The silver star., 1898-01-20
PAYING INVESTMENTS
BUILDING AND LOAN AND saw
iNOs ASSOCIATIONS LEAD.
A Lees Percentage Of Failures Than In
Banks. Railroads or InsurAnce-Ncw
Laws Enacted In Their lnterest-Ths
Courts Regard Them with Increased
Favor.

For several years the feeling mas
been spreading In the West. as well as
in the East, that speculative invest
ments are seldom desirable for 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 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 S650,000.0OO, owned
by 2SS0OO stockholders, while the
building and loan associations have n
paid-up capital of S6070o0.0O0, owned
by 100000 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 Sl0OOO,OOO. while
tuelT aSSttS uetTeiStu T-fo,fVo,''ns anu
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 76 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 l.
1898. with the figures for those four
teen states as shown by recent state re-
ports for 1S95-6 a growth is shown in
every item. The number of
associations reporting, which repre-
sents practically all active associations
year old or over had increased from
4.443 to 4.531. or > per cent. The shares
outstanding had increased from $500
155 to 9.9S5.939, or ; 1-1O per cent; and
the installment dues paid in. plus paid
up and prepaid stock, and profits had
increased from S370.471 .2S9 to $40
643.o4S, or 2l 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 S134.OOO.OOO.
Since 1893 the records show that 14g
national banks failed. involving S65.
534.3s1 in assets and S22. .145.O2O In
capital. During the same time 1874
building and loan associations have
tailed. involving assets of S14,211 900
or SOL ,323, ,3S1 less than was involved
In the 149 national bank failures. An.
other feature shows n still greater dis
crepancy. The stockholders of the
Tailed national banks, out of SS4 .S42.,
V'U or paid in capital and assessments.
nave only received in cash the sum of
S1,11I,3S4. which indicates that Their
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 1893 there have been 523 fail
ures Of this class OF banking institu
lions, involving assets of SSl. 300. .745
They have paid their depositors les.
than 70 per cent. while in nearly every
instance the loss Of the stock holders
has been total
the records OF the national board OF
hre Underwriters show that S27 Joint
STOCK nre companies have failed within
the past Few years. involving n paid nm
capital OF $117.312.G33 and arprepata
assets of S191. .s7s.4 .452. and the most n,
these companies failed TO nav tbei,
creditors In full. while their stock hold.
ers met with n total loss. Compared
with these the losses of building nnd
ionn associations are insignificant.
The records show that during the
PAST rour years III railroads and AZ
SD miles of frnck have failed and TIM,
the stock and bond liabilities OF thes,
roads amount 10 $3.50. 5no. 900 or In
other words. that these failures inyoIy,
twenty-five per cent. OF the agpreynt,
capital stock Of all the railroads In IN,
country.
The commercial failures during IN,
past four years have been enormous
Dun's review shows that during 1S9,
the ratio OF defaulted liabilities I,
clearing house exchanges was Sl.37 pe
S1.OOO and That the ratio In 1893 wn,
*6.3o per x1.W0. with losses almost n,
great Tor the two intervening yenrs
These statistics show that the fail
II ..'NT 's s''''V'"s uuTlnS ms
four yenrs nrc about five times grente
than those Of building and loan asso
cintlons. ana tim, the percentage in 9th
er lines IL very much greater.
cnrcful review OF recent legIslniiv
enactmenis and decisions In state nm,
federal courts shows that building nm,
loan assoc intiOns nrc constantly comIn
into high favor. Laws are mnde IN
the express purpose OF promoting nm,
fostering them.
The auditor OF public accounts in II
Ilnois. In his annual report for is0,
says: 'There Is no more safe ana pro
fitnble investment for those bnyIn
small sums to deposit periodically Inn,
these associations"
The associations offer one of the bcs
plans upon which to borrow none,
Tor since the lonn IL constantly reduce,
IN amount by monthly payments. nm
properly IL ccrtnin to become fro
from the debt. The record shows lin
the proportion Of the foreclosures in IN,
nssocintlons In very small as compare,