Omaha daily bee., 1911-09-10
Nebraska
BUILDING ASSOCIATIONS GAIN
Secretary Royse Makes Report on
Loan Societies.
gFe INCREAsE in TEN YEARs
BankinE Board Decries Tendency TO
Build Up NonborrOwinE stock
holders LiabiIity--BiE Test
f. SIN TO Come.
CFrom a stan correspondent.)

LINCOLN, Neb. Sept. s.-Cspecial)-
rotary Royse OF the State Banking board
today made the following report on build
ing and loan associations OF the state In
submitting this, the nineteenth annual re-
port OF the building and loan associations
OF Nebraska. with such summaries and
comparisons as are necessary to set forth
their condition al the present time, ii Is
but necessary TO direct attention TO the
fact that the uninterrupted growth and
prosperity OF these associations sim con-
tinues without apparent break or check.
--5s--increase IN ten years Of from around
100000 to So 900 COZ. demonstrates the fact
that in the financial structure Of the state
place existed for the work Of these in
stitutions. and the splendid growth shown
by this report clearly sustains the wisdom
OF the Nebraska financiers, who had to do
with the laying Of the foundation Of this
branch OF finance. now a potent influence
for wealth creation in this state.
Test for Future.
"Unquestionably it is true that the crucial
test viii come in future periods Of depres-
sion when the values shrink and prices
fall and the over-confident pay the penalty
OF want OF reasonable prudence. However.
there is nothing in the condition OF the
associations. as a whole or the general
cause serious apprehension that the build
ing and loan associations Of the state will
n2t stand a financial strain equal with
kther lines OF business involving the ag-
Hresated accumulation OF the people.
I i think it can be safely said that the
building and loan associations Of Nebraska
are as safe and conservative as similar in
stituuons in other states where they have
been long tried by all the financial vicssi-
tudes that come in cycles OF years TO make
financial epochs.
1T is not necessary for me to 60 into de-
tail TO call your attention to the various
summaries set forth in this report, which
(2learly indicate the past record. the present
Condition. and the future promise OF these
institutions. / am pleased to report to your
honorable body that in the supervision Of
these institutions this department finds
the officers Of the various associations
usually willing and ready to adopt its sug-
gestions made with view 10 assist in con-
serving the interests of the saving and
borrowing members.
Non-BOrrOwers' Liability.
There is one practice. however, to which
the department thinks attention ought 10
II called, and that is the too prevalent
effort to build up nonborrowing stock
holders liability; this in the opinion OF
the department. is the most apparent in.
herent weakness OF these associations;
especially is this true in the too energetic
effort on the part of the management OF
many associations in building up heavy
list Of full paid stock. This practice is
not in keeping with the spirit of the law
and is an element OF weakness. The intent
OF the law Is to encourage thrift by assist
ing the home builder. otherwise known as
the borrowing stakeholder, and by offering
a depository for the savings of the wage
Garner. who can spare but portion of his
intention of the law to create institutions
for large investors who are looking for ar
income instead OF a place to accumulate
savings.
The department is exceedingly anxiou.
to<ave established a uniform system Of
bookkeeping by building and loan associa
Hons as such a course would materially
Ass.st in the compilation of statistics il
alton TO them and would eliminate il
some instances crude and unsatisfactory
records of associations. Other minor sug
gcstions might be considered, but are bein,
taken care Of in the daily relations Of III,
department with the associations
The following statement shows the in.
oreases and liabilities Of the building and
lean associations OF the state of Nebraska
during the fiscal year ending June 30, 1911
ASSETS