The Monte Vista journal., 1898-01-22

a Ases fsfesatA9e OF Failures Than In
6aaks, Railroads or lasuranee-Nsw
Lawn En.ctsd In Their Iatsssss-rhs
Cosrts Regard Thsm With Inersassa
Favor.
For several years the feeling has
been spreading In the West, rs well a.
In the East. that speculative invest
ments are seldom desirable for wage
earners or people of moderate means,
mud men and women Of this class have
been turning their attention to safe,
regular and legitimate business invest
Ments. In view Of this fact 1t 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 $3.50. .O0O, 600, owned
by 2SS,O0O stockholders, while the
building and loan associations have a
pald-up capital OF $0O7, 900, 600, owned
by 2,6O000 stockholders. The number
Of stockholders 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 $4,000, 600. while
their aS-ets decreased $246, 400, ,5S4, and
the records In most lines OF business
show greater decrease than In the
case Of national banks.
How IL II with building and loan as
sociations? There are fourteen states
that issue ofiicIal reports. representing
more then 76 per cent. OF the active as
sociations Of the country In his bulle-
tin, issued in May. 1907, 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 fisca, year Of the asso.
Citations ending nearest to January /.
1893, with the figures for those four
teen states rs shown by recent state re-
ports for 1866, n growth Is shown In
every item. The number of
associations reporting. which repre-
scnts practically nli active association
year old or over had Increased from
4.443 to 1881. or . per cent. The shares
outstanding had Increased from $780,
Ibo to 0,aSs'.9y9. or 3 l-1O per cent; and
the installment dues paid in. plus paid
up and prepaid stock. and profits Ind
Increased from S310.47l.2s9 to $449.-
G33.O4S. or q 40 per cent"
Notwithstanding this great Increase
In assets. these associations during the
past year have paid to withdrawing
members md on stock that has ma.
tured, more than 13l,OOOoOO.
Since 1893 the records show that 139
national banks fnilcd. Involving sG5..
H34.3s1 In assets and $222.745.O2O In
capital. During the same time 13l
building and loan associations have
failed. Involving assets of S14.2ll. 900.
or xJ1.323,3S1 less than was involved
In the l49 national bank failures. An
other feature shows n still greater dis
crepancy. The stockholders OF the
la!!ed national banks. out OF $S4 .S42,-
NO OF paid In capital and assessments.
have only received In cash the sum of
Sl.1l1.3Sl. which Indicates TINT their
holdings have little or 10 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 tnngi-
BILE and nsunlly repay to shareholders,
In any event, q large per cent. Of their
Investment
Since 1893 there have been 523 fall.
ures OF this clnxs Of bGnking institu.
tons. Involving assets Of &S4, ,3O3, 745.
They have paid their deyositorx less
than - per cent. while In nearly every
instance the loss Of the stock khol,lers
has been total.
The records Of the national board OF
nre underwriters show that S27 joipt
stock hre companies have failed within
the past few years. involving a paid.up
capital OF x11i.312.Gi3 and aggregate
nasets OF &l0l SIS. 49,. and the most Of
these companies failed to pny their
creditors In full. while their stockhoId.
ers met with n total loss. Compared
win these the losses OF building and
tonn associations are insignificant.
The records show that during tho
pns' -FOUR years III railroads and AZ.
&'o miles OF ,rnck have failed nnd Tim,
the stock and bond liabilities OF these
roads amount TO $3.50. l,.,. 600. or in
other words. that these failures involve
twenty-five per cent. Of the aggregate
capital s'cck Of all the railroads In ,he
country.
The commercial failures during The
past four years have been enormous.
Dun's review shows that during 1890
the ratio OF dcfaulicd liabilities 10
clearing house exchanges was - l.37 pcr
N.uo aud that the rniio In 1919 was
$G@ per S1.OND. with losses almost us
great FOR the Two Intervening Year,.
There are no nccurntc figures available
In regard to the failures Of land and In.
ves'ment companies and similar lus:i.
tuiions. hut the stocklol,icrs' loss In
connection with such institutions Ii
probably more than Reveniy.flvc per
cent Of the total invested.
These statistics show that the fail.
t,rcH OF national banks during the mast
four years are about five times greater
than iho~e Of building md loan nsso.
clationa. and Tim, the percentage In 9th.
u Lnes 10 very much greater.
la View Of these facts II IL no. singu.
lar that the business Of building und
loan associations has Increased while
that OF other financial Institutions has
decreased. When times begIn 10 ne.
vive with the trxinninR Of = more sc.
tive business era. we may naturally ex.
pect 10 see the building and loan b,,si.
ness 20 forward by leaps and hounds.
while stock In sll ih~ strong and con.
sefvattvc associations will bc eagerly
sought for m not only one nj the mos,
profitable. but one Of the safest possi.
bic Investments.
A careful review Of r~ccp, Legislative
cnactmcn's and decisions In state AMI
federal courts shows that building and
loan associations are constantly coming
ln:o high favor. Laws arc made Tor
the express purpose Of promoting and