Omaha daily bee., 1895-11-03
COOPERATIVE BODYBUILDING
Urgent Demand for Official Supervision in
Iowa.
RECOMMENDATIONS OF STATE AUDITOR
calculations On the Cost of II Home
The Home Owner and the Ten
ANITA Common Fiction
Growth in Jersey.

The costly experience Of the people of
Iowa in dealing with speculative building and
loan associations Of which Richmond's Union
Of Des MOines was the most conspicuous
example, promises to bring about the enact
ment of adequate laws for the government
of all associations. At present there is prac-
tically no legal restriction on their methods,
no provision for supervision and examination,
and no penalty for a species Of swindling
which obtains a foothold under the cloak
Of cooperative home building.
State Auditor Mccarthy urges, in his bien-
NAL report, that the next general assembly
should enact some law governing building
and loan associations, and it is quite probable
that something will be done in that line
this winter. Mr.. Mccarthy says:
Il am convinced that the interests Of our
citizens, who are investing in most cases
their hard earned savings, and in many in
stances at a sacrifice of the ordinary COM
forts Of life, should be protected by some
good, wholesome law, bringing institutions
of this character under state supervision.
During the past few years many savings and
loan or building and loan associations have
been organized in this state. The aggregate
assets of these financial institutions amount
now to many millions OF dollars. They are
likely TO increase in number and volume OF
business In the future, If proper and suitable
laws are enacted by the Twenty-sixth gem
eral assembly providing the manner OF or
ganization and the necessary privileges and
powers for the proper conduct Of the bus
mess, to the end that these very necessary
and important financial institutions may be
safe, stable and profitable for all persons
who may become members. Savings and
loan associations occupy a field in finance
which is peculiarly their own. Their true
mission or legitimate business is that of ac-
cumulating a loan fund from small sums of
money paid upon stock at regular periods
and the making Of loans to their members
from this fund for a long period Of time,
which loans are to be repaid monthly,
| or nthar inuta La, ante tptfI tho eNnol K. 49,
tured and the loans Cancelled. This field is
one that ordinary national, state or savings
banks cannot safely occupy, because they can
not make long time loans with short time
deposits. 1t is quite evident that there is a
great demand for long line loans which
cannot be supplied by banks, and that this
demand must be supplied, II at all, by saw
ings and loan associations. Since safety and
stability OF capital are Of paramount impor-
tance in all financial institutions, since the true
mission of savings and loan associations is to
make long time loans, and since these asso-
Citations cannot make such loans safely on
short time deposits any more than banks can
do so, it therefore follows that all such asso-
Citations must incorporate in the plan of
business such efficient, reasonable and proper
safeguards as will, in the conduct OF their
business, protect the association from sud
den Withdrawals or impairment Of their capt.
tai. Good laws have been enacted by Min
nesota, Illinois, Ohio, Wisconsin, Missouri,
Nebraska and many other sister states, and II
would seem high time that the state of Iowa
should also enact a suitable law"
The code commissioner Of the state have
anticipated the recommendations of the audit
ors and have prepared a very stringent bill,
which they will recommend to the Legislature.
1t requires that companies may begin bust
ness when 8 per cent OF the authorized cap
ital 10 subscribed. The articles Of incorpora-
ton and bylaws must be approved by the
executive council. The auditor may require
amendments, and any association failing for
thirty days to comply with such requirements
shall forfeit its certificate. The expenss Of
each association shall be paid from a fixed
charge, provided in the articles Of incorpora.
ton, Of not 70 exceed IS, or such less sun