San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-04-01
ASSOCIATIONS
OFFER AID To
HOME BUILDER
Whole Institution Founded
Upon Principle Of
Cooperation.
WORK IS APPROVED
Benefit Of B. and L. Asso-
Citations Generally
Recognized.
WORK IS APPROVED
BY MARK ID. RIDER.
svmer President Of the Illinois and
United States Leagues Of Local
Building and Loan Associations.

Building and Loan Associations
First, let us define: A building and
loan association is a mutual co-Opera-
tive money-saving and money-loaning
institution, loaning only on first-mort-
gage real estate security of the mem
bers; chartered controlled and super
yised by the state government.
These associations were here and
functioning before the war, many had
been in business from % to 50 years
previous to the war, and they func-
toned at no advance of interest rates
during the war period or since, and
are increasing in assets and member
ship very materially. They are pre-
pared and willing to assist in the great
task of educating people how to ac-
quire and own their homes in the old
fashioned way of Saving and thrift"
Approved by Government.
Building and loan associations are
not only the object of state favor and
encouragement, but the congress of the
United States appreciated so highly
the great good they confer upon So
ciety, that in every revenue measure
passed in Congress in the last quarter
century they have been exempt from
taxes imposed on other forms of cor
porations, in order to encourage their
growth and development. and to slim
ulate through their auspices the build
ing of homes. As n further evidence
of the high regard in which they are
held, at the last session of Congress
the revenue act was further amended
to exempt from income tax the divi-
dends or interest, received by an in
dividual, from domestic building and
loan associations loaning to members
only, which does not exceed $500.
Work Is Justified.
Let us analyze briefly the work per-
formed by them in order to explain
and justify these exceptional favors
from both state and federal govern
ments:
In the United States there are be-
tween 5000 and 5000 associations. hav-
'-r-r a membership of more than 5.0O0.-
600 members, with accumulated saw
ings of over S2,500,000,00O. More
than 100000 homes have been fl
nanced through them.
The functions of building and loan
associations are two-fold: They teach
thrift and systematic saving of money.
they encourage their members to own
their homes.
The whole institution is founded
upon the principle of cooperation.
The saving members receive their
fair proportion of the interest their
money has earned, generally from to
z per cent per annum, depending upon
the terms of deposit and local loaning
rates. Interest is compounded so that
the saving members have a safe, con-
venient and continuing place in which
to deposit savings monthly or weekly
at the highest rate of interest consis-
tent with absolute safety. The saw
ing and borrowing member becomes a
saving member TO repay his loan.
Are Cooperative Banks.
How do these associations differ |
from banks, and are they COMPETE |
tors?
Frankly. they are type of cooper
alive bank. Herbert Hoover called |
them true peoples banks" They do |
compete with the banks in seeking the |
systematic savings of the people. But
the money is Immediately deposited by |
the association in some bank and as
quickly as possible is loaned-largely
for building purposes. Hence, the
money deposited with building and |
loan associations is Immediately passed |
out to lumber dealers, plumbers, me-
chanics, plasterers. bricklayers, car
penters and building supply houses,
and therefore soon finds its way back
to the bank, having contributed most
generously to the best interests of the
community.
Methods Are Different.
There is also great difference in !,
the methods of loaning. Bank loans
Sreaisually made on a one, two or
three-year term-the short mortgage
business. The building and loan asso-
citation generally on six, eight or ten
year terms. Theirs is peculiarly the
long mortgage business. The bank COL
lects interest quarterly or semi-annu-
ally. and the principal when the debt
natures. The building and loan asso-
citation receives interest and a small
percentage of the principal each
month. This monthly method of re-
payment creates a constant revolving
fund for community building and the
borrower is more certain to pay off
his loan. There are distinct fields of
activity for both banks and building
and loan associations, and there should