Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1897-08-10
SAFE INVESTMENTS.
Institutions That Enable Men and
Women TO Invest Their Earnings
ProfitubIy

Notwithstanding the fact that there
are 5000 building and loan associations
IN this country, with assets OF not less
than NooW0,e0, there are many people
who do not know what a building and
loan association is.
Perhaps one OF the best definitions
That can be given Is the following from
tho American and English Encyclopedia
OF Law: According to this authority,
building and loan association Is ian or
ganization created for the purpose Of
accumulating fund from the monthly
subscriptions or savings OF its members.
to assist them in building or purchasing
Tor themselves dwellings or real estate.
by loaning them the requisite money
from the funds OF the society upon good
security"
That is n concise definition, but Il
VIII not give the uniformed more than
general idea as to what Is I'm fact "a
building and loan association.
Let US see II we cannot make the mat
ter plain All such associations are to
be considered from TWO standpoints--
lrst' that OF the investor who employs
the building and loan association as "A
means OF saving something each month
from his income; and second. from tho
standpoint Of the borrower, who obtains
from the association certain sum OF
ih1hN9 Aoi Aut lNiHtNN OF Duflulng NM
self a house. and pays back the loan in
monthly instalments.
In point OF fact both the investor and
the borrower are substantially on the
same footing. Both are stockholders In
the association. both are using II for
the common purpose OF saving some
thing from month TO month. In the one
case matured stock will mean a snug
sum Of money. and in the other house
and home paid for.
But let us consider each I'm it's order.
First. as an investment Nothing. ex-
cept government bond can be more
secure than stock In well-conducted
building and loan association. The
money accumulated by such an asso-
clation H. loaned on real estate, usually
at about 60 per cent. OF its assessed value.
and the borrower begins after the first
month to pay back the loan. so that
every month the loan becomes more and
more secure. All building and loan
stock, therefore. is secured by real es-
tate and building and loan stock IS bet
ter than an Individual real estate mort
gage, for the simple reason that tho
stock is mortgage on many pieces OF
property, rather than upon one and tho
association might by false title or other
wise lose several pieces of property.
without materially affecting the value OF
its stock. This is enough to show that
the investment Is entirely safe. II tho
association be judiciously and honestly
conducted.
It Is also a profitable investment, and
the figures show that almost all we'll
conducted associations make a profit Of
at least 10 per cent. per annum.
From the standpoint OF the borrower.
the association Is a thing to be en-
couraged. as It helps the poor man to
save enough from his earnings from
month to month eventually to pay for
his home. lie pays n hieh rate OF in
torest, il Is true. but he pays IL IN such
way as not 10 feel Il materially, and
by taking out stock he participates I'm
measure In the profits OF ihe association.
and when His stock is matured. tho debt
is wiped out. II a man owns "A lot he
may build a house thereon. and pay for
II on the building and loan plan, az
about what he would haze a. Ias ll fs..
from month TO month for the s,ne house.
Mr. Carroll j.. Wright. Commissioner
Of Labor, in a recent statement, says
that building and loan ass J,,iations have
helped TO secure in this country about
400 $50 homes, and Il IL safe to say that
without the aid OF such associations,
these homes would have never been built.