The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1896-04-26
BY E. r. L. GOULD. Pr. D.

Belgium in 1885, 1t has had seven
years trial and is steadily growing in
favor. More than sixty companies are
now in operation and other countries,
notably France and Germany, are
seeking to apply the same system. This
measure is not socialistic, although the
loan capital comes from the general
savings bank. whose deposits the gov
eminent guarantees, and which is,
therefore, in a sense, an official insti-
tuition. But the loans are not made
directly II the people. but to inter-
mediate agencies which are RESPONSE
BILE to the bank.
There are four classes of corpora
fions, namely, joint stock and cooper
ative loan companies, and joint stock
and cooperative building companies
The difference between the loan and
the building company is that in the
former case the corporations make
loans to individuals, who select their
own property, whereas the latter buy
tracts of land and build houses and
sell them to acquiring purchasers. The
loan company represents the prevail
ing type of enterprise. An idea of the
working OF this law can best be CLEAN
ed by a concrete example, and in the
following statement joint stock loan
company has been selected as the
agency.
THE WAY TO FORM A COMPANY.
A number Of gentlemen of wealth
and standing come together in a COM
Inunfty and form a joint stock COM
pany for the purpose of facilitating
the proprietorship of homes for work
1ngmen. Let US say that there are
ten, and suppose that they subscribe
$4,000 apiece, making a capital stock
of $10I 600. Ten per cent of this sum
\ al la
Upon the security afforded by this I'M
called capital stock, to the payment
% which if necessary these
gentlemen are pledged, a loan is Sc
cured from the savings bank to the
amount of $4,000, or so per cent of the
unpaid capital A fund of SIS, 900 is thus
available. Workingmen are made
aware of the opportunities offered and
such of them as desire homes put them
selves in communication with the COM
pany. The latter requires that wagd
Garner must be able to pay down 10
per cent of the entire value Of the prop
erty he wishes to build or purchase as
a precedent to the company loaning
him anything. Let us suppose that a
workingman desires a property for
which he was willing to pay So 900; he
would be required to deposit 5000 at
the outset or to purchase a building lot
worth 5000. The loan company would
then advance him from this fund of
$4,000 already spoken of, $600,or one
third of the sum which represents the
unpaid value of the property. The COM
pany offers the worllingman choice
of plans of houses which it has Sc
cured from architects who have made
careful studies of tha living require
ments of wage earners. Every effort
is made to give a maximum of value,
hygenic and economic, at q minimum
price. Building now proceeds and
when the loan already made has been
spent and some tangible value created
the savings bank loans to the company
for the workingman upon a first mort
gage on the house and lot. the remain
ing $1,000 necessary to complete it.
THE PLAN IN PRACTICE.
When the house is built the wage
Garner entering upon its occupancy
chooses a definite period in which he
viii repay his obligations. In order to
carry out the purpose of this act an
insurance bureau has been created in
connection with the general savings
Gank. This bureau has distinct accounts !
and insures the lie of the borrower to
guarantee the reimbursement of the
loan in case of the death of the narty |
insured at any time during the period /
of liquidation. The workingman,
therefore, insures his life for the !
term Of years over which he desires to |
spread the installments-for example
ten, fifteen, twenty, or twenty-five |
years. To the premiums which repre- |
sent per cent per annum with Fairs !
life tables as the accepted basis of |
calculation, and 3 per cent for ex- |
penses, is added the annual interest /
upon the sum due and payable at / |
per cent per annum. The sum is di- |
vided into monthly installments. These |
are all the payments a man has to
make. If he lives out the period he
will receive his house: if he dies his |
family enters at once upon the possess
sion of the home. In other words. this
man has insured himself simply for a +
house instead Of for the usual paid up
policy or cash communication at the end
of an endowment period
Where death occurs and the home is
handed over TO the heirs of the de-
ceased, the policy is simply cancelled
and the transaction thereby ended
Should the necessities OF the wage
Garner require change of residence
during the time when he is paying for
his nome his policy always has an
equitably computed cash surrender
value. Should he default he NAV
within five months demand a resusci-
tatton of his policy upon payment of
the accrued premium, increased by
per cent interest. He is obliged, how
ever, TO undergo medical re-examina-
ton. As a matter of fact, where three
or four years payments have been
made before the workingman gets into
difficulties any individual or institu-
tion is perfectly safe in taking up his
obligations and making his payments
for hnl.
A workin; nan as old as ffty-five
years may begin the purchase of a
home in Belgium on this insurance
plan. OF course the earlier in life he
commences the lower the cost to him.
self. The law was intended to benefit
wcrkingmen solely, hence the limit to
the value Of a property, including both
house and land is $500 francs, about
81 100.
THE ESSENTIAL FEATURES.
The following features of this plan
need especial emphasis:
/. A loan company operating in the
manner described with a capital stock
OF 100000 can make ninety-two work
ingmen proprietors of homes worth
s., 600 apiece for each turn over of the
funds subscribed and borrowed The
paid up capital is very small indeed
namely one-tenth. Such is the machin-
cry of this law that it is possible for
ten men of public spirit actually put
ting UP $1,000 apiece upon which they
receive interest at a savings bank
rate. but also pledging their credit to
the extent of $4,000 each to keep on do
ing this work indefinitely
q Cooperation between the capital
istic and labor interests of the commu-
nifty is secured on plan not only hon
orable, but mutually satisfactory to
both parties in an economic capSa In