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

ton. The amount of the capital
stock is $4,000, $4,000 thereof to be-
common stock. and $4,000 to be pre-
/, ferred stock: the latter to be preferred
/ to the extent of 20 per cent. ON the
amount actually paid in on each share
thereof, after which the common stock
is to receive 20 per cent dividends, and
the balance of the profits, if any there
| be, shall be divided pro rata among
the holders of the common and pre-
! ferred stock" That there may be n,
misunderstanding we viii state that
the stock here referred to is not thai
subscribed for by the ordinary mem
bers. but represents the interests of the
promoters and is the basis for the dis
| tribution of the profits they expect to
obtain. Pa
| Their plan contemplates that every
| subscriber or patron shall at some time
| purchase REID estate through the
agency Of the association. The con
tracts with the subscribers are usually
issued in even thousands of dollars, at
| their option, determined by the value
or the property each wishes to pur-
chase. The rates of monthly payments
'"i5 tit III lHt Inherent as
sociations. usually being $500 before
ana 5000 after property is purchased on
eaeh $1,000 subscribed. They are sub
Stantially the same, and operated upOn
the same general plan, which we still
Illustrate by taking an assumed con-
tract for, $1,000, that being about the
average amount given in their tables.
The subscriber first pays $500. called
the application fee, which goes to the
agent soliciting the business and the
officers and stockholders of the asso-
cation. lie then pays $3.50 per month,
5000 of which is placed to his credit
ana the balance, $l.50,-fifty cents per
thousand doilarS-goes to the expense
tuhd and is applied to the same use as
the application fee. This monthly pay
ment of $3.50 is continued until the
members right has become vested. I"
i-e., until the managers Of the asso-
cation determine that there is sutfi-
cient cash on hand to meet the nav
mcnts on the real estate to be pur-
chased for him. The time when the
different contracts can vest, depends
upon the rate Of increase in member
snip. The only agreement for the pro-
lection Of the members is that this
right shall accrue to them i'm the order
in which they join the association.
TIL" various associations, i'm the read
ing matter they distribute. claim that
shares will vest in from eight to ten
months. This would be true providing
the membership increased monthly
about ten-fold
When members interest vests. real
estate costing, in the instance used rs
an illustration, $1,000. is purchased for
nm and he Immediately enters into
possession. The title to the property
then becomes vested" in the member
no gives back two mortgages, on, to
the 21antOr of the premises securing
the purchase price. ana the other to the
rs iociation securing future payments
according to the original plan. The
association in return pays one-twen-
ueti OF the cost OF the property Oh
transfer of the title to the member and
guarantees the payment of the balance
III nineteen more equal monthly in
staliments. In other words, the assoc
cation undertakes to pay for the prop
erty in twenty months from the time
the subscribers interest vests. The
association usually purchases the prom
erty at Il fiat price. paying no interest
uron the nineteen deferred paw
nentS To do this it necessarily paws
enough more for the property than its
cash value to equal the interest the
Vender loses upon his future payments
II such an arrangement cannot be
made. the subscriber pays all interest
charges until the full amount is paid
and the mortgage discharged. The
amount of this interest, therefore.
fealiy comes from the subscriber
whether the property is purchased al L
nat price or with interest added. If ne
does not pay it as interest. it is added
70 the cost of his real estate. All
taxes insurance. water rates. repairs,
etc. are also paid by the member
After the contract becomes vested.
and the member comes into possession
of the real estate in the manner de-
scrihed. his monthly payments increase
TO $3.50 of which $500 is credited to
his account and $3.50 to the expense
fund or profits of the association.
These monthly payments are con-
tinued until the accumulation there
from, after deducting fees and ex-
pcnSeS as before explained, amounts
to $4,000. or The cost of the property
purchased on his account. without in
tcr"st charges The time it would
take. under the illustrations given for
the member tn pay for his home. would
be substantially two hundred months
In other words, the association under
takes to pay for the property in twenty
months while he has two hundred
month in which to reimburse the as
ISOLATION.
In nearly every one of these institu-
tionG. To- which our attention has been
called. the members absolutely forfeit
the full amount paid in. if they fail to
meet their monthly payments. within
perhaps thirty days Of the time when
due. 1t does not matter how long the
payments have been continued or how
much stands to the members credit.
the fun amount is forfeited To the aSso-
citation and ultimately becomes a part
of the profits OF the operators of the
scheme. one association provides that
a triflng portion Of the expense fund
shall be set aside for The purpose OF
temporarily assisting members who
because Of sickness or any other mis-