Ottumwa semi-weekly courier. [volume] (Ottumwa, Iowa) 1899-1903, 1901-12-05
AUDITOR HITS HARD.
Advises Prohibition of Cooper
alive Concerns.
FILES REPORT WITH GOVERNOR
Wherein There is a Certain Tontine
Feature, Such as the Diamond
Ring" Plan of lnsurance-Says
Building and Loan Decreases.


Des Moines, Dec. 4-The state audi
tor recommends that the coming legis-
lature shall prohibit entirely from fu-
ture operations in Iowa, or else pro-
vide for the supervision and control Of
what he terms cooperative and ton
tine associations and partnerships
This is comparatively new class of
organizations which have established
themselves in Iowa during the last BIZ
ennial period, and the state auditor
sets forth at some length in the intro
duction of his biennial report which
he has filed with the governor, his rea-
sons for believing that they should be
excluded from doing business in Iowa.
Those companies are most common
1y known as home investment associa-
tions. The auditor says that in most
instances they are unincorporated as
sociations or partnerships, and their
business is transacted under what has
been termed Diamond Contracts" In
some of the companies" the state audi
tor says, "the member is promised
diamond on the maturity of the con-
tract and in others a home or some
thing of that nature. The contracts
mature in the order in which the in
dividuals become members, the first
contract issued maturing first and the
second contract maturing second and
SO on in numerical order.
Although these associations do not
possess the stability of building and
loan associations for the control of
which the legislature has enacted
positive legislation and provided meth
DDS Of examinations and supervision,
they are now transacting business in
this state insisting that they are not
amenable to any such law. People
who make investments in such asso-
Citations do not receive the protection
which the law has provided in the case
of other organizations or companies
soliciting funds from the citizens of
Iowa. The state subjects foreign
building and loan associations to sup
ervision and examination of this de-
partment, requiring sworn reports an
nually and deposit of 100000, yet
these mere partnerships are operating
mere without complying with any of
these safeguards which are afforded by
law in the case of other companies.
The department believes that it is
but necessary to call the attention Of
the general assembly to these COM
panies and their transactions in order
to secure legislation entirely prohibit
ing their operations or at least provid-
ing for their supervision and control y
The auditor is known to have taken
this step after carefully compiling fig
ures regarding the workings of these
organizations. He does not state the
number of companies engaged in this
business in Iowa, but they are known
to be several.
Building and Loan Decreasing.
The auditor says that the building
and loan associations have not pros
pered during the period as have the
other moneyed institutions of the
state. With increased deposits in the
banks, less demand for money and the
lower rates of interest, the building
and loan associations have found a
much more circumscribed field for
their operations. The decrease in re-
ceipts from this source for the period
amounted to $1,272, 940.51 and the de-
crease in assets for the same time
to $3,890, 409.12. This is partially ac-
counted for by the associations which
have ceased transact ng business, three
domestic and sixteen domestic local
associations having gone into volun-
tary liquidation. The only foreign
building and loan associations tran.
sacting business in Iowa has settled
up it's affairs satisfactorily and with
drawn. MANY of the associations yet
remaining" the aud tor says, ARE con
templating liquidation, while others
are prospecting and carrying on a com
mandatory and successful work in the
limited fields in which they are operat
ing"
On Revenue and Taxation.
One of the most important features
OF the report are the auditors figures
on revenue and taxation and his &C
company ng comments "A surplus
or $415,000 two years ago." he says
has been increased into a surplus OF
$1,140,0O0. The revenue for the last
preceding fiscal period was $5,O79,
403 20, and for the period just closed
$5,120,059.54; there is thus shown al
increase of $4O.656,25. To this how
ever, should be added the amount re
funded to the state treasury during
the preceding fiscal period under the
provisions of chapter 11S, laws of the
Twenty seventh general assembl,
(board of control ac), providing tina
treasurers of state institutions SHOULD
return to the state treasury none!
previously drawn for such institut ons
The amount so covered back into thu
treasury was approximately $4,000
making an increase in revenue for tn,
fiscal period just closed In the amour
of ABOUT $118,000.
The change made by the Twenty
eighth genera assembly in the ma
ner of assess ng and collecting take
from telegraph and telephone compa1
les and express companies will 81 ght
ly affect the states revenues from tina
source. Formerly the taxes on TIL
properties above mentioned were pai
into the state treasury direct, the eS
ecutive council levy ng the assess
ment. Under the new law such prop
critics are valued by the executiv
council and the levy is made by tn
board of supervisors of the variou
81, 49, 4,