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Table J.— Votes allowed, pp. 360, 361.—The associations which allow one vote to each shareholder number 2,513, and those which allow one vote to each share number 2,558. These two classes comprise all but 11 of the associations reporting as to the voting qualifications of members of building and loan associations.

Table K.- Transfer fce, pp. 362 to 365.—The fees charged by associations for the transfer of stock are shown in this table. One thousand one hundred and eighty-nine associations reported that they inake no charge for such transfers, while 346 charge 25 cents, 351 charge 50 cents, and 307 charge $1 for each transaction. The associations charging a transfer fee for each share transferred are shown in the second half of the table. Of these 1,386 charge 25 cents per share, while the balance vary from 2 cents to $1.

Table L.-Eristing real estate loans in certain representative associations, pp. 366, 367.-This table deals with 2,173 associations only. It shows the number of existing loans on real estate for that number of associations; also the original amount of such loans and the largest and smallest loan. The figures given sbov tlie original amount of loans, undiminished by partial payments on the same, and although less than one-half of the total associations have been considered as regards the facts shown in this table, it is believed that the showing is fairly representative of all the associations in the country. The table shows that the 2,173 associations which reported the value of existing loans on real estate had 164,627 such loans, with a total original amount of $184,401,322; the largest loan being $100,000, the smallest $5, and the average $1,129.

The classification of the loans is shown in-

Table M.-Individual real estate loans in certain representatire (1880ciations, pp. 368 to 371.—This table is designed to show the size of the loans usually made to individual borrowers. A number of the repre. sentative associations reporting the amount of each of their real estate loans to shareholders have been used and the loans classified according to the size. The chief object of this table was to show whether the building and loan associations of the country have been used by small or large borrowers; whether the loans have been made in small sums for the purpose of helping the ordinary man, or in large sums to aid capitalists in the erection of buildings, etc. Taking the totals, which include both local and national associations, we find that 532 associations made report as to 36,821 individual loans. It is found that there are only 664 loans out of the 36,821 the original amounts of which were over $5,000 each. This is 1.8 per cent of all the loans existing in 532 associations. This is an exceedingly gratifying showing, and leads to the conclusion that the associations are being conducted in the interest of men of small means. There have been comparatively few associations making loans of over $7,500 each. In some instances the Department has learned of loans to the amount of $50,000 or more—even ur to the amount of $100,000 iv. one case-but these have been rare, and are made by associations that are composed very largely of merchants and business wen generally.

Table N.-Interest rate charged on real estate loans in ceriain representatire associations, pp. 372 to 375.-By this table it will be seen that 6 per cent is the prevailing rate of interest, but 388 of those reported falling below and but 377 going above that rate.

Table 0,Average premium rate charged on real estate loans in certain representatire associations, pp. 376 to 379.—This is a companion table to Table N. The majority of associations charge a premium on loans in addition to interest. Two methods of doing this prevail (a). Under the first the borrower receives the full amount of the share or shares on which the loan is made, and pays the premium in instalments, with the interest. For the sake of uniformity this has been reduced to the rate per cent per annum in this table. Under the second method the borrower receives the amount of the share or shares on which the loan is made less the premium charged, the gross amount of which is deducted in advance, interest, however, being charged on the face of the loan. In the table the associations using this method are tabulated uuder the head gross. These facts were secured from but 1,704 associa tions, yet they are believed to be fairly representative of the entire number. The interest and premium charges enable us to ascertain the cost of a loan to the borrower, and also to consider the question of whether loans secured through building and loan associations are more or less economical to the borrower than those secured from savings banks or private capitalists. In order to illustrate this interesting question we have made an analysis showing the comparative cost to the borrower of a loan of $1,000 from a representative building and loan association and from a savings bank, both in the state of Massachusetts.

A building and loan association has been selected which has matured several series of shares, the maturing period being in each case 133 months. The comparative results have been shown under the lowest, highesi, and average premium rates charged by this association upon the loans in existence at the end of the fiscal year reported to the Department. The practice of the association was to charge upon each $200 share dues of $1 per montli, interest of $1 per montli, and such monthly premium as might be bid. These payments are made for 133 months, when the shares mature and the loan is satisfied.

A loan of the same amount, principal payableattle end of 133 months, interest at the rate of 5 per cent per annum payable semi-annually, is made from a savings bank. We will suppose the borrower to deposit in the savings bank each month a sum equal to that which is paid into the building and loan association. From this sum he will require $25 semi-amually on each $1,000 to meet the interest payments. The balance he allows to remain in the savings bank to create a fund to pay off the principal of the loan at the end of the 133 months. At the end

a A full description of all the preinium plans will be found in Chapter III.

of each six months he is credited with a dividend of 24 per cent on all sums which have been on deposit for six months preceding, or 11 per cent on all sums which have been on deposit for three months preceding.

The results urder the above conditions are as follows:

BUILDING AND LOAN ASSOCIATION LOWEST PREMIUM RATE.

Cost of a loan of $1,000 from a building and loan association in Massachusetts with dues at $5 and interest at $5 per month-no premium being charged-running to the maturity of the shares, 133 months, $1,330.

In this case the borrower pays in cashDues at $5 per inonth for 133 months.

$665. 00 Interest at $5 per month for 133 months...

665.00 Premium

Total cash paid..

1, 330.00

SAVINGS BANK.

A loan of $1,000 is secured from a savings bank at the interest rate of 5 per cent per annum payable semi-annually, principal payable at the end of 133 months. The borrower deposits in the savings bank each month a sum equal to the above amounts paid into the building and loan association. From this sum he will require $25 each six months to meet the semi-annual interest payments.

His account at the end of 133 months is then as follows: Deposits, $10 per month for 133 months...

$1,339.00 Less withdrawals to pay interest on loan, $25 each six months for 133 months.

554. 17

Deposits remaining in bank at end of 133 months
Add dividends credited semi-annually

775.83 262. 28

Balance in bank at end of 133 months...

1,038. 11 But this balance in bank is $28.11 more than is required to pay off the principal of the loan.

In this case then the same payments which are required to pay for loan of $1,000 from the building and loan association at its lowest premium rate would have paid for the loan from the savings bank and left a cash balance of $38.11.

а

BUILDING AND LOAN ASSOCIATION-HIGIIEST PREMIUM RATE.

Cost of a loan of $1,000 from a building and loan association in Mas. sachusetts with dues at 85, interest at $5, and premium at $3 per month, running to the maturity of the shares, 133 months, $1,729.

In this case the borrower pays in cashDues at $5 per month for 133 months

$665. 00 Interest at $5 per month for 133 months...

665. 00 Premium at $3 per month for 133 months...

399.00

Total cash paid ..

1, 729.00 SAVINGS BANK,

A loay of $1.000 is secured from a savings bank at the interest rate of 5 per cent per annum payable semi-annually, principal payable at the end of 133 months. The borrower deposits in the savings bank each month a sum equal to the above amounts paid into the building and loan association. From this sum he will require $25 each six months to meet the semi-annual interest payments.

His account at the end of 133 months is then as follous: Deposits, $13 per month for 133 months......

$1,729.00 Less withdrawals to pay interest on loan, $25 cacli six months for 133 months ....

554, 17 Deposits remaining in bank at end of 133 months.

1, 174.83 Add divideuda creditel semi-annually....

391. 20 Balance il baik at oud of 133 months ..

1,566.03 But this balance in bank is $566.03 more than is required to pay off the principal of the loan.

In this case then the same payments which were required to pay for a loan of $1,000 from the building and loan association at its highest premium rate would have paid for the loan from the savings bank and left a cash balance of $566.03.

BUILDING AND LOAN ASSOCIATION--AVERAGE PREMIUM RATE.

Cost of a loan of $1,000 from a building and loan association in Massachusetts with dues at $5, interest at $5, and premium at $0.78 per montli, running to the maturity of the shares, 133 months, $1,433.74.

In this case the borrower pays in cashDues at $5 per month for 153 months

$663, 00 Interest at $5 per month for 133 months.

665.00 Premium at $0.78 per month for 133 months

103. 74

Total casii paid...

1, 433. 74

SAVINGS BANK.

A loan of $1,000 is secured from a savings bank at the interest rate of 5 per cent per annum, payable semi-annually, principal payable at the end of 133 months. The borrower deposits in the savings bank each month a sum equal to the above amounts paid into the building and loan association. From this sum he will require $25 each six months to meet the semi-annual interest payments.

His account at the end of 133 months is then as follows: Deposits, $10.78 per montli for 133 months ...

$1, 433. 74 Less withdrawals to pay interest on loan, $25 each six months for 133 months ....

551. 17 D-posits remaining in bank at end of 133 months.

879.57 Add dividends credited semi-annually......

295. 78 Balance in bank at end of 133 mouthis..

1, 175. 35 But this balavce in bank is $175.35 more than is required to pay off the principal of the loani.

In this case, then, the same payments which were required to pay for a loan of $1,000 from the building and loan association at its average premium rate would have paid for the loan from the savings bank and left a cash balance of $175.35.

Table P.--Loans to other than shareholders, pp. 380, 381.-By this table it is seen that only 76 out of the 2,245 associations reporting have loans to other than shareholders, and that they have 2,056 such loans existing, the aggregate value of which is $2,328,621, being an average of $1,133 for each loan. These figures prove conclusively that the associations adhere very closely to the rule of making their loans to shareholders only.

Table Q.--Associations taking money on deposit, pp. 382, 383.–Building and loan associations are not banks of deposit, yet we find 641 taking money on deposit, and the table shows the varying rates of interest paid on such deposits, the prevailing rate being 6 per cent.

THE DAYTON PLAN.

Among the managers of building and loan associations the so-called "Dayton plan" is fairly well known. Very many consider it a model plan, and have suggested that it be incorporated in this report, that all interested in the conduct of building and loan associations may be able to use it should they desire. Mr. A. A. Winters, general manager of the Mutual Home and Savings Association of Dayton, Ohio, has very kindly furnished the Department with the following statement:

The so-called Dayton plan of conducting building associations is not anybody's invention. It is a growth; the growth of twenty years. Hence, it has not been the same in any two successive years. I will therefore confine myself to the plan as it is now in operation, leaving entirely out of account what it has been. As the developments and changes which have made up the Dayton plan have mostly originated in the Mutual Home and Savings Association of Dayton, Ohio, I will also confine myself to the plan as practised by that association.

In the first place it inust be noted that the plan is applicable to permanent associations only, and can not be applied to either terminating or serial associations.

The plan differs from other plans in four main particulars, besides some minor ones,

First. New members may join at any time without paying back dues. Second. Paid-up stock is issued.

Third. Premium is entirely abolished, each member being entitled to borrow money in the order of his application at such rate of interest as the board of directors may from time to time fix.

Fourth. Earnings are not only ascertained and divided semi-annually, but when credited are subject to withdrawal the same as money payments.

I will take them in their order. As a preliminary observation, lowever, I might say that the main object of all these changes has been to simplify methods and to enable the association to more easily adjust itself to the situation and needs of the various people with whom it deals. All the older plans are more or less iron-clad. Very little attempt

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