Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1902-12-24

/
hundred and eighty months after tina
to make up the amount paid out on hi:
account. If, as already suggested, tn.
membership of these associations coult
continually increase in the proper ratio
all shares would vest at substantial,
the same time. and all would get ths
| same results from their contract. This
i however, is impossible. No matter how
mcritorious the plan, how successful
| they may be in fulfilling their promises
| to the members, or how popular the,
may become. they must sometime
reach a limit Of increase in member
| ship. When that time comes. or even
when the increase is not up to dhis
necessary ratio, then the time when
| members shares vest will be DELAYED
proRortlonalIy. The last member tc
| subscribe must wait until within
| twenty months of the full term of his
, contract, or about one hundred and
eighty months before the association
will have sufficient funds to paw for
the property he contemplates purchas-
ing. In other words, the whole ma tter
of interest is based upon the very
simple proposition that what one men,
Der geins in that respect some other
member must lose. This must be true.
as the associations have no funds ex-
/ cepting those contributed by the mem
bars, and those cannot be employed
for the benefit of more than one. The
whole proposition is, therefore. some
what in the nature of arlottefS, or more
nearly like the endless chain schemes
the advantage, however, always going
IN h.
of those who are not so fortunate in the
lime of contracting with the associa-
ton. 1t is simply an attempt to use
the old cooperative plan, which has
sometimes proven Satisfac tory i'm a
small way, and to expand it indefinite-
iy, thus giving the promoters large
profits from membership fees and
monthly payments on account of the
expense fund. In addition to these
profits there is the much larger pro-
Spective profit to the promoters sure to
result from forfeited memberships
Where individuals undertake to make
definite regular payments for a legiti-
mate purpose, like the premium on
life Insurance or the monthly dues to
loan and building associations, many
are unable to meet theid contract either
because they are improvident or be-
cause of sickness or other misfortunes,
and thereby suffer loss because of the
forfeiture OF their rights This fact is
recognized in the statute laws providing
that insurance companies, loan and
building associations, and other corpor-
ationS conducting their business upon
the installment plan, shall not coniiscate
the full amount of payments made I'M
der such contracts. but shall make some
return thereon. There would necessari-
ly be similar forfeitures in these asso-
promises they are now making to their
members. Moreoyer, if the time of
vestingof the members interests should
he deferred materially many would be
come discouraged and stop their pay
mcntS. This certainly would be the re-
suit when they found it necessary to
wait one hundred and eighty months
instead of eight months before the as
socations would have sufficient funds
To purchase homes for them. Sub
SCriberS must repay every dollar eX-
pended by at association on their nc
count. There is no suggestion that
they are 10, participate in any of the
profits. The Payments received from
those members whose rights are
forfeited. would therefore. ultimately
be added to the other profits
of the promoters and operators. If
these associations should ever extend |
their business to a membership of
; 900 members, for instance, the amount
derived from these forfeited contracts |
would give an erl0rmOus profit. Should
only 100 drop their membership at the |
end Of the first year the profits thereon
TO promoters would be $4,000, while ii
would he proportionally greater the |
longer the members staid in.
The reading matter issued by these |
is made to attract persons |
of limited means, ana their agents hold /
out the most tempting propositions to |
reach this class Of people. They tell |
us that The American home is the |
Safeguard of American liberties" that !
Nothing gives n man standing in the !
in which he lives as does |
the fact that he owns his home" that |
The dollar paid for rent is gone for |
ever" and that THE dollar paid on a |
home is saved These are PROPOSE |
tons to which all can truly assent. and |
surely no one could ever object to any
honest project in harmony with such |
The fundamental princi- !
pie upon which they are based is one |
that has been recognized as feasible |
for many years in loan and building |
associations. and for this very reason |
many will be likely to be misled and |
those persuaded to invest who have an |
honest desire To acquire and own their !
home.
The ambition to accumulate wealth |
is universal For this reason |
there are many who are ready to try |
any and every scheme by which they |
are promised the opportunity to get !
for nothing. They are al |
ways ready to try n stock speculation.
or a bucket shop, a lottery, or some |
endless chain scheme, providing a pos
sibility is offered of getting something /
without returning an equivalent there
for. They never inquire whether or
not the proposition is feasible and |
or based on business prin- |
ciples. if it only promises enough they I
are sure to invest and just as sure in !
the end to lose their money. Every |
such scheme when followed to the end |