The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-01-28
A Word for the Expense Fund.

To the Editor of the indianapolis Journal:
In a few words, defending the expense
fund building associations, l would, as pre-
liminary. call attention TO the fact that
each of the articles recently published in
our newspapers abusing the system comes
from a stakeholder who has Withdrawn
from his association within two years, or
before he has been a member long enough
to appreciate it's benefits. No wall nor
abuse comes from members of three or
four years standing, of whom there are
thousands in this State. There are two
sources from which TO pay current eX-
penses, from assessment on stock and from
general profits. Each has its advantages
and disadvantages. With expenses paid
from the profits the stakeholder is always
certain to receive upon withdrawal as much
at least as he has paid into the association.
He has the advantage of being able to pay
in a few dollars monthly, a deposit which
no bank would receive, and receive, on
withdrawal. his full amount of deposit, even
if it be within three months from first pay
ment. But. on the other hand, the system
is discriminating. Who is the real sufferer?
Certainly not the one who withdraws his
stock after six or light or ten months, and
before profits have accrued TO it. But the
good member. the one who stays. to matur-
ltN-ne II Is VINO supports anu lOSltlS liz
association and holds il on its feet; he il is
who should receive such favors as the as
ISOLATION IS able to give: And he 1t Is who
must back the association for the accom-
mediation of those short-lived members who
use the association for a safety deposit and
slip away, under time, and avoid any snare
OF it's expenses.
No system of mutual gain and liability is
right or just which has not the element OF
share and share alike. and this system has
not such element. Expenses for the first
year or perhaps two years OF the company
existence would necessarily be met with
borrowed money, which would have TO be
repaid at some time. when shareholders
joining the company after such expenses
were made will be expected to aid in de-
fraying such indebtedness by rawiEg on
their profits, making such q system unequal
from the beginning. Then. the expense
fund. Many are Mortified when the expense
fund is mentioned, unless In the most bitter
terms. Yet there must be some good in a
system which has operated so successfully
and given homes to 10000 families within
this State alone. The complaint brought
against the expense-fund system is that
Withdrawing members are made to suffer.
Is il true? The distinguishing characters
tic OF building and loan associations is that
of mutual interest Each shareholder
agrees and expects to continue his stock in
the company until accrued .prohts snail
have matured il. or upon withdrawal before
such time TO make such forfeitureS as TO
cover his pro rata of expense during the
time his stock remained in force. Under
an organization of this kind withdrawing
member cannot claim TO he unjustly treat
eel. Expenses DelnS primary rather tnan
incidental. must be met when incurred.
from the inception of the business. and i'm
case such member withdraws before his
profits shall have made up the expense as
he cannot reasonably complain.
As compared with the "expense-from-prof-
it's" system. the expense-fund system is di-
rect. equable and fair. The earnings are as
large. Excess of expense fund is turned to
loan fund and increases active capital. In
| creased dividends. from undisturbed profits.
offset assessed principal. Expenses are met
! as soon as they accrue. without any tempo