The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1900-06-29
ROB The PEOPLE,
Bank Commissioners Plain
Words About Building and
Loan Associations.

John w. Breidenthal. bank commits
sioner, who by virtue of his Office, has
control of the business of loan associa-
tions in Kansas, today issues report
upon this subject in which there are
some interesting denunclatiOnS OF the
methods which some of the organiZa-
tions pursue in dealing with the peo-
pie.
The report which Mr.. Breidenthal is
sues will take its place at the mead OF
state documents because he handles the
subject in no meaningless words but
criticises fearlessly the shortcomings
which he has discovered. One OF the
most striking features Of the report is
the following:
THE local association has popularized
the loan association business just as the
great fraternal benefit orders have pop
ularized life insurance; as a result OF
the popularity of assessment insurance,
fake fraternal orders and bogus assess
ment companies have been organized,
for the sole benefit of the fellows who
promote the scheme. In the same man
ner the so-called national" building
and loan association has been organized,
often by an gang OF consclenceleSS
scoundrels who had no other object IN
view than robbing their victims; posi-
bly, not robbery in the eyes of the law
but robbery nevertheless, for they take
the money of their victims without rem
dering an equivalent and appropriate II
to their own use. In my last report as
to the methods of these associations, L
used this language: But the modern
association is often an entirely dlneIent
institution, and, instead OF providing
the home or the profitable investment,
it has robbed the investor of his saw
ings in a manner compared with which
the acts of the highwayman are respect
able
Il now desire to offer an apology to
the highway4nan for having mentioned
him in connection with some of these
associations, for he takes some chances
of a gun play; but it has not yet been
| recorded that any victim of one of these
modern institutions for absorbing the
earnings of small investors has Shot
| the man who appropriated his money
! nor have any of them been brought &c
! justice in any other manner: NOT al
of the national associations have been
| organized for the purpose OF ROBBERY
| and some of those so organized are now
| in the hands of honorable and capable
| men; but I insist that the plan is defec-
| tive and that it is impossible Tor SucE
| an association to be managed success
fully and at the same time upon JUS
and equitable basis with reference te
| stockholders who Withdraw during tht
| first four or five years of mem DerSnlp.
Loan associations" says the report
| ARE divided into two classes-the loca
| and so-called national or general assocl-
| alton The local association in oul
! small towns is usually organized for the
| of homes for persons of moderate means
and the board of directors is usually
! composed of the best and most substan
tial business men of the city who serve
| without pay or hope of reward othel
than the good which will result to th'
city The officers of such association:
usually serve without pay with the ex
ception of the secretary, who until th'
business of the association has grow
to some magnitude, receives merely
nominal salary and even after the buSi
ness has assumed large proportions tn
salary is always reasonable for tn
very good reason that the StOckholder
| and directors of local associations at
tend their meetings and see to it tina
their earnings are not squadered il
the extravagant salaries and other un
necessary expenses.
Il could enumerate," continues MI
Breidenthal, "a score of foreign associ
ations that have robbed our people in
shameful manner, but it is a painful
subject and l will not enlarge upon il
I do not want to be understood as sug
gesting that foreign associations hav
been the only ones through which on
people have suffered serious losses fo
such is not the case" AS remedy fo
| will continue to be true as long as thes
: associations are permitted to do busi
ness without providing a permanen
capital which will stand between tn
general stockholders, the small invest
ors and the fire "