$3,000, the profits for the term, --- $61, 200= 4.9019, the rato per cent of profit. $18 x .049019= $2.35, profit of a share of the first series. $12 x .049019 $0.59, profit of a share of the fourth series. $2.00, profits undivided. This rule is known in some sections of the country as the second dividend rule. The following variations differ from the rule only in the method of computation, as exactly the same results are obtained: 1. Multiply the number of shares in force in each series by the number of months the series have run. Add these products and divide the sum into the net profits for the term, for the profit of one share for one month. Then multiply the profit per share per month by the number of months the series has run, for the profit of a share in any series. 2. Multiply the number of shares in force in each series by the time of investment expressed in terms or periods corresponding to the intervals between the series. Add these products and divide the sum into the profits for the term, for the profit of a share of the youngest series. Shares twice the age of a share of the youngest series will receive twice as much profit; a share three times as old will receive three times as much, etc. 3. Multiply the number of shares in each series by the dues paid in per share, or by one-half the dues paid in, according to the practice of the association. Add these products and find what fractional part each product is of the sum of all the products. These fractions represent the parts of the total profits belonging to each series, 4. Multiply the dues on the shares in force for onc-half the time of investment by an assumed rate per cent of profit, for the assumed profits. Divide the actual net profits of the term by the assumed profits and multiply the quotient by the assumed profits of each series, for the actual profits of each series. 5. The legal rate of interest is allowed on the total dues paid in all the series, and the remainder of the profits divide among all the shares in proportion to the total amount of dues paid in each series. The variations from the rule which give different results are the following: 1. Only the dues standing to the credit of the shareholders six months prior to the dividend day participate in the profits. 2. Shares must be three months, six months, or one year old, as the rules of the association may provide, before they are allowed to participate in the profits. 3. The last three months' payments of dues do not participate in the 1. A fixed rate per cent of profit is allowed and profits are distributed only when a sufficient amount has accumulated to give to each share this rate per cent on the dues paid in. 5. A rate per cent of profit is ascertained by dividing the net profits for the last year by the total amount of dues standing to the credit of the free shares, plus the dues paid in on the pledged shares during the year. This rate is applied on the dues standing to the credit of each sbare at the end of the year and the profit belonging to the free shares goes to increase their value, while the profit belonging to the pledged shares, with the dues paid on them during the year, is credited on the loan as a partial payment. 6. The profits are distributed to the free shares only. All payments made on pledged shares are credited on the loans. 7. The legal rate of interest is allowed on all the dues paid in except the last regular payment. The remainder of the profits is held in reserve. 8. Profits arising from fines and transfer fees are divided equally among the shares of the series in which such profits were made. The remainder of the profits is distributed in accordance with the rule. 9. A fixed rate of interest is allowed on all the dues paid in. 10. Profits arising from interest and fines are distributed in accordance with the rule. All other profits are divided equally among all the shares in force. 11. Profits arising from premiums are divided equally-among all the shares in force. All other profits are distributed among all shares three months old or over, according to the rule. 12. Profits arising from interest are divided in accordance with the rule. All other profits are divided among all the shares in force, in proportion to the amount of dues paid in during the term. 13. No profit is allowed on the dues paid in during the term. The number of associations operating under this plan and its variations is as follows: LOCAL.-Alabama, 1; Arkansas, 2; California, 2; Colorado, 2; Con. necticut, 1; Delaware, 3; District of Columbia, 2; Florida, 3; Georgia, 1; Idaho, 1; Illinois, 29; Indiana, 39; Iowa, 2; Kentucky, 8; Louisiana, 3; Maryland, 12; Massachusetts, 1; Michigan, 8; Minnesota, 3; Missouri, 21; Nebraska, 6; New Hampshire, 4; New Jersey, 17; New York, 142; Ohio, 76; Oklahoma, 1; Pennsylvania, 51; Rhode Island, 1; Texas, 1; West Virginia, 1; Wisconsin, 2; total local associations, 449. YATIONAL.-District of Columbia, 2; Illinois, 5; Indiana, 7; Michigan, 1; Minnesota, 1; Missouri, 1; New York, 4; Pennsylvania, 2; Tennes. see, 1; Washington, 1; West Virginia, 1; total national associations, 26. PLAN 7. 1. To the amount of dues paid in on one share in each series up to the last report add one-half the dues paid in during the term, and multiply these sums by the number of shares in each series, for the dividend bearing capital of each series. 2. Add these products and divide the sum into the profits for the term, for the rate per cent of profit. 3. Multiply the dividend bearing capital of each series by the rate per cent of profit, for the profit of each series. 1. Divide the profit of each series by the number of shares in the series, for the profit of one share in each series. Using the same data as before we proceed thus: ILLUSTRATION, $19,200, dividend bearing capital of all series. $3,000, the profits for the term, - $49, 200 = 0.0975, the rato per cent of profit. $21,000 x .060975 == $1,280.48, the first series' share of the prolits. $439.02 - 100 = $1.10, profit of a share of the third serics. $182.93 – 500 = $0.37, profit of a share of the fourth series. $0.02, profits undivided. 2. The dividend bearing capital of the free shares is ascertained in accordance with the rule. The dividend bearing capital of the shares borrowed on is found as follows: At the end of the first half of the year one half of the dues paid in on such shares during the period is taken; at the end of the second half of the fiscal year, all the dues paid in during the first half of the year, and the dividend thereon, plus one-half of the dues paid in during the second half year, forms the dividend bearing capital of such sbares. In such cases the association makes an annual settlement with its borrowers, and credits the dues paid in and dividends declared each year on their loans. 3. Profits arising from entrance and transfer fees are divided equally among all the shares. The number of associations operating under this plan and its variations is as follows: LOCAL.-Illinois, 21; Indiana, 5; Kansas, 1; Maryland, 15; Michigan, 11; Missouri, 1; New York, 1; Ohio, 101; Pennsylvania, 10; Tel: nessee, 1; Utah, 1; Wisconsin, 4; total local associations, 172. NATIONAL.- Michigan, 1; New York, 1; total national associa. PLAN 8. 1. Find the legal rate of interest on the values of the shares as declared by the last report and deduct it from the profits of the term for the net profit. 2. Divide the net profit by the sum of the dues paid in during the term and the interest on the previous series, for the rate per cent of profit. 3. Multiply the sum of the interest and dues for the term on one share of each series by the rate per cent of profit, for the profit on one share. 4. Add the previous value of a share of each series, the legal interest on this value, the dues paid in during the term, and the profit on the share to find the present value of a share of each series. Let the legal rate of interest be 6 per cent, and using the same data as in the preceding illustrations, we proceed thus: ILLUSTRATION. $2.33 X 500 = $1,165, interest on first series. $2,373, total interest on old series. $3,000, the profits for the term, - $2,373 === $627, tho net profits. $12 x 2,000, the number of shares in force, = $24,000, the dues paid during the term. $24,000 + $ 2,373 = $26,373, the active capital. $627 - $26,373=2.3774, the rate per cent of profit. $12 x .023774 -= $0.29, the profit of a share of the fourth series. $12 + $0.29 = $12.29, value of a share of tho fourth series. The above rule is known as Brooks' rule. Some associations using this rule vary it by allowing less than the legal rate of interest on the old values, but no separate classification of such associations has been made. Another variation from the rule consists in allowing the legal rate of interest, not only on the values of the old series at the beginning of the term, but also on the equated amount of dues paid in on all the shares during the term. Another variation from the rule is as follows: After the legal rate of interest for the term on the values of the old series has been deducted from the profits for the term, the remainder of the profit is divided by the sum of the value of all shares at the beginning of the term, the dues paid in during the term, and the interest for the rate per cent of H. Ex. 209-29 profit. This rate is then applied to the sum of the previous value of each share, the dues paid in during the term, and the interest on the share for the profit on one share. The number of associations operating under this plan and its variations is as follows: LOCAL.-Colorado, 1; Illinois, 2; Mississippi, 1; Missouri, 9; New Jersey, 7; Pennsylvania, 5; total local associations, 25. PLAN 9. The profits are divided equally among all the shares in force. This plan is used principally by terminating associations, The following variations of this rule have been found: 1. The profits for eacli term are divided equally among all the shares in force. 2. The profits for each term are divided equally among all shares three months old or over, six months old or over, or nine months old or over, as the rules of the association may provide. In such cases shares less than three months, six months, or nine months old do not participate in the profits. 3. Shares less than a year old are given such portion of the profits as the board of directors may allow. The remainder of the profits is divided equally among all the shares one year old or over. 4. The profits for each term are divided equally among the free shares. 5. Shares one year old or over receive equal amounts of the profits for the term. Shares nine months old receive three-fourths as much as those a year old; shares six months old one-half as much, etc. 6. The profits made by each series are kept separate, and are divided equally among all the shares of the series. 7. Profits arising from premiums and fines are divided equally among the shares of the series in which such profits were made. All other profits are divided equally among all the shares. The number of associations operating under this plan and its variations is as follows: LOCAL.-Alabama, 5; Arkansas, 10; California, 4; Colorado, 10; Connecticut, 2; Delaware, 3; District of Columbia, 6; Florida, 3; Georgia, 15; Illinois, 27; Indiana, 191; Iowa, 13; Kansas, 20; Kentucky, 27; Louisiana, 2; Maryland, 22; Michigan, 11; Minnesota, 1; Mississippi, 6; Missouri, 108; Nebraska, 14; New Jersey, 37; New Mexico, 2; New York, 31; Ohio, 48; Oregon, 3; Pennsylvania, 294; South Carolina, 37; South Dakota, 3; Tennessee, 4; Texas, 23; Vir ginia, 38; Washington, 3; West Virginia, 30; Wisconsin, 5; Wyoming, 4; total local associations, 1,062. |