The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-01-31

safer business without it.. Loans will be
more carefully made. The expense fund.
losses, and amounts to a legal assignment
of a part of the principal. A halt should be
dvertes w fe part T 81 'f r poenr Nn
tenths. he said of the members of these
expense fund associations do not know
what goes with the expense fund, and they
are deceived by the apparently small
amount that they believe IS collected Tor
this purpose
Mr.. Macintosh asked as to the compare
tive profits of the associations with an ex-
pense fund and those without. Mr. Thomp-
son said that the shareholder in an assocla-
ton having such a fund would not realize
as large profit as If this slgnlrcant part
OF the shareholders money were not d.
verted to purposes productive only Tor nigh
ly paid officers. He instanced an association
of this class, the Equitable, which made
report to the Auditor of state last year,
in which il was shown that 5000 was ex-
pended in handling $4,000 and yet a divi,
dend OF Il per cent was dec,ared. ne say sdia
citizens, who were themselves deceived, ana
that the report is impossible on It's face. he
should know what the officers are drawing.
Mr.. Patton, who is a director of the FL
deity spoke in defense OF the fund as
handled by his company, but he did not ap,
parently make good his points. for the crowd
frequently laughed at his expense. His chief
argument was that without the fund the
borrower from an association who must stay
in does not fare SO well as If there We're an
expense fund. The gain, he contended' ac,
he realizes some of the profits of the Dor-
rover, unless the association has such
Mr.. Stotsenberg. Chairman Merritt had to
rebuke the audience several times In sharp
language for demonstrations during Mr.
MR.. FISHBACK WARNS UP.
Further Testimony of the practicability of
running associations without expense
fund was given by Mr.. Gutheil, of Win
chester. w. p. Fishback, of this city, was
called out, and did not omit the opportu-
nifty for some of his scorchfng epgrams on
the subject. He not an officer, he said,
in an association, but only a shareholder,
and is plucked with the rest of this class.
He declared that the original law did not
contemplate the great banking business
that has grown up in the form of building
and loan associations, and he contended
that such business is not authorized under
the law. He cited an instance of the great
revenues to officers, contrary to all lnten-
lions when the law was passed. He had
client who discovered that his money was
used with, that of others to pay large sai-
aries to the officers, and that even the Oh
rectors were each drawing $l05 a month.
The other officers drew $4,000 year He
argued that the committee in deciding upon
a report ought not to consult the benef-
Charles of such a system, as necessarily
count of its being thoroughly impregnated
with self-interest. The object of the bona
fide association, he said, is to build homes,
pays no taxes. He said he has some such
stock paying IL per cent. interest, and that
it makes him ashamed, W h the interest h;n
is permitted by law. Such stock, he said,
ought to be taxed. He denounced the prac-
tice of borrowing money to loan out again,
as not within the contemplation or con-
Mr. Irwin, of Rashvle, followed, speak
ing against the expense fund. Father
ODonaghue, of this city, spoke earnestly
and eloquently against the innovations
Aaxr lad ha Hl mol
law, divert!ng Ii from it's original and most
useful purpose of mutual aid i'll the build
ing of homes He said that capitalists are
taking advantage of the good name OF
building and loan associations to do a bank
ing business and to provide large salaries to
officers. He characterized their methods
sharp practice 1t is, he said, an excre-
scence, diversion that ought to be cut off
by legislation. c. A. Bookwalter closed the
line with the general trend of the after
noon. He read a column of computations
the associations having expense funds are
charging an enormous percentage for hand
ling the money OF the shareholders. There
are, he admitted, few exceptions where
the salaries are not high and the balance is
turned back in the general fund for the
benefit of shareholders
Mr.. Bosom, of this city, replied to the
assaults of the afternoon. He was assisted
in the defense of the expense fund by Mr.
result of the committee hearing was plainly
a refutation of the argument of the State
associations that If the expense fund is
abolished the smaller associa lions will have
to go to the wall. 1t was shown time and
again that the most of these do not have
an expense fund, do not want one and do
not need one. 1t was shown that the ex-
pense fund is diversion of capital stock
for the benefit of the paid officials, and
that the shareholder in way profits by
the system of paying expenses out of his in
stallments instead of the earnings, as ali
shown that the shareholder is not protected
from the avarice of the management of the
associations who word their reports as
to avert knowledge of the amounts paid to
the officials. One association makes it's re-
ports in five parts, upon five series, paying
the officers high salaries in each, and
amounting to nearly $4,000 in all. expended
for management. 1t is probable that the
committee will report favoraby upon Mr.
Stotsenberg's bill.