The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1900-07-28
BUILDING AND LOAN.
FINELY IRE4TED BY C1RROLL d.
WRIGHT.
Paper Read Before the United states
League of Building and Loan Associ-
atoms at indianapolis.

atoms at indianapolis.
AT the eighth annual meeting of the
United States league of building and
loan associations, a paper by Carroll ID
Wright, United States labor commits
sioner, was read Mr.. Wright was un
able to be present. His paper in part
follows:
Building and loan associations are the
product of the last half-century. Their
growth has been very rapid, SO rapid
indeed, tfat they present to-day some
of the Weaknesses and pains of growing
youth. Taking the investigation of the
department of labor, the results OF
which We're published in 1898, and some
of the annual reports of different states
since then, believe it to be safe esti-
mate to conclude that there are at least
eight thousand such associations work.
ing under various titles in the United
States, with probably two million
shareholders, and total dues paid in,
plus their profits, to the amount Of
from six hundred million to six hundred
and fifty million dollars. These figures,
taken by themselves, indicate success.
They also indicate some dangers which
are foreseen by some of the wiser man
ayers of building and loan associations
and ignored by others; yet, in order to
form a fairly just conclusion Of the flu
ture OF these associations, these dan
gers should be frankly considered.
/ cannot do better, in opening this pa
per, than to quote a statement by the
superintendent of banks of the state of
New York, in his report for the year
1899, in that part dealing with building
associations. Speaking sof them, MI
Kilburn said:
{ No one has higher opinion of the
system of cooperative finance, which
forms the basis of these institutions,
than /. 1t encourages thrift and tends
to make good citizen Of every member
of an honestly-conducted corporation.
The great majority of the association of
this state are of such a character that
every citizen can be proud of them.
They have enabled thousands of work.
Ing men to obtain homes or to accumu-
late funds sufficient to care for them
selves and their families In later years,
In sickness or distress, by investing
only such sums as otherwise would be
4 paid for rent or otherwise spent. But
the whole building and loan movement
In this state is threatened by the scan
dals connected with the operations of
speculative associations masquerading
as mutual corporations and the machi-
nations of comparatively few individ-
uaIs.
Mr.. Kilburn has been fair in his gene
raj criticisms, and they are to be taken
with all the more seriousness because
of his friendliness to building and loan
associations. The scandals referred to-
In the quotation from his report are not
the only points to which attention
should be called. 1 do not care to
speak of scandals, but of those inherent
difficulties which are likely to affect the
future of these associations, and of
those methods which must be adopted
in order to secure growth, prosperity
and of course, the interests of share
holders.
X 1t must be recognized that during the
last two or three years building and
loan associations have been passing
through a trying period. The long-con-
'ltinued industrial depression affected
them materially. The influence of the
depression carried many associations,
both local and national, into sharp COM
petitive methods, under which they
hoped to secure business, and thus show
reasonable progress, Notwithstanding
the hard times. Such competition has
sometimes been unfair and unWarrant-
ed, and has driven associations into Ii
quotation, thus bringing opprobrium
upon the whole system, and affecting
not only the associations involved, but
the general welfare of all in the vicini-
ty where the scandals occurred A
building and loan association should
not allow itself to become the competi-
tor of any other association.
There should be some legal supervi- |
sion over the organization of building |
and loan associations, under which the
officers having charge of such matters
should be furnished evidence as to the
real need of new associations in the vi
lcinity where one or more already exist. |
The United States government UNDER |
takes to control this matter in the or
ganization of national banks. Some
times the federal government has made |
mistakes, and chartered too many |
banks for some places. the result being |
somewhat disastrous to the whole
banking interest of the city, and consol-
ludJlUHS USGUIilt IlcCcSSuIy' Dut
the building and loan principle, of all |
others, competition should be avoided.
When membership is rapidly increas-
ing, funds from dues accommodating the
Investment of money difficult the |
temptation to loan money on property
valued at too high a rate Is very great
but when a savings bank or any other
provident institution, seeks to secure a
higher rate of interest than that pre-
vaillng in the market, or undertakes to
loan money on an overvalued piece of
property. there is usually but one result
sooner or later. There have been some
failures Of savings banks during the
past few years, and, so far as my obser-
walton is concerned, the failures have
been due to this very cause.-The effort
on the part of the managers to secure
a high rate of interest on investments.
1t is bad enough to make invest
ments on generalization, but there is
another form of investment to which
some building and loan associations
during the past few years have resort
ed, and that is upon unimproved lands,
or through the purchase Of tracts of
unimproved real estate in the vicinity /
of some large city. Such investments
have been quite popular and in some
cases large profits have been made from
them. In some cases real estate, inn