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his money, he may have it, and 6 per cent-
interest for the average time, not $17.97,
but $12, with interest. Let the money rest,
and in time that $17.97 will be realized, and
a great deal more. This fact becomes an
incentive for renewed savings, and the sec-
ond year begins hopefully.

Another twelve-month passes. The install-
ments, not without a fine or two, are paid,
and then comes another annual xeport This
is even more interesting than the first The
long and elaborate array of figures is truly
impressive ; but the most enticing statements
are the valuations of the various series of
shares. His share is in series number 5,
now two yAxs old, and it is declared to be
worth $38.31. Itslastvaluation was $17.97;
he paid during the year $12 more, and the
association earned for him $8.34. In other
words, he paid in $24 in twenty-four months,
and he has made $14.31 by the investment
Turning to another part of the report, he
finds that, if he wishes to withdraw, the
association is willing to buy his share for
the money paid in, and a premium of $3,
or $27 in all ; $3 firom $14.31 leaves $1 1.31.
That is too large a profit for the association,
and he decides to let his money rest, and to
continue paying his dollar a mohth.

Another year passes, and he finds he has

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paid $36 in all, but the new report declares
his share now worth $5^.78. This is cheer-
ful. Now is he beginning to be a moneyed
man. He is growing rich almost without
knowing it. Why did he not take five shares
instead of one ? It would have involved a
more stringent economy, and perhaps more
thought and labor ; but he might have been
credited on the association's books with
almost $300. Indeed, a princely sum for
such an one. He goes steadily on, paying
his dollar a month year by year, and the one
dollar grows to $108. Then comes the best
report of all. With a great flourish, the
directors make the happy announcement
that the series of shares he is in, and known
as the fifth series, has matured, and reached
its ultimate legal limit of $200. Now there
are no drawbacks. For his investment of
patience, and $108 in nine years, is the
handsome profit of $92, and the sum of
$200 in crisp bank-notes. He takes his
money, surrenders his one share, and then
amuses himself in figiuing up the rate of
interest he has received.

This is the experience of a plodding share-
holder, content to pay his dollar a month for
one hundred and eight months. Another has
quite a different experience. He begins by
taking fifteen shares, and at the end of the
first year he finds he has undertaken too
much. He withdraws five shares, and
receives the $60 paid, and interest on the
money at 6 per cent, for the average
time. He has now only $10 to pay
each month, and at that rate continues
another year. The burden is still trouble-
some, and he decides to withdraw five
more shares. The report offers a pre-
mium of $3 per share. He therefore gets
the $120 Daid on five shares in two years,
ides. Misfortunes crowd upon
six months more 1^ decides to
; share. He then receives $33,
thirty months* installments paid
premium of $3, declared six
>re at the last annual meeting,
later, at the end of the third
cides to withdraw two more
5ingle share is now declared to
y $55> ^nd the association will
es offered at a premium of $7.
pity to allow the bank to make
: of him ; but he must have his
his two shares bring him $43
aid in, and the premium of f]'7.
ice between the face value of
: real value of $43 is, of course,
:omes the property of the asso-

ciation. However, he has the consolation
of knowing that his two remaining shares
will reap a part of this benefit.

He continues to pay the dues on his two
shares for another year, and then he trans-
fers them, to close an old and troublesome
debt. Each share has a face value of $82,
and a selling value of $60. His creditor is
very glad, to take them at this valuation,
and they are transferred to him as so much
money. The original investor made a num-
ber of profits on his withdrawals, and found
a safe and ready means of saving his money
in his more prosperous days. The new
owner may continue the payments till the
shares mature, or he may withdraw or sell
them. They are as good as money up to
their selling value, and every month they
increase in value.

Thus is the depositor in these savings
associations hedged about ; thus is he taught
frugality, steadiness, and the elements of
finance. The plain and only safe road to
fortune is pointed out to him, and every
step along the sometimes weary way is made
tlie easier. The monthly payments are easy,,
the fines act as a good spur to keep the
depositors up to the work. The month's
notice prevents hasty and ill-advised with-
drawals, and even then each must take his
turn, and at no time can more than half of
the available money be taken out. These
formalities induce a .safe delay, and place
the associations above the reach of panics.
Commercially considered, they are as safe as
any institution of the kind can be, and in
every respect they are safer than the ordi-
nary savings bank. The total collapse, the
utter vanishing away of all the deposits,
sometimes seen in a savings bank, cannot
take place here. The older an association
grows, the richer it becomes. Eath month
its capital is renewed, and every year an
entirely new set of shareholders bring in
their fresh capital. Certainly the depositors,
be it struggling shop-girl, laborious mechanic,
or helpless widow, have everything to
encoiu^ge, and little to make them afi^id.

The borrowers, those who use the funds
of the association — those to whom it is an
efficient aid in buying or building a home —
are also members and shareholders. ITiey
are divided into two classes : borrowers on
shares and borrowers on real estate. The
first give their shares as security, the others
give their shares and real estate also.

Here is a shop-girl who is a member of a
well-established association. She has worked
at dress-making for three years, and owned

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five shares for that time. She manages to
save five dollars a month, and merely con-
siders it as so much money laid away in the
bank. Suddenly she finds a chance to start
a nice little shop on her own account. To
do this she must have some ready money ;
hot a month hence, but immediately. She
goes this very evening to the secretary of
her association and tells- ^her story. He
hears her patiendy, asks about the new busi-
ness, the probable value of her new ventiwe,
the names of the people she hopes to deal
with, and, in fact, becomes a friendly busi-
ness adviser. It is mutual, for, in reality,
they are partners in the bank. He consults
her account, and finds that she has depos-
ited $180 in the three years just ending.
And there is the premiujn of withdrawal - -
$7 on a share, or ^35 on the five shares.
This added to the $180 gives $215. Will
she give notice of withdrawal ? When could
she have the money ? Perhaps in a month ?
Oh, that would never do; she must have
some money now. Why not borrow the
money on the five shares ? She had thought
of that, but had never been in debt before,
and hesitates to commit herself Perhaps
she might find it hard to repay the loan.
Still, it is such a good chance to belter her
condition, and it would break her heart to
lose it. Has she no fiiends, no money or
other property? No; none. Nothing,
save her two hands and two suits of clothes,
and one is worn — just a little. Couldn't
he help her in the matter? She never
attended one of the association meetings,
and wouldn't know what to do. Yes; he
will help her. The association is always
ready to lend a helping hand to its mem-
bers. They are all partners in the bank
together. He will bid for her. The auction
takes place to-morrow night, and if she will
attend he will arrange it for her, and gladly.
Mow much money does she want? Per-
haps $125 would answer. Oh, if that is all,
it can be easily arranged ; and the girl goes
home feeling comparatively happy.

On the evening of the morrow she appears
at the litde hall where her bank sells its
money. The sale is active at first, and she
fears her little loan will fare hardly among
all these eager men. At last it calms down,
and she hears the secretary bid for one share.
It starts at twenty, and climbs slowly up to
twenty-five, six, seven. It keeps on up to
thirty, and there it is knocked down to the
secretary. Again and again the secretary
bids for single shares, and she wonders how
many other poor girls like herself are

appealing for loans through him. At the
end of the sale a number of men and women
press round the secretary to hear the fate of
their bids. He manages to speak an encour-
aging word to her, and, having paid one dol-
lar for the new share, she goes home happy.

Perhaps that very evening the directors
consider, and allow her litde loan, and the
next day she calls at the secretary's office,
signs the proper papers and gets a check
for $140. She transfers her five shares as
collateral security, and the secretary explains
the transaction to her. She, or her agent, bid
for a loan of $200 on one share in the last new
series, and gave her shares, now worth $215,
as security. The premium was thirty per
cent This has been taken out and leaves
$140. She has now to pay one dollar a
month on the new share, the installments
on her five shares, and the interest on two
hundred dollars at six per cent. This she
pays, a dollar at a time, each month if she
wishes. That is $7 a month in all, and if
at any time she wishes to repay the loan she
can do so by giving in the money or by
withdrawing some of her shares, or she
need not pay it at all, but merely let it pay
itself out of her profits in the association.
She thanks the old gentleman, though not
without a shade of doubt Only $140 and
her shares, if she had withdrawn them,
would have brought $215. But then they
have a face value of $60 each or $300. By
borrowing instead of withdrawing she has
saved all that.

A whole year passes, and she again calU
on the secretary to see how her affairs stand.
She has made a little something and wouLi
like to repay part of her loan. The secre-
tary examines her account and finds that it
presents this cheerful aspect : the interest has
been paid, so that is happily out of the way ;
the installments paid on her five shares, now
held by the association, amount in the four
years to $48 on each, and the declared value
of a share is $81, or $405 for the five ; the
installments paid on the one shai'e she bor-
rowed upon amount to $12. Then her
debt is paid twice over? Well, perhaps
not We must only consider the withdrawal
value if she wishes to pay up in that way.
The last premium offered on withdrawal
was $12, so her five shares may be with-
drawn and will bring her $300; this, with
$12 on the new share, will make $312. In
other words, if she gives notice of with-
drawal her debt will be declared paid, and
she will receive $112 in cash, with a trifle
more as interest on the $12 paid on the new

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share. She is greatly pleased at this show-
ing, and says she will withdraw. Stay a
moment! Will she not lose as much
more ? Yes, the bank will gladly pay her
$300 for five shares, for they are worth $81
each, or $405 in all. She can do as she
pleases in the matter. She considers this a
moment and then asks if she may not repay
part of the loan. Yes, but why pay at all ?
Does she not need the money in her busi-
ness ? Yes, very much, but she does hate
to be in debt. Oh ! that is nothing serious.
It is quite as much for her interest not to
pay it as it is for the bank's.

Another year passes and she calls again.
This time she feels she really must with-
draw. She confesses with a blush that she
is going out of business — ^John, he — ^that is
— well, what does the secretary think about
it ? What are her six shares worth now ?
The first five are now declared to be worth
$110 each. The year has been a prosperous
one for the bank, and her share of the profits
makes her five shares worth $550. The one
share, now two years old, has a face value
of $37-50- In all, her shares are valued at
$587.50, or $387.50 more than her debt
Her eyes sparkle at this brilliant financial
statement, but she wants more ready money,
she must withdraw her shares. Ah! yes,
the withdrawal premium is $20 on those
first shares. The installments paid amount
to $60; so for the ftvt she can withdraw
$400, or in other words, pay her debt and
have $200 besides. The bank will gladly
do this for her ; as a firiend, he would advise
her not to withdraw and lose so large a
slice of that $550, but to keep on paying
the interest and let the debt remain unpaid.

She thanks him and says perhaps the
shop fixtures will bring something. Besides,
she intends to give John the shares, and
let him pay ,the dues and interest till they
mature. The shop fixtures are sold at an
advantage and John prospers. Of course
he does. Such girls always have prosperous
husbands. Finsdly the five shares matiu-e,
and her debt is paid in spite of herself. The
last and most happy report of all declares
her five shares worth $200 each. The debt
is taken out and declared paid. The interest
has been extinguished, a dollar at a time,
and the sum of $822.50 is paid the young
couple in good legal tender. Besides this,
there is the one share, now five years old
and declared to be worth $135,281^.

It may be here noticed that she would
have received more ready money by with-
drawing the one share. In that case she

would have had a clean bill for her debt
and a check for $983, and she would have
been no longer a member of the bank. The
premium she paid, it may be remarked, had
been extinguished gradually by her yeariy
share of the profits of the association.

In this way any manner of man or woman
may at any timei and for any length of time
borrow a sum equal to the paid-up value
of the shares he or she owns, and with no
other security than the shares themselves.
The merchant turns in his shares for a loan
to meet a note. When next in ftmds he may
return the money and receive back a por-
tion of the premium paid and resume his
shares. This he can do as often as he
wishes, and every year he can make larger
and larger loans. The music-teacher may
put up her shares to purchase a piano, and
may repay the loan when convenient. Or
she can (as the association much prefers)
let it rest till the withdrawal, or ultimate
value, covers loan and premium, and then
it is considered paid. In fact, it is paid all
the time, for the borrower only takes his
own money. If the piano is destroyed by
flood or fire, or if the owner is no longer
able to pay the dues, the association takes
her shares, and both they and her debt are
extinguished at once. She loses the money
paid in and all the profits. The bank recov-
ers both, and its claim is adjusted.

Next to these, come the borrowing mem-
bers who can give real estate as security for
loans. A certain man has held ten shares
four years and has paid dues amounting to
$480. He wishes to buy a house, valued
at $2,000. He can get it for $1,500 down,
and the rest may remain as ground rent, or,
in other words, on a first mortgage to the
owner. He bids for $2,000 on his ten
shares. He offers a liberal premium, but
as he is an old member he gets an abate-
ment on this, and, his security being satis-
factory, he gets his loan of $2,000, less the
premium, or $1,500 in money. With this
he buys die house, and installs his family in
it. He transfers his ten shares to the as-
sociation, insures the house for its benefit,
and gives a second mortgage of $2,000. In-
stead of rent he now pays each month his
dues of ten dolldrs, the interest on both
mortgages, the taxes, water rates, etc., and,
in all, his expenses do not exceed the rent of
such a house, more than about 10 per cent.
In this manner he goes on paying dues and
interest each month. In five years his shares
mature. The ten shares are declared to be
worth $2,000, but instead of the money he

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receives a release of his mortgage, and his
debt is declared paid. The house is now
only subject to the ground rent. When that
is paid die house will be his. He has paid
$10 per month for one hundred and eight
months, and the interest on $2,000 for five
years, or $1,680 in all, and the debt is extin-
guished. In other words, he made $320 by
the operation. To clear away the ground rent,
he buys more shares. There being only that
interest to pay, he can afford to carry twenty
or more shares, and very soon he borrows
the money on them, and the house is his
own. This loan pays itself by the install-
ments and profits, and in this easy and sim-
ple manner he saves the total loss of the
rent, has the use of the house all the time,
and eventually owns it outright

Another, a poorer man, wishes a small
house. He buys a lot of land on ground
rent. He finds a contractor who will put
up a house on the land for $1,500
cash. Sometimes the owner will do this.
He then buys ten shares, at one dollar
each, of some association, and bids for
$2,000 on them. He offers a premium of
30 per cent, and he gets $1,400. His
employer advances 4iim $100 to make up
the price of the house, and becomes his
bondsman that the dues and interest shall
be paid (say) for three years. He has
now, in place of house rent, to pay his dues,
the interest on the loan of $2,000, the
ground rent, taxes, water rates, insurance,
and his loan of $100. Each year sees the
debt reduced, and in eight or nine years it
is declared paid. Another venture of the
same kind clears away the ground rent,
and the house is his.

This ground rent system is peculiar to
Philadelphia. Any person desiring to build
on a lot of land can, instead of buying it,
hire it for all time. If, at any time, he
wishes to pay for it, the price can be offered,
and the owner cannot decline it The owner
can never claim payment during the lease,
so long as the rent is regularly paid.

It seems difficult of belief. How can
these building associations make money so
fast ? They have several sources of income :
First, the installments paid in; next, the fines
for neglect of payment. * Then there is
the profit derived from the premiums. At
a stated meeting some borrower bids for
$1,000. He is willing to pay 30 per cent

for the immediate use of the money. He
receives $700, and the association retains
the $300. This is at once put up at auc-
tion, and gains a further profit of 30 per
cent., or $90. This money is again loaned,
and )rields a profit of $27. Each borrower
in time gets his money, less the premium,
and the association makes a triple profit of
$417 in one evening, and the entire $1,417
loaned out begins to draw interest from that
day. Next to this must be noticed the
compounding of interest upon interest every
month. All the dues, premiums, fines, and
interest received each month are put together
and sold, and the gross sum draws interest
at once. One dollar paid in at the meet-
ing in the form of new capital, is in a
few minutes sold out and begins to draw
interest. It earns a premium, and that
is again sold at a premium, and that also
draws interest. Besides these, are the profits
on withdrawals. If a two-year-old share is
worth $39, and can be bought by the asso-
ciation for the dues paid in and a premium
of $3, it is plain that the association makes
$12 by the purchase. There is one share
less to draw $200 at the end, and the final
division will be reached so much the sooner.
This explains the eagerness these associations
display in buying up their own shares. As
a large part of the shareholders and non-
borrowers in any series withdraw before the
eight years* term is up, the profits on the
withdrawals increase the general capital

Philadelphia may point with pride to her
hundred thousand homes, but it is not alone
in these things that the chief interest of this
subject lies. These associations have done
more than help the people build houses, buy
pianos, sewing-machines, land, or what not.
Their moral are greater than their material
results. It is not that they help to build a
city that they may be chiefly recommended,
but as savings banks, as inspirers of thrift,
as liberal aids to industry, and as strong
defenses against the stormy days that come
in every life. No signal service can give even
a probability of these, no cautionary flag
flies before such storms, and to many a
family these associations have been a sure
anchor with which to outride the gale.

* See " How to Manage Building Associations^
Edmund Wrigley, Philadelphia, 1873."

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Hardly any piece of furniture is more
troublesome to bring into harmony with the
conditions of our modem room than the
book-case. And one may well despair of
bringing any help to those who are puzzling
themselves over the problem. If a man be
a large student and a great adcumulator of
books, necessity solves the problem for him.
He takes a room to himself, lines the walls
with shelves, and covers all his available
space with books. But that is not our prob-
lem. We want to have our books in our
living-room, and we want pictures, and
" objects," and furniture, and comfort, too.
We want our books, not necessarily as Leigh
Hunt said he liked his, "where he could
lean his head against them," but in close
companionship, and where we can get at
them easily, and where we shall be often
tempted to get at them. Cut No. i shows
how this difficulty has been met in one case,
and it is a way that is by no means the
invention of the owner of this particular
book-case, but one that has foimd favor with
many another lover of books. The present
example was made to fit into a certain room
where it was fondly hoped it would remain
for a half-dozen May-days or so at the least.
But it has since found itself at home in two
other rooms, and, on the whole, shows itself
a man-of-the-world in acconunodating itself
to what it finds at hand. It is made of
plain white pine, brought to a good surface
and shellacked, and its third year find^ it with
a most beautiful color, only distinguishable
fix)m satin-wood by a richer tone. It is
twelve feet six. inches long, the top and
bottom being each one piece, and it is
about three feet high. The bottom of the
lowest shelf is four inches- fi'om the floor,
and the ends run up nearly five inches
above the top, and are connected by a strip
at the back of the same height. This makes
a low wall of protection for whatever may
be set upon the top of the book-case, and
" finishes'* it, as the slang phrase is, at once
useftilly and handsomely. This book-case
is divided into four by three upright parti-
tions, on each side of which slots are sunk
for the ends of the shelves to rest in, these
shelves being plain boards all of the same
thickness, of course, and, what is unfortu-
nately not " of course,'* sliding in and out

with perfect ease, whether weighted with
books or not, and each one fitting like a
glove into any two of the one hunched and
four slots that it may be necessary to slide
it into. I have found this way of support-
ing the shelves a very good one, and it is an
additional point in its favor, when once its
practicalness has been admitted, that it looks
well, the firont ends of the slots, in which
no shelves rest, showing black, and alter-
nating with the uncut portion of the wood,
— an effect which was not sought for in the
design, but which, when the work came to
be executed, rewarded the designer for hav-
ing tried to solve his problem of shelf-sup-
port in a straightforward, natural manner.
Cut No. 2 will explain this little detail to the
eye. This book-case will hold easily four him- '
dred books ; nearly five hundred, if ordinary
small octavos and duodecimos are to be
accommodated — the lesser number, if one
hundred and odd of them are large octavos
and folios. Moreover, # the shelves being a
foot deep, as many more books or pamphlets
that are not to be discarded, but are only
wanted semi-occasionally, can be ranged
behind the other books and pamphlets.

Online LibraryFrancis HallThe Century, Volume 11 → online text (page 84 of 163)