The watchman and southron. [volume] (Sumter, S.C.) 1881-1930, 1897-02-10
THE BUILDING AND
LOAN BREAK.
History of the Troubles of the
Associations in Tennessee.

KNOXVILLE. TENN January 27.-A
year aud half ago this city boasted of
ten prosperous building aud loan asso-
Citations. whose operations we're as efec-
tive as those of any other factor in
building up the suburbs Of the city and
securing to wcrkipgmen homes. and to
many with small monthly sarpluses To-
vastmsnts which yielded handsome
profits. The Industrial development
which took place all over the South had
been especially evident here in the
period between 1888 and 1892. and
during that time these associations for
lending money in small amounts to be
rapaid on inssalnents found lodgmeut
io considerable oumber.. Their assets
and liabilities year and balf ago
amounted to something over six million
dollars. Principal among them vas the
Southern which vas, operated on an ex-
sensive scale, being national" associa-
ton with agents to be. found 10 every
Southern city Of any importance.
1t had pushing managers. and 5000
took the. lead of all the associations
of the South, aud its loans finally reach.
ed the three-million mark.
Three years ago the first suspicion
that everything was not right with the
Southern was felt when one of the off
GERS who had been ousted from his place
secured stockholders meeting where it
was disclosed that the salary list was
enormous, several Of the officials being
paid $4,000 year. aud the directors
themselves, for the use Of their names
and occasional attendance upon meet
logs, were paid $lo0 moOth. Toere
was evidently something s"rosseu in
Denmark" /" bat those vho had charge
of the association managed to allay
suspicion, aud the business went on ap-
pareotly with profit A large Office
building wss erected. aud some forty
persons have been employed as clerical
help.
Onl7 two of the other associations 10
the city are national" aud they have
not done nearly SO extensive a business
as the Southern. Some of the local
associations. bowever, bad the large
salary evil. aud they suffered from it
when the payments by borrowers began
to fall of. as has been the case during
the last three years. They have also
loaned money on property which has
since deprecated 10 value very much,
aud to this, as we'll as other causes,
mentioned below. the recent disasters
may be attributed.
The frst of the local associations to
fail was the Mechanics. About a year
aud half ago an application by one of
the stockholders for receiver was
granted. In winding up the affairs of
the association litigation with one of
the borrowers went from Court to Court
up,il it was heard in the Supreme
Court. The poiut made by the attor-
neys for the debtor was that the money
loaned him bad not been put up at auc-
ton and bid off. and the Court was Of
the opinion that the point was we'll
taken aud the debt was discharged.
This at once created panic among the
stockholders of the other three asso-
ciatioos here, which had no provision
for auctioniog the money loaned
Other similar suits to avoid the pa;-
ment of dues was filed, aud the share.
holders made runs on the associations
to withdraw the money they had put
in Endless litigation was the result,
and the disaster widespread.
All the Tennessee building aud loan
associations cane under the ban, so to
speak. aud dues we're not paid and de-
mands for Withdrawals became more
importunate The elimination of
these troubles has been reached during
the last month. when the Franklin.
Workingmen's, Savings, Southern and
Rockville went into receivers hands,
and suits have been fled against the
Covenant aud Peoples, Which will, no
doubt. place them in the same position
withiu few days Only two associa
tious are left out of teu. and the loss to
stockholders and the hardship upon the
borrowers consequent upon the nding
I'D of affairs is very cousiderable.-N.
Y. Evening Post.