The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1903-01-04
Luther Hickman, Missouri State
Supervisor, Declares They
Are Impracticable.
ISSUES HIS ANNUAL REPORT.
Old Line Building and Loan Con
Germs Are Said to Be in
Good Financial Con
ditiOn.
REPCRLIC SPECIAL.

REPUBLIC PECIAI.
Jefferson City. Mo-. Jan. 3-The annual
report of Luther Hickman, Supervisor Of
Building and Loan Associations. has just
come from the Public Printer. The docu
ment gives statistics showing the financial
condition of these associations by years.
from 1895 to and including the year just
closed. The figures show them to be in
good condition.
Mr.. Hickman does not like the co-opera-
tive associations. however. and concerning
them he has this to say:
These companies are organized without
capital. and their promoters stake nothing
upon the success or nonsuccess of the bust
ness. Their payment are extended over a
long period Of time, and every month each
member must pay on his contract for TAX
ing care of his small investment a high
assessment for expenses, out of which the
organizers of the scheme expect to reap
much profit
The only hope of benefit held out TO the
member is that he may sometimes be able
to borrow the face value of his contract and
repay the loan by a small monthly pay
his payments Indefinitely and no time is
fixed at which he can demand the privilege
Of such a loan. The early maturity of his
contract depends upon the number Of MEM
bers who are induced to go into the con-
Germ after him.. and who keep up their pay
ments.
SCHEME IMPRACTICABLE.
THE increase of membership required to
mature such contracts within a reasonable
time is such as to render the entire scheme
impracticable. The only way to figure up
on the authority Of such contract Is to d-
vide into the par value of the contract the
monthly payments to be made to the loan
fund bv such contract before a loan is made
upon it. This will give the level at which
all members can secure their loan. 1t does
not matter to the last man at what rate
the holder of a mature or borrowed con-
tract may repay his loan, for the larger his
monthly payments the sooner he ceases to
pay.
IF the company has a payment Of a dol
lar a month to the loan fund on each thou
sand-doilar contract, no one paying more
than that amount to the loan fund. there
can be no question that the level at which
loans can be made is LOCO months. or
eighty-three and one-third years. The man
who carries his contract till 1t reaches this
level will get his $1,000 at a cost to him OF
vests at the rate Of 4 per cent per annum.
He enters into a copartnership and rem
ders himself liable for mistakes and errors
of judgment and guarantees the response
bility of a management In which he can
have no part and as to whose solvency he
knows nothing. 1t has been demonstrated
times without number that losses occur In
the most conservatively managed loan COM
panies. How. then, can a concern that buys
property upon an installment basis. which
bought for cash. and loans the full amount
paid for the property. taking in return a
monthly payment in most cases lower than
the rent. expect to escape ruinous losses?
bility OF its being done is not offered by
these cOmpanieS as now constituted"