. a certificate from the financial committee to the effect that the receipts were so much and that the books agree). The property committee having received from the borrower a record of the property offered for security, said record being filled up on a blank kept for the purpose, is now instructed to visit the premises offered as security and report at a meeting of the board of directors to be held within a few days. The meeting of the directors to pass upon loans may be held at the residence of the secretary or other officer, but is usually held at the regular meeting place on a fixed date, say four days after the monthly meeting. The loan record having been prepared, and the property committee having prepared its report, the directors decide to accept or reject the security offered. A statement of this action is made on the loan record, and if it is favorable, the solicitor is instructed to secure the papers, examine the title to the property and prepare the necessary mortgage. The order for the payment of the money is then drawn, and the mortgage held by the society as security, and having been entered of record, the borrower, having transferred to the society his shares of stock as collateral security for the loan, the order is given to the borrower and paid by the treasurer. In real practice the order is handed to the solicitor who collects the money from the treasurer, and the settlement by all parties is usually made at the office of the solicitor. How the Borrower is Helped to pay Ais Loan. Hundreds of mathematicians engaged to figure and talk for financial institutions conducting business upon different plans of lending money, are daily issuing statements which prove, so they claim, that their particular plan is the best and the cheapest. All these plans, no doubt, have merit, but the poor man who is saving to buy a home of his own cares more for the system which is likely to secure for him that which he is striving to get than he does for a set of figures which present to a mathematical nicety the cost in dollars and cents. If eight or ten persons, friends or neighbors, have purchased homes through a building and loan association, each one will make great sacrifices to be present at the meeting of the society, with pass-book and dues money in hand, so as to meet the other neighbors, to show them that he is able to pay the instalments as often as they fall due. It is the association of individuals as partners of a company in which they take a part in the management which stimulates them to keep up their monthly payments, and finally enables them to accomplish their cherished hopes. The easiest way in appearance is not always the surest way. One way may be represented by a bridge over a stream of water, but the bridge has no protecting side-railings, and the foot passengers may turn to the right or to the left, and be lost before they reach the other shore. Another plan may be like a never-ending cable, which some brave, strong men have carried across, and with the same firm hold are moving up the hill. Along the line are many others, some strong and bold, and others timid and uncertain; but with those ahead pulling, and those behind speaking words of encouragement, first one and then another passes over the hill and enters the door of his own home. This latter seems to be more like the building society plan of getting on. Thousands of men have tried, over and over again to save money on the strength of individual resolution, but failures are nearly as numerous as the attempts. Strong minded men have laughed to scorn the idea that they could not accomplish in their own way, what they had determined to do, but after a number of years wasted they have entered the building society meeting-room, and acknowledged, publicly, that the difference between them and other men was not so great as to free them from the need of that help which their brethern derive from association with those who have a common purpose in view. When the question is reduced or belittled to one of mere dollars and cents the figures may be interesting and really important, but they are valueless unless linked to the moral forces which render practical the attainment of the results shown by the addition of numbers. Reasons for Joining Them. Nearly every officer of a building society is able to give reasons, when asked, why he believes in building societies. Below is a sample list of the answers given : Because I found that a penny saved was a penny gained; that the three dollars I was paying for rent every week, paid instead to a building society, was in a sense three dollars in my pocket. Because, having instituted a course of self denial in order to meet my instalments, the habit of saving grew upon me, and by this means I was eventually enabled to open a lucrative business on my own. account. Because, through their agency, I purchased a property which has since greatly increased in value, and is a fair inheritance to leave to my children. Because, as an investor, it has been my experience to have my subscriptions, after paying in for a few years, returned to me almost doubled in amount. Because, as a depositor, I receive a fair rate of interest on my easy monthly dues paid in. Because my children, having witnessed the good results of such connections, have followed my example in so far that they deposit their surplus earnings with a society, and for a consideration which Because I know that the prosperity of many of my neighbors are attributable to the same beneficent agency. Because I am certain that the rapid progress and generally flourishing condition of the working people are largely due to the habits of economy and industry fostered by such institutions. Because of the incalculable misery and destitution they have warded off from the homes of the industrial classes. Because of their tendency to cut down class distinctions, and to put man and man, the rich and poor, more on a level. Because, independent of borrowers, investors and depositors, there is no class which they do not benefit; artisans and mechanics, men of every calling, are directly or indirectly assisted by them. Because, though founded comparatively recently, and in an humble manner, they have made such mighty strides that their ramifications now extend all over the globe. Because their existence is necessary to the public welfare, as is evidenced by the enormous business they transact. Because of the thousand advantages offered which are peculiar to themselves, and cannot, consequently, be found elsewhere. Because all profits realized are distributed among those who, in one way or another, have banded together and assisted in their foundation. The Cost. The actual interest cost of a loan depends upon the manner in which the borrower sets aside the money to pay it off when due. When an ordinary loan (not a building society loan), say $1,000, becomes due the borrower is obliged to have that sum in hand with which to pay it. Now comes the question. How can a poor man possess himself of $1,000 when that amount is required? The only plan is to begin at the beginning, the very moment the loan is granted, to save so much per week or month. Suppose he sets aside from his wages $7.15 per month and places it in a strong box he will have at the end of one hundred and forty months the necessary $1,000. If the loan is at six per cent. he will have paid $700 in interest during the same period or $5 per month, making a grand total of $1,700. As the money was saved in instalments it is plain to be seen that the loan was paid back to the "strong box" on an average time of seventy months (average time on instalment payments being one half the full time), and as $700 interest was paid for $1,000, which the borrower had the use of for only seventy months, the interest really amounts to twelve per cent. per annum instead of six per cent. The rate of interest (under twelve per cent.) is therefore reduced according to the amount of interest the borrower gains by the judicious investment of the monthly sums he is setting aside to pay off the loan when it falls due. The building society not only lends the money but at the same time furnishes a place of investment for the monthly instalments that the borrower is saving for the purpose of paying off his loan when due, and the cost may be presented as follows: Loan for one hundred and forty months (about the time required to mature shares in a building society which receives very little premium) $1,000. One hundred and forty monthly payments, at $5 dues, Total cost, $700 00 700 00 $1,400 00 This it will be seen is $300 less than the cost of an ordinary loan, shown above to be $1,700. The $300 represents the amount that has been gained by the monthly investment of the savings in the association. It has been frequently stated that the "ordinary loan" borrower may get even with the building society borrower by depositing his savings in a building association while he borrows elsewhere, which is true but not strictly honorable, but that is an acknowledgment that the society is a good place from which to get the loan in the first instance. If the outside borrower can gain the necessary $300 to square the accounts then the cost of one loan is equal to the cost of the other. CONSTITUTION AND BY-LAWS OF THE BEREAN BUILDING AND LOAN ASSOCIATION. [The following sample of constitution and by-laws represents what may be considered a model. Several building society experts were called together and agreed upon them as containing the best features of the laws of many societies. They contain more perhaps than is absolutely necessary, but the purpose was to make them as fully explanatory of the business of the societies as possible.-CHIEF OF BUREAU.] Constitution. SECTION 1. The name of this association shall be called "THE BEREAN BUILDING AND LOAN ASSOCIATION," and shall have for its object the saving of funds from monthly payments of the members, and the investment thereof, or to be advanced or Joaned to members desiring to borrow, to the end that the profits arising from the business thus transacted shall, with the monthly payments, largely reduce the number of months required to make each share worth its par value of two hundred dollars. STOCKHOLDERS AND CAPITAL STOCK. SEC. 2. The capital stock of this association shall be one million dollars, and consist of five thousand shares, of the par value of two hundred dollars, to be issued in one or more series, as the board of directors may determine. SEC. 3. Stockholders of the association shall be citizens of the United States. Minors may hold shares by trustees, and women in their own right. SEC. 4. Every stockholder or trustee shall sign these laws, by which he or she is obliged to the prompt payment of the monthly dues, premiums, interest and fines, WORKING EXPENSES. SEC. 5. Each and every stockholder shall pay for every share of this association subscribed for, twenty-five cents entrance fee, and shall also pay at each annual meeting such sum (not exceeding twenty-five cents per share) as shall be determined by the board of directors, to pay the working expenses of the association. MONTHLY DUES. SEC. 6. Each stockholder, for each share of stock by him or her held, shall pay one dollar per month in current funds, until the series with which he or she is connected shall have accumulated real assets sufficient to divide to each share the sum of two hundred dollars or its equivalent, based on a division of the profits, giving each dollar invested a like per cent. per annum for the time of investinent. FINES. SEC. 7. Any stockholder neglecting or refusing to pay his or her monthly dues, interest, or premiums, as the same shall become due, shall pay the additional sum of two cents monthly on each dollar remaining unpaid. WITHDRAWALS. SEC. 8. Stockholders who have not received loans may withdraw from the association after thirty days' notice given åt a monthly meeting to the board of directors. They shall receive the amount actually paid in as dues, less all fines and other charges, and after the expiration of one year from the issuing of the series in which the stock is held they shall be entitled to the amount of their payments as dues, with such part of the profits as the directors may allow. Not more than one-half of the funds in the treasury shall be used to refund money on withdrawn shares, except by special order of the board of directors. LOANS (amount per share). SEC. 9. Each and every stockholder shall be entitled to a loan of two hundred dollars for each and every share which he or she may possess. LOANS (when to be made). SEC. 10. If the funds in the treasury admit of a loan, the money shall be offered at a stated meeting, and the stockholder who offers the highest premium shall receive the loan. PREMIUMS (to be paid monthly). SEC. 11. The premium in all cases for priority of loan shall be the number of cents per share each month which the borrowing stockholder agrees to pay into the assotion, together with the regular dues, interest, etc.; and all bidding shall be done openly at the stated meetings of the board of directors. STOCK LOANS. SEC. 11. Any member may have an advance or loan, without real estate security, to the amount he or she shall have actually paid in as dues to the association. COLLATERAL SECURITY. SEC. 12. For each advance or loan of two hundred dollars per share to a member, at least one share of stock shall be assigned to the association as collateral security' LIMIT TO BIDDING. SEC. 13. The successful bidder may take the loan for one or more shares (not exceeding ten shares at one bid) at the same premium, but he may continue bidding if there be more money to sell. If there be not sufficient funds in the treasury, the balance may be supplied from the receipts of subsequent meetings. All successful bidders shall immediately submit a full description of the property offered as security, and such other information as shall be required, and shall secure the repayment of the said loan, with legal interest, by satisfactory bond and mortgage upon real estate in the city of Philadelphia, and with a policy of insurance for an approved amount. INTEREST AND PREMIUMS TO BE PAID MONTHLY. SEC. 14. The interest and premiums on all loans shall be paid monthly from the time of bidding for the same. |