The Norfolk Virginian. [volume] (Norfolk, Va.) 186?-189?, 1896-04-30
The Difference Between the Loan and the
Building Company Shown BY Mr.. Gaa'd.
MOST ESSENTIAL FEATURES NOTICED.
The. Adoption OF the Belgium Plan
by Americans Ought Not to Ere
sent Any Serious DificnitiesIAp'
proved by Experience, There ca"
re NO Doubs orIts Prnctieabiiity.
BY E. R. L. GOULD. PHI. D.

Is The cheapest, faireSt anu hos' Guy
tive scheme for facilitating the proprie.
torship OF homes amongst people of
small means was originated in Belgium
An 1889. 1t has had seven years trial.
and is steadily growing in favor. More
I than sixty companies are now In opera
ton. and other countries, notably
France and Germany. are seeking to ap>
( ply the same system. rms measure IS
q not socialistic. although the loan capt.
tai comes from the general savings
bank, whose deposits the Government
guarantees, and which Is therefore In a
sense an official institution. But the
loans are not made directly to the pco-
pie. but to intermediate agencies. which
are responsible to the bank.
rs There are four classes of corporations,
\ namely, joint stock and cooperative
loan companies, and joint stock and CO.
operative building companies The diff
$ ference between the loan and the build
ing company Is that in the former case
s the corporations mako loans to individ.
uals who select their own property.
1; whereas the latter buys tracts of land
( and build houses and sell them to ac-
I qulring purchasers. The loan company
represents the prevailing type of enter
prise. An idea OF the working OF this
I law can best be CLEANED by concrete
example. and in the following statement
{ a joint stock loan company has been Sc
THE WAY TO norm A COMPANY.
Ia A number of gentlemen of wealth and
standing come together in a community
( and form joint stock company for the
purpose of facilitating the proprietor
I. ship of homes for workingnlen. Let us
say that there are ten. and suppose that
: they subscribe $4,000 apiece, making
q capital stock OF 100000. Ten per cent.
otithis sum is paid up: the remainder
Sa mot no1l lad lx..s t,rtt ff,N..l
Il ed by this uncalled capital stock, 10
the payment of which IL necessary these
+ gentlemen are pledged, a loan Is secured
a from the savings bank to the amount
4 of $4,000, or 80 per cent. OF the unpaid
capital, A fund of s55.000 is thus avail
able. Workingmen are made aware of
q the opportunities offered and such of
them as desire homes put themselves in
communication with the company. The
latter requires that n wage Garner must
q be able to pay down 10 per cent. OF the
entire value of the propertv he wishes to
y build or purchase as a precedent to the
4 company loaning him anything. Let us
4 suppose that a workinGman desires a
property fox which he was willing to
pay $4,000; he would be required either
to deposit 5000 at the outset or TO pur-
81 chase a building lot worth 5000. The
y loan company would then advance to
4 him from this fund OF s55, 900 already
which represents the unpaid value OF
the property. The company offers the
working man choice of plans OF houses
which 10 has secured from architects who
have made careful studies of the living
requirements of wage earners. Every
effort is made to give a maximum of
vaule, hyg!enic and economic, at mimi
muns price. Building now proceedssan
when 1.-THE loan already made has been
spent and some tangible value created,
the Savings Bank loans to the company
for the workingman upon first mort
gage on the house and lot the remain
eng $1,000 necessary to complete It.
THE PLAN IN PRACTICE.
4 When the house is built the wage earn
er entering upon Its occupancy chooses
definite period in which he will repay
his obligations. In order to carry out
the purposes Of this act an insurance
bureau has been created in connection
with the General Savings Bank. This
bureau has distinct accounts and insures
the life of the borrower in order to guar
antee the reimbursement of the loan in
case OF the death of the party insured
at any time during the period of lquida-
4 ton. The work!ngman therefore !nsures
his life for the term of years over which
he desires to spread the installments-
for eSampie-ten. fifteen. twenty, or
3 twenty-five years. To the premiums
H.. IN III
mum with Fairs life tables as the &C.
4 cepted basis of calculation and 3 pc,
cent. for expenses, Is added the annual
! interest upon the sum due and payable
g. at per cent. per annum. This sum Is
divided into monthly installments. These
IS are all the paments a man has to make
y II he live out the period he will receiy,
his house: if he dies his family enters al
once upon the possession of the home
In other words. this man has insured
himself simply for a house instead Of
for the usual paid up policy or cast
communication at the end of an endow
ment period.
59s Where death occurs and the house {,
! handed over to the heirs of the decea sed
the policy is simply cancelled and tn,
transaction thereby ended. Should thu
necessities OF the wage Garner REQUIRE 9
4 change of residence during the tim,
1 when he Is paying for his home his poli
! cy always has an equitably computed
cash surrender value. Should he de-
fault. he may within five months demand
resuscitation Of his policy upon pamenr
& Of the accrued premium increased by
8 per cent. interest. He Is obliged. how.
ever, to undergo medical re-exam.na
81 ton. AS matter of fact where three
or four years payments have been made
= before the workingman gets into dim
cElties any individual or institution /,
perfectly safe in taking over his obltea
; tons and making his payments for him
a workingman as old as fifty-fv,
years may begin the purchase of a hom
& IN Belgium on this Insurance plan. O
{ course. the earlier in life he commence
4 the lower the cost to himself The Ia N