The silver lance., 1898-01-21

in the East that speculative invest
ments are seldom desirable Tor wage
earners or people of moderate means,
and men and women of this class have
been turning their attention to safe,
regular and legitimate business invest
ments. In view of this fact it speaks
well for building and loan associations
that during this period they have
steadily increased their membership
and capital, while the business OF other
kinds of financial corporations has
greatly decreased.
According to recent official reports,
the national banks have an aggregate
paid-up capital of 650,OOO,O 900, owned
by 2SS,OOO stockholders, while the
building and loan associations have
paid-up capital of $G07 100000, owned
by 2,5OO,OO0 stockholders. The number
of stock holders in the latter exceeds
those in the former nearly ten to one.
The comptroller of the currency
shows that during the past four years
the capital stock of national banks has
decreased more than S4O,OOO.OOO, while
their assets decreased SAG, ,4O9,5 ,5S4, and
the records in most lines of business
show greater decrease than in the
case of national banks.
How is it with building and loan as
sociations? There are fourteen states
that issue official reports, representing
more then rs per cent. of the active as
sociations of the country. In his bulle-
tin, issued in May, 1897, the commits
sioner of labor says:
Comparing the figures for fourteen
states for the period covered by the
ninth annual report of the commission
er of labor, the fiscal year of the asso-
Citations ending nearest to January i,
1893, with the figures for those four
teen states as shown by recent state re-
ports for 1856. growth is shown in
every item. The number of
associations reporting, which repre-
sents practically all active associations
a year old or over, had increased from
4,443 to 4,531, or per cent. The shares
outstanding had increased from $780,.
1855 to 9,9S5, 800, or 1-1O per cent; and
the installment dues paid in, plus paid
up and prepaid stock. and profits had
increased from $37O,471 ,2S9 to $40
643, ,O4S, or 21 40 per cent"
Notwithstanding this great increase
in assets, these associations during the
past year have paid to withdrawing
members and on stock that has ma
tured, more than $134,OOO,OOO.
Since 1898 the records show that 149
national banks failed, involving $65,.
534, ,3S1 in assets and 500, 745,O2O in
capital. During the same time 1874
building and loan associations have
failed. involving assets of $14, ,211, 900,
or $51 ,323, ,3S1 less than was involved
in the 149 national bank failures. An.
other feature shows still greater dis.
crepancy. The stockholders of the
Hn V.<N
800 Of paid in capital and assessments.
have only received in cash the sum OF
$1.117. 1884. which indicates that theiI
holdings have little or no value in the
event of failure. On the other hand
the assets of the associations, which
are almost exclusively invested in first
mortgages upon real estate, are tangi
BILE and usually repay to shareholders
in any event, a large per cent. of theiI
investment
Since 1898 there have been 523 fail
ures of this class Of banking institu
tions, involving assets of $S4. .3O3. .745
They have paid their depositors less
than 70 per cent, while in nearly every
instance the loss of the stockholders
has been total
The records of the national board OF
hre underwriters show that S27 Join,
StoSh III cOlupduleS nave Id1leQ W1tl1n
the past few years. involving a paid-up
capital of S117.312,633 and aggregate
assets of $191 .S7S, ,452. and the most OF
these companies failed to pay their
creditors in full, while their stockhoId.
ers met with total loss. Compared
with these the losses of building and
loan associations are Insignificant.
The records show that during the
past four years III railroads and 45.,
$50 miles of track have failed and tha,
the stock and bond liabilities of these
roads amount to $3.50, 500. 900. or in
other words. that these failures involve
twenty-five per cent. of the aggregate
capital stock of all the railroads in the
country.
The commercial failures during the
past four years have been enormous
Dun's review shows that during 1896
the ratio of defaulted liabilities tc
clearing house exchanges was $4.37 pei
$1,000 and that the ratio in 1893 was
$3.50 per $1,000 with losses almost as
great for the two intervening years
These statistics show that the fail
ures of national banks during the past
four years are about five times greater
than those of building and loan asso
Citations, and that the percentage in 9th
er lines is very much greater.
A careful review of recent legislative
enactments and decisions in state and
federal courts shows that building and
loan associations are constantly coming
into high favor. Laws are made for
the express purpose of promoting and
fostering them.
The auditor of public accounts in ii
linois. in his annual report for 1896.
says: There is no more safe and pro-
fitable investment for those having
small sums to deposit periodically than
these associations"
The associations offer one of the best
plans upon which to borrow money,
for since the loan is constantly reduced
in amount by monthly payments, the
property is certain to become free
from the debt. The record shows that
fhp DrODOr.iOD Of tho foracInS,urpa in the