
ter three months the amount he already paid
was forfeited.
When asked what it would cost to secure a
loan of 1000, he said an appraisers fee OF
SO would "a to be paid, the interest
/ would be IS a month, premium, 81 a month,
| total, $11.50 monthly. This sum must be
paid monthly for IA months or twelve
| years, making a total payment of S1,656.5O,
| at which time if the association had no losses,
the 81, 900 loan would be cancelled. A non
| borrower pays in $500, and at the end of
twelve years receives $1,000.
The officers of the company are:-Presi-
| dent, Alex. A. Forman, New York City;
| Vice Presidents. L. G. Gadd, F. E. Case, Jr.
Treasurer, E.. w. Scarborough; Secretary,
F. o. Case, of Brooklyn.
HI N ASSOCIATION.
William s. Gummere and Lawyer B. b.
Hutchinson of Trenton. counsel for the New
| Jersey Building and Loan and Investment
| Company, told the committee that their
| plans were somewhat similar to the Repub-
| lie, but could give no information regarding
| the expense of conducting or salaries paid or
any other matters, but agreed that some act
| should be enacted for the better protection
of all associations. He said their officers
| and directors were all New Jersey citizens
| and men of wealth and business experience,
| and that all of their money was invested in
the State of New Jersey.
Assemblyman Glaspell said he was an Off
Ger OF the State Mutual Building and Loan
| of Camden; that his association was just the
| same as the local, with the addition of estab-
| fishing various branches in the cities of the
State; that all borrowers were treated alike,
| q uniform premium of rate and interest wa
charged, and all loans and shares matured
after eight years.
PHILADELPHIA HEARD FROM.
Judge Clemmer of the Eastern Union of
| Philadelphia, which does considerable bust
ness in this State, said.-
II think our plan is as good as the Repub-
lie Building Loan. If a man wants a $1,000
loan it costs $3.50 a month and it takes
ninety months on a TX contract; the pre-
MUM is $40, IS interest and the balance In
stalments on his shares, $3.50, i. g., rs cents
per share per month. We guarantee it te
run out IN ninety months. Surprising there
are losses, our plan is that the borrower is
entitled to the return of his mortgage at the
end of the period. We say that the investor
shall not be compelled tc pay more than the
ninety months payment. The borrower Is
no worse off than the investor. He only gets
earnings up to the end of the ninety months. =
There are some features which should be
modified. and render it alike equitable to the
society and to the withdrawing member. !
/ do not think he should be eaten up or be
put in q position where he will get more than
his just proportion compared with the man
who comes in n pays his way through.
This membership certificate does not repre-
sent a loss to the member. If he natures his
stock he gets his withdrawal certificate IN
/ connection with it. The dollar share he
| pays to become a member if he natures his
stock is added to the mature value of his
stock.
Lawyer Gummere of Trenton said that his
society did not object to legislation. 1t only
asked that the committee would submit the
bill to the various associations.
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