Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1914-08-24
VAST GROWTH OF
BUILDING ASSN'S
Banking Commissioner Believes
Some Of Them Are Ex-
plotted by Promoters

A tendency to loan money on build
ings other than dwellings,, notably fac-
tories. hotels, theaters, moves
stores and business houses, is noted
by William H. Smith, State Commis-
sioner of Banking, in his report on the
operations of Pennnsylvania' l'foe
building and loan associations TOT
1918. The commissioner calls atten-
ton to the remarkable growth of the
business of the associations, whose as
sets last year aggregated $685. a.
4b5.6O. as compared with S2l5,S ,SEo,-
54T.7O in 1912, but apparently IeeIs
that the vast resources OF orsdh-
izations formed for the purpose OF as
sisting the wage-earner to buy a nome
are being exploited by promoters, VINO
are obtaining loans and putting Dig
commissions for the service into their
OF the increase of s19,73S,9o7 in
assets approximately S19,0OO,OOO Went
into mortgage loans in 1913 and there
was 100000 of an increase IN @ redl
estate. most of it by foreclosure. the
largest increase being in those asso-
Citations which do not coniine their
business to certain localities, but which
receive high rates of premium in ad-
dition to the regular interest. In the
loans on buildings other than homes
the investigation of the commissioner
shows that there are nearly So'ooV,voo
in Philadelphia and S2,OOO,OOO IN Allie
gheny county. the commissioner re-
marking; Years ago loans of this
character could not be obtained IN
building and loan associations and the
privileges granted by the state 10
foster the system were INTENDED 10
inculcate thrift in the wage-earner by
4 g.
direct charge is made that these loans
are being largely put through by pro-
moters, who charge for their services
enormous commissions, which are not
paid into the treasures of the re-
spective associations for the beneht OF
all shareholders
The statistical portion of the report
sets forth that 90 associations We're
formed during the year, most of them
in Philadelphia, and 26 liquidated un-
der departmental direction, thus avoid
ing large receivership fees.
The assets include S201, ,09S,SS1.9 81
on mortgage on stock shares; Sl5,-
1S9,175.S3 in stock loans; SS,645,3 ,3S5.
in straight mortgages; $4,52O.24SO3
cash in banks; $5,450,90S.77 in real
estate; S1.464,772.78 in delinquent
shares; S1,30S,176.05 in delinquent in
terest. fines and premiums; S9,66712
in rents due and other items.
Liabilities include s170, 1,316.41
dues of instalment stock; $4,S51, ,7S7.67
full paid stock; $12, ,431, ,046.4S bor-
rowed money: SAL ,594, ,546.90 earnings
due shareholders. S1.362,S14.47 ad-
vanced payments of dues; S1.226,-
32S.21 matured stock; S6SS, S,162.30 un-
earned premiums.
The receipts amounted to $122,011,-
512.43, a gain of S11.376,S11.S2 over
1912; shareholders numbered $40, ,S39,
with 4.106,454 shares, of which
1,S26,451 were clear and 2,7S0,094 had
been borrowed upon. There was an
increase of nearly 100000 in the
instalment stock remaining in force,
but full paid stock fell off $150,O00,
probably due to the decision of the
Supreme Court that full paid stock
must bear it's proportionate share of
losses.
The associations aided people to get
1851 homes, but there are some
which. the commissioner says caused
some anxiety. Some did not adhere
to building and loan association prin-
ciples" and went out of business.
Others advertise the virtues of the
system, but do not carry them into
effect These take risks and accumu-
late real estate, pay high salaries and
cause complaints by. shareholders.
They are within the law, technically,
and the department cannot make pub
lie what they do, under the law re-
quiring secrery.