The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-03-05
B. & L. STOCK TAXATION
THE STATE LEAGUE WANTS A UNI
FORM PLAN TO PREVAIL.
Law Passed by the Last Legislature
IndOrsed-OId Officers Reflect
ed-The Addresses.

IQral rooms OF the SIdIenOuSe. Inc dLISnu-
ance was up to the average of former
years, the number of associations repre-
scented being about fifty, including the
leading associations of many of the larger
towns OF the State. The league numbers
seventy-two associations out of the sos in
the State at this time.
The principal feature of yesterdays
meeting was a discussion of the subject
of taxation as applied to building and loan
stock. While some of the speakers depre-
Gated the fact that stock in the associa-
tions, representing, as it was claimed, the
savings of the working classes of people,
should be taxed in any degree, many ex-
pressed themselves as in favor of having
the stock classed as personal property and
subjected to taxation the same as the stock
Of any other classes of corporations. AS
a result of the discussion, President Book
walter was requested to appoint a commit
tee of five to attend the meeting of coun-
ty and township assessors, to be held the
middle of this month in the StatehouSe, to
endeavor to bring about some uniform plan
of taxing the associations. At present there
is great diversity in the methods used by
the different counties in assessing the stock.
AS one speaker said:
There is great need for some uniform
ity in this respect and 1 am of the opinion
that If no exception is made of building
and loan stock in the tax law, and each
owner of such stock is called upon to list
il the same as any other personal property
there be a cessation of stone throwing at
the associations"
NO SYSTEM IN TAXING.
Speaking this subject President c. A
Bookwalter said in his annual report:
cIof,
tie the question of taxation of building and
loan associations and of building and loan
stock. Section 4, of the act of March 8,
defined paid-up and prepaid stock, and
provided method for the taxation of the
same. 1t specifically provided that building
and loan associations, as such, should be
exempt from taxation. In the face of this
plain expression of the legislative viii, the
State Board of Tax Commissioners ordered
township assessors to list all building and
loan STOCK for taxation. In MANY counties
TINS was done, while in others no attempt
was made to reach running stock. In Ma
flon county the Board of Review called
upon the secretaries of aSSociatio for a
ist or the paid-up and prepaid stockhold-
ers, but finally receded from this position
ana taxed the associations for all cash on
hand April l. and all money loaned upon
STOCK or the associations. am of the opin-
ION that no two counties in the State have
followed exactly the same rules. I would
recommend that a committee of three be
APPOINTED Apo to be present at the meeting of
for this city during the present month and
mat sucn committee be empowered to take
Such action as is necessary to protect the
tion."
Mr.. Bookwalter, in his review of the
building and loan situation, said that the
Said he:
The enactment of the new building and
loan law. the necessary changes in the
plans or many of the larger associations
the large amount of money seeking invest
ment through the medium of trust compa-
MES and loan agents, the decreasing rates
of interest, the liquidation of many asso-
Citations under the provisions of the act of
1871, the FEELING Of suspicion and unrest
among thousands Of citizens of Indiana
caused by the methods of many expense
1unQ associations, and the consequent I'M
setting of public confidence, have all COM
Dlned to produce condition which to any
thinking man cannot appear otherwise
than critical -
BAD METHODS RESPONSIBLE.
Why are thousands of people to-day
doubtful as to the advantage of building
and loan associations where a few years
ago they were enthusiastically in favor of
the system? Why is any question raised as
to the security of investments of this char
acter? Let us not deceive nor attempt to
deceive ourselves These conditions are
possibly caused in part by unfriendly out
side influences, but they are largely owing,
am sorry to say. to the methods of BUSH
ness followed by many building and loar
associations in this State, up to the time of
the taking effect of the law of 1897. There
can be no denying the statement that
system which tolerated or allowed the con-
nscation of 20 to 80 per cent. of the pay
ments made by an investor, when such in
weston sought to withdraw from the asso-
cation, was of such character as to de-
al fho hoy dcs 90 he
iawmaking power. l am firmly of the be-
lief that most Of the troubles of the build
ing and loan business have been caused by
reckless promises of maturity; by mislead-
ing literature; the high rates of dividends
sought to be declared, and by the deduc-
ton made from stockholders on account of
the operation of the concealed withdrawal
charge and the expense fund. While most
OF these abuses have been removed their
erect still remains, and it will be the duty
of those who have entered this business for
the purpose of lending money and not of
exploiting stock, to so manage the affairs
or their association as to again secure
from the people that perfect confidence in
the stability of the system that for
merly enjoyed.
1T is not to be expected that associations
will be able in the future to earn as high
rates of dividends as in the past. but with
teed by the new law; with the prohibition
of withdrawal fees and other concealed
charges it will be but short time until the
investor as well as the borrower will come
to understand that a 6 or per cent divi-
dend on the basis of the new law where
stockholders receive credit for the full
amount of the payments, is of far more
benefit to such borrower or stakeholder
than a ~ or II per cent. dividend on the old
expense fund plan. When this fact becomes
apparent-When stockholders are able to
say that they have withdrawn and have re-
celved all that they have paid in-when il
IS demonstrated that associations are in
the business. to loan money. and to build
homes, instead of selling stock and building
an expense fund, then, in my opinion, there
Will return TO this business the confidence
and good will of the people-that confidence
and good Will so essential to its success.
The law passed by the Legislature of
1897. and which took effect July ! last will,
IN my opinion, prove of great benefit to the
building and loan business, but while in
dorSing the measure as a long step in the
crept into the business, believe that in the
interests of all there should be certain
amendments urged upon the coming Cen
eral Assembly. Section z, providing for the
liquidation of associations within one year
from the passage of the act, should be re-
enacted. This section has afforded a safe
and inexpensive method of closing out as
sociations, and is certainly far preferable
to the expense and delay of a receiver
Ship
NEW LAW INDcRSED.
Beside the address of the president there
We're dozen other addresses during the
day bearing upon different features of as
ISOLATION work. The committee on resolu-
tons offered the following report, which
was adopted:
THE local building and loan associations
of Indiana are to be congratulated on the
good results following the passage of the
Of our State to the building and loan laws
This enactment has tended to eliminate