New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-02-28
SAVINGS IN BAD HANDS.
BANK sUPERINTENDENTs COMMENTS
ON NATIONAL LOAN CONCERNS.
ASSOCIATIONS WHICH PAY SOME MEMBERS AT
THE EXPENSE OF OTHERS AND THE
REPORTS OF WHICH ARE
MISLEADING.

MISLEADING
Albany Feb. 27.-An interesting report on the
operations of the cooperative savings and loan as
sociations for the year 1896 made public to-day
by Frederick ID. Kilburn Superintendent Of the
state Banking Department. There are SSS savings
and loan associations and twenty-five building
lot associations operating In this State OF the lat
ter twenty-one in Monroe County. In his
recommendations covering the supervision Of the
building and loan associations. Superintendent Kill
burn says:
Il think some action ought 10 be taken which will
give the superintendent of this Department ade-
uuate power in dealing with The associations and
which will make il impossible for them TO incur the
large expenses IN which many OF them indulge.
and which will insure to great degree as pos
sble tho protection OF their members. respect
fully suggest therefore. that the law be so aeueu
as to require that the liability OF any ASSOCIATION 10
its members never be less than the amount
paid by them IN dues and that whenever II appears
that the assets OF an association are iAsuihciehi 10
nav this liability fl shall be deemed insolvent, and the
superintendent OF Banks shall report the TACT 10
the Attorney General. who shall then institute such
action or proceedings against such corporation as
Is now authorized in the case of insolvent corpora
lions 1t is further recommended that express
statutory prohibition be made restraining all as
sociations Of this character from scaling their la
bies TO their shareholders for the purpose Of ere
aing a condition of solvency except upon the con-
sent and approval of the Superintendent OF Banks
The assets Of the National loan associations
operating in this State are Slscs73ol. and of the
local associations SSG.i529l7 The National associa-
tons have SlS.S5S.l9l loaned on bond and mortgage
ard the local associations $l 1920 The amount
due shareholders from the National associations Is
$l4S002ss and frcm the local associations s29i1,GS'
The National associations have N.51S7lJ In un-
divided earnings and the local associations nave
s2OSSSS9. The National associations had s6SSO4S
cash on hand on January and the local assoca-
tons had 81 1892
o s,xrn Niace
OF building and loan associations, known respect
lively as locals and Nationals. The former con-
fne themselves in their membership and invest
menis within radius of fifty miles OF the home
Office limit payment of salaries 10 one or two ndi-
viduals in small sums. and. their shareholders
being known to each other and in touch with the
management. substantially all participate IN the
business and become more or less familiar with IT.
Most OF the associations known as Nationals
operate in much wider field. many of hem having
members and investments in several States OF the
Union This scattered membership. with the faci
that the shareholders are unknown TO each other is
a bar 10 any concerted action by them with reference
10 the mnagemeni of their respective associations
generally sending proxies TO the ofacers TO repre-
Mt them such occasions. The effect Is 10 en- |
;aat these are practically seifcontinuing and also
only self-accountabse Often the expenses OF man
ment are entirely out OF proportion 10 the p'ont
laws provide for free withdrawals meaning the |
return 10 4 shareholders OF the entire amount paid |
IN by him. together with stated increase of profit
on TIE same REGARDLESS Of the amount earned OF Of
The losses paid. This result in paying those who do
with9ra.. j. 10 the detrimen, Of those who remain.
y have IN mind an association whose total profit |
receipts from all sources, including fOrfeturcs. from
the date OF its organization 10 September last. |
period OF than four years. amounted upward
OF $4,000. It's operating expenses for the time
Were upward Of $500 .eaving the profits for
the entire time little less than 5000 or less than
average OF one-ha.f of per cent Of profit per year.
During that tire had paid in dividends upward
Of S2s 900 and credited 10 shares earned upward of
sl2 roo additional. making in all than $40 900
thus declared paid in dividends"
The following is table OF interesting items taken
from the report of the National and Local associa-
lions operating in this State: