Evening star., 1947-10-08

Unified as business group In the
District Of Columbia Building and
Loan League. 27 individual associa-
tions operating In the Washington
Metropolitan Area now have COM
bined assets of more than $500, ,000,-
900.
They serve 46, ,432 borrowing men,
bers and 1884, investing members
The average outstanding loan bal
ance is 1855, and the average in
vestment account Is 1852.
Growth Is Steady.
Typically the growth of this bus
iness is slow and steady, yet in the
past eight years assets have doubled
and In the past 20 years have quad
rupled. The record Of growth in
membership parallels the growth In
assets, indicating the general appeal
for the type of service rendered.
Basically building and loan as
sociation performs but two func-
tions:
/. 1t accepts savings from individ-
uals which, in turn,
2. It lends to those who wish to
buy or build homes.
The form in which these transac-
tions are handled has changed
greatly over the years except for the
one factor which for a century has
made building and loan distinctive
among home financing agencies.
That is the infeXible requirement
that all loans be made on the
monthly amortization plan.
This method is held to be the sur
est and safest in acquiring debt-free
home ownership. The safeguard Is
mutual as to the borrower and the
institution.
Monthly Payment Fixed.
Under this plan the borrower has
a fxed, monthly payment, and he
is never called upon for additional
curtail.
The loan runs under the original
terms until paid in full. From the
standpoint of the association, the
monthly payments made by the bor-
rover constantly increase the bor-
rower's equity, thereby increasing
the safety of the associations invest
ment.
Patterned after earlier plans In
use, particularly in England and
Germany, the first building and loan
association in this country, the OK
ford Provident of Frankford, Pa,
was organized in 1881. 1t repre-
sented the answer by cooperative
effort to a problem which the m
dividual could not solve alone.
The country was young and IN the
early stages of development. Bank
ing facilities were either lacking en-
tirely or were restricted to CONNER
cial enterprises. Under these cir
cumstances, it was impossible for
the average person to accumulate
the funds with which to purchase a
home or to obtain satisfactory credit
arrangements for that purpose.
Subscribers Pooled Funds.
Through the medium of the OK
ford Provident, it was possible for
the subscribing members to pool
their funds and provide the desired
mortgage facilities The plan was
elementary and slow. but 1t worked
Each subscriber was required to
pay in monthly or weekly dues
When a sufficient amount was accu-
mulated, 1t was loaned to one of the
members on the security of mort
gage on real estate. Thereafter this
member made his regular payments
on his mortgage in addition to his
original subscription.
1t was intended that in time each
subscriber should have his oppor-
tunity to borrow from the common
fund.
Assets Exceed 10 Billion.
Today there are many thousands
of such institutions in every part OF
the country, with assets we'll in ex-
cess of, ,000,000.000 and serving
millions of home owners.
Recognizing the economic impor-
tance of these institutions, Con-
gress has enacted legislation de-
signed to give stability and fexibil-
ity to their operations.
Most important was the passage