The San Francisco call., 1905-03-05
CAUSES COMPLICATIONS.


Page 4, line 9S, says that stock may
be issued in the form of 'installment
stock, prepaid stock, paid up stock.
permanent stock and guarantee
stock" Now this is such a complica-
ton and confusion of accounts that
for the average secretary in country
towns it would be impossible to mas
ter. There should be only one kind
Of stock issued, the original monthly
installment stock. There should be
only one way and one measure for all
stockholders alike.
On the same page, line 113, II
speaks about stock being forfeited"
No honest local building and loan
association ever permits any stock TO
be forfeited. If member cannot
continue to pay his dues, after six
months. he is notified by the secretary
to call and receive whatever he has
paid into the association and the earn
ings due him.
Page 5, line 1853, states that the as
sociation shall have power to charge
an entrace fee not exceeding 81 on
each share" This innocent looking
article is one of the worst features of
the building and loan associations.
The 81 a share entrance fee is paid
to the glib travelling agent who goes
throughout the country to solicit for
members. 1t is only natural that this
man promises great things which are
impossible to be achieved by the legit-
innate building and loan associations.
ADVERTISE THEMSELVES.
Legitimate building and loan asso-
Citations only charge 10 cents a
share for entrance fee, which pays for
the passbook and printing. They do
not require travelling agents to go over
the country to solicit membership.
The members, when they find that
they are in a legitimate building and
loan association, speak of it to their
neighbors. One member brings in an
other and large associations are form
ed in this simple manner.
But still worse, after the victim
learns that he has joined a get-rich-
quick concern, he cannot withdraw his
money without losing all or a part of
the funds which he has invested. As
is proven, commencing with line 1856,
which says, but no fee shall be
charged on withdrawal in excess of
S per share on installment stock upon
which not more than thirty install
ments have been paid and been in
force not more than thirty months"
This shows that IL person sub
scribes for twenty-five shares of stock
he pays s25 entrance fee and in, say,
six months he will have paid at the
rate of sixty cents per share, SIS per
month, $50. Upon his withdrawal he
not only receives no interest on his
money but sustains an actual loss of
$25. Cases of this kind have come
to my observation recently as may be
seen by letters in my Office.
This is the way that installment
stock is dealt with. What takes place
with prepaid stock, paid up stock, per-
manent stock>and guarantee stock, the
Lord only knows. The proposed new
law does not give light on that sub-
ject.
BILL IS DANGEROUS.
Again I repeat that any person either
through sickness or other cause, who
may desire to withdraw his money
from the building and loan associa-
tion would receive at any time every
dollar that he has paid into the funds
of the corporation with fair proper
tion Of the interest accrued.
Evidently this new bin has been
gotten up in great hurry without due
consideration, and there are numerous
dangerous rules througout the bill
which would virtually wipe out of the
State one Of the most meritorious
financial institutions for wage-e learners
ever invented by man. Therefore, as
we are nearing the end of the legisla-
tive session, / would earnestly recon-
mend that the Assembly reject the
Senate bill.
For thirty years we have been doing
very well with the laws now in exist