The Indianapolis journal., 1897-01-18
BUILDING AND LOAN.
An Argument In Behalf OF the state
Associations.


notice in your paper. as well as others.
that great many comments against state
building and loan associations have been
made by papers and individuals. and il
would appear that some are serious and
mean we'll some are prejudiced. and some
very ignorant. Let us not be too hasty and
look before we leap and see if we are bene-
hted or not by such associations. All real
ize that many homes have been built by
this method. and the question arises, why
not let the good work go on?
Local and state associations conduct busi-
ness generally under the same methods. To-
calls combining their operations to their own
immediate cities or towns. while state asso-
Citations are generally ready to loan money
all over the State. Their responsibilities
are identical. The majority of locals are
serial, while the majority of state associa-
tions are permanent. l think statistics
would show that the average number of
shares held by individuals is less in state
than in local associations showing concu-
sively that the money classes do not control
state ,any more than local associations.
Also, the per cent. of locals paying weekly
is very great, while that of state associa-
tions paying monthly is greater thus COM
pelling the stockholders to make more pay
ments, the difference being equal TO one
monthly payment more per year than in
state associa atoms. In voting about half of
the locals allow each member one vote re-
gardless OF number of shares held, while
nearly all state associations allow each
member one vote for each share OF stock,
thus allowing the stockholders to control
the state institutions. as their proportion of
stock TO members is less than locals Many
locals loan money to other than stock
holders: associations
small towns could not support or be
materially benefited by locals. but state
associations are enabled to loan money in
such towns, which has proved a blessing.
Would any sane man expect agent to
travel over the State soliciting members
and loaning money for his health? He and
the men who have the ability TO safely
| manage such institutions must be paid.
What effect has it on locals? None. Why?
Because locals never were and never Will
| be able to meet the requirements of the
| borrowing members, because they have not
the territory from which TO get capital,
with few exceptions. in very large cities.
Borrowers are always plentiful. If you
want to have money to loan IL takes hust-
4 ling to get that money. After you get il
\ IL takes men of known ability and expert
| ence TO handle ii safely and judiciously:
| they must be paid for their services, and
| most of the fees they get come from the
| borrower in the way of expense etc. and
| not out of the expense fund. as some are
| led to believe. AS to the rates of interest
| and premium charged. there seems to be
( lower the loaning rate you cut OF your
| nose. Why? Capital can always find a
| good and profitable investment. If you
| offer an n0ucement to capital ii responds
| If you do not il goes elsewhere. State as
| sociatiOns usually issue paid-up and pre-
| paid stock and pay fair dividends: any
thing less than is now paid is no induce
ment Why not pay 1t. you pay on in
dividual straight loans the same, if not
bonds. At present loaning rates 6 per
cent. interest and per cent premium)
| these dividends on paid-up and prepaid
stock can be paid easily and also mature
| the inStallment stock. earnings on such
| paid-up and prepaid stock contributing to
| the earnings of installment stock helping
| to mature it. Some say loan at per cent.
| interest and per cent. premium Now. If
| you do. the earnings are less III you can
not pay the management fair wages for
| their work they won't manage, Tor men OF
| such ability and responsibility don't have
to- Leaving this out however. if
on paid-up or prepaid stock the installment
stock is the sufferer and will run longer at
Sand than and per cent. and this Is
the stock that would suffer. which is gen.
| orally borrowed upon. If you don't pay
| the paid-up and prepaid stock "A fair dvi-
| dend men will not invest in it: If they will
| not invest where will you get your money
| to loan. as the instaliments are not suf-
| ficient to meet the demand? If you have no
money to loan. how do you expect to get
view TO borrowing? ! know of an associa-
| ton that claims to loan at and 2. Is
| this what you want? Well. We have it.
| Let's see. There is no inducements; they
| have been in existence over a year, and
| have sold but 1000 in paid-up stock: most
| of it's stockholders (about 400 shares) took
| stock to borrow. How long at this rate will
| it take to make their loans? Where is the
| benefit of and rate over "A and .
| when the and cannot get money? Ii
| sounds well. but money talks. and If they
| haven't the money l cannot see that they
| benefit anyone. Capital responds to the cal
| when you tickle il; if you tickle IT with a
| fair rate of interest you will have money
| to loan: then you can sell stock and make
| loans, sell more stock and make more
| loans: the workingman is enabled to own
| "a home and he happy and croakers VINO
| are ever ready TO depreciate any successful
| business never own property; but tnoSt
| who are being robbed have homes. Ex-
| plain how the man who says he is able to
| run his own business and not be robbed 10y
| building and loan associations never owns
| property while those who, as II is alleged
| by such croakers. are being robbed accumu
| late property and prosper Let all stoT
| croaking and push all local and state as
sociations Help each other. and do moi
| allow trusts and banks to dictate and cause
| us to become blind to our own interests.
GEORGE II. PADGETT.
| Princeton Ind. Jan. 16-