San Antonio light. [volume] (San Antonio, Tex.) 1911-1993, 1923-10-21
Have Endorsement Of State
and Federal Gov
ernments.
DIFFER FROM BANKS
"True Peoples Banks"
Hoover Calls B. & L.
Associations.
BY MARK ID. RIDER
Former President of the Illinois and
United States Leagues Of Local
Building and Loan Asso.
nsoxin.,y


United States Leagues Of Local
Building and Loan Asso.
Citations.
First, let us define: A building
and loan association is a mutual
cooperative money-saving and money
loaning institution, loaning only on
first-mortgage real estate security of
the members; chartered, controlled
and supervised by the state govern
ment.
These associations were here and
functioning before the war. many
had been in business from % to 30
years previous TO the war, and they
functioned at no advance of inter-
est rates during the war period OK
since, and are increasing in assets
and membership very materially.
They are prepared and willing TO
assist in the great task of educating
people how to acquire ard own their
homes in the old-fashioned way Of
Saving and thrift"
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
society, 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.
Association Work Justified.
let us analvze briefly the work
performed by them in order to ex-
plain and justify these exceptional
favors from both state and federal
| governments:
In the United States t',ere are be-
tween 5000 and 5000 associations. hav-
ing membership of more than 5000
600 members. with accumulated say
ings of over $500, 100000. More than
100000 homes have been financed
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 compound
ed so that the saving members have q
safe. convenient and continuing place
in which to deposit savings monthly
| or weekly at the highest rate of inter
est consistent with absolute safety
The saving and borrowing member be-
comes a saving member to repay his
loan.
Are Cooperative Banks.
How do these associations diffe,
from banks, and are they competi'
tors?
Frankly, they are type of CO.
operative bank. Herbert Hoove,
called them true peoples banks
They do compete with the banks ir
seeking the systematic savings of thu
people. But the money is immediately
deposited by the association in somC
bank and as quickly as possible is
loaned-largely for building purposes
Hence the money deposited with build
ing and loan associations is immediate
ly passed out to lumber dealers, plumb
ers, mechanics. plastercrs. bricklay
ers. carpenters and building suppl
houses. and therefore soon finds it
way back TO the bank, having cor
tributed most generously to the bes
interest Of the community.
There is also great difference IL
the methods of loaning. Bank loan
are usually made on one, two o.
three-year term-the short mortgag
business. The building and loan asso
citation generally on six, eight or ten
year terms. Theirs is peculiarly III
, long mortgage business. The bank col
lccts interest quarterly or seminar
nually, and the principal when tn
debt natures. The building and LOAF
associations receives interest and
small percentage of the principal eac
month. This monthly method OF re
payment creates a constant revoly
ing fund for community building an
the borrower is more certain to pa
off his loan. There are distinct field
of activity for both banks and build
, ing and loan associations, and Their
should be a general recognition @
/ this fact by all.
. Copyright, American Homes Bureau.
Lamplight Saves Eyesight.
The increasing favor of more lamp
in the home is backed by purel
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