The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1900-06-30


times the average Of locals. A glance at
the comparative statement of the nine
principal local associations page 1922 as
well as the tables showing the withdrawal
value of stock at each six-month period
(pages 134 to 1850, demonstrates conclu-
s1Veiy that local associations are the only
ones that are entitled to be classed as
mutual cooperative companies,
"A careful examination of the results
obtained in a. large number of these ma
uOnal associations demonstrates the fact
that IS per cent. of the stockholders with
draw and suffer a loss of from Is to IS per
cent of their Investment. In view of
this fact it should not be difficult mat
ter for any association, with any sort of
management, to fulfill its contracts with
the remaining Is per cent; yet few, very
have absolutely failed I contend that
any business that must depend upon IS
per cent. of its investors losing portion
Of their principal in order that the re
naming p per cent. may reap fair
profit is not a desirable place for the in
Vestment OF FUNDS by persons whose IN
come is uncertain and who may be COM
PEELED at any time to discontinue their
payments, and that no such association
should be permitted to do business as
mutual cooperative enterprise; for the
only mutually that exists, and the only
point where there is cooperation for rs
per cent. of the stockholders is in the
payment Of losses and expenses out of
In Introducing his report Mr.. Breiden-
thai explains that the delay is due to the
failure of the officers of associations to
make proper reports to the department.
When the law first became effective he
sent out 0vU letters explaining what WOu1Q
be expected IN the report from the asso-
Citations doing business in the state:
About 60 replied. There are now 40 local
and y national associations in Kansas.
The law required reports in March and
September. This was deemed inadvisable,
and after cOnferrlng with the attorney
general the commissioner asked for these
statements in June and December.
The report calls special attention to the
law requiring officers of associations to
give bonds; states that usury laws are
applicable to these associations and that
having equal.
at their market value, to the liabilities
of the association and that the liability
of a stockholder is the book value of his
stock. Further, that cumulative fines
such as are likely to prove conhscatory
of the stock are unlawful
OF the Great Eastern Cooperative Loan
company of EmpOria which he took
charge of the commissioner says: I re-
gret to say that the officers of the En-
pOria association induced a large number
of their stockholders to transfer their
stock to a south DAKOTA assoclanon tnat
is not authorized to do business. The plan
of this South Dakota association is a
very unjust and inequitable one and the
transfer to the same was an outrage.
The business was transacted before the
taking effect of our law and there is no
| means of redress for the victims
Another which fell by the WaySide was
the Continental of Kansas City Kas.
Prom the records of this association
showing its expense account in its early
/ history one must conclude that it was
conceived in sin and brought forth in
iniquity for the sole benefit of the gang
The Mid-COntinent of ConeyV1lle failed
] failure
/ commissioner in this report, is due 70
/ combination of incOmpetency, rascal1ty,
/ and a general lack of knowledge of the
/ business of a loan association.
The commissioner refers to the National
I Savings and Loan association of Topeka.
/ He says; This association was organized
by d noted promoter of fake enterprises,
and in its early history all it's receipts,
! I am informed, were appropriated by the
promoter who issued stock to pay his
personal bills Later on, number Of
/ honorable gentlemen of good standing, but
1 who We're wofuly lacking in knowledge
! of the business of loan associations IN
/ dertoOk to put it on its feet. They are
1 wiser now, though poorer in purse than
q year ago The losses to stockholders
/ are considerable in the aggregate, al
| though no Individual has lost heavily,
| owing to the short life of the associa-
As a general proposition, referring to
/ foreign associations doing business in the
/ state, the report says: For every dollar
1 dollars of losses have been sustained
/ through them. Eighty per cent. of the
/ foreign associations that were doing buSl-
| ness in Kansas five years ago have
I failed
Mr. Breidenthal says in conclusion:
| mot a day passes that I do not receive
inquiries with reference to some fake IN
! vestment scheme, such as 'Tontine Mer-
! camille companies 'Tontine Investment
| companies Diamond Investment com
| panies' and all sorts of get-rich-quick
| schemes, none of which come within the
| scope of legitimate business enterprises,
| and all of which viii bring grief to at
! least 70 to IS per cent. of those who invest,
| and joy to the 10 or % per cent, pro-
! vided the other fellows will put up long
! enough and then drop out. No business
principle is involved in any of them, and
| none are authorized to do business in
Kansas, nor can they receive authority
to do business in this state. The next
legislature should pass law prohibiting
this class of business under severe pen