The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1898-11-05
A GREAT EVIL
Pointed Out by Mr. BreidenthaI in
Connection With Building
Associations
Associations

Associations
One of the reforms advocated by Bank
Commissioner Breidenthal is that build
ing and loan associations should be placed
under the supervision of the bank com
missioner and made subject to laws SIM
liar to those which control savings banks.
n his f6gfh99ming bie9 q F Fbe ASH M5
Citations, as now conducted, and viii rec
ommend legislation to remedy the evils
which he points out In his report he will
loan associations were originally in
tended to provide a safe and profitable
investment for the savings of persons of
limited means or income, and to afford an
opportunity for its members to procure
homes through small monthly payments;
lions working along these lines have been
the means of providing thousands of Ia
boring men with homes, who, were it not
for the opportunity thus afforded. would
today be homeless. But the modern as
sociation is often an entirely different IN
sutution and instead of providing the
home or the profitable investment, it has
manner compared with which the acts
of the highwayman are respectable This
st3iLe5nenI aPPnes PafClc9iarly 20 fne SO
many of which have operated in the state
14r years aIl1 nave roDDsu olr peopIe u
passes that I do not receive inquiries from
their victims. one relates that ne mas
paid in Sl25 and will be permitted to with
draw SCI; another has paid in 5000 and is
offered s246; still another has paid in 1851
and will be permitted to withdraw S95. In
each of these associations the investors
had been informed from year to year OF
annual profits accrulng on their invest
o y
ed only a small portion of the principal.
am COMPELLED to reply that there IS no
relief for them; that the state of Kansas
has made no provision for their protection
nor for the punishment of those who have
robbed them.
investors in foreign associations and pro-
vide supervision for home companies was
tary of a Missouri association, who had "a
friend at court in the person of the chair
n 0f he faOr m who he
man in The faifhfIII disc6a rye of his dTfv
to his Missouri friend (not to his constit1-
ents), pOCketed the bill and thereby pre-
the Missouri gentleman he argued that
company ont Of tha state ana thai thew
only wanted to come into Kansas to make
they could ind Investment for in Missouri
and that they only asked permission to
furnish us Missouri money to build homes
in Kansas. He admitted that if a Kan
sas association desired to do business in
Missouri it would be required to deposit
100000 in good securities with the state
as a guarantee to and protection for
Missouri investors, but claimed this was
Il have observed that every. law which
tends to interfere with the business CT
sidered a bad law BY men who follow
those pursuits. At the coming session of
the Legislature there will doubtless be
those who will oppose the passage of
law on this subject, who are interested
the state, but hope there will be sufficient
number of Kansas representatives to pro-
vide proper and necessary protection for
her people.
Il regret to say that there are some
Kansas associations, Investments in which
partake of more of the nature of a game
of chance than bona fde transaction,
and while we have number of aSSOcia-
lions that are doing a legitimate business,
beyond the powers conferred on them Ivy
our present very defective law. The bet
ter class of these are anxious to have a
law passed defining their rights, privileges
and duties and providing for supervision
similar to that provided for banks.
4 do not know of an association doing
business in the state upon plan that is
entirely just to the unfortunate member,
who is compelled through misfortune or
otherwise. to withdraw. Fines, penalties.
way as to absorb not only his earnings,
but a portion of his principal. In fact,
the principle of tOntfne insurance is ap-
piled and only those who are able to keep
UP their payments to the end secure Den
efits. This fact has resulted in men of
the sole object of profiting by the nisfor-
tunes of other members. The loan assO-
citation is a mutual company and there
cannot lawfully be more than class
of shareholders. Any shareholder is en-
titled to his proportion of the earnings
and he should be permitted to Withdrew
the entire amount he has paid in at al
times after the earnings exceed expenses,
plus certain percentage of the earnings,
and this percentage should increase as
the duration of membership increases. I
am aware OF the stock argument that
penalties for Withdrawals must be suff-
cient to make it Improbable to withdraw,
but I am confident that many more would
invest if it was known that they could
withdraw at any time without loss"