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Report on Depositors' Guaranty Fund in Oklahoma.

The official statement of the condition of the depositors' guaranty fund dated September 30, 1913, is not reassuring. From that source it appears that, notwithstanding the new law passed by the Fourth Legislature, which took effect March 6, 1913, as an emergency measure, and which provides that "the assessment for the year 1913, shall be payable immediately after this act takes effect," that the collections on assessments from June 30 to September 30 only amounted to $2,096.79, while the amount of guaranty fund warrants increased during the same period from $481,948.59 to $656,605.76 and the amount of cash on hand had decreased from $24,000.27 to $15,840.74.

During the same period the amount realized from assets of failed banks was $28,657.48. The statement does not disclose the purpose for which the increase of $174,657.17 in guaranty fund warrants was used.

State guaranty fund warrants which are authorized to be issued bear six per cent interest. The interest on $656,605.76 would amount to $39,396.34 per annum, while the guaranty fund collected from banks in the last six months is $73,602.19, or less than twice as much as the annual interest on outstanding warrants,

Following is the statement issued September 30:

Statement of the Depositors' Guaranty Fund of the State of Oklahoma

for the Quarter Ending September 20, 1913. Cash on hand June 30, 1913...

- $ 24,000 37 Collection on assessments..

2,096 79 Collections on failed banks : Oklahoma State Bank, Durant..

.$ 496 44 Bank of Garvin..

1,386 50 Oklahoma State Bank, Hugo..

5,150 00 Alamo State Bank, Muskogee.

50 00 Planters & Mechanics, Oklahoma City.

92 85 First State Bank, Oklahoma City..

8,455 44 Night and Day Bank, Oklahoma City.

21 75 Bank of Stillwell...

4 50 Oklahoma State Bank, Sapulpa.

13,000 00 $28,657 48 Interest on daily balances...

165 87

Total ....
Interest paid on warrants.
Warrants paid.....
Cash on hand..

$54,920 51

365 55 38,714 22 15,840 74

Total ......
Amount of outstanding warrants..

.$ 54,920 51

.$656,605 76 -Investor.

New Jersey Report, by Commissioner La Monte.

As the statute requires, I herewith submit the report of this department for the year ended October 31, 1913, relating to building and loan associations.

These institutions now aggregate 724 in number. Since the date of the last annual report sixty-seven have been incorporated and seven have ceased operations, leaving a net increase of sixty, as compared with a gain of thirty-eight in the preceding year.

Abstracts of the reports of the 643 associations which have made returns during the past year are contained in the appendix. The number reporting is forty-four in excess of the total for the previous year. Their condition and transactions in the aggregate are shown in the following tables :

Assets. Loans on mortgages (first liens)..

$110,508,227 Loans on mortgages (other than first liens)

48,918 Loans on shares of association..

3,603,666 Loans on other securities...

39,657 Bonds owned ..

100,377 Cash on hand.

19,672 Cash deposited in bank.

2,019,012 Real estate acquired under foreclosure or in settlement of debts 772,962 Real estate otherwise acquired.

132,454 Real estate sold under contract..

425,002 Furniture and fixtures....

59,680 Installments due and unpaid..

513,059 Interest, premium and fines due and unpaid.

483,529 Taxes, insurance, etc., advanced for borrowers.

78,538 Other assets

148,925 Total

.$118,953,658 LIABILITIES. Due installment shareholders-dues......

.$ 85,794,872 Due installment shareholders-profits apportioned.

20,880,471 Due installment shareholders-advance payments.

258,301 Due on shares lapsed or forfeited..

28,490 Due prepaid or paid-up shareholders-subscriptions.

2,671,087 Due prepaid or paid-up shareholders-profits accrued or apportioned

47,984 Due shareholders-matured shares.

510,018 Interest accrued on unpaid matured shares.

6,200 Unearned gross premiums...

150,140 Balance payable on loans made..

1,287,480 Mortgages assumed for borrowers.

29,738 Mortgages on real estate owned.

15,550 Interest accrued on mortgages..

381 Borrowed money

6,565,294 Interest accrued on borrowed money.

17,036 Surplus or undivided profits...

161,786 Other liabilities

528,830

Totals
Receipts were $73,165,457.

$118,953,658

..............

MISCELLANEOUS. Membership at beginning of fiscal year...

218,455 Membership at close of year.....

241,487 Borrowing members .......

57,455 Shares held by borrowing members......

660,595 Non-borrowing members ......

184,032 Shares held by non-borrowing members..

1,243,837 Shares in force at beginning of fiscal year.

1,713,954 Shares issued during the year....

447,137 Shares matured during year....

48,576 Shares otherwise cancelled during year..

256,659 Shares in force at close of year...,

1,904,432 Foreclosures during the year..

214 Material gains are shown by the foregoing summary. Excluding the figures of the one small "state" association, the aggregate membership of 241,013 represents an increase of 22,079, or over ten per cent for the year. The combined gross assets of $188,807,906 are larger in amount by $12,405,585, or over eleven per cent. The dues or subscriptions paid on the shares outstanding total $88,388,306, which is an increase of $8,543,053, or over ten and a half per cent. The profits, apportioned and unapportioned, aggregate $21,040,733, the increase being $2,048,909. The share dues or subscriptions plus the profits make a total of 109,429,039, which is the amount of the net assets or net worth of the institutions. Of the whole number of shareholders, some twenty-three and four-fifths per cent are borrowers. The real estate held is reported at $1,314,584,, or slightly above one per cent of the gross assets. More than thirty-two per cent of the total has been sold under contract. The additions made to the real estate item during the year covered by this report amounted to $240,440, as against only $22,108 in the year preceding. The number of foreclosures was larger by 66, the total being 214. These are the less favorable features of the data reported.

Some 593 of the associations issue shares in series, the proportion being ninety-three per cent, the same as last year. Of the two premium plans, "gross" and "installment,” the former is in use in 330, or a little more than fifty-two per cent of the institutions, this proportion also being the same as in 1912, and the latter is followed by 248, or slightly over thirty-seven per cent, which is a decrease of not quite three per cent.

The record of the year has been marred by the discovery of defalcations in a few of the institutions. In no instance, however, was the solvency of the association affected. The whole amount involved was comparatively small, and the sums abstracted have either been made good or will, it is believed, be eventually recovered. The wrongdoing was in each case made easier by the absence of proper checks upon the work of the particular officials, due to the implicit trust placed in their integrity by the boards of management. The unsafety of such a situation in any financial institution is thus given added demonstration, and the warning conveyed should be heeded by the managers of other associations who may be disposed to permit similar conditions to exist.

Recognizing the advantages to the community from the operations of building and loan associations, it has been the policy of the state to encourage their establishment by providing, among other things, a simple procedure for their incorporation. Any nine persons, citizens of New Jersey, may now form an association of the kind by executing a brief form of certificate, and having it recorded in the county clerk's office and filed in this department, for which merely nominal fees are charged, and business may be commenced when shares having a par or ultimate value of $10,000 have been subscribed. No other requisites are prescribed in the law, except that the name assumed must be approved by the commissioner of banking and insurance. The institutions have multiplied in recent years, and while the greater number appear to have succeeded, some have not been

able to acquire a membership sufficiently large to make the scheme workable, and as the result they have amalgamated with other associations or been wound up, although a few are still struggling along under this handicap. It is quite apparent that the formation of these societies was ill-advised. They were variously located, some in places where the population was too meager to afford reasonable promise of their success, and others in more populous sections, but where the field was already covered by existing associations. In the latter connection, the belief has been expressed that the business of organizing such corporations in certain localities had been overdone, and therefore ought to be curtailed. All of which suggests the advisability of an amendment to the law requiring associations hereafter incorporated to obtain a certificate of authorization from the commissioner, and empowering him to withhold the same in any case where it shall appear that the conditions do not warrant its issuance.

In line with what was stated in its report for the last preceding year, upon the subject of uniform system of bookkeeping, the department has prepared and is now having printed sample forms of certain essential books, copies of which will be furnished the various associations. It is confidently believed that the general adoption of these forms will aid in bringing about the desired results.

What is the field of the Building and Loan Association ? As applied to Co-operative Banks, which is the name the so-called Building and Loan Associations are

known under in Massachusetts. By James B. Dooley, Member Committee on Housing, United States League of Building and Loan Associations, before the First City and

Town Planning Conference, Section on Housing
Finance, Wednesday, November 19, 1913,

Boston, Mass.
Mr. Chairman and Gentlemen of the Massachusetts City and

Town Planning Conference: The time allotted to me is so short that it will enable me but briefly to treat the important question I have been invited to address you about.

I had the honor of being one of the delegates sent by the Massachusetts State League of Co-operative Banks to attend the annual convention of the United States League of Local Building and Loan Associations, held at Atlantic City in July, 1912.

At the said convention, two papers were read relating to the Housing Question, one being entitled “The Housing Question at Home and Abroad," by the Hon. Julius Stern, of Chicago; and the other, entitled "Housing of the Working Classes in France,” by Dr. Charles Pranard, of Paris, France.

The said papers aroused the interest of the convention to such an extent that a special committee of five was appointed to consider the housing problem, as set forth in these papers and to make a report of their conclusions at the annual convention to be held in 1913. I had the honor of being appointed a member of this committee of which Mr. Stern is the chairman. The said committee, at the meeting of the United States League held this year, reported at length and if I attempted to even outline the said report, am afraid it would interfere with your program. I will leave with your chairman a copy of the proceedings which contains the said report, and will simply at this time give you the summary of the recommendations contained in the said report:

1. By a national policy of self-help—the Wisconsin idea.
2. By the taxation of the unearned increment of land.
3. By the exemption from taxation of all dwelling houses.

4. By the nation-wide establishment of home-building societies.

5. By securing the use of big capital at the lowest market rates.

I have been requested to inform this conference “What is the Field of the Building and Loan Associations” or as I presume your Chairman, Mr. Foster, meant as applied to co-operative banks, which is the name the so-called building and loan associations are known under in this state. The purpose of co-operative banks is to afford our citizens corporations, under our laws, wherein they may make monthly deposits, not in excess of $25.00 per month, upon which deposits they shall receive such profits as the bank in which they are may earn, less the legal requirements. These monthly deposits are called share dues, that is, the person depositing one dollar ($1.00) each month would be the holder of one share and so on up to the limit, $25.00 for twentyfive shares. These monthly deposits are continued until the deposits, with the accumulated profits on each share, amount to $200.00, when they are called matured and the value of the same is paid to the shareholder. The money so deposited is loaned out each month to our citizens who must become shareholders, if not already such, to the extent of at least one share for each $200.00 borrowed. A shareholder is entitled to a loan of 95 per cent of the withdrawal value of his account at the time the loan is granted; this is called a share loan or, he may obtain a loan of $200.00 upon each unpledged share held, provided satisfactory real estate security be given, the real estate to be located in Massachusetts.

The borrower upon improved real estate must have therein an equity, above all incumbrances, of at least twenty per cent (on unimproved, 50 per cent). The loan upon real estate security works out this way-say a loan of $2,000.00 at 572 per cent per annum:

Ten shares are held and pledged for the loan, requiring a monthly payment of $10.00. The interest on the loan must also be paid monthly and amounts to $9.17, or a total monthly payment of $19.17. This monthly payment continues until the ten shares amount to $2,000.00, when they are applied to cancel the loan. The time it takes is usually about twelve years. There are many other favorable features which I have not the time to go into.

I presume I have been mainly invited to address you to bring

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