The Yale expositor. (Yale, St. Clair County, Mich.) 1894-current, 1913-09-18

matte saving to the extent not accom-,
plished by any other financial insti.
tuition.
Michigan associations have, during
the past decade, more than doubled
their assets and, at the present time
are in prosperous and flourishing
condition. This growing popularity is
due to various reasons; state super.
vision, conservative and skillful man
agement and high business integrity
of the me- directly in charge. The
most important factor to my mind has
been the reduction of interest to the
borrower and the elimination OF com
pick fees and premiums. Without new
borrowers, an association must neces-
sarily decline and an association that
intends to advance and be OF benefit
must treat the borrower, the source
of its income and the cause for its
eXistance, well. A simple mortgage and
a low and uniform rate of interest pro-
vides the best security. Under high
rate the association becomes the last
resort of the borrower.
There is probably no city or town
in the state of any consequence in
which a properly conducted associa-
ton could not be organized and oper-
ated to the mutual advantage of all
concerned and also be of inestimable
value to the community. l believe it
would be a benefit to this league il
an educational campaign should be
started to popularize the building and
loan movement in these localities, in
view of future legislation and protec-
ton. AS the times change so must
methods, consequently new laws and
regulations.
During the past few years many
changes have come up for discussion
and consequently among those have
been the borrowing OF money Bor-
rowing where it is cheap and loaning
it where it is dear does not fall within
the object contemplated by building
and loan associations. 1t should at
best be only a temporary arrange
ment and should not be carried in
large amounts from year to year, as
it is sometimes done in some associa-
tions. IL does not as a rule increase
the dividends to members, but only
increases the risk. In most cases the
only Investment is derived from real
estate promoters or contractors and l
question the advisibntty of making
too many loans to contractors, who in
turn sell on contract. This is more
or less speculative and in case OF a
slump, unless the builder be man OF
means, is apt to saddle the associa,
ton with burdonsome real estate.
THE law provides that at least one
per cent OF the net earnings should be
set aside annually and some are very
loath to do this. In my estimation
one per cent is not enough. 1t should
at least be five per cent until it
reaches the required five per cent OF
outstanding loans. This is provided
in the laws governing building and
loan associations in many of the other
states. In Ohio especially, where
building and loan associations thrive
in great numbers, thousands of small
houses were destroyed by fire and
flood, but thanks 10 the reserve fund,
not dollar was lest TO the depositors.
The argument advanced-'we never
had any losses is not a safeguard
against the elements"
Secretary of State Martindale says
that the assets of the various building
and loan associations in Michigan at
the close of the fiscal year amounted
to S24,00S,6 62.40, and increase of ST.
97S,223.08 over the previous year.
Loans on mortgage security and on
association stock increased $2,159,.
1892 or ia per cent
The amount to the credit OF mem
beers on stock and dividends is $22,-
1873 ,594.04 while the reserve fund has
been increased to $338,947.6S which is
1.6 per cent of the loans in force. The
total receipts for the year were $751;
5,48S.99. Approximately S4,493 900
by way of installments withdrawn and
$647.00 in profits were distributed to
the shareholders. Through the CO.
operations of the members of the local
1875 new homes were
built last year with an estimated value
Of S1,500,000 New earnings were ST.
210,03006 which was 81 per cent OF
the dues and dividends credited. The
operating expense was one per cent
OF the assets. The total membership
is reported as $500, an increase OF
Sill while the shares in force have
increased from S5S1.712 to $619,18S.