The Springfield herald., 1898-01-21
PAYING INVESTMENTS
BUILDING AND LOAN AND saw
INGS ASSOCIATIONS LEAD.
A Less Percentage of Failures Than In
Banks, Railroads or Insurance-Ncw
Laws Enacted In Their Interest-The
Courts Regard Them with Increased
Favor.

in the East, that speculative invest
ments are seldom desirable for wage
carners 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
pnld-up capital of S65O.OOO,OOO, owned
by 2SS,OOO stockholders, while the
building and loan associations have Il
paid-up capital of $6OI. 100000, owned
by 2,5OOOOO 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 S4O,OOO.OOO, while
their assets decreased S246. 400, ,JS4. and
the records in most lines of business
show n 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 I6 per cent. of the active as
sociations of the country. In his bulle-
lin, 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.
cintions ending nearest to January 1,
teen states as shown by recent state re-
ports for 1896, II 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 9.5OO.-
100 to 9,9S5,999, or ) 40 per cent; and
the installment dues paid in. plus paid
up and prepaid stock. and profits had
Increased from S3TO.4T1. $50 to $449,-
643,O4S, or 81 4-1O 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
turcd, more than S134, ,OOO.OO
Since 1893 the records show that 140
national banks failed involving SG5,-
5343Sl in assets and S22. .TI5.O2O in
capital. During the same time 134
building and loan associations have
failed. involving assets of S14211 900.
or Sol 23.3S1 less than was involved
in the 149 national bank failures. An
other feature shows n still greater dis
crcpancy. The stockholders of the
failed national banks. out of SSI, ,SI2.-
900 of paid in capital and assessments.
have only received in cash the sum of
S1.l1I.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-
bic and usually repay to shareholders.
in any event, Il large per cent of their
| investment.
Since 1893 there have been 523 fail
ures of this class of banking institr-
tons, involving assets of SSI.3O3. 14.
They have paid their depositors less
than % per cent, while in nearly every
| instance the loss of the stockholders
| has been total
The records of the national board of
| fire underwriters show that S2T Joint
stock fire companies have failed within
| the past few years involving n paid-up
capital of S117.312,G33 and aggregate
assets of S191. .STS.i52. and the most of
these companies failed to pay their
creditors in full. while their stocklold-
ers met with II 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.-
S95 miles of track have failed and that
the stock and bond liabilities of these
roads amount 10 $3.50, 500. 600. 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 dcfaulted liabilities to
| clearing house exchanges was S43T per
$1,000 and that the ratio in 1893 was
$500 per 81 900. with losses almost as
! great for the Two Intervening years.
| There are no accurate figures available
| in regard 10 the failures of land and in
vestment companies and similar insti-
| tutions. but The stockholders loss in
| connection with such institutions is
| probably more than seventy-five per
cent of the total invested.
These statistics show that the fail
ures of national banks during the past
four years are about five times greater
ciations. and thar the percentage in 9th
er lines is very much greater
In view of these facts it is not singu-
lar that the business of building and
loan associations has increased while
that of other financial institutions has
decreased. When times begin to re-
vive with the beginning of Il more ac-
tive business era. we may naturally ex-
pect TO see the building and loan bust
ness go forward by leaps and bounds.
while stock in all the strong and con
servative associations will be eagerly
sought for as not only one of the most
profitable, but one of the safest posi-
BILE investments.
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 IL
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"