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recognition of the practice by the Act of June 22, 1897, P. L. 178, which subjects such stock to taxation. We find nothing unlawful in the issuing of full-paid stock, the dividends of which are not guaranteed but are limited in amount and payable only out of the profits, and the holders of which are entitled to no preference and have no advantage over other stockholders upon distribution in case of loss or insolvency; provided, that the issue is incidental to the main business of the association and is intended to provide a fund from which loans may be made to the holders of installment stock. To this extent and for this purpose its issue is within the implied powers of such association."

Judge Endlich is the author of a standard treatise on building associations, and in Sections 451-4 of the 2d edition he has again considered the subject and has stated the results of the prevailing principles to be as follows:

"464. The result of the principles declared and applied in these decisions would seem to be, in the absence of any statutory provisions expressly authorizing or prohibiting it, (1) that building associations may always permit prepayment of stock subscriptions to be received, with or without rebate or interest allowance in consideration of such repayment; (2) that, in pursuance of charter provisions, such associations may issue paid-up stock with the incident of priority in distribution over installment stock; (3) that, under a like power and the right to pay dividends, they may issue paid-up stock bearing income at any given reasonable rate per annum, payable in cash out of and to the extent of the earnings of the association-an arrangement on the part of any corporation to pay interest or dividends to its shareholders, without reference to the ability of the company to pay them out of its earnings, being wholly illegal and void."

We agree with these conclusions and with the reasoning that supports them, and we see no occasion to prolong the discussion. In our opinion the members of the Park View Building and Loan Association are mutually benefited by the issue of the prepaid stock in question, and as a consequence the association is organized and operated exclusively for such benefit. It is certain that the association regards the arrangement as mutually beneficial, for it haş availed itself of the statutory permission to adopt it; and we may be sure that the keen sense of self-interest possessed by the members of such associations would scarcely tolerate an arrangement-even if the statute did not expressly forbid it-that would constitute a small class of privileged stockholders with rights superior to their fellows.

Looking at the subject from as many points of view as possible, we are persuaded that Congress intended the word "mutual" to mean "substantially equal," and that a building association is organized and operated for the mutual benefit of its members when they share in the profits on substantially the same footing. Exact equality is probably not possible, where part of the stock is prepaid, and part is installment; but an approximate equality, sufficiently close for all purposes, is certainly not beyond the reach of calculation. We have no doubt that such a calculation is always made before the terms are adopted upon which prepaid stock is allowed to share in profits.

In brief, the Park View Building and Loan Association was "organized" exclusively for the mutual benefit of its members; the New Jersey Legislature required such benefit to be its object, and (as a means of attaining it) expressly permitted the use of prepaid stock. And the association is in fact "operated" for their mutual benefit, if we may trust the abundant and well reasoned authority that approves of prepaid stock, and if we may also rely on the strong antecedent probability that the members would not agree to any arrangement that would disturb their substantially equal footing.

The judgment is affirmed.

Riker & Riker, of Newark, N. J., were the attorneys for the association.

U. S. League Meeting at Washington, D. C.

THE annual meeting of the United States League of Local Building and Loan Associations has been definitely fixed by the officers of the League and the local committee at Washington, D. C. It will be held at Washington, D. C., on Monday, Tuesday and Wednesday, July 27, 28 and 29. This will enable such delegates as intend to go to London for the International Building Association Congress to sail from New York on July 31.

Missouri League Proceedings.

BURTON MCGINNIS, secretary-treasurer of the Missouri State League of Building and Loan Associations, has just published the proceedings of the fifth annual convention, containing seventy-four pages of highly interesting matter. The Missouri League has made splendid progress during the past few years and deserves the hearty support of associations in the State of Missouri.

The Contingent Fund in Pennsylvania.

The following circular, from the Commissioner of Banking to the building and loan associations of Pennsylvania, explains itself:

"With reference to the circular 'To Building Association Secretaries' accompanying the call for 1913, attention is called to an error in the paragraph relating to the creation of a contingent fund wherein it states that 'the whole shall not exceed 5 per cent of all the earnings.' This paragraph should read instead of 5 per cent of all the earnings, '5 per cent of all the assets.'

Rural Credits.

A PAMPHLET has just been issued containing the hearings at Washington, D. C., on December 11, 1913, before the sub-committee of the Committee on Banking and Currency of the House of Representatives. This committee was charged with plans for the development of Rural Credits in the United States. It contains the statements of Mr. Edwin F. Howell, of New York City; Mr. K. V. Haymaker, of Defiance, Ohio, and Mr. E. L. Keesler. This was published as Part III, and is a highly interesting public document. The committee representing the United States League of Building Associations deserves great credit for the able manner in which this matter was brought to the attention of this committee.

IN MEMORIAM.

J. F. WALTON, OF NEW ORLEANS.

In the death of J. F. Walton New Orleans has lost one of the best known and prominent attorneys. He was a man of highest ideals, always striving to keep things bright and shining. His life was one long struggle upward, but not without fine fruition, for he achieved the dreams that he had believed impossible, and dying, leaves behind him the memory of a splendid manhood and life well spent. He was a lover of beautiful things of life and gathered them unto himself so that they became a part of him. Kindly, lovable, true to his friends and devoted to his family, he was rich in the best sentiments of life.

Mr. Walton had helped to organize the Dryades Building and Loan Association, of which he was a director, and was considered an expert on homestead matters, and had been frequently sent as a delegate to U. S. League conventions. He had also shaped much of the homestead legislation of Louisiana, and was keenly interested in the work of the homesteads. Mr. Walton was also a member of the Bar Association and had always stood with those who worked for the uplifting of the association. In spite of his innate modesty he was absolutely fearless in the expression of his opinions, and yet he had even the friendship of those he opposed, because his motives were always unquestioned and his methods. always fair.

Thrift Lectures in New York City.

THE Department of Education of the city of New York has prepared a series of eight lectures on "Thrift," delivered at Public School No. 37, 145th street. On Wednesday February 4th Mr. A. W. McEwan, secretary of the New York State League of Savings and Loan Associations, New York, spoke on "The Savings and Loan Association as an Aid to Thrift."

This is a step in the right direction and will greatly assist the co-operative home building and saving societies in the Metropolitan District.

Correction on International Congress Commission.

IN the "Official Call" issued by Mr. L. L. Rankin, chairman, which was published in the last issue of the NEWS, the name of Mr. Herbert W. Pinkham, of Woolaston, Mass., should be inserted in place of Mr. E. F. Howell.

Juvenile Savers in Newark, N. J.

ONE of the interesting things in the movement in Newark during the last year was the opening of juvenile stock shares by one of the old associations. The departure has already proven a success here, as it has been for the last few years in Rutherford, N. J., and in Corning, N. Y., and Elmira, N. Y., where it has been given a trial. Many minors who would not begin systematic saving through a building and loan association probably for many years have thus been started early on the road to an accumulation of small sums of money by regular deposits, and children are in that manner being taught their first lessons in economy and thrift.

Association Not Liable for Money Paid Official.

Owing to a mistake made in paying $350 to Harry Ellenberg, former secretary of the Red Star Building and Loan Association, who is now serving a prison sentence for embezzlement, at his private office, instead of at a regular meeting of the association, Frank D. Borah and his wife, of Philadelphia, are debarred from holding the association liable under a decision handed down by President Judge Bregy in Court of Common Pleas No. 1 recently. The plaintiffs, who own three shares of stock in the association, gave the money to Ellenberg to pay off a $600 mortgage, but he converted the money to his own use.

Judge Bregy, in dismissing the suit against the association, points out that under the by-laws the money was payable to the board of directors at a regular meeting of the association, and as the plaintiffs had disregarded this provision by entrusting their money to Ellenberg at his own office they had voluntarily assumed the risk of selecting him as their agent and could not, hold the association liable.

Blue Sky Act Upheld by Supreme Court of Arkansas.

The Supreme Court of Arkansas sustained the constitutionality of the "blue sky" act of the last legislature, in the case of the Mechanics' Building and Loan Association against State Auditor Coffman. The building association contended that the act was unconstitutional because on a final passage of the bill the yeas and nays of the Senate were not entered on the journal as provided by the constitution. They also contended that the Senate journal showed that the bill as amended by the lower house had never been passed by the Senate.

The court held that the act was passed by the Legislature constitutionally and that it does not confer judicial power on the insurance commissioner.

Farm Bank Bills Before Congress.

Administration rural credit bills were introduced simultaneously in the Senate and House recently by Senator Fletcher, of Florida, and Representative Moss, of Indiana, members of the commission President Wilson sent abroad last summer to study the foreign systems.

The bills were for long term farm loans, and bills for short term loans will be introduced later. The introduction was a sequel to the preceding day's conference at the White House. The bills were referred to the banking and currency committees

The measures would establish in the Treasury Department a bureau of farm banks under the direction of a commissioner and make provision for the formulation of such banks in any state under Federal charter and Federal inspection.

Under the bills any group of farmers within a state might organize co-operative farm land banks with power to issue bonds to raise funds from distant money markets for farm development. Operations of the individual banks would be confined within state lines, though supervision will be federal, owing to the variety of state laws bearing upon land titles, taxation, foreclosure and like subjects. They would be strictly prohibited from doing "a city business." The rules for and restrictions upon such banks as provided are:

"Loans to farmers not to exceed 50 per cent of the value of improved land, nor extend more than thirty-five years.

"No institution to begin business without a foundation capital and double liability of stockholders provided for national banks.

"The amount of long term business to be undertaken could not exceed fifteen times the amount of paid-up share capital and surplus.

"The banks might accept and pay interest on deposits not exceeding 50 per cent of capital and surplus, and receive deposits of postal savings funds to the same extent."

The report submitted with the bill was drafted by Senator Fletcher, chairman; Senator Gore, Representative Moss, of Indiana, Dr. John Lee Coulter of Minnesota, representing the census bureau, and other members of the rural credit commission.

Representative Bulkley of Ohio, chairman of the sub-committee which will consider the House bill, and Oscar W. Underwood, majority leader, will visit the President this week to determine a schedule of action on the bill. If there is time many representatives want to conduct hearings in farming centers throughout the country. Joint House and Senate commitee hearings are to be held to expedite action, if the President and congressional leaders decide to have the legislation passed during the present session.

Senator Norris, of Nebraska, introduced a bill for a bureau of farm loans in the Department of Agriculture. The senator's idea is that through the army of postoffice inspectors, postmasters and district attorneys the Government could carry on the business practically.

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