« 이전계속 »
War and Its Effect on Building Associations. The destruction of capital by war and the loss of production during the war are sometimes referred to as sure to make times hard for many years after the war is over. Of course, there can be no doubt that war is costly and must be paid for and will be taking its toll of workers everywhere for many years. However, it does not follow that building and loan associations must endure more than the average of adversity that is bound to follow. The associations are on a firm and solid basis, and most of them have ample reserve funds to meet contingencies that may arise.
It is the better part of wisdom to cut down on the demand for loans wherever possible and meet the demands of your present members who will be compelled to withdraw more or less for actual living necessities. It is in these times that associations come closer to the people than other financial institutions. The men who control the destinies of these institutions must see to it that the membership is properly taken care of.
Educating Members of the Legislatures. The Kansas League of Building Associations has taken an advance step in educating the members of the legislature of this state on the subject of building and loan associations. Each month all elected members of the Senate and House of Representatives of this progressive state receive a copy of the AMERICAN BUILDING Association News, mailed to their respective homes.
The Illinois League at its last meeting, held at Moline, decided to follow in the footsteps of the Kansas associations.
Thus it will be seen that the men, to whom have been entrusted the destinies of future legislation affecting building and loan associations in these two states, will know something about the true merits of these beneficent institutions.
A Great Financial Factor. The financial world has no doubt given but little thought to the great building association movement, says the Philadelphia Ledger, yet this wonderful system has practically come to the rescue of the financial world, or the American part of it, during the recent difficult period of money transactions, and, what is more wonderful, this relief has come from the wage savings of those who fortunately are yet employed. When the startling fact becomes well known that last week alone the building associations of the County of Philadelphia made 252 real estate loans, aggregating nearly $600,
000, and in forty-six weeks 9,986 real estate loans, amounting to $23,117,600, the wage savers must be given credit for representing a great power for good in times of distress. Many merchants and others, finding it not an easy matter to dispose of securities, or even quickly obtain money on real estate elsewhere, have flocked to the building society and obtained, if not all they needed, at least enough to relieve them of pressing wants. Not only Philadelphia County, but other counties in this state, and in other states wherever the building society system flourishes, have done their part well.
Rural Credit. It is very encouraging to Ohio and Indiana building association men to see associations in other states taking up the work of making farm loans. Ohio was the pioneer in this line of business. The last report of the Ohio Building and Loan Bureau shows that building associations have loaned about $20,000,000 to Ohio farmers, being about 20 per cent of all farm loans now in force on Ohio farms, as estimated by the Federal Census office. Building associations in Ohio and Indiana are making great strides along this line, and if associations in other states will join in this movement they will quickly solve the problem of rural credits.
The following, from the Emporia (Kan.) Daily Gazette, is of interest:
"Lyon county is the first in the state to have a Rural Credit Association. The Mutual Building and Loan Association, of this place, is now making loans of this character, patterned after the German system. Under these contracts the farmer is allowed to pay any amount at any time, on his loan, without notice, these payments being entered in a pass-book which is retained by the borrower, and which shows at a glance the payments made and the balance due. As no commissions of any character are charged by the association, interest is stopped on the amounts paid on principal, thus encouraging the borrower to pay off his loan and get out of debt as quickly as possible.
"Under a somewhat similar contract which this association makes for its town loans, the borrowers have, on average, reduced their indebtedness twice as rapidly as required in the contracts, and it is reasonable to suppose the same will prove true in the case of their rural credit loans, as soon as the borrowers realize their privileges in the matter of payments on principal.
"The Mutual Building and Loan Association is also like the German rural credit associations in that it is a savings institution where no fees, fines or penalties are charged, and
where not only the townspeople but the farmers can deposit their savings at any time, in amount, and receive the maximum rate of interest or dividend consistent with absolute safety. Many a young man in Lyon county has accumulated his first savings in this institution, and after the amounts he had paid in, with interest, were of sufficient amount, he has withdrawn his money to make the first payment on a home, either in town or in the country, securing the balance of the money necessary to pay for the property, from the loan association. After the home has been paid for, the habit of thrift is formed and a new savings account usually is opened with the association.
“There has been a good deal of talk in the newspapers and among the people generally about the importance of having special rural credit legislation enacted not only by Congress, but by the state legislature, but it has remained for this Emporia institution to demonstrate that Rural Credit Association can be conducted under the present building and loan law, and it is to be hoped that other associations over the state will enlarge their usefulness, so the farmers generally may have the advantage of these rural credit loans. It is to be hoped, also, that the state banking department not only will encourage the present associations over the state to enter the rural credit field, but will use its influence to have new associations established.
“Every town of a thousand inhabitants could support an association if it entered the rural credit field. If this should be done it would gradually result not only in reducing the rate of interest to the farmer, but in eliminating all commissions, and the large sums of interest, amounting into the millions of dollars each year, which are sent East, would be kept in this state."
An Explanation. If there were no other evidence of the growth of the building association movement than the ever-increasing amount of literature that reaches the Editor's desk, that alone would be sufficient to convince the most skeptical. Newspaper and magazine articles, pamphlets, addresses and lectures treating the different phases of this movement are received daily from every corner of the country. Many of them are laid aside with the hope that space may be found for them in some future issue, but when press-time arrives there is always an overflow of matter that demands precedence. The Editor is grateful to his many friends for supplying him with literature and information, and regrets that he cannot find space for more of it.
Rural Credits and Farm Loans. A CONSIDERATION OF THE PENDING BILLS IN CONGRESS AUTHOR
IZING THE ORGANIZATION OF LAND Banks.
Paper read before the U. S. League Meeting by
[K. V. HAYMAKER, Defiance, Ohio.]
This League, at its meeting one year ago in Milwaukee, listened for the first time to a discussion of the subject of Rural Credits and Farm Loans, and the relations of building associations to that type of investments. Resulting from that discussion, the League at that meeting appointed a Committee on Farm Mortgage Loans, charged with the duty of laying before all proper authorities the claims and merits of the building association system as the most practical type of institution through which to work out the problem of land credits.
Since that meeting there has been a nation-wide discussion of the subject. Financial journals, the farm and rural press, and farmers' organizations throughout the country have discussed the problem from every possible angle. Committees of Congress, and officers of the several departments of government, gave long extended hearings, where every phase of the question was threshed out, the published reports of these hearings making several bulky volumes.
The American commission which visited Europe to study and investigate foreign methods of handling mortgage credits, rendered a voluminous and highly interesting and instructive report.
The discussion of this subject before the League last year was widely published, and attracted a surprising degree of interest, and brought to your committee a vast flood of correspondence from practically every state in the union, all eager to learn the particulars of the plan of making farm loans by building associations. The attention of the government was attracted to the activities of our system in the farm loan business, and your Committee on Farm Loans was given a hearing early in November before the Rural Organization Service of the United States Department of Agriculture, and a month later your committee was given a hearing before the Sub-committee of the Committee of Banking and Currency of Congress.
We feel justified in asserting that these two hearings made a favorable impression on the minds of the gentlemen who listened to them, and had its influence in giving them a favorable idea of the merits of the building association system as a nucleus around which to build up a land credit system in this country.
These two hearings both occurred before the introduction of the Land Credit Bills in Congress, so at that time your committee could only discuss the broad subject of building associations and their relations to the subject of land credits, and we had no opportunity to discuss the features of the bills that were afterwards introduced. Since your committee has had no public opportunity
to criticize these bills and point out what seems to us to be their faults and weaknesses, we desire at this time to devote a few minutes to that subject.
Quite a number of bills have been introduced in Congress, each aiming to create a special type of financial institution for handling land credits, and disclosing widely differing ideas and theories on the problem, and suggesting various plans of solution. The two bills most prominently discussed were known as the Fletcher-Moss Bill, which represents the plan approved by the majority of the American Commission, and the Bathrick Bill, which was championed with signal ability by its author, Representative Bathrick of Ohio. These two bills might be said to represent the two extremes of opinion existing on the subject.
The Fletcher-Moss Bill provided for the organization of capitalized banks, with a feeble attempt to engraft thereon a shadowy sort of co-operative feature, these institutions to be conducted under government supervision, but without financial aid from the government, except that such institutions were made legal depositories for postal savings, on the same terms as other banking institutions.
The Bathrick Bill authorized the issue of a vast volume of government bonds, the proceeds to be loaned by the government directly to farmers, and secured by farm mortgages. Regarding the merits of this bill, which has been urged with much energy and ability by its author, without raising the question of its constitutionality (which question is a very grave one), we do not believe that the great mass of the American people are at this time quite ready to endorse the suggestion for the government to make loans of public funds directly to individuals of a certain class or engaged in a certain occupation. Such a proposition is fraught with infinite possibilities of the most dangerous character. Who shall decide that merchants or miners or factory laborers are not as justly entitled to this government aid and assistance as are farmers? On what good reason shall such aid be extended to one class or occupation and denied to any other class equally needy and deserving? As yet public opinion draws a broad distinction between public aid extended to a great public utility, like a transcontinental railway or a great river improvement, or an interocean canal, or a gigantic irrigation project, and a like benefit extended to an individual or a class of individuals. It must be admitted that in recent years public sentiment has been traveling very rapidly in that direction, but it does not appear that it has yet reached the advanced position which would approve the principle on which this proposition is builded.
Without taking the time to make an analysis of the various bills now pending, we will discuss the general character which marks all of them, in greater or less degree.
The proposition, which is a prominent feature in the FletcherMoss Bill, to authorize these proposed land banks to deal in shorttime loans, made on personal credit, or chattle security, or lien