Tennessee State Report. The thirteen building and loan associations in the state are all in good financial condition, according to the report of Treasurer W. P. Hickerson, who is ex officio building and loan commissioner of the state. The report says that many of the companies are changing their plans of payment to the monthly plan and this is proving uniformly satisfactory. The assets of the thirteen associations are given as follows: American, $1,210,525; Bluff City, $70,189; DeSoto, $191,269; Dyer County, $138,183; Equitable, $42,588; German-American, $349,280; Home, $81,786; Jackson, $338,281; Memphis, $93,639; Somerville, $19,195; Tennessee, $18,368; Trenton, $51,140; Workingmen's, $352,291. This makes a total of $2,956,733 and an increase of $173,264 as compared with the previous year, or 6.22 per cent. The liabilities of the several organizations total $2,817,388, with unapportioned profits or surplus funds of $139,345. As compared with the fiscal year ending June 30, 1912, this shows an increase of $163,733, or 6.17 per cent, and a net increase of surplus of $9,531. All taxes due have been paid, says the report, which gives the total amount of taxes and fees as $3,751.50. The report further says: "The business of the building and loan associations is conducted principally upon the monthly premium payment plan, which has proved much more satisfactory than the old gross premium plan. The associations still operating under the gross premium plan distribute the premiums retained so as to run throughout the entire life of the series, so that in effect the system is equally as safe as though operating upon the monthly premium basis. The Dyer County Building and Loan Association changed its plan of operation to the monthly premium plan during the year, which is expected to yield much more satisfactory results than under the old plan." Pennsylvania Reports Called For. Banking Commissioner Smith has issued a call to the 1,737 building and loan associations of the state to send in their reports showing their business up to the end of the year 1913. Under the act of May 4, 1913, these organizations must set aside funds for contingent losses to be carried as a separate liability. Where funds are loaned to members on straight mortgages they are to be carried as assets independent from mortgage loans on shares. Commissioner Smith calls the attention of the officers of the organization to this law. THE rich are known by their dollars, but the humble onion is known by its scent. EDITOR NEWS: Correspondence. How to Use Income Tax Affidavit. MASSILLON, OHIO, January 19, 1914. In the January issue of the AMERICAN BUILDING ASSOCIATION NEWS I notice an income tax affidavit. I wish you would kindly inform me just how this must be used. I presume only by those who own paid-up stock. Will it be necessary for an affidavit of this kind to accompany every check for dividend? And, if so, does the party receiving the check file this with the revenue collector? I have read the income tax law, but confess I do not understand it. As you are entirely familiar with the proposition, I will appreciate an explanation and answer to my questions. Yours truly, MR. CHAS. G. KING, Sec'y, Massillon, Ohio: CHAS. G. KING, Secretary. January 21, 1914. I note what you have to say relative to income tax affidavit. The matter of preparing this affidavit should be attended to by the association and filed with the Collector of your district, because that will then put you in a position to show that you have complied with the law and it will not be necessary for you to fear any penalties. I am of the opinion that any person who receives a dividend from a building association must consider this an income, and on this he would have to pay the tax, provided his income is in excess of legal exemption. Yours very truly, EDITOR. Letter From Mr. Pranard. EDITOR NEWS: PARIS, FRANCE, January 10, 1914. I have had plenty of business with workmen's dwellings. I have prepared a respectable number of bills, which will be probably passed in a few months and will, at the same time, give a fresh impulse to the development of the cheap dwellings' scheme and involve the state in new financial responsibilities. I have had, on the other hand, the pleasure of seeing here many of our American friends. By mail of same day I am answering a letter from Mr. Rankin, asking for the title of the paper I wish to present at the International Congress. I have chosen the following subject: "French Building Loan Societies; Their Characteristics, Development and Possibilities"-because this will allow me to give general information about our special laws and to compare our associations with yours. If you wish me to treat specially any other particular subject, please let me know, for you are aware that any suggestion of yours is always very welcome. Believe me, my dear friend Rosenthal. Ever very sincerely yours, C. PRANARD. Words of Condolence From Mr. Thos. J. Fitzmorris. EDITOR NEWS: OMAHA, NEB., January 20, 1914. I extend to you my deepest sympathy on the death of your brother Abe and Fred Bader, both stricken in the noonday of life, activity and usefulness. So fast are the gaps coming in the ranks of the elder statesmen of the United States League that one is shocked and surprised. It bids one pause and take account of the fleeting years and wonderingly inquire, "Whose turn next?" To say that the co-operative movement loses two staunch pillars in the deaths of these men but feebly expresses their worth. They were on the firing line when the battle called for courageous men; men of ability, persistence and vigor. They were among the dauntless few who blazed the trail to the summit of victory and success. They lived to see and enjoy the fruition of labors unselfishly given to the cause of home ownership and human betterment. It is a consolation to be treasured with the hallowed memory of their deeds. Very truly yours, THOS. J. FITZ MORRIS. Preparing to Organize a State League in Mississippi. EDITOR NEWS: JACKSON, MISS., January 21, 1914. You will find herewith copy of our last semi-annual statement for the period ending December 31, 1913. Our association was organized in May, 1886, and has had a wonderful growth from its beginning. Our uncollected dues, as shown in the report, is large, for the reason that our books close usually on the 5th of the month to enable salaried people to receive their checks and make their payments to us. This report closed on the last day of December to comply with the state law in making the annual report to the Auditor of Public Accounts. Conditions are such in Mississippi now that we feel the need of the organization of a State League of Building and Loan Associations for our mutual protection, and the enacting of law favorable to our institution. We would thank you to advise us of the state having the best League and where we may obtain a copy of their charter and by-laws. We have a copy of Mr. Rosenthal's latest work on Building and Loan Associations. Our attorney_read the work while handling a case for us in the Chancery Court here. He says it is the best ever. Yours very truly, W. O. REA, Secretary. Kansas State League. EDITOR NEWS: TOPEKA, KAN., January 21, 1914. I have your letter of the 19th inst. relating to my inquiry about a subscription rate for the NEWS to our hold-over State Senators. I thank you very much for the liberal proposition, and in a few days I will begin to send in the Senators' names and addresses. I am interested in the "protection and promotion" bureau proposition. Will take that up with you later. Our State League is affiliated with the Kansas Bankers' Association as a section; that is, the League is a section of that association. We pay a nominal sum as dues to the Bankers' Association and have all the privileges of the bankers' organization that goes to the bankers in the way of literature, advertising, burglary insurance, typewriters, adding machines, etc., etc. We hold our meetings at the same place and on the same dates as the Bankers' Association, but our League meetings are separate. While talking with Mr. Bowman, the Secretary of the Bankers' Association, a few days ago, he asked me if we had any arrangement, or desired to make any arrangement for some outside speaker at our next League meeting. I told him that it was most too early to take it up, but I would do so soon. Your suggestion reminds me that possibly you might recommend some good Eastern man who we could get to come to Kansas next May and talk to our Building and Loan League and address the Bankers' Convention. Please think this over and advise me at your convenience. Yours truly, T. B. BROWN, Secretary. Comments on the Income Tax Exemption Clause. EDITOR NEWS: I wish to call your attention to the form of affidavit prepared by you and printed in the January number, for use by building and loan associations, in claiming exemptions from the income tax. This form has been printed by our Indiana Building and Loan Department and blanks sent out to the various associations for use in making this claim of exemption, and in my opinion the form is unnecessarily specific and in such terms that many associations are unable to make the affidavit and yet are entitled to the exemption under the statute, as I view it. A number of building and loan men of Terre Haute met in my office this morning to consider this matter, and we went over the status of the exemption as it was worded in the Corporation Tax Law and in the Income Tax Law, and the proceedings which are pending to secure an interpretation of the corporation tax provision in the courts. You have adopted the view that the present provision in the Income Tax Law is the same as in the Corporation Tax Act, and that the qualifying clause "organized and operated exclusively for the mutual benefit of their members," modifies and applies to the exemption of domestic building and loan associations as well as cemetery companies. In this, it is altogether possible that you are correct; but, at any rate, there is a serious question of construction involved, and it was the purpose of yourself, Mr. Hennessy and Mr. Cellarius, as I understand it, to secure a provision which would avoid the strict rules laid down by the department with reference to the old law, and apparently the comma after cemetery companies, was inserted while the bill was in the Senate, or possibly was inserted by mere error. However that may be, I should think that the associations ought to adopt the view that the qualifying clause does not apply to domestic building and loan associations until a different construction has been authoritatively made by the courts. However, assuming that the qualifying clause does apply to building and loan associations, it would seem to be sufficient to make an affidavit in the language of the statute "that the association is a domestic building and loan association, organized and operated exclusively for the mutual benefit of its members, and therefore under the provisions of Section 2, Paragraph G, of the Federal Income Tax Law of October 3, 1913, is exempt from the income tax imposed by said Act." I do not see the necessity or the wisdom of incorporating in the affidavit the specific rulings made by the department with reference to the Corporation Tax Act, which rulings are disputed by the building associations and are now the subject of litigation. We decided, so far as we were concerned, to file an affidavit in the brief form suggested above, and make our claim that the associations were exempt and fight it out along that line. The principal point is that many of our associations from time to time, have funds on hand for which there is no demand for loans among the members. We have had associations here with as much as $100,000.00, which they could not lend to their members, and if left uninvested they would constitute a source of great loss to the association, and these associations have made loans of such surplus money to non-members, and have frequently loaned such funds to other associations which had demand for more loans than they had funds. Such business does not in any way deprive the association of its mutual character, but would prevent the making of the affidavit in the form prepared. I am not informed as to whether the U. S. League, through its officers or committee, has passed on this question, but I am afraid that the suggested form will operate to embarrass many associations unnecessarily, and I should be glad to receive your views on this fully. Yours very truly, C. A. ROYSE, President Indiana League. EDITOR NEWS: Bureau of Building and Loan Associations. COLUMBUS, OHIO, January 15, 1914. Your letter of January 12, 1914, with reference to a Bureau of Building and Loan Associations, duly received. I am firmly convinced that we have reached the point in the history and development of Building and Loan Associations, Co-operative Banks and Homestead Associations, where it would be most advisable to have such Bureau in good working order. It would be well to economize in some other direction and thus obtain the necessary funds for an efficient and well organized Bureau. In reading the papers, one sees where President Wilson is now turning his attention to Rural Credits. It certainly will be unfortunate if a new financial institution should be forced upon the people to take care of Rural Credits, when Building and Loan Associations are better prepared to occupy this field than a new financial institution would be. Already my own company has $1,000,000 loaned upon farm lands in Central Ohio. We are making loans upon farms every day. It is an inviting field and one in which much good can be done, not only to farmers, but also to our associations. Others throughout the state are also making loans upon farms, and so far as Ohio is concerned, certainly no other financial institution need be organized. With a conviction that you are on the right track, I certainly wish you success in your efforts to organize and maintain such Bureau. Yours truly, The Buckeye State Bldg. & Loan Ass'n. Favors Bureau of Promotion and Publicity. EDITOR NEWS: UTICA, N. Y., January 26, 1914. Replying to your letter of the 21st inst., I desire to thank you for the kind expressions contained therein. In reference to the establishment of a bureau for promotion and publicity to support the good work of building associations, I desire to say that I firmly believe that that would be an excellent thing. There is nothing that contributes so much to the growth of a movement as publicity. For instance it is a well-established fact that our January series is always the largest series that we issue during the year, and we can account for it only by the fact that we hold our annual meeting in January. The newspapers all give a full account of the meeting and the reports of the condition of the association showing what has been accomplished during the past year, and it serves as the best possible advertisement of the business for the association. Now if some movement could be started which would result in calling the attention of the wage-earners to this system of co-operation more frequently, it would doubtless have a like effect on the reading public. Again thanking you and wishing you a prosperous and Happy New Year, I remain, Most sincerely yours, W. T. DUNMORE. Essay Contest Among Spokane (Wash.) High Schools. EDITOR NEWS: We expect to conduct an essay contest among the students of the Spokane High Schools. This contest will be for three prize essays treating on Savings and Loan Associations, for which three local associations are offering cash prizes of $25, $15 and $10, respectively. We desire to place in the hands of the students general information regarding the savings and loan movement, and wish to inquire if you could |