The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1897-07-30


DETROIT, July 29.-At the session of
the United States League of Building
and Loan Associations to-day. D, Ed
ridge, Of Boston, gave flew notes on
the management OF a cooperative
hank" The authority to make loans
on the part of the secretary of Coop
eratlye bank should be exercised with
extraordinary care and great wisdom.
Affairs in this line ought to be so con-
Quoted that II question of proposed
loan reach the directors that would be
presumptiye evidence that 1t had passed
the ordeal of the secretary's scrutiny
and the committees examination. A
secretary, II he is good manager,
will only bring before the directors for
their action matters OF superior impor-
lance, settling all others himself, but he
should in no case so beyond the limits
permitted by his directors. The speak
er gave his ideas as to the routine
management OF an association by its
secretary, spoke of the banking OF the
funds, the discharge OF mortgage. re-
newat OF insurance, rental of property,
payment OF money or Withdrawals, and
matured shares, and many other exig-
encles in connection with the affairs of
a cooperative bank"
"The rights and duties of building
and loan association stockholders and
their relations to creditors" was dis
cussed In a paper by A. j. Duncan, of
Columbus. deputy inspector OF Ohio
building associations, and brother-in-
law OF President Mckinley.
He said that the purposes of his adj
dress was to stimulate, among those In
terested in the maintenance OF the orig
inal principles upon which building and
loan associations are based, inquiries
as to present rights and duties OF
members and their relation to creditors.
Such increased interest. he asserted,
with It's accompanying broader under
standing OF rights. privileges and du-
ties, would be the inspiration of more
favorable legislation, and the best de-
tense against inimical laws. "At no
time" said the speaker, has the public
demanded more stringent legislation
and protection against visionary and
dishonest schemes under the gulse of
building and loan associations than at
present"
Mr.. Duncan commended the simple
contract provisions of the original
Greenwich building and loan associa-
ton, organized in 1909, az a true test
and reasonable guide for building asso-
Citations. and one which the courts Of
England and America are disposed to
recognize in interpreting subsequent
legislation and decisions on these sub
jects.
The right of member to borrow on
his stock or to receive an advanced
loan upon his shares might be called the
cornerstone Of the system and any de-
parture from this fundamental princi-
pie was destructive OF the whole
scheme. The decisions OF our courts
were uniform upon the point that the
loan Is an advanced payment upon the
amount of stock which the member
would receive when the share is perfect
ed, and to the payment of which stock
the member is bound.
The general rule Of allowing directors
to determine the amount to be paid to
Withdrawing member had been n
stumbling block to the associations.
The Ohio law, said the speaker, re-
qured an annual distribution, to be
placed to the credit OF the members ac-
counts. thus placing. the associations
upon the same basis In this respect as
other financial institutions.
Owing to the peculiar nature OF the
building association business. receivers
had to be allowed great discretion in
settling claims in cases Of liquidation
or insolvency and the line of action In
such cases should be modified accord
ing to circumstances and the statutes
Of the various states. In conclusion,
Mr.. Duncan urged strict compliance
with the foundation principles OF build
Ing associations and closer Observance
OF state statutes relative thereto.
The service and influence of our
state leagues" was discussed by Hon.
James NJ. Clarency, OF Philadelphia, He
spoke particularly OF the state leagues
influence upon legislation Affecting
building associations, and gave 1t az
his opinion that every state should have
a specific building and loan law and all
societies be operated under 1t. Our
aim In Philadelphia" he said, has been
TO keep the associations purely, even
severely, local, that we might build up
a system in which the local committees
would become interested, and thereby
lessen the possibility OF failure, either
through defalcations or unwise Invest
ments." He advocated the election of
at least one first class building and loan
man to every session Of the different
legislatures. Organization by building
associations for legislative purposes has
also been suggested. "Once judlclous
building and loan associations are plnc-
ed upon the statute books" concluded
Mr., ClarenCy, the state leagues should
sec to II that no speculative band be
allowed to alter or revise them for gain
or any Interior purpose"
Albert Barnes, of Decatur, ILL.,. treas
urcr OF the Illinois league, read pa
per on "Apportlonment OF profits" He
condemned the practice OF app0rtiOning
at any time more profits than had actu-
ally been earned and showed that unless
an association had nm ample contingent
or reserve fund, tho shares In force
when a loss is met must Inevitably bear
The burden, not only OF their own pro-
portion Of the loss, but also the addi-
uonnl burden OF that part of the loss
which should be charged to maturing
shares
Mr. Barnes cautioned secretaries not
to hasten the time for maturing Of n
berlos Of shares on account of the Inn
portunities of members or for any rca-
son, no matter what the temptation TO
De able to announce quick maturity OF
Shares"